Natural Resources and Energy
Introduction of new Electricity Act (03/01/31)
Jan. 31, 2003
FREDERICTON (CNB) - The provincial government is taking a major step today in reforming the electricity industry in New Brunswick, with the introduction of the new Electricity Act.
"This important legislation is a made-in-New Brunswick solution to global changes in the electricity market," Natural Resources and Energy Minister Jeannot Volpé said. "It ensures a continued supply of electricity at reasonable rates and minimizes risk to New Brunswick ratepayers and taxpayers."
The Electricity Act provides the legal framework within which we can move ahead in implementing the reform of our electricity market, and the reorganization of NB Power as planned and announced over the last few years."
As announced previously and stipulated in the Energy Policy, the new legislation provides for the establishment of the rules governing an open wholesale market for the province's three municipal distribution utilities and 42 largest industrial customers that are directly connected to the transmission system.
"NB Power's remaining 356,000 customers will notice little change. Their electricity rates will continue to be regulated by the Public Utilities Board under the same rules that now exist," Volpé said. "The same NB Power name will appear on monthly bills. The same trucks will be on the road, and when customers require service they will call the same phone numbers."
Unlike Ontario and California, the government is not making any changes in the retail electricity market.
The Electricity Act also covers a number of issues related to NB Power's restructuring such as its new status and the transfer of assets and employees. The act also expands the role of the Public Utilities Board.
"The legislation ensures that the employees of the current NB Power can make a smooth transition to their respective new corporations without interruption to their employment entitlements such as pensions or holidays," Volpé said. "The employees of NB Power will remain in the Public Service Pension Plan and existing collective agreements will also remain."
Under the new act, NB Power Corporation will officially become NB Power Holding Corporation with four subsidiaries. The new subsidiary corporations are to remain Crown corporations because the Province owns all of the shares in NB Power Holding Corporation, which in turn will hold all of the shares in the subsidiaries. The corporations being created are reflective of the existing business units at NB Power. The functions of each are as follows:
The new corporations will receive general management services from the holding company but will be expected to operate as commercial businesses
"Over time, these four NB Power subsidiaries will be appropriately capitalized, pay dividends and special payments in lieu of income and capital taxes to the Province, and will no longer be dependant on the Province to guarantee their borrowings," Volpé said. "They will operate on a level playing field with other energy providers. These measures will help to ensure that the risk to taxpayers is minimized."
The new legislation also provides for the creation of two new entities:
The legislation will give the Public Utilities Board the authority to license market participants and to regulate and set rates, tariffs and charges. Existing authority over electricity rate increases remains.
"This new legislation is positioning our province to meet the challenges and opportunities of a new era of in the electricity sector," the minister said. "The restructuring and commercialization of NB Power and the move to market competition are key components of our energy policy - one that reduces risks to taxpayers and ratepayers alike while encouraging a controlled and deliberate approach to market competition."
MEDIA CONTACT: Robert Duguay, communications, DNRE, 506-453-2614.