Opportunity: Utility’s announcement it will partner with the private sector on future capital investments indicates a fundamentally different strategy, think-tank says

There’s no question that NB Power’s plan to look for private-sector investment would take the utility in a new direction, says the head of a regional think-tank.

Charles Cirtwill, president and CEO of the Atlantic Institute for Market Studies, said NB Power’s announcement on Tuesday that it will explore opportunities to partner with the private sector on future capital investments indicates a fundamentally different strategy.

Newly minted president and CEO, Gaëtan Thomas, along with Ed Barrett, chairman of the board of directors, revealed the utility’s long-term plan at NB Power’s headquarters in Fredericton. The board and executive’s recommendations, which were submitted to the government, also include restructuring NB Power’s four existing companies back under one common CEO and board.

Cirtwill said NB Power hasn’t taken sufficient advantage of the province’s location in the past, but he thinks the plan to look for private partners makes sense given the current “global obsession” with green energy.

“Transmission – the capacity to move electricity from place to place – is going to become even more important. And New Brunswick is perfectly positioned to be the leader in that field,” he said.

Thomas emphasized the strategic the importance of NB Power’s location in the region in his remarks Tuesday.

“The closest opportunities right now are with Nova Scotia and P.E.I. They depend on our interconnections to get access to the other markets and the New England market,” he said.

For his part, Barrett said he hopes a stronger, unified utility will be more attractive to private investment.

“We are not entirely sure how (private sector opportunities) are going to emerge, but we are sure we want to be open. We find ourselves in a world where key strategic partnerships will be critical to us going forward,” he said.

Tim Curry, president of the Atlantica Centre for Energy, said the announcement is not a surprise.

“If there’s an opportunity to leverage skills, proprietary knowledge, additional capital investment – whatever a potential partner would bring to the table – it makes sense that the board and management would be open to exploring it,” he said.

In terms of potential partners, both Curry and Cirtwill predict that players already active in the region, such as Emera Inc. (TSX:EMA) and Fort Reliance Co. Ltd., might be interested.

Curry pointed out that Fort Reliance, the parent company of Irving Oil Ltd., has already created a company, Portage Energy Ltd., to look at potential investments in the sector.

Nova Scotia-based Emera already owns the Bayside Power plant in Saint John and the Brunswick Pipeline and has invested in the Maritimes & Northeast Pipeline.

“We’re very pleased to be part of the NB energy hub,” said Sasha Irving, director of corporate communications at Emera, adding “We’re always interested in additional opportunities in our neighbouring province.”

Curry also suggested that companies involved in renewable energy, such as TransAlta Corp. (TSX:TA, NYSE:TAC) or GDF Suez S.A. (Euronext:GSZ), could potentially be interested in partnership opportunities with NB Power.

Bill Marshall, president of WKM Energy Consultants Inc. and past president and CEO of New Brunswick System Operator, agreed that Emera and Fort Reliance would be the most likely partners for NB Power but said other private interests outside the region, such as TransCanada Corp. (TSX:TRP; NYSE:TRP), Canada Power Holdings Ltd. or Brookfield Renewable Power Inc., could also be possible candidates.

On the subject of potential projects, Marshall said there might be an opportunity for the development of renewable energy projects that could meet future carbon-reduction targets.

– with files from Brett Bundale