Energy minister expects 'smooth' natural gas utility transition

The province's energy minister says the government will do its best to help lower natural gas prices following the sale of Enbridge Gas New Brunswick.

Mike Holland says it's too early to have 'concrete plan' to reduce rates

Mike Holland, the minister of energy and resource development, says he's optimistic about the natural gas utility transition. (Mike Holland MLA for the Albert riding Facebook page)

The province's energy minister says the government will do its best to help lower natural gas prices following the sale of Enbridge Gas New Brunswick.

Mike Holland, the new minister of energy and resource development, said the government can play a supporting role in the transition of Enbridge Gas New Brunswick to its new owner Algonquin Power and Utilities.

"The success of Algonquin … can bring new jobs to the province and ultimately what can we do to help them so that the ratepayers benefit both in the form of service and in rates," Holland told Information Morning Fredericton.

However, they have no "concrete plan" this early on in the transition, he said.

The $331-million sale was announced Tuesday.

We find out more about the company that bought the gas network, and what the sale means for Enbridge customers. We also ask Mike Holland, NB Minister of Energy and Resource development for his thoughts on the deal. 17:27

High rates

New Brunswick has some of the highest natural gas rates in the country. Enbridge's Ontario customers pay $2.71 per gigajoule, while New Brunswick customers pay $11.20.

"We need to explore and review any opportunities that we have to bring those prices to a more reasonable level," Holland said.

Enbridge Gas New Brunswick hoped to have 71,000 customers by this year, but there are only 12,000.

Attempt to lower rates

During its almost two-decade stay in New Brunswick, the company has tangled with the province, filing an $800-million lawsuit in 2016 after the province passed legislation allowing competitors into the market to force rates down.

As part of a settlement, the province put a cap on rates ending for 2018 and 2019, allowing Enbridge to collect assets and do some long-term planning.

David Pasieka, the chief transformation officer at Algonquin Power & Utilities, said that's setting the company up for success.

The commodity rate for natural gas in New Brunswick is one of the highest in Canada. (CBC)

"Clearly yes, your natural gas prices here are the highest in the country and that's a function of the availability of the product," Pasieka told Information Morning Fredericton.

"In this particular case, I think what Enbridge New Brunswick has done in 2016, once they got all the lawsuits and all the noise under control, they started to buy natural gas on a more long-term basis than they had in the past. Those long-term contracts will ultimately create lower prices."

Wage subsidies

During the transition Algonquin will be relocating five or six employees to New Brunswick.

Pasieka said the sale was not dependent on getting any government wage subsidies for these employees, as they are existing Enbridge Gas workers. But if there is an option to work with government, he said they would.

"If those things are available, we'll look at that and ultimately that might give us an opportunity to put more things in the province, to do more things for the utility," he said.

Holland said while he's "pretty confident" about this deal because it's not cutting workers or increasing rates, the government will continue to keep private business "at arm's length."

"It look like as though it's going to be a fairly successful and smooth transition" he said.

Holland said he has faith in Algonquin's ability to bring the prices down.

"They are coming with a pretty innovative plan," he said. "I'm pretty excited to watch this unfold and see how this can directly benefit New Brunswickers."

With files from Information Morning Fredericton and Jacques Poitras