Former New Brunswick premier Frank McKenna called the proposed sale of NB Power 'courageous.' (Gerald Herbert/Associated Press)

Former New Brunswick premier Frank McKenna is warning Premier Shawn Graham about the political perils that could come with the "courageous" decision to sell NB Power.

Graham unveiled the $4.8-billion deal to sell NB Power to Hydro-Québec on Oct. 29, but the proposed sale has drawn a barrage of local criticism in the last two weeks.

The New Brunswick premier has said that he called on McKenna, who is now the deputy chairman of TD Bank Financial Group, throughout the negotiations to seek advice.

McKenna said in an interview that the merits of the deal stand on their own, but he did have a word of caution for the premier.

"I told him this was fraught with political peril, that it would be enormously courageous to take on an issue of this magnitude in an election year, and had he thought through all the political ramifications of it," McKenna said.

The proposed deal would sell the majority of NB Power's assets for $4.8 billion, which will erase the utility's debt immediately.

As well, residential ratepayers would receive a five-year rate freeze and rates for large industrial customers would drop to the level of their Quebec competitors. The provincial government has estimated the rate package is worth an additional $5 billion.

For Hydro-Québec, the deal offers it 380,000 new customers and a transmission system next to the valuable New England power market.

The former premier said he would speak about the specific elements of the deal in the coming days.

But McKenna, who said after he left office that NB Power was one issue he wished he had dealt with, said he isn't sure he would have had the political fortitude to push forward with such a deal.

"I don't know if I would have the guts," McKenna said.

"In terms of having the guts to do this, this is something that takes great political courage. I would wish I would have had that courage but I can't guarantee it."

Minor role in deal

McKenna is also brushing off the suggestion that he was highly involved in the contentious deal.

Although Graham referred to him as a special adviser, McKenna said that is "over-flattering" his actual role.

"Over the last several months, I would say not very frequently, maybe every three or four weeks, he would talk to me about this and we would bounce ideas around, but that's really the extent of it," McKenna said.

New Brunswick's Opposition Progressive Conservatives have jumped on any link between McKenna and the proposed deal.

Opposition leader David Alward has criticized the hiring of Brian Levitt, a Montreal-based lawyer with the Osler law firm, as the lead lawyer in the deal's negotiations.

Graham said Levitt, who sits on the TD Financial board of directors, came recommended from McKenna. The Tories have criticized the fact that a Quebec lawyer is negotiating the deal for New Brunswick.

"Simply put, the Graham government is adding insult to injury by hiring a Quebec-based lawyer to oversee a New Brunswick-Quebec deal," Alward said on Nov. 6 in a statement.

The New Brunswick government has also hired two public-relations consultants with ties to the former Liberal premier to help sell the agreement with Hydro-Québec.

The lead PR consultant hired to promote the deal is Steven MacKinnon of Hill and Knowlton's Ottawa office. He once worked as McKenna's executive assistant.

Hill and Knowlton has subcontracted some of the work to Colour, a New Brunswick firm run by David Hawkins, another consultant with ties to McKenna.