Update: Sale of NB Power to Hydro-Quebec dies, Quebec and N.B. say deal too risky

The Canadian Press ~ The News
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The controversial multibillion-dollar sale of NB Power assets to Hydro-Quebec is dead after a dispute over risk arose during negotiations that were intended to finalize the deal.
New Brunswick Premier Shawn Graham said the tentative $3.2-billion agreement collapsed after the Quebec utility sought changes that no longer made it worthwhile.
"It is with so much regret that I am announcing this morning that we are no longer proceeding with discussions to finalize the energy agreement with Hydro-Quebec," Graham told the legislature Wednesday.
"Hydro-Quebec has asked for changes to the agreement that would have unacceptably taken away some of the value and increased some of the risks for New Brunswickers."
Graham said he decided to pull the plug on the deal after he met with Quebec Premier Jean Charest late Tuesday. He said Hydro-Quebec found there were more risks than it was willing to accept, but did not explain further.
But Charest said it was his province that decided to pull out of the deal after finding unanticipated costs related to matters like security.
The original plan to sell NB Power, announced last October, would have seen Hydro-Quebec acquire transmission and distribution systems in addition to power plants for $4.75 billion. At the time, Graham touted the deal as one that would have drastically reduced the province's staggering debt and lower power rates.
But Graham later took transmission and distribution off the table, and said the 90-year-old utility would remain a New Brunswick-owned Crown corporation.
He amended the proposal following a public backlash and criticism within his own Liberal caucus. The revised deal was not enough to satisfy one cabinet minister, however, who was booted after calling for a referendum.
"There are lessons to learn from this experience," Graham said.
"People were not upset with us for taking on the electricity issue, they were angry with us because they wanted to be part of the solution and our process didn't let them in."
The stunning reversal comes months before an election, scheduled for Sept. 27.
"There has been a lot of talk and speculation about the political costs of attempting this deal and I am sure there will be more talk about the political costs of not doing it," Graham said.
"Despite this setback, so long as I am premier, we will continue to take on the tough issues. If we want a province that is self-sufficient, if we want to keep our kids at home, we can't hide from our problems or look for the easy way out."
The deal also drew opposition from the premiers of Nova Scotia and Newfoundland and Labrador, who expressed concerns that it could detrimentally affect their energy plans.

Organizations: Hydro-Quebec, NB Power

Geographic location: Quebec, New Brunswick, Nova Scotia Newfoundland and Labrador

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Recent comments

  • Graham
    July 02, 2010 - 13:16

    Too risky. Quebec didn't want any risk at all, they wanted to completely rip off NB.

  • snafu
    July 02, 2010 - 13:15

    Shawn Graham is trying to make it sound as if he made the decision to pull the plug because he felt it was a bad deal. It was a bad deal all along, all of NB told him so. The truth is, Shawn Graham wouldn't know a good or bad deal if it urinated in his face. Mr. Graham is simply trying to act as if he is competent in a leadership role, which he is not. The people of NB told Shawn Graham he would be thrown out on his arse if he allowed this stupid deal to go through. Shawn is just trying to save his own skin.

  • Manny
    July 02, 2010 - 13:10

    What a pile. Graham should resign!

  • Graham
    July 01, 2010 - 19:57

    Too risky. Quebec didn't want any risk at all, they wanted to completely rip off NB.

  • snafu
    July 01, 2010 - 19:55

    Shawn Graham is trying to make it sound as if he made the decision to pull the plug because he felt it was a bad deal. It was a bad deal all along, all of NB told him so. The truth is, Shawn Graham wouldn't know a good or bad deal if it urinated in his face. Mr. Graham is simply trying to act as if he is competent in a leadership role, which he is not. The people of NB told Shawn Graham he would be thrown out on his arse if he allowed this stupid deal to go through. Shawn is just trying to save his own skin.

  • Manny
    July 01, 2010 - 19:46

    What a pile. Graham should resign!