Hydro-Qubec should not fear changes to NB deal: expert

Hydro-Qubec should not be worried about any possible changes to the deal to buy New Brunswick's power utility for $4.8 billion, says one of Quebec's top energy experts.

Jean-Thomas Bernard, an economics professor at Laval University who specializes in energy issues, said the original deal with New Brunswick would not have improved access to potential American customers.

"It does not give further access to the U.S. market than what we have now because right now if Hydro Quebec wants to export, they just have to buy their way and that's it," Bernard said.

Last October, Quebec announced an agreement in principle to buy NB Power for $4.8 billion, which would allow the province better access to sell electricity to the northeast United States.

The New Brunswick and Quebec governments are still negotiating the final agreement, and now, New Brunswick Premier Shawn Graham, under intense public and political pressure to scuttle the deal, may be backing down.

Graham has indicated Hydro-Qubec may not be permitted to obtain all of NB Power's assets, in particular, its transmission lines.

"I've listened and I've heard that the energy sovereignty was very important and New Brunswickers want to maintain that ability to set energy policy and maintain control," Graham said last week. "So the final deal, when it is finalized, I think it's going to reflect those concerns."

But Bernard said if New Brunswick blocks access to its transmission lines, that really won't change anything.

"The fact that Hydro Quebec might have purchased the transmission network in New Brunswick would have changed nothing," he said. " We'll continue to have basically the same rules to use the transmission network, and there can't be any discrimination with regards to access to the network."

Meanwhile Quebec Premier Jean Charest is indicating he could sweeten the $4.8 billion agreement, which also guarantees rate freezes and rollbacks for New Brunswick Power customers.

When the deal was signed in October, Graham said the selling price would eraseNB Power's debt.

In addition, Hydro-Qubec will freeze residential rates in New Brunswick for five years and immediately cut large industrial rates by about 30 per cent to the levels paid by those customers in Quebec. That component of the deal is worth an estimated $5 billion to NB Power customers, Graham has said.