Newfoundland and Labrador Premier Danny Williams finalized a $6.2-billion deal to develop the Lower Churchill hydroelectric project on Thursday, raising questions about whether the new electricity will be routed through New Brunswick.

Newfoundland and Labrador Premier Danny Williams is expected to announce a deal to develop the Lower Churchill hydroelectric project with Nova Scotia's Emera Energy. (CBC)Nalcor, N.L.'s Crown-owned energy corporation, and Nova Scotia's Emera Energy have agreed on a term sheet to develop the hydro project at Muskrat Falls.

Nova Scotia Premier Darrell Dexter plans to meet with Premier David Alward to discuss how the agreement would enable New Brunswick and Nova Scotia to strengthen the electricity system in the Maritimes and create jobs in Atlantic Canada.

Dexter promised an enhanced transmission grid to the New Brunswick border.

The deal will see Nalcor develop the hydro project and the companies will build subsea power lines from Labrador to Newfoundland. Emera would then pay the cost of building additional subsea power lines to Nova Scotia.

N.B. Energy Minister Craig Leonard said there was no question the deal would benefit his province, either through transmission or through buying the power.

"N.B. Power is always looking for opportunities to purchase low-price power and this is just another opportunity for them down the road," he said.

However, Leonard said, it would not likely lead to the shutdown of any existing N.B. power plants.

Last month, Williams told a Progressive Conservative party convention that a deal was in the works and the new hydro power could be sent through New Brunswick en route to the United States.

"Ultimately some of that power could end up going into New Brunswick or the hungry United States market," Williams told the partisan convention.

'Somebody's got to determine whether the business case works to be able to sell that kilowatt hour competitively into Massachusetts.'— Jack Keir, former N.B. energy minister

The power deal is the kind of arrangement Williams accused Hydro-Québec of trying to block when it attempted to buy NB Power last year.

But it's not clear whether there's a business case for getting hydro power from Lower Churchill all the way to New Brunswick and then into the power-hungry U.S. market.

Getting the hydro power from Nova Scotia into the United States would probably require the construction of new power lines in New Brunswick.

Sylvain Gignac, the president and chief executive officer of the New Brunswick System Operator, the organization that regulates access to the province's power grid, said if new power lines need to be constructed then a study will need to be conducted.

"If there's no benefit to New Brunswickers, at that point, the proponent will pay everything," Gignac said.

Jack Keir, a former New Brunswick energy minister, said he's still uncertain if the Lower Churchill project can be profitable. (CBC)And if Newfoundland and Labrador's energy utility has to shoulder that full cost of constructing power lines, that could hurt the project.

Jack Keir, a former New Brunswick energy minister, said it remains to be seen if Lower Churchill can be profitable.

"Somebody's got to determine whether the business case works to be able to sell that kilowatt hour competitively into Massachusetts," Keir said.