The collapse of the multibillion-dollar sale of NB Power’s assets to Hydro-Quebec has given Nova Scotia one less thing to worry about — for now — says the head of the Atlantic Institute for Market Studies.
Had the deal proceeded, power rates for large industrial customers in New Brunswick were to be cut by 23 per cent.
“Right now, if you look at Nova Scotia and New Brunswick and you’re a company looking to invest, let’s see, what does New Brunswick have?” Charles Cirtwill said Wednesday.
“They’ve got lower corporate taxes, your employees can take more money home, you can pay higher wages, but the good news is, their electricity rates are still higher.
“So at least we didn’t give them a fourth advantage.”
But that relief might be short-lived, said Cirtwill, the president and CEO of the Halifax institute.
“Already we’re hearing hints that there’s something else in the mix,” he said. “So are they going to get a green energy supply from Newfoundland? Are they going to make a long-term deal with Quebec just for power and forget about the sale of the various assets? Because in either one of those scenarios, New Brunswick ends up again with a low-cost green energy resource that allows them to control or reduce their costs going forward.”
But Jim McNiven, a former dean of management at Dalhousie University in Halifax, doesn’t see the deal’s failure as a plus for Nova Scotia.
“I don’t think the situation is one where their loss is our gain,” McNiven said. “The fact that they might have had cheaper power had this deal gone through, in terms of businesses, might have made a difference to things like forest products companies who use a lot of power. But if the trees are in New Brunswick, the plant isn’t going to move to Nova Scotia.”
The sale’s collapse doesn’t do “anything to us or for us in either direction,” McNiven said. “We don’t have any power to export. Our power is expensive because we have to generate it using coal or oil, possibly natural gas down the road.”
Critics of the New Brunswick-Quebec deal that broke down Wednesday feared it might block Nova Scotia’s access to the North American power grid through New Brunswick.
But McNiven is skeptical that producers of renewable energy in Nova Scotia will be able to export their electricity anyway.
“The most expensive way to move energy in our society is on a wire,” McNiven said. “The cheapest way is in a tanker.”
Then there’s tidal power.
The problem with that, McNiven said, is it’s too variable and can’t be depended upon all the time.
“When the tide’s going in and the tide’s going out, you’ve got some power being generated, but there’s big chunks of time in the middle when nothing happens.”
Wind power presents a similar problem, he said.
Emera, the parent company of Nova Scotia Power, says it’s still “business as usual” between the utility and its New Brunswick counterpart.
“What this means is NB Power continues to run the system,” said Emera spokeswoman Sasha Irving. “We have a good working relationship with all the players.”
When the sale of NB Power to Hydro-Quebec was first announced last fall, Emera and Nova Scotia Power wouldn’t comment on it, except to say it was only a memorandum of understanding and neither side had signed off on it.
Irving reiterated that stance Wednesday.
“For us and the Province of New Brunswick, it is business as usual,” she said.
New Brunswick was facing an increase in power costs, particularly for industrial users, when it entered into the tentative deal with Hydro-Quebec, said Elizabeth Beale, president of the Atlantic Provinces Economic Council in Halifax.
“This was coming right at the time when the recession and long-term shifts in markets was really cutting into companies’ bottom lines,” she said. “It’s important anywhere, but it was especially important for the timing for New Brunswick because they’ve got a lot riding on forest companies in the province, for example. They’re a much more important part of their economy than here in Nova Scotia.”
The government of New Brunswick “had been interfering in the rate process to not allow the regulator to set adequate rates to meet the cost of service,” she said.
“We haven’t seen the same thing in Nova Scotia. We’ve seen the regulator being able to act without that kind of interference.”
Nova Scotia and New Brunswick “both have challenges in terms of our reliance on thermal generation, and in particular, coal-fired plants,” Beale said. “The attractiveness for New Brunswick entering into the deal with Hydro-Quebec was to basically get out of that in the long run and not bear the enormous costs that are anticipated, particularly if we end up with pricing carbon under a climate change agenda”