N.L. Premier Danny Williams told reporters in St. John's on Tuesday that he is pleased New Brunswick is renegotiating its proposed deal to sell NB Power to Hydro-Québec. (CBC)

Premier Danny Williams of Newfoundland and Labrador says he is pleased New Brunswick is taking a second look at its proposed power deal with Hydro-Québec.

Williams told reporters in St. John's on Tuesday that New Brunswick Premier Shawn Graham told him Sunday that the deal reached in October was being renegotiated.

Graham's plan to sell NB Power to Hydro-Québec has been the subject of intense opposition since it was announced, including public criticism from Williams. At least five members of the Liberal government in New Brunswick told Graham they would not vote for it.

Williams had argued a complete buyout of New Brunswick's hydro-energy assets would jeopardize the energy ambitions of Atlantic Canada while enriching Quebec.

He said Tuesday that this pressure had an impact.

Trying for better deal

"The people of New Brunswick reacted," Williams said. "They heard what we were saying and obviously public pressure mounted, and Premier Graham, his cabinet and caucus heard it, and they obviously felt because of the weight of the arguments and the importance of this to the future of the people of New Brunswick, they decided that they'd go back and negotiate a better deal."

New Brunswick Finance Minister Greg Byrne told reporters that an amended deal would be made public Wednesday and that the new agreement has the full support of the caucus.

Graham told the legislature last week that ownership of the energy system, including the province's transmission lines, would remain in New Brunswick, which would signal a major shift in the nature of the deal.

Williams said with New Brunswick holding onto its transmission lines, talks to deliver Lower Churchill power from Labrador to other markets are back on.

Under the proposed agreement, New Brunswick would sell a majority of its assets to Hydro-Québec for $4.8 billion, which would erase the utility's debt and freeze residential rates for five years while cutting large industrial rates to the same levels as in Quebec.