Power: Think-tank says proposal a clear attempt to circumvent Hydro-Québec’s proposed purchase of NB Power
HALIFAX – An Irving-proposed regional electricity grid is a well-timed alternative to Hydro-Qubec’s attempt to monopolize much of the eastern Canadian power grid, says the head of the Atlantic Institute for Market Studies.
On Monday, Fort Reliance Co. Ltd., the parent company of Irving Oil Ltd., announced a new company aimed at forming a regional electricity transmission system in Atlantic Canada.
The new venture, Portage Energy Ltd., intends to spend up to $2 billion – with the help of public and private sector partners – on better linking the transmission grids between the eastern provinces and New England states.
While most of the details are unclear, Fort Reliance officials say the project could include all of the region’s major energy players – as well as outside companies looking to enter the market.
Charles Cirtwill, head of the Atlantic Institute for Market Studies, says the proposal is a clear attempt to circumvent Hydro-Qubec’s proposed purchase of NB Power, New Brunswick’s public utility.
“It’s a counter offer to Hydro-Qubec’s proposal,” Cirtwill said Tuesday. “Quebec is trying to buy up all the assets they can to build a monopoly-controlled transmission system.
“But these guys are proposing … a single, regional operator that owns all the transmission assets and sells grid access at a fixed price to anyone who wants to generate electricity.”
Cirtwill, president of the Halifax-based think-tank, said the timing of Fort Reliance’s announcement is not random. Instead, it comes as the Shawn Graham government is renegotiating the tentative sale of NB Power amid public and regional protest.
“If anybody thinks this is a coincidence they need to give their head a shake,” Cirtwill said. “Make no mistake, they are making their announcement now so that Graham understands there are other options.”
While “vague,” Cirtwill said Fort Reliance’s plan is very similar to a 2003 study that proposed a free and open energy market across eastern Canada and the north-eastern U.S. (see www.AIMS.ca/library/weilfinal.pdf )
The plan could please the governments of Nova Scotia and Newfoundland and Labrador, he noted. Those two provinces have expressed anger toward the NB Power sale, saying it could box them out of the eastern power grid.
Those concerns, combined with negative public sentiment toward the Hydro-Qubec deal, could help Fort Reliance’s plan gain traction, Cirtwill said.
“Fort Reliance is the Irvings. And good, bad or indifferent against the Irvings, the simple fact is these guys do not play games. They have money and they invest in things that tend to be profitable,” he said.
“In terms of the potential to go forward, the players are the right ones and the idea is hitting at the right time.”
Daniel Goodwin, a spokesman with Fort Reliance, said the proposal would involve adding electrical transmission between the eastern provinces and New England. For example, Newfoundland could finally be connected to the Maritime power grid.
According to Goodwin, the players involved could span the entire region: NB Power, Hydro-Qubec, P.E.I.’s Maritime Electric, Newfoundland and Labrador’s Nalcor Energy, and Halifax-based Emera Inc., which owns Nova Scotia Power and the Bangor Hydro-Electric Company.
“This is an initiative that goes far beyond the walls or thinking of any one organization or government,” he said Tuesday.
“If we work together, rather than compete with each other, we’ll be able to better serve our own needs and potentially the export needs.”
Goodwin also denied the proposal was hatched in direct response to the pending sale of NB Power.
“It’s about ensuring all provinces and communities and industry players in the region are having an open dialogue about how to work together, rather than having projects done in isolation,” he said.
“This initiative is very much about breaking down any barriers that might exist.”
But Larry Hughes, head of the Energy Research Group at Dalhousie University, has concerns.
For example, he says there is too much focus on exporting energy to the U.S., and not enough attention paid to cementing the region’s long-term energy security.
“Once you deliberately develop a market for your energy, the market is going to continue wanting that energy. In Nova Scotia we gave away our oil, we gave away our natural gas, and we’re giving away our wood chips. And now we want to start exporting our renewable electricity,” Hughes said.
“We’re going to be at the mercy of the people who are buying the electricity to the south of us.”