Proposed sale of NB Power
Encyclopedia
The proposed sale of NB Power
was an attempted takeover of New Brunswick's government-owned public utility
assets by Hydro-Québec
, Canada
's largest utility. Announced on October 29, 2009 by premier
s Shawn Graham
and his Quebec counterpart, Jean Charest
, the deal ultimately collapsed in March 2010, after months of controversy.
, the government-owned integrated public utility
serving most areas of the Canadian
province of New Brunswick
, is plagued by financial difficulties. Over the years, the company has built and operated a diversified generation mix, including oil- , and coal-fired
thermal, nuclear
, and hydroelectric
plants. Faced with ageing generation fleet and fuel cost increasess, the utility must find ways to meet increasing demand for electric power while keeping operation costs down.
In the late 1990s, NB Power signs a supply contract with PDVSA for Orimulsion
, a cheap bitumen-based fuel, for its Coleson Cove and Belledune facilities. The utility then converts one of three units at the 978 MW Coleson Cove plant, in Saint John, to burn the heavier grade while burning Orimulsion at Belledune. After investing hundreds of million dollars at Coleson Cove, NB Power learns that the Venezuela
n supplier's decision to stop making the fuel, thus breaking the contract. After successfully litigating the case and winning a settlement estimated at more than $200 million, the utility turns to a mix of petroleum coke
, an oil refinery byproduct, and heavy oil, drawing opposition from environmentalists.
Meanwhile, NB Power and Bernard Lord
's conservative
government must decide whether they undertake the refit of the Point Lepreau Nuclear Generating Station
. The nuclear plant, whose mid-life refit has been hotly debated, was authorized in July 2005. NB Power signs a $C 1.4 billion contract with Atomic Energy of Canada Limited
(AECL).
Refurbishment work began in April 2008 and was expected to last 18 months. However, due to a series of delays, the reopening was first postponed in January 2009, then further pushed back. Delays and high fuel costs in 2008 added one million dollars per day to the budget for replacement power. Premier Graham initiated informal talks on regional electricity issues with Quebec's Jean Charest
during a federal-provincial meeting, on January 16, 2009.
The next month, a delegation of senior New Brunswick
officials
, led by premier
Shawn Graham
's chief of staff
, Bernard Thériault
, travelled to Quebec City
for secret talks with their Quebec
counterparts. In June 2009, the two neighboring province
s announced an "energy partnership" between them. At that point, the option of selling NB Power to Hydro-Québec
was largely dismissed. Outside firms were hired to advise the provinces on legal, financial and public relations issues and by September, the parties were discussing the terms of a memorandum of understanding.
(MOU) to sell most assets of NB Power to Hydro-Québec
. This agreement would have transferred most generation, transmission
and distribution assets of the New Brunswick utility to a subsidiary of the Quebec-based Crown corporation, including Point Lepreau, 3 diesel
-fired peakers
and 7 hydroelectric dams, but would exclude fossil-fuel fired plants in Dalhousie, Belledune and Coleson Cove.
According to the memorandum of understanding, Hydro-Quebec would not assume any liabilities with respect to the Point Lepreau refurbishment project. The deal also included provisions to reduce industrial power rates to those paid by Hydro-Québec Quebec-based industrial customers and a 5-year rate freeze on residential and commercial rates.
An economic analysis commissioned by the Graham government to Washington
's NERA Economic Consulting
estimated that the tentative deal would save New Brunswick ratepayers $5.6 billion over a 30-year period compared to the status quo
. The study also showed that residential, commercial and wholesale customers would reap 60% of the savings, but the savings would happen later than the discounts granted upfront to large industrial customers.
The controversial deal was subject to review and approval by the New Brunswick Legislative Assembly. The leaders of both opposition parties in New Brunswick, David Alward
of the Progressive Conservatives, and Roger Duguay
of the New Democrats, opposed the deal.
's Brunswick News
group, welcomed the sale. The Telegraph-Journal
saluted it as the "deal of century" while Moncton's Times & Transcript
argued that the sale lifted a "big burden". Media critics noted that Irving interests controlled the New Brunswick press outlets that were in favour of the deal and other conflicts of interest were evident.
The province sole French-language daily, L'Acadie Nouvelle
, supported the transaction in a nuanced piece, stressing the "political and financial impasse" facing the New Brunswick utility.
In Montreal
, business columnist Sophie Cousineau of La Presse called it a bold deal providing benefits to both provinces, but worried it would face steep opposition in New Brunswick while Jean-Robert Sansfaçon of Le Devoir
stated that the proposed deal provided an initial response to those in Quebec who have expressed concerns about recurring electricity surpluses caused by Hydro-Québec
's large dam construction program.
Premier Danny Williams
was among the first to loudly protest the ceding of transmission lines to Quebec's effective jurisdiction, as he was involved in a longstanding dispute over the development of Churchill Falls
and reliable access to NERC Open Access Transmission Tariff (OATT) governed transmission lines to sell hydropower
to the United States
. Despite assurances by the Graham government, Williams took the position that just as Quebec and its regulatory agencies had permitted Hydro-Québec to interpret the OATT rules in such a way as to monopolize and block transmission via Quebec, it would similarly be possible to block his only other land transmission route via New Brunswick.
Nova Scotia
objected on grounds that it had always supported a Maritime regional or Atlantic regional power transmission system subject to a single common set of rules, and that conflicts between Newfoundland and Labrador and Quebec over New Brunswicik or otherwise threatened to subject the entire region to American rules administered via NERC especially with regards to OATT tariffs.
Prince Edward Island
, wholly dependent on connections to NB's transmission grid, also objected as it removed their longstanding option of receiving competing bids from Quebec or NB and further cast doubt on their ability to cooperate with Nova Scotia or Newfoundland and Labrador independently of New Brunswick or Quebec.
As all these objections were related to the transmission, distribution and open market operations of the grid, they disappeared in the second deal which regarded only generating assets.
. While the business community's formal representatives were publicly quoted as largely in favor of the agreement, reactions to the MOU have been hostile. In addition to opposition leaders, a trade association representing independent power generators in New England, Local 37 of the International Brotherhood of Electrical Workers
(IBEW), the union representing 2,200 NB Power employees and wind energy supporters have condemned the agreement as detrimental to the interests of New Brunswick. However, in a notable reversal, Maine Governor John Baldacci
altered his stance, now saying the sale is "a positive step forward" in early 2010.
Opponents in the general public used social media to show their displeasure and contest the various arguments for the deal. On Facebook
, 14,000 people joined a group in opposition to the sale within five days of the announcement. A demonstration organized by the group and trade unions drew approximately 600 people outside the Legislative Assembly building on November 17, 2009. A Leger Marketing
opinion poll
conducted on behalf of Quebecor Media newspapers in November 2009 in New Brunswick and Quebec showed that 60% of New Brunswickers polled opposed the deal, while 22% supported it. The situation is reversed in Quebec, where the deal gets the support of 55% of Quebecers. Only 14% of those who were polled in Hydro-Québec home province opposed it.
Other First Nations had similar deals, for instance St. Mary's near Fredericton has a similar arrangement which is demonstrated and reaffirmed spectacularly each year by a Christmas light display that people from many miles around come to view all season. Despite the right to waste an effectively infinite amount of power, St. Mary's has in recent years moved mostly to LED Christmas lights and other energy-efficient displays and there have been proposals to compensate it for power it has a right to use but is not using, in line with other energy demand management
deals elsewhere in North America. A few First Nations have NB Power generating assets on their lands without any benefit to their residents whatsoever, and this has also been a point of debate.
The Tobique traditional council issued its own injunction against any cooperation with the sale of the dam, and the elected band council was prepared to go to court to prevent any transfer of the disputed asset or to back any blockade of rights of way or any effort by the First Nation to reclaim the dam itself. This was forestalled by the collapse of the deal.
and Radio-Canada
both reported on January 18, 2010 that the sale would involve NB Power's generation facilities, which would be bought by Hydro-Québec for C$3.4 billion. The government of New Brunswick would still own the transmission and distribution divisions and NB Power would enter into a long-term power purchase agreement with Hydro-Québec. The PPA would allow NB Power to deliver the rate freeze for residential and general customers. However, the industrial rates rollback would be smaller than under the original MOU.
However, this interpretation was contested by analysts, who blamed the collapse of the deal on the difficult political situation in New Brunswick, six months before a scheduled provincial election.
This dire assessment for the liberal Premier was confirmed by polling results released one week before the September 27, 2010 election. Among respondents, 38% said their personal opposition to the sale was important to their vote, and this factor was benefiting David Alward's Progressive Conservatives. According to political scientist Don Desserud, the proposed sale and earlier issues gave the public the impression "that this government was doing things that were reckless and without forethought".
NB Power
NB Power , formerly known as New Brunswick Power Corporation and New Brunswick Electric Power Commission is the primary and former monopoly electrical utility in the Canadian province of New Brunswick...
was an attempted takeover of New Brunswick's government-owned public utility
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...
assets by Hydro-Québec
Hydro-Québec
Hydro-Québec is a government-owned public utility established in 1944 by the Government of Quebec. Based in Montreal, the company is in charge of the generation, transmission and distribution of electricity across Quebec....
, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
's largest utility. Announced on October 29, 2009 by premier
Premier
Premier is a title for the head of government in some countries and states.-Examples by country:In many nations, "premier" is used interchangeably with "prime minister"...
s Shawn Graham
Shawn Graham
Shawn Michael Graham, MLA is a New Brunswick politician, who served as the 31st Premier of New Brunswick. He received a Bachelor of Physical Education Degree in 1991 and a Bachelor of Education Degree in 1993, he worked for New Brunswick's civil service before being elected to the Legislative...
and his Quebec counterpart, Jean Charest
Jean Charest
John James "Jean" Charest, PC, MNA is a Canadian politician who has been the 29th Premier of Quebec since 2003. He was leader of the federal Progressive Conservative Party of Canada from 1993 to 1998 and has been leader of the Quebec Liberal Party since 1998....
, the deal ultimately collapsed in March 2010, after months of controversy.
Context
For a decade, NB PowerNB Power
NB Power , formerly known as New Brunswick Power Corporation and New Brunswick Electric Power Commission is the primary and former monopoly electrical utility in the Canadian province of New Brunswick...
, the government-owned integrated public utility
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...
serving most areas of the Canadian
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
province of New Brunswick
New Brunswick
New Brunswick is one of Canada's three Maritime provinces and is the only province in the federation that is constitutionally bilingual . The provincial capital is Fredericton and Saint John is the most populous city. Greater Moncton is the largest Census Metropolitan Area...
, is plagued by financial difficulties. Over the years, the company has built and operated a diversified generation mix, including oil- , and coal-fired
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
thermal, nuclear
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
, and hydroelectric
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...
plants. Faced with ageing generation fleet and fuel cost increasess, the utility must find ways to meet increasing demand for electric power while keeping operation costs down.
In the late 1990s, NB Power signs a supply contract with PDVSA for Orimulsion
Orimulsion
Orimulsion is a registered trademark name for a bitumen-based fuel that was developed for industrial use by Intevep, the Research and Development Affiliate of Petroleos de Venezuela SA , following earlier collaboration on oil emulsions with British Petroleum.-Source of the bitumen:Like coal and...
, a cheap bitumen-based fuel, for its Coleson Cove and Belledune facilities. The utility then converts one of three units at the 978 MW Coleson Cove plant, in Saint John, to burn the heavier grade while burning Orimulsion at Belledune. After investing hundreds of million dollars at Coleson Cove, NB Power learns that the Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
n supplier's decision to stop making the fuel, thus breaking the contract. After successfully litigating the case and winning a settlement estimated at more than $200 million, the utility turns to a mix of petroleum coke
Petroleum coke
Petroleum coke is a carbonaceous solid derived from oil refinery coker units or other cracking processes. Other coke has traditionally been derived from coal....
, an oil refinery byproduct, and heavy oil, drawing opposition from environmentalists.
Meanwhile, NB Power and Bernard Lord
Bernard Lord
Bernard Lord, ONB, QC, is a Canadian politician and lobbyist. Lord served as the 30th Premier of New Brunswick from 1999 to 2006.-Early life:...
's conservative
Progressive Conservative Party of New Brunswick
The Progressive Conservative Party of New Brunswick is a centre-right political party in New Brunswick, Canada. It has its origins in the pre-Canadian confederation Conservative Party that opposed the granting of responsible government to the colony...
government must decide whether they undertake the refit of the Point Lepreau Nuclear Generating Station
Point Lepreau Nuclear Generating Station
Point Lepreau Nuclear Generating Station is a Canadian nuclear power station located 2 km northeast of Point Lepreau, New Brunswick. The facility was constructed between 1975-1983 by NB Power, the provincially-owned public utility....
. The nuclear plant, whose mid-life refit has been hotly debated, was authorized in July 2005. NB Power signs a $C 1.4 billion contract with Atomic Energy of Canada Limited
Atomic Energy of Canada Limited
Atomic Energy of Canada Limited or AECL is a Canadian federal Crown corporation and Canada's largest nuclear science and technology laboratory...
(AECL).
Refurbishment work began in April 2008 and was expected to last 18 months. However, due to a series of delays, the reopening was first postponed in January 2009, then further pushed back. Delays and high fuel costs in 2008 added one million dollars per day to the budget for replacement power. Premier Graham initiated informal talks on regional electricity issues with Quebec's Jean Charest
Jean Charest
John James "Jean" Charest, PC, MNA is a Canadian politician who has been the 29th Premier of Quebec since 2003. He was leader of the federal Progressive Conservative Party of Canada from 1993 to 1998 and has been leader of the Quebec Liberal Party since 1998....
during a federal-provincial meeting, on January 16, 2009.
The next month, a delegation of senior New Brunswick
Government of New Brunswick
The Government of New Brunswick refers to the provincial government of the province of New Brunswick. Its powers and structure are set out in the Constitution Act, 1867....
officials
Civil service
The term civil service has two distinct meanings:* A branch of governmental service in which individuals are employed on the basis of professional merit as proven by competitive examinations....
, led by premier
Premier
Premier is a title for the head of government in some countries and states.-Examples by country:In many nations, "premier" is used interchangeably with "prime minister"...
Shawn Graham
Shawn Graham
Shawn Michael Graham, MLA is a New Brunswick politician, who served as the 31st Premier of New Brunswick. He received a Bachelor of Physical Education Degree in 1991 and a Bachelor of Education Degree in 1993, he worked for New Brunswick's civil service before being elected to the Legislative...
's chief of staff
Deputy Minister (Canada)
In Canada, a deputy minister is the senior civil servant in a government department. He or she takes political direction from an elected minister. Responsibility for the department's day-to-day operations, budget and program development lie with the deputy minister...
, Bernard Thériault
Bernard Thériault
Bernard Thériault is a political figure in the province of New Brunswick, Canada. He became chief of staff to Premier of New Brunswick Shawn Graham on October 30, 2006....
, travelled to Quebec City
Quebec City
Quebec , also Québec, Quebec City or Québec City is the capital of the Canadian province of Quebec and is located within the Capitale-Nationale region. It is the second most populous city in Quebec after Montreal, which is about to the southwest...
for secret talks with their Quebec
Government of Quebec
The Government of Quebec refers to the provincial government of the province of Quebec. Its powers and structure are set out in the Constitution Act, 1867....
counterparts. In June 2009, the two neighboring province
Provinces and territories of Canada
The provinces and territories of Canada combine to make up the world's second-largest country by area. There are ten provinces and three territories...
s announced an "energy partnership" between them. At that point, the option of selling NB Power to Hydro-Québec
Hydro-Québec
Hydro-Québec is a government-owned public utility established in 1944 by the Government of Quebec. Based in Montreal, the company is in charge of the generation, transmission and distribution of electricity across Quebec....
was largely dismissed. Outside firms were hired to advise the provinces on legal, financial and public relations issues and by September, the parties were discussing the terms of a memorandum of understanding.
First memorandum of understanding
On October 29, 2009, the premiers of New Brunswick and Quebec signed a memorandum of understandingMemorandum of understanding
A memorandum of understanding is a document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in...
(MOU) to sell most assets of NB Power to Hydro-Québec
Hydro-Québec
Hydro-Québec is a government-owned public utility established in 1944 by the Government of Quebec. Based in Montreal, the company is in charge of the generation, transmission and distribution of electricity across Quebec....
. This agreement would have transferred most generation, transmission
Electric power transmission
Electric-power transmission is the bulk transfer of electrical energy, from generating power plants to Electrical substations located near demand centers...
and distribution assets of the New Brunswick utility to a subsidiary of the Quebec-based Crown corporation, including Point Lepreau, 3 diesel
Diesel engine
A diesel engine is an internal combustion engine that uses the heat of compression to initiate ignition to burn the fuel, which is injected into the combustion chamber...
-fired peakers
Peaking power plant
Peaking power plants, also known as peaker plants, and occasionally just "peakers," are power plants that generally run only when there is a high demand, known as peak demand, for electricity.-Peak hours:...
and 7 hydroelectric dams, but would exclude fossil-fuel fired plants in Dalhousie, Belledune and Coleson Cove.
According to the memorandum of understanding, Hydro-Quebec would not assume any liabilities with respect to the Point Lepreau refurbishment project. The deal also included provisions to reduce industrial power rates to those paid by Hydro-Québec Quebec-based industrial customers and a 5-year rate freeze on residential and commercial rates.
An economic analysis commissioned by the Graham government to Washington
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
's NERA Economic Consulting
NERA Economic Consulting
' is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities...
estimated that the tentative deal would save New Brunswick ratepayers $5.6 billion over a 30-year period compared to the status quo
Status quo
Statu quo, a commonly used form of the original Latin "statu quo" – literally "the state in which" – is a Latin term meaning the current or existing state of affairs. To maintain the status quo is to keep the things the way they presently are...
. The study also showed that residential, commercial and wholesale customers would reap 60% of the savings, but the savings would happen later than the discounts granted upfront to large industrial customers.
The controversial deal was subject to review and approval by the New Brunswick Legislative Assembly. The leaders of both opposition parties in New Brunswick, David Alward
David Alward
David Nathan Alward is a Canadian politician, the 32nd and current Premier of New Brunswick.Alward has been a member of the Legislative Assembly of New Brunswick since 1999 and has been the leader of the Progressive Conservative Party of New Brunswick since 2008...
of the Progressive Conservatives, and Roger Duguay
Roger Duguay
Roger Duguay is a former Canadian politician and Roman Catholic priest. He sought election to the Legislative Assembly of New Brunswick unsuccessfully on four occasions as a representative of the New Brunswick New Democratic Party...
of the New Democrats, opposed the deal.
Reception in the press
The tentative agreement between the two governments was initially well received by newspapers, both in New Brunswick and Quebec, before polls showed it to be opposed by the vast majority of New Brunswick residents. The province's three English-language daily newspapers, owned by the IrvingJames Irving
James K. Irving, OC, ONB is the eldest son of industrialist K.C. Irving. J.K., as he is normally referred to, along with his brother, Arthur, share the ownership of what is known informally as the Irving Group of Companies...
's Brunswick News
Brunswick News
Brunswick News Inc. is a Canadian newspaper publishing company based in Moncton, New Brunswick. It is privately owned by James K. Irving.-Newspapers:...
group, welcomed the sale. The Telegraph-Journal
Telegraph-Journal
The Telegraph-Journal is a daily newspaper published in Saint John, New Brunswick, Canada. It publishes a hybrid newspaper, serving as a provincial daily while catering to the Saint John audience in its City and Sports sections. The newspaper is published by Brunswick News, owned by J. K. Irving...
saluted it as the "deal of century" while Moncton's Times & Transcript
Times & Transcript
The “Times & Transcript” is New Brunswick's largest newspaper circulation daily newspaper with an average paid daily circulation of approximately 40,000, and readership of approximately 110,000. It serves Metro Moncton and eastern New Brunswick. Its offices and printing facilities are located on...
argued that the sale lifted a "big burden". Media critics noted that Irving interests controlled the New Brunswick press outlets that were in favour of the deal and other conflicts of interest were evident.
The province sole French-language daily, L'Acadie Nouvelle
L'Acadie Nouvelle
L'Acadie Nouvelle is an independent French newspaper published in Caraquet, New Brunswick, Canada since June 6, 1984. It is published from Monday through Saturday and is the only francophone newspaper published in New Brunswick.- History :...
, supported the transaction in a nuanced piece, stressing the "political and financial impasse" facing the New Brunswick utility.
In Montreal
Montreal
Montreal is a city in Canada. It is the largest city in the province of Quebec, the second-largest city in Canada and the seventh largest in North America...
, business columnist Sophie Cousineau of La Presse called it a bold deal providing benefits to both provinces, but worried it would face steep opposition in New Brunswick while Jean-Robert Sansfaçon of Le Devoir
Le Devoir
Le Devoir is a French-language newspaper published in Montreal and distributed in Quebec and the rest of Canada. It was founded by journalist, politician, and nationalist Henri Bourassa in 1910....
stated that the proposed deal provided an initial response to those in Quebec who have expressed concerns about recurring electricity surpluses caused by Hydro-Québec
Hydro-Québec
Hydro-Québec is a government-owned public utility established in 1944 by the Government of Quebec. Based in Montreal, the company is in charge of the generation, transmission and distribution of electricity across Quebec....
's large dam construction program.
Positions of other provinces
Newfoundland and LabradorNewfoundland and Labrador
Newfoundland and Labrador is the easternmost province of Canada. Situated in the country's Atlantic region, it incorporates the island of Newfoundland and mainland Labrador with a combined area of . As of April 2011, the province's estimated population is 508,400...
Premier Danny Williams
Danny Williams
-Music:*Danny Williams , South African-born popular musician*Danny Williams , Australian singer, member of CDB-Sports:...
was among the first to loudly protest the ceding of transmission lines to Quebec's effective jurisdiction, as he was involved in a longstanding dispute over the development of Churchill Falls
Churchill Falls
Churchill Falls are waterfalls named after former British Prime Minister, Winston Churchill. They are high, located on the Churchill River in Newfoundland and Labrador, Canada....
and reliable access to NERC Open Access Transmission Tariff (OATT) governed transmission lines to sell hydropower
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...
to the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Despite assurances by the Graham government, Williams took the position that just as Quebec and its regulatory agencies had permitted Hydro-Québec to interpret the OATT rules in such a way as to monopolize and block transmission via Quebec, it would similarly be possible to block his only other land transmission route via New Brunswick.
Nova Scotia
Nova Scotia
Nova Scotia is one of Canada's three Maritime provinces and is the most populous province in Atlantic Canada. The name of the province is Latin for "New Scotland," but "Nova Scotia" is the recognized, English-language name of the province. The provincial capital is Halifax. Nova Scotia is the...
objected on grounds that it had always supported a Maritime regional or Atlantic regional power transmission system subject to a single common set of rules, and that conflicts between Newfoundland and Labrador and Quebec over New Brunswicik or otherwise threatened to subject the entire region to American rules administered via NERC especially with regards to OATT tariffs.
Prince Edward Island
Prince Edward Island
Prince Edward Island is a Canadian province consisting of an island of the same name, as well as other islands. The maritime province is the smallest in the nation in both land area and population...
, wholly dependent on connections to NB's transmission grid, also objected as it removed their longstanding option of receiving competing bids from Quebec or NB and further cast doubt on their ability to cooperate with Nova Scotia or Newfoundland and Labrador independently of New Brunswick or Quebec.
As all these objections were related to the transmission, distribution and open market operations of the grid, they disappeared in the second deal which regarded only generating assets.
Popular opposition
The October 29 memorandum of understanding fostered a spirited public debate in New Brunswick and Atlantic CanadaAtlantic Canada
Atlantic Canada is the region of Canada comprising the four provinces located on the Atlantic coast, excluding Quebec: the three Maritime provinces – New Brunswick, Prince Edward Island, and Nova Scotia – and Newfoundland and Labrador...
. While the business community's formal representatives were publicly quoted as largely in favor of the agreement, reactions to the MOU have been hostile. In addition to opposition leaders, a trade association representing independent power generators in New England, Local 37 of the International Brotherhood of Electrical Workers
International Brotherhood of Electrical Workers
The International Brotherhood of Electrical Workers is a labor union which represents workers in the electrical industry in the United States, Canada, Panama and several Caribbean island nations; particularly electricians, or Inside Wiremen, in the construction industry and linemen and other...
(IBEW), the union representing 2,200 NB Power employees and wind energy supporters have condemned the agreement as detrimental to the interests of New Brunswick. However, in a notable reversal, Maine Governor John Baldacci
John Baldacci
John Elias Baldacci is an American politician who served as the 73rd Governor of the U.S. state of Maine from 2003 until 2011. A Democrat, he also served as a member of the United States House of Representatives from 1995 to 2003....
altered his stance, now saying the sale is "a positive step forward" in early 2010.
Opponents in the general public used social media to show their displeasure and contest the various arguments for the deal. On Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
, 14,000 people joined a group in opposition to the sale within five days of the announcement. A demonstration organized by the group and trade unions drew approximately 600 people outside the Legislative Assembly building on November 17, 2009. A Leger Marketing
Léger Marketing
Leger Marketing is the largest solely Canadian owned polling and market research firm in Canada with 650 employees, including 103 professionals. Leger Marketing provides access to Canadian and American markets...
opinion poll
Opinion poll
An opinion poll, sometimes simply referred to as a poll is a survey of public opinion from a particular sample. Opinion polls are usually designed to represent the opinions of a population by conducting a series of questions and then extrapolating generalities in ratio or within confidence...
conducted on behalf of Quebecor Media newspapers in November 2009 in New Brunswick and Quebec showed that 60% of New Brunswickers polled opposed the deal, while 22% supported it. The situation is reversed in Quebec, where the deal gets the support of 55% of Quebecers. Only 14% of those who were polled in Hydro-Québec home province opposed it.
First Nations
The status of deals with First Nations, notably Tobique, on whose reserve lands the dams had been constructed in the 1950s without a formal written contract was also problematic. The longstanding arrangement had been that Tobique reserve itself and its residents would not pay any electric power bills whatsoever, forever, and this had been respected at least through 2000. However, after the reorganization of NB Power, there was at least one attempt to bill Tobique residents for power use, indicating that the longstanding arrangement was being unilaterally breached by NB Power's successor corporations. The proposed sales of the dam to Hydro Quebec either under the original deal (to sell all of NB Power) or the second deal (to sell only some generating assets including Tobique) also constituted material breaches of these arrangements, leaving Tobique at least in an unassailable bargaining position to set new terms for access to the river and rights of way used to transmit power from it.Other First Nations had similar deals, for instance St. Mary's near Fredericton has a similar arrangement which is demonstrated and reaffirmed spectacularly each year by a Christmas light display that people from many miles around come to view all season. Despite the right to waste an effectively infinite amount of power, St. Mary's has in recent years moved mostly to LED Christmas lights and other energy-efficient displays and there have been proposals to compensate it for power it has a right to use but is not using, in line with other energy demand management
Energy demand management
Energy demand management, also known as demand side management , is the modification of consumer demand for energy through various methods such as financial incentives and education...
deals elsewhere in North America. A few First Nations have NB Power generating assets on their lands without any benefit to their residents whatsoever, and this has also been a point of debate.
The Tobique traditional council issued its own injunction against any cooperation with the sale of the dam, and the elected band council was prepared to go to court to prevent any transfer of the disputed asset or to back any blockade of rights of way or any effort by the First Nation to reclaim the dam itself. This was forestalled by the collapse of the deal.
Second agreement: Power generating assets only
After two months of controversies, New Brunswick and Quebec reprentatives signed a second agreement, reducing the scope of the sale. The Globe and MailThe Globe and Mail
The Globe and Mail is a nationally distributed Canadian newspaper, based in Toronto and printed in six cities across the country. With a weekly readership of approximately 1 million, it is Canada's largest-circulation national newspaper and second-largest daily newspaper after the Toronto Star...
and Radio-Canada
Canadian Broadcasting Corporation
The Canadian Broadcasting Corporation, commonly known as CBC and officially as CBC/Radio-Canada, is a Canadian crown corporation that serves as the national public radio and television broadcaster...
both reported on January 18, 2010 that the sale would involve NB Power's generation facilities, which would be bought by Hydro-Québec for C$3.4 billion. The government of New Brunswick would still own the transmission and distribution divisions and NB Power would enter into a long-term power purchase agreement with Hydro-Québec. The PPA would allow NB Power to deliver the rate freeze for residential and general customers. However, the industrial rates rollback would be smaller than under the original MOU.
Deal falls through
On March 24, 2010, Premier Graham announced the deal had fallen through, due to Hydro-Québec's concern over unanticipated risks and costs of some aspects such as dam security and water levels.However, this interpretation was contested by analysts, who blamed the collapse of the deal on the difficult political situation in New Brunswick, six months before a scheduled provincial election.
This dire assessment for the liberal Premier was confirmed by polling results released one week before the September 27, 2010 election. Among respondents, 38% said their personal opposition to the sale was important to their vote, and this factor was benefiting David Alward's Progressive Conservatives. According to political scientist Don Desserud, the proposed sale and earlier issues gave the public the impression "that this government was doing things that were reckless and without forethought".
See also
- NB PowerNB PowerNB Power , formerly known as New Brunswick Power Corporation and New Brunswick Electric Power Commission is the primary and former monopoly electrical utility in the Canadian province of New Brunswick...
- Hydro-QuébecHydro-QuébecHydro-Québec is a government-owned public utility established in 1944 by the Government of Quebec. Based in Montreal, the company is in charge of the generation, transmission and distribution of electricity across Quebec....
- Point Lepreau Nuclear Generating StationPoint Lepreau Nuclear Generating StationPoint Lepreau Nuclear Generating Station is a Canadian nuclear power station located 2 km northeast of Point Lepreau, New Brunswick. The facility was constructed between 1975-1983 by NB Power, the provincially-owned public utility....