The New Brunswick government is opening its electricity market to competition. But it's avoiding full deregulation because of bad experiences in places such as Ontario and California.

New legislation introduced Friday will split the provincial Crown utility, NB Power, into four subsidiaries. They will handle generation, nuclear power, transmission and distribution.

The subsidiaries will remain publicly owned, but they are designed to operate at arm's length from the provincial government.

New Brunswick Premier Bernard Lord says it's a balanced way of playing the market, while retaining public control. Energy Minister Jeannot Volpe calls it re-regulation, not de-regulation. A restructured power utility that's publicly owned, but still more competitive in the open market.

Volpe says that should avoid problems, like the soaring rates, that happened in Ontario and California. "We've just used a prudent, step-by-step approach. We're looking at what's happening in other jurisdictions. We're only opening the market to what we need to do today."

NB Power will be split into four publicly owned companies. Residential consumers won't be able to choose their energy provider. They'll have to buy from the government-owned retail company.

That company will be able to shop around for cheaper power and, in theory, pass any savings on to homeowners.

The acting CEO of NB Power, Stewart MacPherson, says it's the only way NB Power can maintain the right to sell power to the United States. "If we're going to continue to operate in those markets, we have to operate under the same rules and conditions as those players in those markets," he said.

But opposition politicians say the plan amounts to privatization because the province is putting one of its generating plants up for sale.

Liberal Leader Shawn Graham says that could lead to higher power rates. "The government now wants to turn this over to the private sector and private sector companies want to have a return on investment. That's their number one priority."

The new structure takes effect April 1, but it could be years before New Brunswickers see if this system does what the government has promised: keeping rates down, while paying off NB Power's $3-billion debt.