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More spin? New deal proposed for sale of NB Power

In the face of serious public opposition, the Liberal New Brunswick government has been forced to go back to the table over plans to sell New Brunswick (NB) Power to Hydro Québec (HQ).  Announced yesterday is a new deal with Québec for the future of NB Hydro.

You can read a summary of the Agreement on Energy between the governments of Québec and New Brunswick here

To read Council responses to the original Moratorium of Understanding (MOU), see “Council of Canadians says NB Power should remain Public,” our open letter to the Premier, Energy Minister and Party leaders and our action alert.

Here are some initial thoughts about the new deal.

The Council of Canadians is still compelled to see the new deal as largely not in the public interest, with a number of the questions and points raised in our open letter continuing to be not sufficiently addressed.

Public engagement

Fundamentally, the fact that a draft copy of a legal agreement is not publicly available means that New Brunswickers’ can’t be sure that the agreement is in the public’s interest. Further, public engagement by the New Brunswick government on what remains a monumental decision continues to be inadequate.

While the serious and damaging (for the Liberals) public backlash is responsible for this re-jigging of the deal, this backlash wasn’t heard through formal public consultations or democratic process.  Public response was limited to comments on a PR run government website and in public meetings and demonstrations organized by New Brunswickers. Nor are full details of the agreement available for independent public review, compromising any thorough analysis.

Janice Harvey, freelance columnist, university lecturer, and president of the New Brunswick Green Party, denounces the sorry state of democratic review in New Brunswick exemplified in the NB Power deal in her op-ed, “A Failure of Democracy.”

The new deal keeps the March 31 deadline for closing the transaction and was not announced alongside any formal public hearings process (such as an energy committee of the legislature that holds public hearings or a referendum).

Expanding public and community owned renewable power

Any deal must provide the space for local renewable energy to increasingly play a role in supplying New Brunswickers’ energy needs.

As reported in the Daily Gleaner, David Coon of the Conservation Council of New Brunswick says keeping NB Power’s transmission and distribution systems in the province’s hands is the first step to developing green energy. “Our proposal is that the public utility we are keeping should have a mandate to develop renewable energy,” he said. “We have to develop a New Brunswick green energy policy instead of proceeding in an ad-hoc way.”

Retaining ownership of the transmission and distribution assets under the new deal may help to diminish concerns about local renewable energy projects not having access to the grid. Retaining ownership can provide the capacity and space for provincial policies promoting the rapid expansion of public and community renewable energy projects. This stated, the devil is in the details and New Brunswick residents need full assurance that ownership means maintaining the right for local renewable energy projects to supply local needs and have priority access the grid.

The Council of Canadians continues to maintain that the province should create a new renewable energy arm of NB Power. This utility can provide logistical support and funding to renewable energy projects, making direct investments in publicly owned wind, solar, biomass, and tidal developments and ensure their access to the grid. Here, community and cooperatively owned renewable energy developments can also play an important role in ensuring an emphasis on local and democratic governance of a new renewable energy system.

In the interests of workers?

There still remain unanswered questions on whether the new deal is in the interests of workers.  The new deal continues to use the word “respected” in reference to existing collective agreements, previously criticized under the original MOU as having little legal standing.

As reported by the Canadian Press, “Before we had some concerns but it looked like the group was going to stay intact,” says Ross Galbraith, business manager of the International Brotherhood of Electrical Workers, “Now it looks like some of them are going to be carved out and that creates a whole lot of questions in my mind.”

There remain no just transition plans for workers at the fossil fuel generating facilities referenced in the new deal or accompanying announcement, at least one will face closure in the near future.
Questionable benefits for New Brunswickers

The new deal will see the sale of seven hydroelectric generating facilities, 2 diesel peaking units and the Point Lepreau nuclear power plant to HQ.  While this is being justified on the basis of helping to reduce debt, this sale still represents a serious loss of future revenue that could be earmarked by the province for a number of worthy efforts including green job expansion and social programs. This is particularly the case with the hydroelectric dams that are producing valuable low emission power.  Questions continue to remain over the future of electricity rates with price being tied to the NB Consumer Price Index after 5 years.

What about energy security? What accountability measures will be put in place to ensure that HQ maintains the heritage supply? The fact remains that New Brunswickers will be reliant on power generation owned and managed by a Crown corporation accountable to the Québec provincial government. With a myriad of future possibilities that could affect power generation, where does this place New Brunswickers in ensuring their energy security?


Export-oriented energy vision versus sustainable energy systems

Let’s be clear. The opposition to and questioning of the original MOU by Premier Danny Williams and the premiers of Nova Scotia and PEI as well as the subsequent acceptance of the new deal, is all driven by the desire to access export markets through New Brunswick.  Under the new deal, HQ retains 670 MW of transmission rights with New England, the purchase of seven hydroelectric generating facilities also reportedly comes with 970 megawatts of export capacity. While it appears that in the short to medium term future electricity needs in New Brunswick will be met by generation facilities in the province, ultimately HQ appears to want to supply New Brunswick needs in order to be able to profitably sell power generated in New Brunswick to the U.S. market.

Premiers are still be driven by a regional energy vision directed at export-oriented trade.

As described in our open letter, the business model of focusing on exports and profit potential as opposed to sustainably meeting local and regional needs raises concerns. This can lead to decisions guided by priorities that may not be in the public interest. It can act to justify the expansion of large scale energy projects with serious social and environmental impacts while overlooking the benefits of achieving smaller scale, more diversified and sustainable energy production and consumption (including increased energy conservation and efficiency). For example, the expansion hydropower under Plan Nord in Québec, driven in large part in the desire to export power, has raised a number of legitimate concerns. This includes the lack of consensus regarding First Nations rights and decision-making powers over resource development, planning and implementation affected by the expansion as well as concerns raised over associated environmental impacts.

Further, if investor-owned generators begin to play a more prominent role in provincial electricity sectors, provincial government’s capacity to ensure energy security is undermined. The North American Free Trade Agreement (NAFTA) gives significant rights to foreign investors and limits the ability of Canadian governments to intervene in energy exports – for example, to prioritize provincial energy needs first –  except in extraordinary circumstances.