The CEO of Hydro-Québec says his company did not suggest the controversial rate structure in the deal to buy NB Power.

Thierry Vandal said the idea for the agreement — which would see industry power rates rolled back and residential customers handed a rate freeze — came from Premier Shawn Graham's Liberal government.

"That was very, very clear," Vandal said Tuesday. "The New Brunswick government had established what they were looking for in this transaction.

"We said 'fine, we'll look at the assets that you have, we'll work together to establish the value of those assets.' But accepting that that was the rate structure, the rate framework that we were going to be operating under."

The gap between the industry rollback and the residential freeze is one of the most controversial elements of the memorandum of understanding signed between Quebec and New Brunswick last month.

The deal set the stage for Hydro-Québec to buy the majority of NB Power's assets for $4.8 billion — the equivalent of NB Power's debt.

Figures released to CBC News showed industry would be the clear winner of the deal early on, with the benefits to residents taking years, perhaps even decades, to catch up.

In the first year, for example, industry would save $91.6 million — 79 per cent of the first year's total, the figures show. The figure is 5½ times what residential customers would save in the same time frame.

After the five-year freeze ends for residents, rates would be linked to inflation in most circumstances. At least one critic has suggested there should be a cap on that inflation-indexed increase.

Graham said he may incorporate it into the final contract when it's negotiated.

"I think it's an interesting proposal that he's put forward and we're going to evaluate it," he said.

But Vandal said he does not foresee the final text of the agreement deviating from the memorandum of understanding.

"We're not there, and that's not something that is in front of us as far as I know."