10.1 This MOU is a statement of intention to proceed as outlined above, is not an offer and does not create any legally binding obligations of any party.

10.2 The Proposed Transactions will be subject to the negotiation and execution of the Definitive Agreements by the Parties.

Provisions about the “status” of the MOU come at the very end of the document and they mean, according to the government, that talks with Quebec can end at any time before a deal is signed and neither party would face a financial penalty.

New Brunswick could even entertain signing a deal with some other party if it wanted and tell Hydro-Québec to go fly a kite, according to this thinking.

So, unless some other company or province makes a better offer to New Brunswick, or the Conservatives find some mechanism to stall or derail the deal, it appears an agreement will be signed with Quebec by March 31. A new era, for better or for worse, will begin for the New Brunswick economy.

That new era carries multibillion-dollar risks for both New Brunswick and Quebec but it is also intended to create multibillion-dollar benefits for both parties over the long term if the deal unfolds as intended.

Quebec expects to turn a $100-million profit in the first year of the agreement while New Brunswick forecasts billions of dollars of savings through lower rates to homes and businesses in coming years.

Should some difficulties arise in the next few weeks or months, negotiations between New Brunswick and Quebec could continue beyond March 31. But such a delay could affect the $4.75 billion price tag Quebec has agreed to pay for NB Power.

That figure is the amount of money NB Power’s debt is expected to be March 31 but not necessarily in a few weeks or months afterwards. Debt is a floating figure, dependent upon interest rates, consumption levels and other factors.

Even if the deal is concluded March 31, 2010, as envisaged, New Brunswick will not be getting $4.75 billion immediately. An amount, possibly $1 billion although no precise figure has yet been announced, will be subtracted from the $4.75 billion and paid only when the Point Lepreau nuclear station goes back in operation after a lengthy refurbishing.

The target date for that is March 31, 2011, but there is no guarantee the work being done by the federal government’s Atomic Energy of Canada Ltd. will be completed by then.

There are even fears Point Lepreau will never return to service, though Hydro-Québec CEO Thierry Vandal told the Telegraph-Journal editorial board last month that he had “no doubt” that it would.

Whatever the case, New Brunswick is paying for replacement power while Point Lepreau is out of service. If it meets the new target date, that bill will amount to $800 million. But the Graham government has said Hydro-Québec takes over the bill for replacement power under the deal – if the deal is signed by March 31, that would limit New Brunswick’s payout to $525 million; the Quebec utility would assume the rest.

A study by Gordon Weil of Standard Energy Co. in Maine for the Atlantic Institute for Market Studies, a Halifax-based think-tank, says the permanent mothballing of Lepreau, before Hydro-Quebec is scheduled to take it over, would be disastrous for New Brunswick because the province would have to bear the costs of decommissioning the plant and other costs related to Lepreau being out of service for the past few years. Billions of dollars are at stake.

“A significant part of the benefit that New Brunswick expects to obtain from the arrangement resulting from the MOU could be lost if Lepreau did not come back into service,” says Weil.

The New Brunswick government admits there are risks for it associated with Lepreau.

But the government also notes that Hydro-Québec is assuming many other risks associated with the long-term viability of New Brunswick’s entire generating and transmission network.

Once the deal is done, Hydro-Québec must assume the costs of keeping dams, plants and transmission lines in good working order.

Those costs, which otherwise would be borne by New Brunswick in coming years, could stretch into the billions of dollars. Example: NB Power says it would cost $10 billion in the next 25 years just to replace existing oil- and coal-fired plants in the province due to be phased out. But, of course, Hydro-Québec can also try to finance unexpected costs in New Brunswick by increasing rates, just as NB Power would.

There is, however, another important element in this: Fears New Brunswick’s tax base simply can not sustain NB Power’s current $4.75 billion debt plus whatever new electricity-related debt is on the horizon.

The deal with Hydro-Québec offers an alternative to pay off the existing debt and prevent future debt. Hydro-Québec, being located in a province with 10 times the population, has an easier time to manage large debt.

“The status quo guaranteed three things,” Premier Shawn Graham has said in full page newspaper ads, “higher rates, increased debt and financial risk, and an overdependence on carbon fuels.”

The premier has conceded the deal with Hydro-Quebec is “not perfect.”

But he is committed to it despite public opinion polls showing a majority of New Brunswickers are opposed to it and despite heavy opposition in the legislature from the Conservatives.

Paul Robichaud, the Conservative energy critic, notes that one day Graham calls it “the deal of the century” and the next day proclaims “it’s not perfect any more.”

So, Robichaud says, “Don’t blame New Brunswickers for being confused.”

More precise details of the deal are to emerge in March.

Those details will fill at least an estimated 1,000 pages, not just the 14 pages in the English version of the MOU. The question is whether those 1,000 pages will provide more clarity or even greater confusion for New Brunswick consumers.