NB Power deal could have waited until after vote
Utility would have posted profit if NB Power deal was delayed, CEO says
A decision on whether to sell parts of NB Power to Hydro-Québec could have waited until after a fall election without causing financial losses at the utility, CBC News has learned.
Gaetan Thomas, the president and chief executive officer of NB Power, confirmed in an interview the utility likely would have posted a company-wide profit in the 2010-11 fiscal year with no rate increase.
That is contrary to provincial government's claims made during the Hydro-Québec sale debate that NB Power's pressing financial needs prevented a vote on the deal.
"[The profit] would have been around $30 some million [without any rate increase]," Thomas said in an interview.
Energy Minister Jack Keir declined a CBC News request for an interview about the government's portrayal of NB Power's financial situation during the sale debate. His office referred questions back to the utility.
Keir, Premier Shawn Graham and Finance Minister Greg Byrne all claimed NB Power's urgent requirement for a rate increase in the spring made it impossible to delay a power deal with Quebec so voters could pass judgement on it in the Sept. 27 provincial election.
"Obviously, if we do that, NB Power is not going to be in a financial position to meet its obligations," Byrne told the Legislature in late February.
"It's irresponsible to suggest that."
The Graham government announced a plan to sell NB Power to Hydro-Québec in October 2009. The Liberals scaled back the proposed deal in January 2010 in the face of widespread anger over the power proposal.
The final deal would have sold parts of NB Power to Hydro-Québec for $3.2 billion and would have cut large industrial power rates by 23 per cent and froze residential power rates for five years.
Profit was possible
Thomas confirmed NB Power's budget for the 2010-11 now shows NB Power could have met its financial obligations with enough left over for a multi-million dollar profit even if the sale — and a rate increase — had been delayed until March 2011.
A three per cent rate hike was implemented on June 1 and the utility now expects to post an after-tax profit of $69 million this year among its five separate companies.
The rate hike is now being reviewed by the Energy and Utilities Board, the province's energy regulator, and is expected to raise slightly more than $30 million in extra revenue for NB Power.
The Hydro-Québec deal collapsed in late March, but until then the provincial government staunchly maintained NB Power's financial woes prevented a vote on the unpopular proposal.
In February the province did agree to delay the sale for seven weeks into mid-May to allow public hearings on the arrangement, but Keir made it clear NB Power's shaky finances could not withstand further delays.
"A delay of six or more months would not be financially responsible," he told reporters Feb. 26.