FREDERICTON – Despite substantial criticism that the NB Power sale will reduce New Brunswick’s ability to decide its own energy policy, the drive to become an energy hub is now stronger than ever, Energy Minster Jack Keir says.
“Nothing in this deal would change any of the opportunities that we have as an energy hub,” the minister says of the vision of New Brunswick becoming a gateway of homegrown electricity flowing into the northeastern United States.
“The biggest advantage we have is our geographical location and this agreement certainly plays into that,” he said. “We’re getting a great investment from Hydro-Québec to continue on with the energy hub.”
The proposed $4.75-billion deal, which the government hopes to finalize by the end of March 2010, will see the sale of almost all of NB Power’s transmission, distribution and production assets to the publicly owned Quebec utility company. New Brunswick would receive frozen residential rates for five years and significant decreases for large industrial customers.
Critics of the deal, such as former energy minster Jeannot Volpé and Université de Moncton professor Yves Gagnon, have suggested it would prevent the future expansion of sustainable energy projects in New Brunswick.
But Keir says the Liberals remain committed to the development of renewable energy in the province.
“It was our government that put the first wind farm on the grid and it was our government that put 400 megawatts (of electricity from renewable sources) in our energy policy,” he says. “That won’t change. We’re not giving up control of our energy policy. We will continue developing energy policy and we will be directing the utility — whoever that is.”
Charles Cirtwill, president and CEO of the Halifax think-tank Atlantic Institute for Market Studies, says the outcomes of the deal remain to be seen, but it has the potential to help build the province’s energy sector.
“Certainly there are a lot of advantages from a partnership with Hydro-Québec if you are most interested in seeing New Brunswick achieve its full potential as an energy hub,” he says, adding that Quebec’s size, production capacity and ability to attract outside investment makes it an advantageous partner.
“I think Hydro-Québec has resources to take advantage of your geographic location that, simply, NB Power didn’t have and never was going to have.”
Cirtwill also says that fears expressed by other Atlantic provinces that Hydro-Québec will block their access to the U.S. are unlikely to be realized. Such an anti-competitive act could result in the American electricity regulatory body banning Quebec from exporting energy into their lucrative markets, which is the “golden goose” everyone is after.
“These are Americans we’re talking about and, for them, it’s very simple: American first,” Cirtwill says.
“If they get the feeling that Quebecers or New Brunswickers are trying to put one over on them, they’re not going to be very shy in very quickly straightening that away.”
Keir says NB Power may soon belong to Hydro-Québec, but those assets would remain in this province and a combination of low taxes and energy costs would help to make New Brunswick attractive to new companies.
While he acknowledges the possibility that additional energy requirements above the 14 terawatt allotment outlined in the deal would mean rates would go up, Keir says that can be used as an incentive to make New Brunswick grow into a more green-friendly province.
“That’s why it’s very important that we continue to give the proper resources to Efficiency New Brunswick so that folks can continue to use less electricity, so that we can grow our population, grow the electricity base, without having to build new generation,” he says.
Keir said the elimination of NB Power’s debt, as well as the economic growth the government anticipates, could potentially pave the way for the purchase of a second reactor for the Point Lepreau nuclear facility.
“The quick answer is ‘Yes,'” he says, as long as the project can compete against Hydro-Québec on the open market. “There’s still always room for investment in New Brunswick to generate electricity to go to New England. But what I would say is that the business case is going to have to work.”