New Brunswick gives up unprecedented control of its regulatory authority under a proposed deal between NB Power and Hydro-Québec, an independent analysis of the memorandum of understanding has concluded.

Much of the regulation of New Brunswick's electricity market would reside in Quebec after the sale of NB Power, said Gordon Weil, an energy consultant based in Augusta, Me., who was commissioned by the Atlantic Institute of Market Studies to write a report.

"New Brunswick does considerably more than cede control of its electric utility," he says in the report, released Thursday.

'Such a transfer of regulatory control is unprecedented.'—Gordon Weil, energy consultant

"As part of the consideration it gives to HQ for the transaction, it also permanently cedes some important government authority," wrote Weil, who helped establish New England's entire electricity transmission marketplace.

The New Brunswick government has consistently maintained that the sale of NB Power would not affect the province's sovereignty over energy issues or its ability to regulate its electricity marketplace.

"The fact is, nothing changes with this memorandum of understanding in terms of control of the energy policy in New Brunswick," Energy Minister Jack Keir said four days after the proposed sale was announced.

But Weil contends the deal would force New Brunswick's regulatory body — the New Brunswick Energy and Utilities Board — to adopt some Quebec regulations and certain regulatory decisions.

Although it is not unusual for a single utility to operate in different jurisdictions, in every case they are expected to abide by the individual regulation of those jurisdictions, not the other way around, he said.

"Such a transfer of regulatory control is unprecedented."

Weil said he is neither in favour of, nor opposed to, the deal.

"My findings about the MOU are based on my long experience in the electric sector and my research on the deal," he said in a news release accompanying his report. "I have tried to bring to bear a level of expertise in the matters at hand.

"This paper and its conclusion have nothing to do with NB politics. People there will decide if what the deal really produces is sufficient to make it worthwhile."