New Brunswick

NB Power may seek partner for Mactaquac project, says Roger Melanson

The Gallant government says NB Power could give up partial ownership of major assets like the Mactaquac Dam to lower the cost of refurbishing or replacing them.

Finance minister says 'hypothetical scenario' could see utility give up partial ownership to lower cost

Mactaquac dam, built in the mid-1960s, is the largest of seven hydroelectric dams in New Brunswick (CBC)

The Gallant government says NB Power could give up partial ownership of major assets, such as the Mactaquac Dam, to lower the cost of refurbishing or replacing them.

That comment came as Finance Minister Roger Melanson spent a second straight day before a legislative committee defending a bill that will change tendering rules for the Crown corporation.

Finance Minister Roger Melanson told a legislative committee Wednesday that NB Power may want to seek a partner to lower costs on the Mactaquac dam project. (CBC)
Melanson told the committee that if the power utility wanted to bring on a partner to lower its costs, it might give that partner a stake in the facility.

But he stressed it's only a hypothetical scenario.

"If it's what NB Power wants to do as an objective, transfer risk, maybe there would be an equity position in the partnership agreement," he said.

"Maybe. I don't know."

Bill 12 would exempt NB Power from regular rules requiring competitive bids when it awards contracts for a "non-routine capital project."

Cost possibly $5B

The utility is in the midst of public consultations over whether to replace or remove the Mactaquac Dam. Some of the options cost between $2 billion and $5 billion.

Officials said last week they now believe they can extend the life of the existing dam beyond 2030, the date by which they previously said it had to be replaced or removed. That would be done by replacing some of the concrete and equipment.

But at Energy and Utilities Board hearings earlier this week, NB Power staff said it was too early to say if that option is less expensive. The utility will choose one option to recommend to the corporation's board by the end of this year.

Melanson told the committee Wednesday that's why it's too soon to talk about whether a private-sector partner would get an ownership stake in the dam.

NB Power president Gaetan Thomas is faced with choosing to rebuild, refurbish or remove the Mactaquac dam by 2030. (CBC)
"Who is the partner? What's the proposition of the partner? It's way too early to even discuss any of these details."

In 2013, Gaëtan Thomas, the president and chief executive officer of NB Power, mused about the possibility of the corporation seeking a partner for the Mactaquac project.

Thomas noted that partnerships with Prince Edward Island helped build the Point Lepreau Nuclear Generating Station and the Dalhousie Generating Station.

"These mega projects are easier to justify if some of the output is guaranteed through some power purchase agreements or other agreements of that sort," said Thomas.

Control questions

PC MLA Stewart Fairgrieve suggested that the utility might give up some control over its facilities.

"We could enter into an agreement where ownership of that asset would fall outside the jurisdiction of NB Power, the province of New Brunswick, and the taxpayer of New Brunswick," he said.

He brought up the previous Liberal government's attempt to sell NB Power to Hydro-Quebec in 2009.

NB Power is not for sale.- Roger Melanson , finance minister

"I'm sure we would like to avoid duplication of that kind of situation," Fairgrieve said.

Melanson shot that idea down quickly.

"NB Power is not for sale," he said.

"A partnership is not selling the risk. It's about sharing some of the risk."

Any deal would involve "protecting assets and minimizing the risk to the ratepayers."

Any partnership would have to comply with the utility's business plan, win the approval of its board and get EUB approval if it costs more than $50 million, Melanson pointed out.

"There's so many steps that have to be followed through this exercise," he said.

"We have to wait and see what the proposed partnership would be, if there is one."

About the Author

Jacques Poitras

Provincial Affairs reporter

Jacques Poitras has been CBC's provincial affairs reporter in New Brunswick since 2000. Raised in Moncton, he also produces the CBC political podcast Spin Reduxit.