The Mysterious East

The proposed sale of NB Power to Hydro Quebec is testing the ability of our political parties and provincial media to manage this debate in a reasonable way. This is a huge public policy question, and the debate in the Legislature that will begin in two weeks is not going to be enough to explain the pros and cons of the deal to the people of New Brunswick, and to relieve the very real fears of many New Brunswickers. In my view, one solution would be to convene an all party select committee on NB Power that will tour the province, hold public meetings and report to the Legislature. The Memorandum of Understanding would be the starting point for a discussion of what we are to do about the problem of NB Power. Both political parties have contributed to the problem. The NB Power sale is one way out of this corner we’ve been painted into by the mismanagement of successive governments, by the circumstances of our geography, by our industrial base and population size.

The Liberals should be flexible on the March 31 deadline (three per cent residential rate increase? who cares given the vast implications of the deal) and proceed with a final agreement only after a full and transparent picture of what we are getting ourselves into has been presented to New Brunswickers. That full and transparent picture is not there now.

Here are some areas that need clarification:
• What happens to power rates after five years, during which time residential rates are frozen? We need a clearer picture of the regulatory process that will manage future rate increases. Where are the financial models to explain how the process will unfold? Give us a variety of scenarios, the good, the bad and the ugly.
• What happens if and when we exceed the “heritage pool” of power we are now using? Under the proposed deal, we are guaranteed a supply of power for the 14.5 TW of power we now use, but when we exceed this amount, what does this mean for rates? What happens if we exceed the heritage pool during the first five years of the deal? How will those adjustments be made? Where are the models projecting the various scenarios related to power usage inside and outside this so-called “heritage pool”?
• What happens if the Point Lepreau refurbishment fails? We may have already signed the deal by then. You might say this is a foolish question, but my faith in anything AECL says about Lepreau and timelines and costs etc. is weak.
• What will happen if Hydro Quebec decommissions the St. John River dams? This is one of the potential hidden benefits of the deal as far as I am concerns. Beechwood and Tobique would immediately become marginal players on the Quebec Hydro grid and I would suspect a Mactaquac refurbishment many years down the road would be at least a subject of debate. How would the removal of the dams be managed?

Part of this debate should involve discussion of what happens if we retain ownership of NB Power. CEO David Hay’s assertions that everything is fine and the debt is no big deal is just not good enough. This is how bad it is now. Industries in this province are now burning biomass (ie. trees and parts of them) to generate power because NB Power rates are so high. The least productive thing we can do with our forests is to burn them to create power.

NB Power rates are hindering economic growth in this province, and the corporation’s debt, which is measured against to a series of assets of questionable value (ie. aging hydro dams and a non-functioning nuclear plant), is a liability that our children and grandchildren will have to face.

The only real deadline for the Liberals is the September 2010 election. The election could turn into a referendum on the proposed deal. The effect of such an election/referendum, is that it would become an entirely partisan affair (Tory leader David Alward vowing never to sell NB Power, to keep all of the dirty fossil fuel plants open, to offer David Hay a lifetime contract as CEO, to guarantee every NB Power employee a job for life; Shawn Graham offering up the proposed sale to Hydro Quebec and then having to renegotiate the whole thing after the election should he win) with the effect of stalling progress on any kind of energy policy or direction for years to come. The all-party committee might be a start in transforming partisan rhetoric into a public policy debate.

I appreciate the Liberals putting a bold strategy on the table for discussion. Now we are asking our politicians, news organizations, and citizens to rise to the occasion and make this a real public discussion, to lead us carefully into these potentially greener pastures without stepping in a big cow pie.