Jan. 20, 2010
FREDERICTON (CNB) - New Brunswick will retain complete ownership and control of its transmission and distribution systems following the conclusion of negotiations of an energy agreement with Québec.
The announcement was made in Fredericton by Premier Shawn Graham, Energy Minster Jack Keir and Business New Brunswick Minister Victor Boudreau.
A New Brunswick-Government owned NB Power will retain NB Power Transco and NB Power Disco, as well as NB Power Holdco, while the New Brunswick System Operator will continue to operate as an arm's length agency.
As a result of these changes to the proposed energy agreement, NB Power will continue to operate as a New Brunswick-owned and operated Crown corporation, employing approximately two-thirds of the current workforce of the utility.
As the owner of the transmission and distribution companies, NB Power will continue in its roles of customer service excellence, planning, maintenance and development of our transmission system.
The New Brunswick Energy and Utilities Board and the New Brunswick System Operator will continue to have oversight as it applies to all aspects of the transmission and distribution networks in New Brunswick.
As previously announced, the Government of New Brunswick will continue to set and implement energy policy, and will continue to work towards the development of the province's energy hub.
New Brunswick will receive $3.2 billion for the assets being sold to Hydro-Québec, projected to be a sum sufficient to retire the debt related to the generation assets of NB Power. The transmission and distribution networks yield a secure revenue stream that is sufficient to service the remaining debt.
"New Brunswickers have clearly told us that our province must have absolute control over our energy future," said Graham. "With today's announcement, the province continues to meet its objectives, while still owning our power lines and entire transmission and distribution networks. There can be no further question that New Brunswick controls its energy future and that we have secured a good deal for our province. At the same time, we will continue to enjoy guaranteed rate relief for all New Brunswick homeowners and businesses, which will make electricity more affordable and our economy more competitive."
Hydro-Québec will still provide New Brunswick with a 14 terawatt-hour heritage pool of electricity, more than large enough to meet the province' current electricity needs. New Brunswick ratepayers in the residential, commercial and wholesale rate (RCW) category will continue to benefit from a guarantee of no rate increases for the next five years. This will mean those customers will avoid a planned minimum rate increase of 16 per cent over that period.
"The bottom line is that over the next five years, our residential rates will not increase," said Keir "A significant advantage for New Brunswickers concerned with the rising cost of electricity. "Following five guaranteed years of no rate increases, it will be NB Power Disco that will appear before the New Brunswick Energy and Utilities Board to justify any rate increases."
All businesses will continue to enjoy substantial rate benefits, which will strengthen the province's overall competitiveness and its economy. Large industrial ratepayers will see reductions averaging 23 per cent and medium-sized industries will receive reductions averaging 15 per cent.
"We made it very clear from day one that an important objective for us was making our economy more competitive," said Boudreau. "While this change does take away from some of the advantages originally proposed for large industry, it will still give them a considerable benefit which will, combined with our Plan for Lower Taxes, allow them to maintain the 46,000 jobs they provide today, and create more high-paying jobs for New Brunswickers in the future."
As a result of the final negotiations, Hydro-Québec will acquire the Point Lepreau generating station, hydroelectric generating units and the peaking diesel units at Sainte-Rose and Millbank. As previously announced, the generating facilities at Belledune and Coleson Cove will continue to be operated by NB Power under a contractual arrangement with Hydro-Québec.
Hydro-Québec will supply replacement power from the heritage pool at a fixed price, thereby reducing the risk to ratepayers. This means that although New Brunswick will continue to own and manage the deferral account, the costs associated with replacement power are more certain.
The other features and benefits of the proposed energy agreement originally agreed to in October 2009 remain substantially the same. These benefits include elimination of most of the financial risks associated with electricity production as well as the risks associated with servicing a large debt portfolio. Today's changes also provide a clear catalyst for significantly reducing the province's environmental footprint.
The memorandum of understanding (MOU), along with today's changes, will lead to the signing of definitive agreements, which are expected to be signed by March 31, followed immediately by a guarantee of no rate increase for the next five years for residential and small business customers.
MEDIA CONTACT: Marie-Andrée Bolduc, communications, Office of the Premier, 506-453-2144.