Consumer electricity rates frozen, commercial rates reduced 20%

From a CBC story – updated

New Brunswick Premier Shayne Graham andHydro-Québec officials are set to announce the takeover of NB Power by the energy giant. Newfoundland warns PEI and NS the deal looks good but will bite them in the end.

The $10 billion price tag includes hydro and nuclear generating plants, transmission and distribution but excludes older fossil fuel plants.

$5 billion is being paid in cash and the balance through funded rate reductions.

Consumers will have their rates frozen for 5 years and commercial customers get rate cuts of 20%.  After that period, rates will be increased at the cost of living.

Hydro-Québec is Canada’s largest electrical energy company with 59 hydro plants and one nuclear plant. The public utility generates 36,000 megawatts.

PEI’s Energy Minister Richard Brown is touting the deal as a cost savings to PEI. However, history has shown that Hydro-Québec strikes hard and profitable deals for itself not other provinces.

Newfoundland and Labrador Premier Danny Williams also weighed in on the issue Wednesday, writing a public letter to Graham that he copied to Nova Scotia Premier Darrell Dexter and P.E.I. Premier Robert Ghiz.

“I caution you, based on our experience with Hydro-Québec, that a short-term opportunity can turn into a long-term loss of significant magnitude as they will most definitely find ways to recoup their investment and more from New Brunswickers who no longer control their energy destiny,” Williams wrote.

Newfoundland struck what appeared to be a great deal in the 1968 with Hydro-Québec for Churchill Falls power. They discovered later than they were bound to provide cheap energy for Quebecers without much compensation. Churchill Falls deal probed

It was obvious 15 years ago that lavish spending by NB Power officials was leading New Brunswick down the garden path to financial difficulties. The largely powerless NP PUC was warning the government in the early 90′s that NB was over-spending.

The cost over-runs at the Point Lepreau Nuclear plant have NB Power on its knees. It needed a financial rescue that Premier Graham had no confidence he could manage. “Sell the farm” became the by-word for extricating NB and the government from the mess before the next election.

Politicians manage resources for the short term. Newfoundland has learned the hard way and is gaining financial independence.

PEI is drifting without policies that will gain it any advantage in the future. The recently announced royalty on wind power sounds like spare change not a major source of revenue for the Province of PEI.

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