Energy: Utility in Perth-Andover hopes proposed agreement won't leave it out in the cold

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Mark Rickard
The Victoria Star

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Will the planned sale of NB Power to Hydro-Québec mean the end of Perth-Andover Electric Light Commission's claim to the cheapest power in New Brunswick?

Dan Dionne, the chief administrative officer for the village, said the community is still trying to determine exactly how the planned sale will affect New Brunswick's smallest electrical utility.

Premier Shawn Graham and Quebec Premier Jean Charest recently announced New Brunswick planned to sell most of NB Power to Hydro-Québec. The deal would see Hydro-Québec take over the hydro-generation assets throughout the St. John River Valley, Point Lepreau nuclear generation station, all transmission lines and customer service, and even the employees. New Brunswick gets NB Power's hefty $4.75 billion debt paid in full by Quebec, a five-year rate freeze for residential customers and industrial power users will see their rates lowered to match their Quebec counterparts. The complex memorandum of understanding provides a framework for future rate increase and "power sovereignty" for both New Brunswick and Quebec.

Dionne said at first glance the deal appears to be a good one for New Brunswickers, but there are many questions about how the change will affect New Brunswick's three municipal utilities - in Edmundston, Saint John and Perth-Andover. Edmundston and Saint John purchase the majority of their power from NB Power, but Perth-Andover buys its electricity from WPS Generation Canada, a subsidiary of Integrys Energy, a United States firm that owns Tinker hydroelectric dam on the Aroostook River near the Maine-New Brunswick border. The 33-megawatt power dam has kept the lights on in Perth-Andover since the early 1920s.

"Even though we are not directly a customer of NB Power, we still receive services from them," Dionne said. "There are some issues for the municipal utilities that we need clarified. They not only froze the wholesale rate for the next five years, but they froze the rate to customers. Obviously there are other inflationary costs that utilities face, not just the purchase of power. And if we have to give huge discounts to our commercial customers (to match NB Power) where does that money come from?"

Perth-Andover's power contract with WPS Canada expires on Dec. 31, 2011, and the contract price is tied to NB Power wholesale energy costs. Dionne said it was too soon to tell if the projected drop in NB Power's rates would translate into cheaper power for the village.

"The difficult part for the municipal utilities is what do we do with our larger industrial customers, do we give them the 12- to 30-per-cent discount that NB Power is giving the larger ones if our rates are frozen? We're not clear on the details and if we can purchase power at the cheaper rates for our larger industrial customers."

While Perth-Andover residents and business customers have traditionally enjoyed much cheaper power than NB Power customers, the gap between the municipal utility and NB Power has narrowed under the latest power purchase contract.

Dionne said the contract does give the village utility the option to cancel within 30 days if the village can find cheaper power elsewhere.

"I don't believe that the new rates are any cheaper than what we have now, so I fully expect we will stay with WPS for the duration of the contract. Who knows after that?" Dionne stated.

Perth-Andover's vulnerability to St. John River flooding is another concern if Hydro-Québec purchases NB Power. Dionne said he has asked Jack Keir, New Brunswick energy minister, that control over the Grand Falls, Tobique Narrows, Beechwood and Mactaquac dams remain under local management, particularly during the spring freshet.

"We met with the minister and the management of the spring runoff was on the list. We wanted to make sure that was controlled locally. NB Power has experience managing that. Last spring with the high water, I know we would have more serious flooding if it wasn't for the expertise of people at Mactaquac. We would hate to see that moved to Rimouski or somewhere else, that is for sure."

Dionne said the minister assured the municipal leaders that NB Power would function as before, but with different ownership.