Industry needs answers on exit fees

Uncertainty over costs is stopping some large manufacturing companies from leaving NB Power in the hope of finding cheaper electricity rates in New England or by generating their own electricity.

Before any company can start buying power from another utility, it must pay an exit fee, which would cover NB Power' s original costs in setting up transmission lines to the company.

David Plante, the vice-president of the Canadian Manufacturers and Exporters in New Brunswick, said in an interview on Wednesday that companies can't make decisions on whether to leave the NB Power grid unless they know how much it will cost them in exit fees.

"We would hope this question would be brought to the [Energy and Utilities Board] as soon as possible in which case we could have a clear determination on how much the exit fees could potentially be because in fact nobody can make a move without having that figure ahead of us," Plante said.

Burdening companies with large exit fees would only further hurt the manufacturing industry which would further damage the economy, Plante said.

The New Brunswick government opened up the possibility of the province's largest industrial players in 2004 when it restructured the energy sector.

The EUB, the province's energy regulatory body, has not been given a request to study exit fees since the law came into force.

Power rates paid by large industrial companies have been a contentious political issue in recent months following the New Brunswick government's failed attempt to sell parts of NB Power to Hydro-Qubec.

In that power deal, the province's biggest power users would have seen their rates cut by roughly 23 per cent. The Canadian Manufacturers and Exporters were a supporter of the proposed power pact.