Industry rate cuts in NB Power deal exceed requests
Last Updated: Saturday, November 7, 2009 | 8:43 PM AT
CBC News
Rate cuts under the proposed NB Power deal will benefit industrial customers the most, including industries that didn't ask for them. (CBC)Rate cuts for New Brunswick's industrial customers under the proposed deal between NB Power and Hydro-Québec are more than double what some requested and cover other industries that didn't ask for them.
It's a windfall that Liberal Premier Shawn Graham opposed when he was leader of the Opposition.
Under the proposed deal announced Oct. 29, Hydro-Québec would take over most of New Brunswick's generating stations for $4.8 billion, the equivalent of NB Power's debt.
The utility would also lower rates for large industrial users to the prices offered to the same type of customers in Quebec and freeze residential power rates for five years.
Two years ago, a special electricity rate was proposed for big forestry mills to help them stay afloat. The campaign for lower rates — led by Jim Irving of J.D. Irving Ltd., which operates four industrial paper mills — asked for $44 million in rate cuts.
'You know competitive energy costs mean a competitive business in this industry.'—Mark Mosher, J.D. Irving Ltd.
Under the proposed deal with Hydro-Québec, power rates at Irving Paper in east Saint John alone would be cut by more than $18 million in the first year of the agreement.
That's more than the $16 million in combined savings for all the province's residential customers, figures obtained by the CBC show.
"You know competitive energy costs mean a competitive business in this industry," said J.D. Irving vice-president Mark Mosher.
Although J.D. Irving Ltd. would be the single biggest winner of the rate cuts, it's not alone.
Across-the-board cuts
Figures from the Department of Energy show industrial power customers across the board would save a total of $91.6 million in the first year.
That's 5½ times more than all the residential savings and 11 times more than small businesses would save.
Four years ago, during a CBC political panel, then-Opposition leader Graham said he didn't agree with across-the-board industrial rate cuts because they would deliver extra money to companies that didn't need it.
"Some large industrial manufacturers aren't being severely impacted, such as the Irving Oil refinery, so we shouldn't be putting in a program to help people that do not need help at this time," he said at the time.
The proposed deal needs legislative approval before it can go ahead. New Brunswick's Progressive Conservatives have demanded an election over the issue and have promised to stall the legislation if there is no immediate campaign.
The Liberal government has said if the deal is delayed past March 31, NB Power's planned three per cent rate hike will go forward, instead of the rate freeze promised in the Hydro-Québec agreement.
