Love it or loathe it, the deal to sell NB Power to Hydro-Quebec is nothing if not

A4

Alec Bruce

Stumble Upon

del.icio.us

Digg

Facebook

Print

Email

Speak Up

For all who have been waiting for that signature moment when Shawn Graham turns from mild-mannered politico into "Captain Transformation," it happened late last week in a dark hallway at Freddy Beach. That's when the normally gregarious premier of New Brunswick astonished nearly everyone with a deal to sell the major assets of NB Power to Hydro-Quebec.

Enlarge Photo

Indeed, the details of the memorandum of understanding "" which won't be ratified until next March "" were significantly less interesting than the negotiation, which was deliberate and conducted in utter secrecy. As an otherwise superbly connected friend of mine exclaimed, "I thought I knew everything that goes on in Fredericton, but I really did not see this one coming."

Now that the dust has settled, however, whatever grudging admiration some may have harboured for Graham's political gamesmanship has receded. In its place is a full-scale debate on the wisdom of the move in which, predictably, there appears no middle ground.

In fact, to review the hundreds of news reports that have issued over the past few days, you'd think the king has given away the keys to the castle.

"From my perspective, (this sale) removes all possibility of developing future energy sources in New Brunswick," fumed Yves Gagnon, the K.C. Irving Chair in Sustainable Development at the University of Moncton. "All of those possibilities are gone with this deal."

Added Conservative Opposition Leader David Alward: "Any sense that an energy hub was being built for Saint John is dead. The energy hub will move from Saint John, New Brunswick, to Saint-Jean, Quebec. And the fees collected off our grid will go to Quebec."

Others complain that the deal "" which involves a $4.8-billion takeover of NB Power "" undermines the province's energy sovereignty, rendering it little more than a serf. Still others insist that the Graham government has no right to make such a monumental decision without first obtaining a mandate, either through referendum or election, from the people.

Naturally, the ruling Liberals beg to differ. Here's what Business New Brunswick Minister Victor Boudreau tells me: "Any time anyone talks about change, there's an initial opposition. But I think that as New Brunwickers are getting informed, and reading about this proposal, I think more and more are buying into it and seeing that there some real advantages here for New Brunswick.

"Let's face it, if the Province of New Brunswick were to continue on with NB Power as we've been doing, we would never be able to offer the types of rates that we can offer with this agreement with Hydro-Quebec."

He refers to measures in the MOU which freeze residential power rates at current levels for five years and provides industrial users with favourable and predictable energy costs. Beyond this, he insists, rate increases after 2015 will be held to New Brunswick's Consumer Price Index.

"If we look at the past 12 years, the average rate of inflation in New Brunswick was 1.8 per cent. If you look at the average rate increase over the past 12 years, I think it was around 3.6 or 3.7 per cent. So, obviously, tying it to the rate of inflation for New Brunswick is the way to move forward, and that what guarantees a sense of stability."

Moreover, he says, "If there was ever a need for more production or new infrastructure projects, well then they [Hydro-Qubec] would have to go before the Electrical Utilities Board which is going to continue to operate to make sure that rates are kept as low as possible."

What of New Brunswick's independent energy future?

"We, as a government, have already set a target of having 10 per cent wind energy by 2010. Well, if we wanted to increase that to 15 per cent, could we do that? The answer is yes. We can set the energy policies we want to set as we go forward. That would simply have to be worked into the agreement in the sense that if we decided we wanted to add five per cent wind into our energy mix and if that price is competitive and comparable to what Hydro-Quebec can offer us, then great. But that's all something that we control. We design what we want to do."

Frankly, the Graham government may be gilding a few lilies in its determination to obtain public support. Whatever is signed today "" or five months from now "" does not guarantee happy consequences for New Brunswick in perpetuity. Regulatory regimes exist to be challenged. And, despite Boudreau's valiant efforts, no one can really predict the future of greener, more renewable forms of home-grown energy in a province that no longer controls its own energy grid.

Still, few predicted the catastrophic effects of the global economic downturn on New Brunswick's fiscal health, or the multi-million-dollar delay in the refurbishment of Point Lepreau, or, indeed, Irving Oil's decision to indefinitely postpone its plans to build a second refinery in Saint John.

Is this a boon or a calamity? Time will tell. But it is nothing if not "transformational."

Alec Bruce is a Moncton-based writer. He may be reached via www.thebrucereport.com.