by Jesse Robichaud

Premier Shawn Graham says the door is open for a marriage between the private sector and NB Power, but chuckles at rumours that suggest former premier Frank McKenna is peddling the public utility to private interests.

“We feel there can be a marriage between the private sector and the public utility, but NB Power will remain in the ownership of the citizens of New Brunswick,” said Graham in a phone interview from France.

“I have not asked Frank McKenna to sell NB Power,” said Graham.

While Graham says the opposition Tories should heed the Liberals’ campaign promise and divorce any notion that NB Power will be sold, Gordon Weil, chairman of the Weil Consulting Group and president of Standard Energy Company in Augusta, Me., says he has heard no such rumours.

Weil qualifies the chances that such rumours may be circulating without his knowledge as “not great.”

“I would have thought if there were a rumour of it we would have heard at least a rumour.”
However, Weil adds that considering the current investment climate filled with capital-rich equity groups and a warmer than average interest in utilities, it doesn’t mean there is nothing happening behind the scenes.

Weil says a well-connected and business-savvy McKenna could be working independently in an unsolicited capacity to broker a deal that would place an interesting choice in front of government.

“It could very well be if McKenna is doing this on his own hook he’s going to come in at the last moment and say here’s an offer. It is going to be speculation until that moment, nobody knows for sure,” he said.

“It wouldn’t surprise me if tomorrow you found out that ‘XYZ’ is offering $15 million for NB Power — I would think that’s too much — and you wouldn’t know about it in advance.”

With such “sizeable accumulations of capital” available, and billionaire trendsetters like Warren Buffett purchasing utilities, Weil says there are large investment groups out there that would jump at the chance to acquire a provincial utility.

However, Weil thinks it would be a tough sell to convince a politically responsive provincial government to sell such an asset to the highest bidder without regard for retaining ownership in the province.

In that sense, he points to the example of Emera, which purchased Nova Scotia’s public utility in the 1990s.

But selling NB Power “lock, stock, and barrel” even to locally based interests, would not be as cut and dried as the Emera deal, explains Weil. One of the chief reasons is the fact that NB Power is now divided into three companies responsible for generation, transmission and distribution of power.

Weil said N.B. could follow a pattern set in New England where public utilities sell off their generating companies, which allows generation to become a purely competitive business while providing the money to pay off debts incurred as a public entity.

Charles Cirtwill, acting president of the Atlantic Institute for Market Studies, says the Liberal government’s plans to fuel its self-sufficiency agenda through the sale of power to the northeastern U.S. can go ahead with a public or private utility in the province.

The only real difference to ratepayers and taxpayers is the risk involved.

A public company means more potential profits once generation and transmission capacities are increased. But the investments required to raise such capacities also means more potential risk on the backs of not only rate payers, but taxpayers as well, explains Cirtwill.