Newfoundland and Labrador Premier Danny Williams has lashed out at Hydro-Québec’s power deal with New Brunswick, saying the revamped agreement would still give Quebec a “stranglehold” over electricity exports from eastern Canada.

In a telephone interview from St. John’s, Mr. Williams said the deal announced this week is an improvement, but could still hurt Atlantic provinces that want to export clean power to New England.

“I have serious concerns based on the past behaviour of Hydro-Québec,” he said.

Under the $4.8-billion proposal announced last fall, New Brunswick planned to sell Hydro-Québec its electricity system, including a transmission system with nearly 1,000-megawatts of export capacity.

After an outcry from voters and his own caucus, New Brunswick Premier Shawn Graham unveiled a scaled-back plan this week. Under the $3.2-billion deal, Hydro-Québec would take over most of the province’s power stations and get a long-term contract to supply electricity, but New Brunswick Power would keep the transmission system.

Hydro-Québec would also get guaranteed capacity on the transmission system, including the export lines. Both Premier Jean Charest and Hydro-Quebec chief executive Thierry Vandal cited this as key to the deal, with Mr. Charest concluding the new agreement is “a better deal for Quebec” than the initial one.

Mr. Vandal said Hydro-Québec would receive only the transmission rights that New Brunswick Power has contracted to the generating stations that would be sold in the deal.

Mr. Williams had slammed the initial deal as a “capitulation” to Quebec. Earlier this week, both he and Nova Scotia Premier Darrell Dexter said they were pleased their concerns over the independence of the transmission system had been addressed.

But Mr. Williams said he was disturbed by a closer reading of the agreement, and by Mr. Charest’s stated desire that Hydro-Québec dominate eastern North American markets.

“That kind of talk raises my concern that Quebec-Hydro could have a stranglehold on eastern Canadian exports,” he said.

In an interview Thursday, New Brunswick Energy Minister Jack Keir said giving Hydro-Québec the transmission rights for the generating stations it would acquire is a responsible thing to do. Buying a power plant without access to the grid would be “like buying a toaster with no plug,” he said.

Mr. Keir shrugged off Mr. Williams’ criticisms, saying he is engaged in a battle with Quebec over electricity exports.

“I get what Danny Williams is doing, and I guess some New Brunswickers might buy into his bashing-Quebec argument,” Mr. Keir said. “But he’s using New Brunswick as his smoke while he looks to carry on negotiations with Quebec.”

Newfoundland’s power company, Nalcor Inc., is arguing before the Quebec energy regulator that Hydro-Québec’s transmission arm is not dealing fairly with its request for export capacity for the proposed Lower Churchill hydroelectric project in Labrador. Nalcor has also filed notice that it would like to send electricity through Quebec and New Brunswick to New England.

While Mr. Keir chuckles over Mr. Williams’ warnings about Hydro-Québec’s ambitions, they will no doubt be taken seriously south of the border, said Gordon Weil, a Maine-based power industry analyst who reviewed the Quebec-New Brunswick deal for the Atlantic Institute for Market Studies.

Mr. Weil said Hydro-Québec’s acquisition of the New Brunswick transmission capacity would clearly give it a dominant position in eastern Canadian power exports.

Once the deal is completed, the U.S. Federal Energy Regulatory Commission will review it to assess whether it gives Hydro-Québec too much power. And provinces that want to export power to the U.S. can make their views known in Washington.

U.S. regulators require Canadian transmission companies to provide access to exporting power producers on a non-discriminatory basis.

Mr. Weil echoed Mr. Vandal’s comments this week that Hydro has achieved its aims even though New Brunswick would still own the wires.

“You don’t need to own the transmission system in order to get all the benefits that Hydro-Québec is getting from this deal,” the analyst said.

Newfoundland, Nova Scotia and even Prince Edward Island are all eager to supply clean power to the U.S. northeast, where many states have renewable power mandates. But they need a transmission corridor through New Brunwick.

“The new agreement doesn’t do anything more for those locked-in provinces than the previous one did,” he said.