24 March 2010

Graham abandons NB power deal

The deal to sell New Brunswick Power to Hydro Quebec is dead.

Both sides are pointing to risks and problems that turned up apparently by surprise.

New Brunswick Premier Shawn Graham said:

"However, over the past several weeks as we worked to take that agreement and turn it into a full legal document, Hydro-Québec 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."

And CBC reported:

Quebec Premier Jean Charest told reporters on Wednesday his province pulled out after its power utility found unanticipated risks and costs related to matters like dam security and water levels.

After due diligence was done, he said Hydro-Québec decided that "we were beyond what was acceptable."

It will be interesting to see what happens if the Tories win the next provincial election and have to cope with the NB Power debt pig.  So far their only bright ideas have been to oppose someone else’s bright idea.

15 comments:

Wm. Murphy said...

we seemed to have coped quite well with the NL hydro debt pig of the 90's...

Ed Hollett said...

Was there a point in there other than to compare apples and oranges?

ClaudeB said...

I'd like to see the engineering assessment of Mactaquac HQ prepared during the "due diligence" phase.

Everybody knows the Mactaquac dam, 30 km upstream has a bad case of alcali-aggregate reaction (it was diagnosed 30 years ago). La Presse writeup on the story paraphrases Charest talking about "public safety risks" at some undisclosed NB Power facility. (see http://bit.ly/info/aHuSvV)

People can say whatever they want about HQ, but their engineers are top notch. If they got scared by the scope of the remedial work to be done there, so should the people of New Brunswick.

Ed Hollett said...

There will undoubtedly be all sorts coming forward with all sorts of claims about this, that and the other thing in this deal.

In some respects this a politically convenient "out" for Graham but it doesn't deal with the issues in NB related to NB Power.

There may be problems at Mactaquac. There are definitiely problems elsewhere in the NB Power system and I doubt very much NB Power has the financial ability to deal with it.

If I was in New Brunswick, I'd be asking: now what? it's like in this province: people ran along with the NL Hydro expansion, equity stakes etc and not a single person has asked or bothered to think about the long term financial implications. Heck, people don't even know what DW and his crew are actually doing.

WJM said...

Heck, people don't even know what DW and his crew are actually doing.

Apparently it isn't good enough for some people that DW is giving you pride, strength, and determination.

And bread. And the occasional circus.

Anyong said...

Ha....wonderful...it has been stopped. That means the big guys lost.

Ed Hollett said...

If by big guys you mean the ordinary taxpayers of New Brunswick, you got it dead right there, Anyong.

Wm. Murphy said...

Speaking of fruit Ed

I commented on your comment about debt and how the next NB Tory gov't will cope.
When we speak about the so called reason to privitize the utility, it is/was based on reducing debt. The same can be said abot CKW's reason to do the same.

As seen here in the March 1st 1995 Hansard quote from Wells;

PREMIER WELLS: Mr. Speaker, the privatization of Hydro will cause the investment of hundreds of millions of dollars as equity, displacing the hundreds of millions of dollars of debt for which the Government of this Province now has ultimate responsibility and is on the credit of the Province.

So when I speak about fruit Ed... it appears that the province has coped fairly well with its debt load without having to privitize NL Hydro

Ed Hollett said...

Well you can speak about fruit all you want but the point remains that the situation in NL and the 1990s and the situation in NB today are starkly different.

Privatising NL Hydro in the 1990s was a way of reducing the provincial government debt at a time when the size of the debt and the size of the economy were the same number.

NL Hydro then did not have the issues with huge debt and huge infrastructure costs that need to be addressed coupled with a generation issue as does NB Power today.

In other words, the two situations are completely different.

The fact the word "debt" is involved in both isn't enough. You have to go deeper to actually understand the issues. I won't bother to suggest you go back and do some reading on previous posts here and other material online since that seems to make you crankier.

You can speak of fruit all you want but your one sentence throw-away line and the subsequent comments don't conform to the facts of the matter.

Now as for NL Hydro today, I wonder how exactly you contend we are doing so well with it. That one is one you'll have to do on your own without a clip from old Hansards. Still, I'd be interestign to see how you figure that is the case.

Wm. Murphy said...

...Now as for NL Hydro today.

Sure, who asked you Ed? I certainly never mentioned anything about NL Hydro today

"... your one sentence throw-away line and the subsequent comments don't conform to the facts of the matter."

"throw away line"... good one!

You are better than a basketball player Eddie....dribble, dribble, bob and weave....ally opp and slam dunk!!

Beautiful man Ed


Wm. "cranky pants" Murphy

Ed Hollett said...

Thanks for confirming you are interested in something other than a substantive discussion.

Wm. Murphy said...

The only substantial"throw away" I got Ed was that you wish our NL Hydro was privitized

Ed Hollett said...

If that's all you got then you didn't get very much. Then again that was fairly obvious from your comment.

Wm. Murphy said...

my imagination must be running wild today...so do you wish that our NL Hydro was privitised?

Ed Hollett said...

Read what I wrote: if that is all you got out of my comments you didn't get much.