Quebec expected to pay $5b for control of NB Power

Dexter, Williams concerned about what deal will mean for Atlantic region By KEVIN BISSETT The Canadian Press Thu. Oct 29 - 4:46 AM FREDERICTON — Quebec could buy a majority stake of the assets of New Brunswick’s power utility in a tentative deal worth almost $10 billion to be announced by premiers Jean Charest and Shawn Graham, The Canadian Press has learned. A Quebec government source confirmed that after months of talks and public speculation, a deal on the sale will finally be announced at a news conference today in Fredericton. However, a source in the New Brunswick government said that a memorandum of understanding, and not a final deal, will be announced. The source said the MOU, if agreed to, would see Hydro-Quebec shell out just under $5 billion in cash — an amount equal to NB Power’s debt — while a lower rate structure for electricity would see savings for New Brunswickers of approximately $5 billion. The memorandum of understanding would serve as the basis for public debate before formal negotiations on a final sale. The Quebec source said the debt is not part of the deal, but the New Brunswick source said the debt would be addressed through the cash transfer. According to the New Brunswick source, a deal would see Hydro-Quebec establish a New Brunswick-based company and assume ownership of NB Power offices, trucks, power lines and most power plants, including the Point Lepreau nuclear power plant. The source said the deal would close by the end of March and the province would not transfer the ownership of Lepreau until the ongoing $1.4-billion refurbishment is complete. That refit of the reactor was supposed to be completed last month, but is running 18 months behind schedule. Sources say that under the provisions of the memorandum of understanding, NB Power would continue to exist as a utility with ownership of five fossil-fuel powered plants — although only the ones at Dalhousie, Belledune and Coleson Cove are now in use. The power from those plants would be sold back to Quebec. The New Brunswick source said the province’s Energy and Utility Board would remain in place and regulate power rates. The New Brunswick government has come under pressure in recent days to reveal details of discussions over the future of NB Power amid fears that the province could relinquish control of the Crown corporation. Graham has said any deal would have to address a number of key demands, such as lowering power rates for New Brunswickers, eliminating the utility’s debt, and promoting his government’s vision of making New Brunswick a conduit for neighbouring provinces to export their energy to the northeastern United States. He refused to release details but said there would be ample opportunity for debate. Nova Scotia Premier Darrell Dexter said he was advised about the pending deal in a phone call Wednesday with Graham. Dexter refused to release details, but expressed concerns about an agreement that could set back the interests of the Atlantic region. "I have over the last number of months been looking to promote Maritime interests," Dexter said. "There’s a difference between promoting Maritime interests and selling Maritime interests." Newfoundland and Labrador Premier Danny Williams turned up the volume on his opposition to such a deal. "I have great fears and reservations about the stranglehold that Hydro-Quebec could put in place over the Atlantic region and I hope that you share this concern given your extensive statements on your desire to see your province as an energy hub," Williams wrote in a letter to Graham. Williams said he’s disappointed that his province was not made aware of the extent of New Brunswick’s negotiations with Quebec. Williams has accused Hydro-Quebec of trying to block his plans to develop the Lower Churchill hydroelectric project and sell the energy from that development to the U.S., and of taking an unfair share of profits from the 1969 contract to develop the Churchill Falls project in Labrador. "Our province feels compelled to look into the potential of anti-competitive behaviour on the part of Hydro-Quebec given the potential monopoly that could exist as the result of an agreement between them and NB Power," Williams wrote. Graham has issued assurances that Newfoundland and Labrador would have access to transmission lines in New Brunswick for routing any of its hydroelectric power to the U.S. http://thechronicleherald.ca/Front/1150012.html