23 October 2009

NB Power up for sale?

Hydro-Quebec may be in the market to purchase NB Power, the government-owned New Brunswick power utility.

According to CBC,

In a statement Thursday, his communications director, Elizabeth Matthews, said Williams "can't imagine the people of New Brunswick would allow their government to sell their energy asset and put that power into someone else's hands."

Odd idea, that, selling an energy asset or even a chunk of an asset to Hydro-Quebec.

Surely Danny Williams would never do anything like that especially since he supposedly wanted “redress” on Churchill Falls first.

-srbp-

13 comments:

Anonymous said...

And the beat goes on, and the beat goes on....lah dee dah dee lah dah dee dah. Of course it is not politically correct to say the word....lies!!

Edward G. Hollett said...

What lies?

NB Power is up for sale. The government response pretty much confirms it.

Over here in NL, we just haven't got the full story.

One thing is fairly obvious, though. Hydro-Quebec is evidently looking at the value of NB Power for all its assets and what it means to their future ability to deliver their massive power to market.

It's a very smart business move, whereas rejecting out of hand a good basis for a deal in 2005 doesn't look quite so good an idea now, does it?

of course, as long as the local traditionals ignore the issue of DW's contradictory words and actions, the local Lower Churchill power charade will continue. it will only stop once someone else starts pointing out what the provincial government was up to.

Anonymous said...

NB Power is a giant pile of liabilites, it's just about getting a strangle hold on the grid. The Irvings are driving the deal because Hydro Quebec has committed to lower rates.

Edward G. Hollett said...

So if the Irvings are interested in lower rates, it isn't "just about [someone] getting a stranglehold on the grid" is it?

Anonymous said...

Okay, it's mutual interest. The Irvings get cheap electricity, Hydro Quebec gets control of the grid. Wonder what value Hydro Quebec sees in the grid, they have unfettered access under the terms of free trade, right? Could it possibly be that they mean customize or limit capacity to control the market? Heaven's, no, Hydro Quebec is one of the most magnaminous institutions in Canada, nation building is top of their agenda ... now which "nation" ...

Edward G. Hollett said...

The gird is controlled by the regulator.

The obvious is advantage is that it gives them:

- revenue from wheeling; and,
- cheaper access for their own wind power out of Gaspe into the US.

While Kathy Dunderdale was moaning and complaining about all the new-fangled technology out there the reality is HQ is infinitely more successful at bringing the new and the old online and getting it to market.

They are running circles around NL and all you hear locally is yet more chatter. That's why they keep getting left behind: they spend more time bitching than doing.

ClaudeB said...

I doubt HQ would be willing to buy the whole shebang, but NB Power transmission business is obviously part of the equation. After all, it is the most lucrative part of the NB Power group, generating a revenue of $100 million and a $15 million profit in 2007-2008.

NB Power relies on coal and heavy fuel oil for half of its generation (1,900 MW), and they know very well that they have absolutely no control over oil prices in the long term. And thermal generation is something you want to get away, from a GHG reduction standpoint.

Now, we know New Brunswick (and PEI) wants to add hundreds of MW of new wind capacity, which means they will have to commit to huge transmission investments in the next few years. But NB Power is flat broke (the capital structure of the company is 92% debt, 8% equity). So they won't be able to make the required investments unless they find someone with deep pockets.

That's where HQ comes in. They can make the capital investments without a sweat (they invest $1 billion a year in transmission) and they can provide load balancing services required by wind generation.

Edward G. Hollett said...

You've clearly got the subject matter expertise, Claude.

My gut feeling was that it was a pragmatic issue rather than the hysterical one more likely to be applied locally.

Someone else online pointed out he "dirty" generation in NB which of course will be replaced in time. Heck, there's even a potential for HQ to simply displace NB's dirty generation with its own hydro and wind and thereby bring in extra revenue that way. It would certainly be more lucrative than marginal changes in Quebec domestic rates.

Anonymous said...

"What lies?" I was referring to Danny.
"Surely Danny Williams would never do anything like that especially since he supposedly wanted “redress” on Churchill Falls first."

Edward G. Hollett said...

Did he knowingly say something that was not true?

Do you have the evidence and the example?

I sarcastically made the observation about the contradiction between his redress policy and his offer to sell an ownership stake, but I never said he lied nor did I imply it.

ClaudeB said...

Ed: I drop by your place because you are a rational and knowledgeable guy :)

I must admit I'm surprised by the mass hysteria I read elsewhere on the web.

Your point on a power purchase agreement is well taken, but if I was the premier of New Brunswick I'd be looking more towards ways to increase investment in the province, and we know that Graham really wants more wind farms in his province.

In order to do that, the report the NB System Operator commissioned last year http://ea-energianalyse.dk/projects-english/725_integration_of_wind_power_in_new_brunswick.html. And in order to do that, told New Brunswick to strengthen their grid and get load balancing from Quebec.

Anonymous said...

"I sarcastically made the observation about the contradiction between his redress policy and his offer to sell an ownership stake, but I never said he lied nor did I imply it."

Lighten up I didn't say you had. Danny Williams suggested HQ help out with the lower Churchill Falls development but said, "In a statement Thursday, his communications director, Elizabeth Matthews, said Williams "can't imagine the people of New Brunswick would allow their government to sell their energy asset and put that power into someone else's hands.""

"Far from going it alone on the Lower Churchill or seriously pursuing a transmission route around Quebec, the Williams administration has been working fervently to get Hydro Quebec on board as a co-owner of the Labrador project."

It's a contradiction and the reason for tongue in cheek "Of course it is not politically correct to say the word....lies!!" Do you get it now because I'm not explaining further to someone who is so smart.

Edward G. Hollett said...

It is not a matter of political correctness. it is a matter of fact.

Ron Ellsworth lied about polls because he knew at the time he said it that his response to the reporter was not true.

To say DW lied requires that one know that he deliberately and knowingly made a false statement.