A provincially appointed panel gave the green light on Monday to a controversial agreement to sell major NB Power assets to Hydro-Quebec, but the endorsement isn’t expected to curb the fierce opposition to the proposed deal in New Brunswick.
The panel was appointed last November by New Brunswick Premier Shawn Graham to provide independent advice on the multi-million dollar proposal that would see Hydro-Quebec acquire most of NB Power’s generating stations, its hydro dams and its diesel and nuclear plants.
Under the amended version of the agreement, watered down to $3.2 billion last Jan. 20 from $4.8 billion in Oct., Quebec would obtain transmission rights to send power to New England markets, while New Brunswick would maintain ownership of the province’s transmission and distribution capacity.
The six-person panel, chaired by businessman David Ganong, came to the conclusion that compared to the status quo, the agreement is good for the province, notably because it would ensure lower electricity rates for New Brunswickers.
The group asserted the purchase price offered by Hydro-Quebec is fair and the proposed pact would mitigate financial risks related to current and future debt of the province.
Ganong dismissed criticism that his panel is only rubber-stamping the government’s proposed deal and stressed he wants to stay out of the political debate.
“This is not the government’s report, this is our report,” Ganong told a news conference in Fredericton.
But Opposition Leader David Alward blamed the panel for meeting in “secrecy” and with very few observers opposed to the deal.
“The recommendations made today (Monday) are as irrelevant as the panel,” said the Conservative party leader.
Charles Cirtwill, president of the Atlantic Institute for Market Studies, didn’t expect much from the report and noted Monday its conclusions are only going to strengthen the beliefs of both opponents and supporters.
“I’d rather have too much analysis of the deal than not enough, but looking at it, I think basically, all they’ve done is in one document, summarize both sides of the argument: ‘Here are the positive things, some potential bad things, but overall it’s a good deal,’ ” said Cirtwill, head of the Halifax-based think-thank.
Many opponents feel the benefits of lower power rates don’t offset the long-term cost of losing control over energy assets in New Brunswick. Just last weekend, a group of 23 engineers and former civil servants rejected the deal for similar reasons.
“The deal has touched a nerve on the question of sovereignty and the question of independence. That seems to be resonating a lot in the debate in New Brunswick,” Cirtwill said.
Ganong’s panel pointed out in its report that residential, commercial, and municipal utilities would see their rates go down by six per cent during the first 10 years and by 13 per cent by 2030. During the same period, industrial customers would see their electricity bill slashed by 20 per cent during the first 10 years and by 23 per cent by 2030. This represents savings of $3.4 billion for residential customers and $1.6 billion for industrial customers.
The report added the deal would position New Brunswick as a greener province by reducing environmental impacts from fossil-fuel generation.
The group also stressed the deal would allow the province to continue to have policy and regulatory control over the electricity sector, a major sticking point since the original deal with Hydro-Quebec was announced last October.
But the panel also called on the New Brunswick government to adopt a new energy policy regardless of whether the deal gets passed.
“NB Power has had its policy over the years impeded by governments using power rates as political tools, notably, before elections. We don’t think that leads to a healthy, reasonable rate setting. The government should establish the policy and leave it to the EUB (New Brunswick Energy and Utilities Board) to implement that policy,” the report noted.
Cirtwill said he wouldn’t be surprised to see the New Brunswick government make further amendments to the proposal or walk away from it if the recent changes don’t play out in its favour.
A final agreement has to be reached by March 31.
Alward said the New Brunswick government has not yet made it clear whether the proposal will be presented to the legislature for a vote before it is adopted.
“We are talking about a commercial deal between two companies that are both owned by governments. So, that brings politics to the floor. And politics isn’t about logic, it isn’t about facts, evidence or mutual benefits. It is about win, lose and emotions,” Cirtwill said.
