U.S. regulator lacking info to decide role in power play

Rob Antle
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Energy But FERC will have final say on access to U.S. markets

American regulators say they don't yet have enough information to determine whether they will have any jurisdiction over Hydro-Quebec's pending takeover of NB Power.

Officials with the Federal Energy Regulatory Commission (FERC) say they are waiting for more details on what the deal involves, and when it is going to be finalized.

American regulators say they don't yet have enough information to determine whether they will have any jurisdiction over Hydro-Quebec's pending takeover of NB Power.

Officials with the Federal Energy Regulatory Commission (FERC) say they are waiting for more details on what the deal involves, and when it is going to be finalized.

U.S. federal law covers the takeover of energy companies and assets like transmission lines.

But FERC officials say they don't have enough information to determine whether those American laws will apply to this transaction involving two Canadian-based companies.

Both Hydro-Quebec and NB Power do have U.S. affiliates in their corporate structures, officials said.

FERC does, however, have the power to enforce rules requiring open access for electricity imports into the U.S.

But the American regulator can't tell Canadian companies how to sell power within Canada, spokeswoman Mary O'Driscoll noted.

"We have no authority (over) how they do business within Canada," O'Driscoll said, referring specifically to power sales entirely within Canadian borders.

"Any kind of authority we have only relates to their sale of electricity at market-based rates in the United States."

Last month, Hydro-Quebec announced a tentative $10-billion pact to acquire NB Power's assets, including its transmission lines.

The agreement must be ratified by the New Brunswick legislature.

Newfoundland and Labrador Premier Danny Williams railed against the deal, calling it a "complete capitulation."

Williams expressed concern that the agreement would give Quebec a stranglehold on both routes to American markets for electricity from the potential Lower Churchill hydro project in Labrador.

American open-access rules apply to both Hydro-Quebec and NB Power, O'Driscoll noted. Both have market-based rates on file with FERC.

That allows them to sell electricity into the United States at whatever price the market can bear.

In return, those companies must satisfy FERC that they are not using their market power to block access to others seeking to use their system for sales into the U.S.

Once the agreement between the two Canadian power giants is consummated, they will have 30 days to file a notice with FERC outlining any changes in their status. Other parties - such as Newfoundland and Labrador - will then have an opportunity to make representations to the regulator.

FERC will then take all of that information into consideration in assessing the changes, O'Driscoll said.

Hydro-Quebec's pending acquisition of NB Power has sparked a major public policy debate in New Brunswick, and heated words from Newfoundland and Labrador.

This week, Williams gave a speech to energy executives in New York promoting Labrador power and accusing Hydro-Quebec of not practising what it preaches on open access to American markets.

Williams accused Hydro-Quebec of attempting to gain an unfair advantage in the marketplace.

He said Hydro-Quebec is trying to slow applications for transmission rights across the province and is acquiring to NB Power to block the alternate route to the U.S. for potential Lower Churchill power.

rantle@thetelegram.com

Organizations: Federal Energy Regulatory Commission, Hydro-Quebec, NB Power

Geographic location: United States, Newfoundland and Labrador, Canada New Brunswick Quebec New York

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