NB Power pitches energy reforms
Crown corporation recommends competing subsidiaries merge again
NB Power is proposing to the New Brunswick government that it bundle some of its competing subsidiaries back into a larger utility, ending seven-year-old plan to make the utility run more like a business.
Gaetan Thomas, the president and chief executive officer of NB Power, and Edward Barrett, chairman of the utility's board of directors, outlined the proposed changes Tuesday at a news conference.
The Liberal government asked NB Power's executive and board of directors to report back on possible reforms after the deal to sell parts of NB Power to Hydro-Québec fell apart.
NB Power is recommending that its subsidiaries NB Power Generation Co., NB Power Transmission Co., NB Power Nuclear Co. and NB Power Distribution and Customer Service Co. be turned into generation and customer service business units.
The proposed moves would undo the massive reforms launched by the former Progressive Conservative government in 2003 that broke up the Crown corporation into competing subsidiaries in an effort to have the power utility operate in a more business-like fashion.
"This proposed structure for NB Power would increase efficiencies, reduce costs, eliminate duplication and promote greater transparency which would help us to enhance our relationships with our customers and stakeholders," Thomas said in news release.
Donald Savoie, a public policy expert at the University of Moncton, who wrote a report in 1998 that recommended restructuring options, said he was dismayed to learn the Lord government's reforms cost $16 million, most of it in legal and consulting fees.
He said if reversing that change is going to lead to similar spending, it's not worth it.
"This has got to come to a stop. So if people are telling me that in order to re-organize [NB Power], we're going to have a bill to taxpayers or ratepayers for another $16 million to bring it back together, then I would say no. At some point we've got to say no," Savoie said.
Along with trying to make the power corporation run more like a business, the Tories also reformed NB Power so it could possibly be sold.
Energy Minister Jack Keir said he wants to study the utility's proposal, but it makes sense.
"If the previous government separated it out to do those two things and didn't accomplish either one of them, why would you want to leave the structure that way?"
Progressive Conservative MLA Jeannot Volpé, the energy minister who split up NB Power, said declining energy prices are the main reason the private sector wasn't interested in the utility. He said reversing the restructuring will leave the province unprepared for when that changes.
"Because of what happened to the energy market and the whole sector with the economy going down, the demand for power has slowed down a bit," Volpé said.
"It will come back at some point."
Volpé said the reintegration will make it harder to see which parts of NB Power are losing money.
Also under the NB Power proposal, all rate increases would be subject to a review by the Energy and Utilities Board. Currently, NB Power is only required to appear before the regulatory board for rate hikes of more than three per cent. However, the Liberal government has requested the EUB to review smaller rate requests.
The utility also recommended that Efficiency New Brunswick and the New Brunswick System Operator would retain their current roles and not be folded into the utility.