N.B. to restructure electricity system
FREDERICTON (CP) -- The New Brunswick government has drafted a new corporate plan for the province's power utility, hoping to avoid the kind of deregulation horrors that have haunted places like Ontario and California.
New legislation introduced Friday will split NB Power, the provincial Crown utility, into four subsidiaries to handle generation, transmission, distribution and nuclear power.
The subsidiaries will remain publicly owned, but they are designed to operate at arm's length from the provincial government.
"People in Ontario were not ready for it (deregulation)," said Energy Minister Jeannot Volpe. "We have decided to take a more prudent, step-by-step approach in New Brunswick."
Premier Bernard Lord stressed he is not privatizing the power utility.
However, opposition politicians attacked the Conservative government for giving away control of the province's largest public asset.
"This legislation will wipe out any kind of clear, public capacity to make significant decisions about our energy future," charged NDP leader Elizabeth Weir.
Lord denied the accusation.
"This is like a bad episode from Fear Factor," Lord told the legislature, referring to a TV show that forces contestants into risky competitions.
"What we're doing is re-regulation... We want to maintain fair, affordable rates for ratepayers and, at the same time, limit the risk to taxpayers."
The International Brotherhood of Electrical Workers, which represents 2,800 workers at NB Power, warned the province is following a risky path.
"We fear this is simply a longer stroll toward the same road other jursidications have followed, without success," said union spokesman Ross Galbraith, referring to Ontario and several U.S. states.
Ontario recently reversed its decision to sell Hydro One, its huge electrical-transmission utility, under pressure from deregulation opponents.
Facing a consumer revolt, Premier Ernie Eves capped retail electricity prices last November after deregulation of the generation market led to soaring power bills.
Lord said that despite the problems in other jurisdictions, New Brunswick cannot maintain the status quo.
NB Power's $3-billion debt will be divided between the subsidiaries, but the people of New Brunswick are still on the hook for the money.
Nevertheless, divvying up the debt between the new corporations will improve the province's bottom line, the energy minister said.
"This has a direct bearing on our credit rating, which in turn has an impact on the province's cost of borrowing funds in the capital markets," Volpe said.
The average New Brunswicker won't notice any change in the operations of the utility, the government said.
Only the three municipal power companies in Saint John, Perth Andover and Edmundston, and 42 large industrial customers will have a choice of who they buy power from, or generate their own.
However, they'll be hit with an exit fee if they unplug from NB Power.
Lord said the province will not sell the Point Lepreau generating station, Atlantic Canada's only nuclear power plant, although it's looking for private investors to help with a possible modernization of the Candu reactor located on the Bay of Fundy shore.
"It's a nuclear power plant," Lord said, adding that for regulatory and safety reasons, it should remain publicly owned. "We could lease it, if conditions are right."
Still, the province is willing to sell the Coleson Cove generating plant near Saint John, N.B., and is currently negotiating with a potential buyer.
Lord would not say whether the talks are aimed at full or partial sale of the oil-burning plant, the largest single generating station in New Brunswick.