On NB Power again

Someone told me yesterday that this whole deal was cooked up by a bunch of large industrial users looking to get cheap Quebec power.

Yeah.  So what?

It always amazes me when people broadly cast the average Joe Q Public as sweet and nice and altruistic and the corporation as manipulative bullies looking to exploit the average Joe Q Public.

Corporations (including the loved small business) want to make decent return on their invested capital.   For large industrial companies, high energy costs eat into their ability to make a decent return on invested capital.  Therefore, it makes sense to pursue public policy that fosters competitive power rates – balanced as alawys against the broader public needs.

We have talked about this many times.  Individuals want to make a ‘decent’ return on their retirement savings and that is why 96% or more of our RRSP and pension monies are invested outside New Brunswick (the provincial government pension monies are 99% invested outside New Brunswick).

Why should we expect anything different from our industrial companies?

I’m not saying that all corporations are great corporate citizens any more than I am saying that all residents are fine upstanding contributing members of society.  But this whole manufactured big business = bad is getting boring. 

In Northern New Brunswick, we have received a little taste of what happens when large industrial companies leave and it ain’t pretty.  I think that fact should be in the back of every politician, journalist and resident mind when considering the NB Power thing or any other public policy that impacts economic development.

We need to be an environment where industry can generate reasonable rates of return on invested capital.  Maybe then we, as residents, will feel more inclined to invest our money here as well.

35 thoughts on “On NB Power again

  1. My only concern with this deal is that we don’t seem to be getting a cut of the profits for an amazing amount of the power that will be sold to the US. Has there even been mention of collecting tariffs on the exports?

    I was under the impression that we were going to get a cut of the pie.

  2. David, with the reduction in corporate taxes, and now the reduction in corporate utility rates, have you seen any indication that large industrial corporations are willing to relocate to New Brunswick?

    I feel that our most significant obstacle is the lack of qualified workers, but I strongly believe that this issue could be a moot point; in today’s economy who is in a position to turn down a secure job with a well established company, purely on the basis that they don’t want to move to NB?

    Are we even a blip on the radar following these strategis moves? If we aren’t getting some consideration, I really fear for the future of NB.

  3. What kind of whine is that David? I think big business can take a couple of hits, because Joe Q Public doesn’t get the same reduction as the big corporate customers. And funny that you think the large industrial users have some elevated position on these things, other than what John Q Public think.

    The large industrial users didn’t leave Northern New Brunswick because of power rates. It was because they took all the fiber and did not upgrade, innovate or do any R&D. They did that all elsewhere and took the raw material, now that’s its gone, so are they.

    It also looks like Belledune and Dalhousie generating plants are both toast, in the not too distant future. This will have a big impact on the Port of Belledune because much of the revenue generated at the Port is because of NBPower hauling in all that coal.

    Bellaliant just left Northern New Brunswick…..

    Government response is hire 20 more bureaucrat, on the advice of the consultants, to run around hiring more consultants and to look for new business…

    It’s all very depressing.

  4. Sounds like most of NB Power will be sold to HQ, with a new entity (FossilGen) keeping the fossil fuel plants at Dal and Coleson Cove. Guess that means the latter will be shut down in the not too distant future. Will jobs lost there be replaced by jobs created by lower power rates?

    I find the comments from Keir and Graham re NB Power to be a bit disengenuous: not too long ago, they were praising NB Power – now it has a debt load that will ‘strangle’ NB if not eliminated. Lots of twisting and turning there. NB Power does have considerable debt to be sure, but lots of companies have debt; whether the debt is manageable and whether the investments made will bring benefits to NB is the issue. NB Power saddled itself with power plants that burn expensive fuel – perhaps it would have been cheaper just to import more hydro from PQ years ago. I wonder how many of the decisions made by NB Power re plant construction were made, not in terms of what power sources are most economical in the long and short term, but how many jobs would be created in the short term? In other words, is NB Power a victim of GNB’s desire to create jobs, any jobs, more than a victim of its own poor decisions?

    “We need to be an environment where industry can generate reasonable rates of return on invested capital.”

    Well, that’s true, but are industries in NB not now making a decent return? Where is the evidence that they are not? Has Irving opened their books and shown the opposite? Was it power rates that closed mills in northern NB (as opposed to e.g. a lack on investment in new technology when times were good)? If power rates are reduced, and we still do not see more investment in NB, what then?

  5. One Nuclear station would replace these

    Beechwood (113 MW)
    Grand Falls (66 MW)
    Mactaquac (672 MW)
    Milltown (4 MW)
    Nepisiguit Falls (11 MW)
    Sisson (9 MW)
    Tobique (20 MW)

  6. I agree that there is no need to fear NB big business becoming more viable.

    What we do need to fear is getting into bed with the Quebec government. This is not a fear of the unknown; there is clear evidence of what we can expect. We can expect a deal that may look good in the short term but we will pay dearly in the long term.

  7. But they WON”T be getting cheap new Quebec power, they will be getting NEW BRUNSWICK power for cheap. There is a clause according to CBC wherein Quebec can raise prices IF NB isn’t generating enough power to service the NB market.

    Let’s not split hairs here, we are talking about IRVING and FRASER, not about good nice corporations who love capitalism. Both of those corporations have bled NB and now get even cheaper wood which they ship out of NB to be processed. Irving owns mills up and down the Canada-Maine border, and ships different processing across the border at various stages to take advantage of various tax laws in each country.

    And of course they do all this to make money. But the reality is that ‘making money’ has a moral element to it. If I sold drugs to little kids I am ‘making money’, but we’d all agree that its a bad thing to do. Certainly not all of Irvings policies are bad, its simply too big a company to say that, but I’d suggest that ENOUGH of them are bad that a moral censure here is required. That’s because we are talking about selling a provincial crown corporation. IF that is being done at the behest of IRving, Fraser or whomever then it is right they be shouted down. Remember how big a stink this blog made at the NB conservation council when it was thought they may have killed a development deal?

    If companies are making public policy then that’s a problem-they were not elected. If they are ‘controlling’ elected leaders then it makes a mockery of what we’d like to call ‘democracy’.

    Ironically, this is almost a non starter. We’ve already got David Ganong talking about how the big issue is natural gas, and how gas prices in NB are twice what they are in ontario. So its true the only real beneficiaries are guys owning pulp mills who have been after cheap power for years.

    So the ‘bad’ certainly applies, especially in NB where forestry companies have essentially been propped up by subsidy for decades. IF this were a public company and NBers owned shares and dividends then it may perhaps be different, but all this is going straight into cayman island banks. And remember, YOU may have stocks and RRSP’s, but only a minority of canadians are in that position.

  8. I won’t be publishing any language or bilingualism related posts so please stop trying. There must be a variety of venues for you to post. Any comments pro, con or otherwise on the NB Power deal are welcome.

  9. No doubt the discussion will continue, but at first blush the deal looks like a good one for New Brunswick.
    – it lowers commercial power rates
    – it freezes, and then stabilizes, residential power rates (*very* important in NB, since so many homes are heated by electricity – I was shocked when I moved here to discover this)
    – it eliminates 40 percent of the provincial debt, a staggering amount that WILL pay dividends when interest rates creep back up again
    – it keeps a regulatory framework in place
    – it allows us to phase out coal-based plants, and bring wind or tidal power online (thus extending the sort of program begun with Tran-Alta)
    – it therefore helps us in one stroke meet our Kyoto obligations (not that anyone is still counting, but still…)

    Now I will say this: businesses (and especially large businesses) have gotten both substantially lower taxes and substantially reduced energy costs under the Graham government. According to what we’ve been reading here, we should be seeing some sort of renaissance now.

    If we do not see a substantial uptick in business activity, I think we have a right to ask, what will it take? At what point can we stop giving and giving to corporations, and get some of this activity?

  10. QH would not buy these assets (Lepreau, the Hydro and the transmission capacity) unless they can make money with them. If they can make money with these assets, then so can we. What this deal says is we are too dumb (or too lazy) to know how to make money so let’s give it to someone else.

  11. At first glance, this deal is great news for New Brunswick. I can’t wait to see the details though. I’ve been advocating for NB Power to sell off its generating arm for a long time in order to pay down its debt. Any Tom, Dick, or Harry should be allowed to generate electricity and sell it to the pool. Debt wise, New Brunswick will save big on the debt servicing costs. The question becomes, what will the government do with those savings? Tax cuts? Infrastructure? Health and Education operational money?

    The Mactaquac Dam is crumbling and will need to be fixed. Great! Its Hydro Quebec’s problem now. Cost over runs at Pt. Lepreau? No problem!

    But its the transmission, the big Power Lines, and distribution, the ones going to your house, that I’m concerned about. Transmission and distribution are the golden goose, you have to get the power from plant to market somehow. If Hydro Quebec gets a hold of the transmission infrastructure, let alone the rights to it all for the entire province, Shawn Graham might spark the biggest Newfoundland Separatist movement the country has ever seen. Newfoundland got screwed once by Churchill Falls, they won’t get screwed again.

    If Hydro Quebec gets the transmission infrastructure, Hydro Quebec will get all the money from the private power plants like the wind farm in Prossor Brook, the Irving co-gen in Saint John, and others that want to set up. The money won’t go into NB Power, a crown corp, thus into the government coffers to do the things that NB’ers need done, thus a huge lost source of revenue. Sure! Hydro Quebec might give you a break for five years on your power bills, but now your taxes will go up because NB lost a source of revenue from the transmission of electricity.

    Hmmm, taxes go down for less debt servicing costs, taxes go up for less revenue from transmission. I really want the numbers now so I can run them.

    Nice to see they will shut down some of the fossil fuel plants. Have they announced which ones? We all know Minto is closing as is NB Coal. Too bad all those fossil fuel plants couldn’t be converted to Natural Gas. Seems there is plenty of it these days, and cheap, from Sussex, Sable Island, and the LNG Terminal in Saint John.

  12. I like Cod Father’s points, we need to take this deal apart, on the service I don’t like it. I think that NB Power is a problem and rather than try to force change on it the government is offloading the problem, the responsibility and the blame for change on somebody else. At the very least get some other offers.

  13. As a Nova Scotian watching this unfold with interest, it would appear to me that this sets the stage for a stronger relationship between Nova Scotia and Newfoundland and increases the probability of supplying New England via an undersea transmission cable.

    We’re just as close to these lucrative Northeast markets as our neighbour and the infrastructure needs for such an approach could vastly improve propsects for both tidal and wind development here at home. Hopefully, someone will have the vision and foresight to pursue this opportunity with vigour, buy in to the Lower Churchill with Newfoundland on the front end of its development and create a strong Atlantic Energy strategy that’s not dependent upon NB being the “hub”.

    Perhaps, they’ll also have the vision to bring Newfoundland’s energy onstream via Cape Breton and into our grid along the way to Boston and points south. An undersea system starting in the upper reaches of the Bay of Fundy at Truro, out the Minas Basin and down the outer Bay to Eastport, could pick up Nova Scotia’s tidal and wind resources along the way and be much shorter to market than a route along Nova Scotia’s Atlantic coast.

    Instead of whining about New Brunswick being too clever by half, Danny and Darrell ought to get down to business and put such a system in place. Maine’s Governor won’t stay in bed with NB forever and he may finds that Charest snores once the lights go out… 🙂

  14. Good point Greg, and I believe there is no reason NFLD can’t pull out of the Confederation, changing any former deals.

  15. I have read your blog for a couple of years now, and it never fails to surprise me of the hypocrisy you display towards northern New Brunswick. Over 1000 jobs will have disappeared over the last 2 years in Dalhousie alone, only a small fraction of these are government jobs. Most of these gone because of mergers with Quebec companies (AbitibiBowater as the prime example).

    Perhaps if economic development “experts” such as yourself would provide useful guidance and actual, real ACTION on how WE, Joe Q Public, can invest in our own province, there would be a different outcome with investment in New Brunswick.

    But no, it’s much easier to take the “high road” and maintain a blog that only talks about the missing pieces.

  16. I don’t know why some people have to be so nasty and personal. This type of thing makes me want to shut the blog down. I’m just a guy in good faith putting out a few ideas and I get people like Jennifer Guitard calling me a hypocrite. And she is actually nice compared to some. Why do people have to be so personal and attack people in such a mean spirited way? Did I hammer Jennifer Guitard? Did I hammer the Miramichi? I have tried my best to put up ideas about Northern New Brunswick economic development. I wrote a report for the Biz Council on it. You don’t have to agree with me but please don’t be so nasty.

    As for useful guidance and real action, I have provided ideas – just none that you seem to agree with. Which is fine. Reasonable people can disagree. I think we need to attract a few new, large anchor industrial companies to the north. Many people disagree but I ask them (and you) to provide alternatives.

  17. I think that the regulatory framework is a key here. Who would have the right to access transmission grids, and at what cost? Who would have the right to construct additional transmission capacity? Who is bearing the costs of Point Lepreau is also not completely clear. We need some more fine print disclosure.

  18. Miramichi is poised to acquire 500 direct jobs in the next two years, and possibly 400 indirect through the reopening on Weyerhaeuser and establishment of UMOE Solar. Apparently there is talk of a $100M project that could arrive in the Miramichi in the near future, secured by, Jeff MacTavish, Miramichi’s Economic Development Officer. The boost for such a large local economy will be significant, and (one would hope) new small businesses will start popping up as a result. The NBBC has shown great interest (with the help of this blog’s author) in revitalizing Northern New Brunswick. With the exception of Brunet, I’ve heard very little talk north of Miramichi, other than the typical anti-government rants that you can overhear at any given time in your local Tim Horton’s.

    The personal attacks continually come from the misinformed “little-guys” who pollute the newspapers with anti-french tirades and fear-mongering rants about how the government doesn’t care about the votes that actually get them elected. You don’t revitalize the province by making the easy decisions which avoid controversy; that’s how we actually go into this mess in the first place.

    I for one would be incredibly dissappointed if David chose to shut down this blog. I have a great interest in economic development, specifically in Northern New Brunswick, and there is no other source of information that has provided as much insight into provincial ED issues.

  19. First, people ALREADY can sell power to the grid, its called net metering. Why it hasn’t been more aggressive I don’t know, but I’m suspecting that they knew about this deal quite some time ago. Here in ontario they’ve finally looked at upping the amount of power small generators can sell. Before, it was only worthwhile to ‘get off the grid’. It’s almost enough to make you believe in the worldwide conspiracies as to why a province so desperate for power would restrict the amount of renewable energy small companies want to provide.

    And of course that’s what makes me think Quebec would go out of its way to ensure that policies that may help conserve energy or localize it to communities or even individuals never get near the legislature.

    Meanwhile, like I’ve said, our home heating and washing is all natural gas. This month I’m paying a whopping $40 and our heat has been on almost all the time. We only power our low watt lights and computers with ‘hydro’, which is about $45 dollars a month. Meanwhile, my folks pay $200 per month to ‘run’ their household which has no more people in it than ours.

    As for the comments, David has had nasty comments before. He needs to understand that NBers OWN NB Power. It may have debt but it is YOUR debt. Its assets are YOUR assets. And now a government is suddenly announcing selling it, a government, by the way, that never even got the voting support of a majority of New Brunswickers last election. There is no election planned on it, and no referendum. So like I said at CBC, if no NBer comes forward to legally challenge it, it will say more about NBers than the sale. If Graham thinks its such a great deal-have a referendum. It’s actually the proponents that I worry more about, every critic is called ‘anti french’ or too stupid to know whats in their best interests. There hasn’t even been movement toward maritime union, so do you really think the response would be any different if Newfoundland or Nova Scotia tried to buy NB Power?

    But people don’t feel they can DO anything, and that makes people angry. If you listen to military podcasts then you know that when you attack an enemy they don’t reply where you are strong-they attack the weakest link. That’s why civilians are increasingly targeted. So people don’t waste their time on MLA’s, they dont’ listen anyway. But on blogs its far different, and people get VERY nasty. Being called hypocrite is actually pretty light, if you haven’t been called worse than that then this blog isn’t having nearly the impact I would have thought. And people like Jennifer haven’t time to read through all the blogs, but I’ve mentioned numerous times that often the economic development policies seem fairly ‘Moncton centric’, which isn’t surprising-this is a blog, not the CBC.

    But I have a feeling this is going to get FAR nastier. It’s true a minority of people turn everything into a tirade against the french, and the sad thing is they don’t need to. For all the comments above about ‘why this looks good’, I will just add that political policies can change on a whim, and have more to do with ‘power’ than anything else. Just because an MOU SAYS some things, that means nothing about actual policies. And what about in five years….in ten years….in fifty years…

  20. I’ve had a chance to review the executive summary of the MOU. This looking better. Danny Williams hasn’t quite had a bird yet, there may still be hope for Newfoundland yet.

    Now, how could this deal have been done differently? NB Power is divided into four subsidiaries. First, I would have made a call for offers on the distribution arm. Someone like Fortis/Maritime Electric/Newfoundland Power might have wanted that asset. Would Hydro Quebec have gotten into a bidding war on the distribution arm?

    Next, there would have been a call for bids on the individual generating plants and nuclear arm of the company. Maybe Saint John Energy wanted to buy Courtney Bay? Maybe TransAlta, Enmax, or ATCO want Colson Cove and the Chatham and Ste. Rose combustion turbines to convert to Natural Gas. Belledune could have been picked up by Capital Power/Epcor or Sask Power and converted to a zero emission clean coal technology generator. The dams of course would be Hydro Quebec’s best interest to get, but maybe Nalcor would give Hydro a good run for its money. Bruce Power or Ariva would likely want to acquire Pt. Lepreau.

    The point is, there were plenty of other purchasers out there, and I don’t remember hearing about an open sale or request for offers. Was NB power really only worth the value of its debt? Maybe the open market would have valued it higher?!

  21. Graham may have outfoxed Quebec?
    A new long-term forecast of electricity use in Ontario shows the government should have little problem shutting down all coal plants by 2014.

    It also confirms there’s no rush to build a new nuclear power plant in the province.

    The forecast, released yesterday by the grid watchdog North American Electric Reliability Corp. (NERC), says demand on the electricity system in Ontario will fall an average of .7 per cent a year between 2009 and 2018. That’s a 9.5 per cent drop in annual consumption, or the equivalent shutting down two Candu 6 nuclear reactors.

    “Structural change in Ontario’s energy-intensive export industry will lead to a rationalization of inefficient and uncompetitive facilities,” according to NERC. “Conservation savings and the growth in embedded generation are expected to more than offset any growth from increased population and eventually economic recovery.”

    Embedded generation includes rooftop solar panels, micro-generators and other technologies that generate power where it’s used, rather than transmitting it through the grid.

  22. And maybe it need not be sold at all? David Hay met with the St. John Board of Trade two weeks ago and said what a vibrant company it was. As I’ve posted elsewhere, if NB Power debt were added into provincial debt (which it is anyway) then NB’s debt would be no higher than Nova Scotia’s. And NB’s debt to GDP ration is almost HALF of Quebec’s, and twenty percent lower than Newfoundland’s.

    So the ‘debt’ argument is false. What IS bad, again, is that Graham and Lord were cutting taxes, particularly on the wealthy, as a way to lead to the point where “now we gotta do something cuz we got no money”. That’s an old Reagan trick, but its not quite that bad YET. However, massive highway spending is a real problem, I was in NB recently and highways that were perfectly fine were being torn up to be repaved, some were roads that virtually nobody travels on.

    The last ten years have NEVER had ‘balanced budgets’ but because thats the way the wind blew, debt kept being added to. THAT is the economic problem. And for those who think that people would oppose ANY NB Power policies, thats absurd. At facebook there are more than one anti NB Power threads. In fact, people have been so miffed about NB Power bonuses that it was becoming a real political issue. It wouldn’t surprise me if David Hay and other executives were perfectly fine with this deal as it would insulate them from public policies (although that may be too cynical:)

  23. Most of the opinion I’ve seen on various sites has been negative but also much of it uninformed. I’m more than willing to admit I don’t know enough about all of this to make a fair decision and the more I do learn, the more muddled my thinking gets. So I’m undecided.

    One aspect I keep going back to relates to debt. There is an obvious benefit to getting rid of debt, and also to frozen rates (at least for a period). But even if you eliminate debt, if you have no revenue coming in it just builds again. Where is the revenue stream in this? It seems the hope is that NB will look very attractive and will attract industries, and that may be the case. But risk management dictates that you also look at the worst case and imagine, “What if it doesn’t?”

    I would feel much more comfortable with it if New Brunswick, like a shareholder, was getting a piece of Hydro-Quebec and the assurance that a portion of its revenues were coming here. As I understand it, we don’t even get to bring in revenue through taxation.

    It may simply be that I’m unaware of other aspects. But it’s something I’d like to see addressed. Where’s the future money coming from?

  24. You’ll be getting no new business in New Brunswick! All business’s need workers. The workers could not get jobs in NB so have left.
    Bill will be saddened to hear that I think he gives a very good and expected occurrence.

  25. ” There is an obvious benefit to getting rid of debt, and also to frozen rates (at least for a period).”

    I think the problem is not the debt per se, but the likelihood that the debt will increase greatly in the near term, given the fossil fuel plants and the cost overruns at Lepreau. GNB sees no way out and they see the sale as a quick way to improve GNBs books. I suspect that is NB was in better shape financially then this deal would never have been made; in a better economic climate perhaps they could bite the bullet, close the fossil plants and just import more power from PQ (supplmented by renewable local power).

  26. “However, massive highway spending is a real problem, I was in NB recently and highways that were perfectly fine were being torn up to be repaved, some were roads that virtually nobody travels on. ”

    Which roads would those be???

  27. A good portion of the debt problem was brought on by the political interference to build Belledune, keep Grand Lake and Dalhousie running and other such politically motivated actions. Yes, a portion of it was bad management as well. However, if the debt is all of a sudden a major issue, without the help of Quebec Hydro telling us to do it, we can close the fossil facilities, at least all but Coleson Cove.

    The deal is loaded with loop holes after year 5. There are several parameters in addition to the CPI (which is meaningless as hydro costs are not connected to CPI)where QH can incerase our rates: “reasonable transmission charges” and “extra generation costs” are the two major ones. At that point we have no options if QH treats us unfairly.

    Another point that very few people have talked about is the lost business by NB suppliers. There are numerous engineering, construction and service firms that will lose a major customer as QH takes over NB Power. Yes, they will say we can bid on the work, but talk to any business person who has tried to win work form Quebec. It is virtually impossible as they have mastered the protectionist measures.

  28. The government has a lot of info at their website. The above is exactly the concern that many have-what if business and industry DON”T come to NB? There is a dangerous thinking of ‘if we build it they will come’. To go back to David’s blog of awhile ago, we discussed how companies rated ‘taxes’ as only around the seventh criteria they look for when relocating. Power rates were also inconsequential. As you saw with the pulp mill, when Irving feels out of pocket on one expense, they simply call up the government to lower other ones. Apart from auto manufacturing I can’t think of ONE manufacturing or high power using industry that is looking to expand or relocate. If Graham had a list of corporations and said “look here, these companies will come if we lower our rates” then perhaps it would make a LITTLE sense.

    The other concern mentioned above is also true-getting rid of 40% doesn’t give you carte blanche for new spending. The government has been running an ACTUAL deficit for years now, plus adding to debt. That’s been universal amongst provinces, so lowering the debt now just gives the province more leeway to put off the ‘day of famine’. They can continue promising marginal tax cuts, all while the debt builds up again.

    More on debt is that Nova Scotia Power actually still has $2 billion in debt held by the Nova Scotia Power Finance Corporation-and that’s from 1992! That’s debt that Nova Scotians have to pay-even though they don’t even own the resource anymore!

    And as has been noted elsewhere, virtually EVERY utility in the country has debt. Manitoba has 14 billion, Saskatchewan is better with only 3 billion, while Quebec hydro has 36 billion and ontario at least 20 billion. Meanwhile, recent reports in Quebec state that their rates are going up, even as much as 20% because Quebec is also bleeding red ink.

    While some don’t have a lot of information, their instincts seem to be right here. The more reading I do about it, the WORSE it gets. Notice how after five years rates can increase ‘with new generation’ needs. In other words (not positive but this is how it sounds), that IF it requires more energy to service NB than NB can provide-NBers will actually be paying for that. Since Quebec is phasing out three of NB’s largest generators, then NB has to get cracking ANYWAY to build up new resources.

    I’d be ‘more comfortable’ if Shawn Graham had shown good instincts in making public policy in NB. I sometimes wonder if he’s that smart that he’s doing this just so NBers will shout it down and be relieved when they get their 3% increase in power rates while he just shrugs and says “well, it was your decision”.

  29. Mikel you took the words out of my mouth. The flip flop Premier may have just pulled off an elaborate charade to turn the public, who use NB Power as a political punching bag, into passionate defenders of their crown corporation. However, that is giving this government far too much credit.

    The call for debate is quite unfair as they have given us only one real option to consider. I respect that these deals are tough to find, but whynot ask NFLD for their proposal if they have one and as a minimum, NBP should put their revised plan on the table. This plan would include closure of the fossil plants and renting transmission capacity ro the highest bidder. It is only the fossil fuel costs that have such volitility. They ought to be able to provide excellent estimates of the hydro and nuclear costs for the next 20 years and project the revenues and debt payments. With those facts, we could have a meaningful debate.

  30. The big point here is that NB ALREADY buys power from Quebec. On the ‘free market’ they can look and get the best price. If Quebec doesn’t have it, maybe NFLD or the US. There is no doubt that ‘thermal’ capabilities are the sore spot here, they are dirty and require purchases of volatile fossil fuels. They also account for almost half of the power generation. That’s why even if its sold its a problem. Quebec wants to keep them ‘on standby’, but doesn’t say whether that figures into the ‘more generation’ requirements. That means NB has to look seriously at conservation measures.

    The real crux though is a basic question that nobody has asked. How does a utility company thats not supposed to make money pay off its debt? The fact is thats NB’s debt, you either get cheap rates or cheap taxes-not both. The only other way it works is by luck-three years ago the US was hit by hurricanes that necessitated them buying power at a premium rate (a gouging rate in fact), while heavy rains meant a great year for hydro. That’s not luck that’s likely to repeat. The real problem here is treating a public utility as if it were just another business.

  31. “How does a utility company thats not supposed to make money pay off its debt? ”

    Not supposed to make money? NB Power has made money and has used that to pay down debt. The problem is the size of the debt relative to the value of the assets and revenue streams, plus the future value of things such as power exports. That is a larger problem for NB Power and GNB than it is for a number of other provinces. Quebec and Manitoba power utilities, for example, can accumulate more debt because they have a lot of export power potential. What are the alternative solutions for NB Power?

  32. The deal is bad because it was not negotiated by anyone on the NB side with any knowledge of NB Power. Hyro Quebec can wheel power through to the states now. They do and NB Power makes money off of them. It shows in the anual report since open access tarriffs were implemented a few years ago. Quebec wants to wheel a lot more, and doesn’t want to pay the toll keeper, NB Power. If you can get the company for just the price of the lines, and leave the liabilities behind that kept everyone from freezing in the dark for the past 80 years, why not. But in 5 years time, when the agreement runs out, HQ can basically charge whatever they want. If there is no snow or rainfall in northern quebec, like a short few years ago, and all NB hydro and nuclear goes to quebec, NBer’s are left using expensive oil for generation and will pay those rates.

  33. It is difficult to accept that I will be supporting the economy of a province that doesn’t support Canada.

    I’ve been thinking about moving to find better paying work, maybe the time has come to make a decision. I love the maritime lifestyle but putting my money into the province of Quebec REALLY grates on me, lower rates or not.

    Let me prophesy the future:

    In five years this will bite us all in the a**.

    Wait a minute, that’s not foresight, it’s hindsight, it’s exactly what took place in Nfld/Lab at the Churchill Falls Project… Quebec made billions, Nfld/Lab got burned. And quess what, we are about to walk into the fire.

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