Hydro-Quebec proposes buying NB Power assets

2 November 2009

Canadian utility Hydro-Québec has proposed buying most, but not all, of the assets of the neighbouring province, New Brunswick, including its Point Lepreau nuclear power plant, for CAN4.75 billion.

But the deal would only include the plant once its refurbishment project was completed, in 2011. "Hydro-Québec would not assume any liabilities with respect to the Point Lepreau refurbishment project," a press release said.

NB Power would continue as a separate, New Brunswick entity, headquartered in Fredericton, and to use the existing name and corporate identity. Hydro-Québec would offer employment to all employees of NB Power at the time of closing, and respect the collective agreements in place.

Other facilities included in the deal are NB Power's distribution assets, and all the hydro and coal generating facilities except four. Thermal generation facilities at Coleson Cove and Belledune would continue to be owned and operated by the Province of New Brunswick, and would supply electricity to Hydro-Québec under the terms of tolling agreements. Hydro-Québec could direct the Province to shut down such facilities on one year's prior notice and all emissions allowances would accrue to Hydro-Québec. The thermal generating facility at Dalhousie would be phased out.

“This proposed agreement is an exciting opportunity for New Brunswick, and in the public interest,” Graham said. “Homeowners will see rates much lower than under the status quo, and we will now share Quebec’s competitive industrial rates which, coupled with our plan for lower taxes, positions us for significant economic growth. Moreover, the elimination of NB Power’s massive debt will help us attain self-sufficiency and relieve our children and grandchildren of this burden.”

"This agreement creates an unprecedented energy partnership in Canada. Through it, Quebecers will acquire quality assets, while over the medium term, our partners will benefit from a clean energy supply that will reduce green house gas emissions in Eastern Canada. It will also provide Québec with a strategic geographic position with regards to the markets of Atlantic Canada and New England. All Quebecers will benefit from this agreement," Charest said.

Speaking for NB Power, President David Hay said, “Hydro-Québec is a highly respected and well-managed world-class, reliable organization. Under the new regulatory framework, our customers would benefit from lower rates than NB Power can provide in its current configuration, while our employees will continue providing the excellent service to New Brunswickers that they have become known for.”

The MOU sets a closing date for substantially all the assets involved on or about March 31, 2010. In addition, a package of regulatory reforms, aimed at harmonizing New Brunswick’s regulatory system with that of Québec, will be presented to the New Brunswick Legislature in the upcoming session.


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