N.B. hydro deal good for Quebec: Charest

Quebec Premier Jean Charest says Hydro-Québec's $4.8-billion acquisition of a majority of New Brunswick's energy assets is in the interest of both provinces.

Charest and New Brunswick Premier Shawn Graham signed the agreement on Quebec's acquisition of NB Power Thursday in Fredericton, concluding a week of speculation.

Charest said the deal will allow Quebec to maintain its position as a leader in energy exportation and to take advantage of new business opportunities. The investment "will turn a profit as of Year 1," he said.

"Quebec and New Brunswick are well-positioned to serve the markets of northeastern North America," Charest said.

Quebec is already in negotiations with Prince Edward Island and American authorities to get approval for the construction of a 1,200 megawatt line between Quebec and New Hampshire.

"Our American neighbour … needs clean and renewable energy and needs to obtain that energy from a renewable source, and that source is here in New Brunswick, in Canada, in Quebec," Charest said.

'This is real evidence that this country works.' —Quebec Premier Jean Charest

Hydro-Québec will acquire seven hydroelectric stations with a capacity of 895 megawatts and will also take over the Point Lepreau nuclear station once its refurbishment is complete.

The agreement will also reduce New Brunswick’s reliance on fossil fuels, Charest said.

New Brunswick will retain control over two thermal generating stations, but Hydro-Québec has the right under the deal to ask the province to shut them down with one year's advance notice.

A third thermal generating station at Dalhousie, N.B., is already scheduled to be phased out.

"The assets we [are] acquiring are quality assets," said Hydro-Québec president Thierry Vandal.

"We are also confident that Point Lepreau, a zero-greenhouse-gas-emission source of power, will be a solid operation for the long term once the refurbishment operation is complete."

Under the agreement, Hydro-Québec gains access to more than 370,000 customers and expects a return on equity of more than 10 per cent starting in the first year. The proposed deal will not have any impact on Quebec's power rates.

Good for Canadian unity

The power deal also strengthens the ties between the provinces, Charest and Graham said.

"Today's deal strengthens the role Quebec plays within the Confederation," Graham said. "This is a partnership. This is bringing our two respective jurisdictions together for the benefit of all our citizens.

"I'm taking the approach today that we're building our country and the strength of it by working in co-operation amongst the provinces, and that's the leadership role we're providing."

Charest agreed this type of agreement strengthens Canadian unity.

"This is real evidence that this country works and that leadership makes a difference when we can see the things we can do together. I'm proud of that," said Charest.

"I know one thing: the separatists would not be at this table today."

Charest also replied to Newfoundland and Labrador Premier Danny Williams who had written a public letter criticizing the deal to Graham that he copied to Nova Scotia Premier Darrell Dexter and P.E.I. Premier Robert Ghiz.

"I caution you, based on our experience with Hydro-Québec, that a short-term opportunity can turn into a long-term loss of significant magnitude as they will most definitely find ways to recoup their investment and more from New Brunswickers, who no longer control their energy destiny," Williams wrote.

Charest said Quebec meant no ill-will.

"I’ve never had a view that if we …[come] to an agreement, that we are doing it at someone else's expense. This isn’t the country that I know."

Charest said it is in the interest of Quebec that there be an open energy market as the province intends to build more capacity to sell power south of the border.