NB Power has hired an international consulting company with ties to former Progressive Conservative premier Bernard Lord to review its internal costs.
The Crown corporation has hired Alexander Proudfoot, a firm with advisors in Brazil, Canada, France, Germany, South Africa, the United Kingdom and the United States, to review its internal processes in the latest step toward cost cutting.
Alexander Proudfoot lists two Canadian corporate advisors, Lord and Warren Holmes, a former mining executive.
When first asked about the consultant on Friday, NB Power would not confirm the appointment. However, NB Power issued a statement on Monday indicating that it had hired Alexander Proudfoot to review its operations.
"As management, we realized that we required an independent analysis that would take a much deeper look at our operations," said Gaetan Thomas, the president of NB Power, in a statement.
"As a result, management engaged in discussions with organizations that could potentially carry out such analysis. It was determined that Alexander Proudfoot had breadth of experience in executing detailed operational analysis within the utility industry. They will provide an objective analysis of areas where we can improve, thus working with our philosophy of continued process improvement. "
An internal memo distributed last week to NB Power employees indicated the consultants would be working inside NB Power for the next three weeks.
Thomas pointed at three specific areas that would be examined by the consultants, including NB Power's generating stations in Belledune and Coleson Cove, the utility's Shared Services division and its transmission or customer service offices in Moncton, Marysville and the customer interaction centre.
NB Power's president told his staff the analysis may lead to cuts.
"There may be opportunities for improvement through the reduction or elimination of redundant or unnecessary practices," the internal memo said.
Kept out of loop
Energy Minister Craig Leonard said the provincial government asked NB Power to review its operations in its updated mandate letter in January.
However, Leonard said his office was kept out of the loop with respect to what company was hired to examine NB Power's internal processes.
Leonard said he was told about the firm after the contract was signed with Alexander Proudfoot.
The Progressive Conservative cabinet minister said he does not have a problem with the fact Lord is an advisor with the company.
"I'm completely comfortable with the decision because … they feel this company can deliver the service in the best manner for NB Power," Leonard said.
"If that is the case, I don't want to let politics get involved in it. I don't want patronage to be involved but I don't want people to be eliminated because of their past."
Liberal MLA Donald Arseneault criticized the hiring of the external consultant.
Arseneault said either the hiring is a patronage appointment or a continuation of the Lord government's energy plan that led to the NB Power reforms in 2004.
"It seems awfully political especially when they say [NB Power] should be run like a business. These guys are not as open and transparent as what they want people to believe," Arseneault said.
Finance Minister Blaine Higgs has asked all government agencies to cut their budgets as the Tories try to eliminate the massive deficit left over by the former Liberal government.
The provincial government has started its own internal review of departmental operations to find cost savings.
Leonard said NB Power wasn't able to conduct the internal review in the same fashion as the provincial government.
The energy minister said the provincial government can move staff around to get an independent perspective on a different government department.
NB Power, however, needed to bring in an outside company to offer a fresh perspective on its operations.
Lord was the Progressive Conservative premier from 1999 to 2006.
The Lord government restructured NB Power in 2004, splitting the Crown corporation into a holding company and a series of competing subsidiaries.
Lord also called on NB Power to trim its budget when he was premier, including a demand to cut $20 million from its budget a few months before he called the 2006 election.NB Power -- President's Message