Opposition Leader David Alward suggests there will be a price to pay if the proposed NB Power deal falls through.Opposition Leader David Alward suggests there will be a price to pay if the proposed NB Power deal falls through. (CBC)

The Opposition Conservatives used the first question period of the new legislative session Wednesday to pepper the government with questions about possible penalties if the proposed sale of NB Power doesn't go ahead.

Progressive Conservative Leader David Alward and his MLAs repeatedly called on the Liberal government to divulge details about the memorandum of understanding with Hydro-Québec, suggesting they have information about a penalty provision.

"Is there any associated cost with tearing up this MOU with Hydro-Québec?" asked Alward.

"What is the cost, the penalty cost, to the province of New Brunswick if you don't go ahead, if you don't sign the agreement by the end of March of 2010?" asked MLA Paul Robichaud.

Energy Minister Jack Keir said Section 10.1 of the memorandum of understanding specifies there's no penalty cost or legal obligation whatsoever.

"It's clear in the MOU that it's not a legally binding agreement," he said.

But Alward later told reporters his Tories have information that suggests otherwise. He declined to say how he knows there would be a penalty, or explain how a secret clause would carry more weight than the tentative agreement that was made public.

"That's for us right now," Alward said.

He noted that many business agreements include clauses providing for penalties if a deal breaks down.

"We don't believe that [Section 10.1] is clear, and it's up to government to say if it's clear or not."

Under the proposed agreement, expected to be finalized by the end of March, Hydro-Québec is to pay $4.8 billion for the majority of NB Power's assets, a sum that will wipe out the utility's debt.

Additionally, Hydro-Québec will freeze residential rates for five years and cut large industrial rates to the level paid currently by Quebec companies. The New Brunswick government values the rate savings at $5 billion.

The Conservatives are against the proposal and have demanded an election over the sale.