30 Oct Hydro Quebec deal is bad for NS & NL, but how good is it for NB?
- NB sheds $4.8 billion in debt, but also loses critical long-term strategic assets, including its transmission grid and a potentially lucrative energy portal into the insatiable New England electricity market.
- NB remains saddled with the ballooning costs for refurbishing the aging Pt. Lepreau power plant, but Quebec Hydro gets the plant. NB does get some relief in the cost of replacement energy while Lepreau is offline.
- NB remains stuck with NB Power’s thermal stinkers—one dirty coal-fired plant and two oil-fired peaking plants—with no guarantee Hydro Quebec will continue to buy power from them.
- Existing NB industries get an immediate 30 percent reduction in power rates, but the new rates are not frozen and will increase in step with industrial rates in Quebec. After five years, all bets are off.
- Moreover, new industries, or existing industries that expand beyond historic consumption, will pay market rates.
- Customers get a five year price freeze. Rates thereafter are theoretically capped to increases in the Consumer Price Increase, but this capping provision goes out the window if Hydro Quebec’s costs go up.
- Graham argues that NB has avoided the huge cost of rebuilding or decommissioning the Mactaquac dam, which is approaching the end of its life expectancy.
- NB essentially surrenders regulatory authority over electricity.
- Hydro Quebec will pay no taxes in NB.