It's unclear how much it will cost to decommission the Dalhousie generating station. (CBC)

The New Brunswick government now says it could take on the cost of shutting down the Dalhousie electrical generating station to avoid having that cost added to provincial power rates.

The Dalhousie station is expected to close next year after its cheap supply of heavy-oil fuel dries up.

Under the proposed sale of NB Power to Hydro-Québec, the cost of dismantling the Dalhousie plant could be tacked on to power rates after the initial five-year freeze on residential rates.

But on Thursday, Energy Minister Jack Keir suggested that could change.

"The government will decide on whether that would roll into ratepayers, or whether the government itself would fund that decommissioning," he said.

It's unclear how much it would cost to decommission Dalhousie. Keir said the only estimate he has seen is about $75 million, which covers the shutdowns of the Dalhousie, Belledune and Coleson Cove plants.

Makes little difference

The political advantage of the government paying the cost is that it would be less visible than if it showed up on power bills.

But Opposition Leader David Alward contends there's little difference. "Whether it's the New Brunswicker who's the ratepayer paying the cost, or the taxpayer, it's going to come out of our pockets," he said.

Alward did acknowledge, however, that even without the sale of NB Power, Dalhousie will require either a costly upgrade or an expensive decommissioning. And New Brunswickers would have to foot the bill, either through their power bills or taxes.

Under the proposed agreement, expected to be finalized by the end of March, Hydro-Québec is to pay $4.8 billion for most 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.