NB Power deal gets green light from advisory panel, Opposition pans process

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FREDERICTON - An advisory panel on the sale of most of NB Power's generating stations to Hydro-Quebec says the deal is good for New Brunswick because it cuts electricity rates and will help the environment, but its opponents say the group's work was pointless.
In its report to the provincial government released Monday, the six-member panel concluded the proposed deal will lower rates in the short- and long-term for homeowners and industry, cut the amount of fossil fuel being used to generate power, and reduce the province's financial risk by slashing NB Power's debt.
"They all contribute to real and positive value for New Brunswick over the business-as-usual case, in the opinion of the panel," said David Ganong, who led the group and is chairman of candy-maker Ganong Bros. Ltd.
The panel, commissioned in November by the New Brunswick government, said the agreement will see residential electricity rates drop six per cent in the first 10 years of the deal, and 13 per cent by 2030. Industrial rates would be 20 per cent lower in the first 10 years, and 23 per cent lower by 2030.
The panel was mandated to compare the proposed agreement to the status quo. It was originally expected to present its report last month but it needed more time after the two governments revised the agreement, which must be finalized by the end of March.
The original $4.75 billion plan would have seen Hydro-Quebec acquire 10 power plants - including the Point Lepreau nuclear generating station - as well as New Brunswick's transmission and distribution systems.
Faced with a public outcry and open dissent within the Liberal caucus, the government scaled back its plan to a $3.2-billion deal that took the transmission and distribution systems off the table, and kept NB Power as a New Brunswick Crown corporation.
Before the report was released, Opposition Conservative Leader David Alward dismissed it as a "public relations exercise" by a government that had already made up its mind to proceed with the deal.
Jody Carr, a Conservative member of the legislature, said the entire process is flawed, adding that the panel heard presentations from 32 people but only one, Yves Gagnon from the University of Moncton, opposed the sale.
Ganong said the report was not prepared in consultation with any government or utility, and the first time it was shown to the New Brunswick government was Monday morning.
"What is in this report are clearly the words of the panel," he said.
The panel also made a number of recommendations, including giving the province's regulatory agency greater powers to eliminate any government interference in its decisions. Ganong said such broader authority and oversight for the Energy and Utilities Board is considered normal in other jurisdictions.
The advisory panel also recommended regulations that would require all distribution utilities in the province to invest in energy efficiency.
That suggestion was welcomed by David Coon, policy director of the Conservation Council of New Brunswick, who said such a move would "cut our environmental footprint significantly and really make New Brunswick a leader in energy efficiency."
As well, the panel suggested that an increase in power rates should begin recouping right away about $880 million that's being spent to buy replacement power while the Point Lepreau nuclear plant is shut down for refurbishment. The proposed deal with Quebec calls for a five-year rate freeze for homeowners, but Ganong says a five-year delay would add more than $200 million in interest to the Lepreau costs.
The New Brunswick government declined to answer questions about the report on Monday, but in a prepared statement Premier Shawn Graham thanked the panel for its work. He said the government would issue a formal response once it has reviewed the report.

Organizations: NB Power, Hydro-Quebec, Ganong Bros. University of Moncton Energy and Utilities Board Conservation Council of New Brunswick

Geographic location: New Brunswick, FREDERICTON, Quebec

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