PEI's Premier Robert Ghiz, in a box with no way out, his face says it all photo: Guardian

When the Parti Québécois returns to power the political impact of this deal will hit home

The capitulation of PEI to Quebec is faster than anticipated.

Yesterday we predicted PEI and the rest of the Atlantic region had lost their autonomy to Quebec in the Hydro-Québec deal for NB Power. End of the Maritime illusion

Who could have predicted Ghiz has so little courage he rolls over and wants to quit when the game is just beginning? No doubt Quebec Premier Charest is using the advantage of momentum in the deal with NB Power to influence PEI and even Nova Scotia.

The psychology in mergers and acquisitions is that the purchaser has all the field advantage to pick up other smaller player while the game is in play. Next month or next year the hysteria will calm down and it might be harder to get Ghiz to the table.

Unfortunately for PEI, it has nothing to offer Quebec other than some retail customers and an embryonic wind business. PEI doesn’t own Maritime Electric and it must pay market to buy it before it can transfer the asset to Hydro-Québec. While there might be some advantage, it would be amazing if Ghiz can wring even a fraction of the $5 billion New Brunswick will be paid.

Ghiz is completely out of his depth. The mistake of electing a male-heir of a former Premier to be a Premier is evident each time the inexperienced Ghiz touches money. He has no idea what he is doing, how to do it and when he is getting the short term and long term shaft.

No doubt Charest will wine, dine and waltz Ghiz giving him a few baubles and beads for the electorate back home. If Ghiz was a leader, he would be developing PEI’s wind power which today looks like a non-starter.

The Guardian is reporting this morning Takeover of Island utility is possible, source says.

CBC New Brunswick also reported that Quebec Premier Jean Charest said his province is “…negotiating with Prince Edward Island to sign a similar agreement.”
Premier Robert Ghiz confirmed he has been in discussions with the Quebec premier since September about purchasing cheaper hydro-generated power from Quebec. Charlottetown Guardian

That’s Wednesday’s story in the Globe and Mail.

“Hydro-Québec has also approached Prince Edward Island to strike a similar deal, and is also eying Nova Scotia Power, a subsidiary of Emera Energy, a source in the Quebec government said.

This comes as U.S. officials pressure eastern Canadian utilities to merge, a move that would make it easier to co-ordinate production and transmission of electricity to the eastern United States. Given that the region’s most important source of electricity is Hydro-Québec, U.S. officials are eager to see it take over its smaller rivals in the Maritimes, the government official said.” Globe and Mail

Today the Globe has Newfoundland’s Danny Williams with his analysis of what he calls a bad deal for Atlantic Canada. Hydro deal gives Quebec too much power, Williams warns

“Hydro-Québec’s takeover of New Brunswick Power amounts to a virtual power monopoly in Eastern Canada and poses “a very dangerous situation” for the entire country, Newfoundland Premier Danny Williams warns.

The outspoken premier told The Globe and Mail Thursday that Hydro-Québec’s “agenda” is to secure a stranglehold over access to electricity markets in the U.S.

Hydro-Québec has already initiated similar discussions with Prince Edward Island and contends that eventually Nova Scotia will have no choice but to join the pack – raising fears that Quebec could suddenly hold control over a major portion of Eastern Canada’s energy supply.”

Williams analysis of the NB Power sale and PEI’s chances are bang on. Too bad he didn’t move sooner himself to play in the game.

Nova Scotia is in a weak position vis a vis its debt and may have to give Quebec the nod as well.

Down the road when the Parti Québécois inevitably returns to power merely on rotation the political impact of this deal will hit home.