Energy Minister Jack Keir has conceded that tying future electricity rates to inflation is not a guarantee that power prices will remain low but he stands by the plan.

'Look, I'm not trying to suggest to you for one second I can predict the future. I wish I could.'— Energy Minister Jack Keir

Under the proposed agreement to sell NB Power to Hydro-Québec, residential ratepayers will have a five-year rate freeze. Starting in 2015, power prices would rise with the consumer price index and the cost of any new generation or transmission projects approved by the Energy and Utilities Board.

Those controls on the consumer price of electricity have been key to the Liberal government's efforts to sell the proposed deal, which has been under attack since it was announced in late October.

But a CBC analysis showing that had inflation been used to guide rates since 1959, power prices would be almost triple what they currently are had Keir on the defensive on Wednesday.

Keir told reporters there are no guarantees that inflation will stay low.

"Look, I'm not trying to suggest to you for one second I can predict the future. I wish I could," Keir said.

The energy minister said it is unfair to use inflation increases before 1991, when the Bank of Canada adopted a policy to keep inflation at two per cent and cited a Conference Board of Canada prediction that New Brunswick's inflation rate would rest below two per cent for the next 20 years.

Experts can be wrong in their forecasts, Progressive Conservative Leader David Alward said, pointing out that few predicted last year's global recession.

"We do not know what tomorrow will bring, what 10 years from now will bring, what 20 years will bring, what 50 years will bring," Alward said.

Industry group calls for reform

The New Brunswick government has entered into a memorandum of understanding to sell the majority of NB Power's assets to Hydro-Québec for $4.8 billion, which would immediately clear the utility's debt.

'Funny things have happened over long periods of time to various economic indicators that were unanticipated. That's fine. Life happens.'— Tim Curry, Atlantica Centre for Energy

The province estimates the five-year rate freeze and lower large industrial power rates to be worth an extra $5 billion.

A final agreement is now being negotiated between New Brunswick and Quebec.

As those talks continue, it isn't only the opposition Tories who are questioning the wisdom of tying future rate increases to inflation.

The Atlantica Centre for Energy, a Saint John-based energy group that includes large businesses such as Irving Oil, Emera and Enbridge, is also worried that predictions of low inflation could be wrong and could lead to higher rates.

Tim Curry, the centre's president, said Atlantica supports the sale but it wants the deal changed so that New Brunswick rate increases match whichever is lower: the inflation rate or the increase in power prices being passed on to Quebec ratepayers.

"Funny things have happened over long periods of time to various economic indicators that were unanticipated. That's fine. Life happens," Curry said.

"But we felt this might be a way of both respecting the interests of both parties and reducing the uncertainty associated with it."