NB Power sale will cut rates: Saint John mayor
Edmundston mayor wants more details
Last Updated: Wednesday, November 4, 2009 | 4:29 PM AT
CBC News
Saint John Mayor Ivan Court says the city's utility should be able to obtain power at lower wholesale rates if the Hydro-Québec deal passes. (CBC)Power rates in New Brunswick's largest city will go down if the proposed sale of NB Power to Hydro-Québec is approved, Saint John Mayor Ivan Court predicts.
Saint John Energy, one of three municipal utilities in the province, purchases power directly from NB Power at a wholesale price, which means its customers pay less than homeowners elsewhere.
Following meetings with Premier Shawn Graham and others in the provincial government, Court said Saint John power rates should actually go down.
"My understanding is whatever reduction is going to industry will go to Saint John Energy. So there should be actual savings," Court said. "What we have now we'll still have, but there should be actual reductions."
Court said he does not expect Saint John Energy will get the 30 per cent reduction that some large industrial companies are getting, but he said it will be better than the frozen rate other New Brunswick consumers would get.
Edmundston and Perth-Andover also have municipal utilities.
Edmundston wants clarification
Edmundston Mayor Jacques Martin is calling on the province to clarify how Edmundston Energy would operate under Hydro-Québec.
As it stands, Edmundston is the only municipality in New Brunswick that produces and distributes its own power. It currently produces 10 per cent of its energy and buys the remaining 90 per cent from NB Power.
A takeover by Hydro-Québec could complicate that arrangement, Martin said.
"If they treated us much in the same way as they treat the Sherbrooke Hydro — which purchased electricity at a far lower rate than we're buying from NB Power — if this would be part of the agreement for us and for New Brunswick as a utility, this would be something very interesting for us," he said.
"But it doesn't seem like this is the situation."
Martin said he isn't opposed to the Hydro-Québec deal, but he needs to know what it will mean for his community before he decides whether he's for it.
Meanwhile, he said, about $20 million in expansion projects are now on hold until more details are known.
Edmundston Energy has two main projects on the table: It wants to refurbish a dam on the Madawaska river that generates power for the utility, and expand its power grid out to the new city limits, which includes some areas currently served by NB Power.
Some of the work was supposed to get underway this fall, but that's now up in the air, Martin said.
"For us," he said, "we need to sit down with government and have serious discussions and chats about what we'll do with this project here."
Proposed deal
Under the proposed deal, Hydro-Québec would purchase most of NB Power's assets for $4.8 billion, which would immediately cleanse the province of NB Power's debt.
Additionally, residential ratepayers would receive a five-year rate freeze, and large industrial customers would have their power prices reduced to rates paid by Quebec's big power users, though they would not be frozen.
The rate package is estimated to be worth about $5 billion, pushing the deal's total value up to about $10 billion.
If legislative approval for the deal does not go through by March 31, Graham has warned that NB Power will follow through on its planned three per cent rate hike.
Despite the proposed savings, the inter-provincial power pact has not been received warmly by many New Brunswickers.
The Opposition Progressive Conservatives have demanded an election over the planned sale of NB Power. If Graham refuses to call an election, the Tories have promised to stall the passing of the legislative changes.
