A bad deal

Gordon Weil thinks the NB Power purchase deal with Hydro-Quebec is a bad idea.

Interesting that both the pro and con for this two part series in the Telegram both come from people associated with the Atlantic Institute for Market Studies.

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A good deal

Brian Lee Crowley and Tom Adams weigh in on the NB Power sale.

Among other things they not that the Lower Churchill is a dead horse owing to the current market situation:

The lesson for Newfoundlanders and Labradorians is inescapable. They should learn from the Mackenzie gas experience before supporting Premier Williams' ephemeral dream to press ahead with hydro-electric development on the Lower Churchill in a glutted market. Taxpayers should be relieved, not outraged, that Nalcor, Newfoundland's Crown energy company, is not out in the market trying to sell costly power right now.

In the long term, the economics of Lower Churchill development may well turn around, particularly if the market for its environmental characteristics becomes sufficiently rich to overcome the costs of remoteness. But that's for another day.

Perhaps one day soon local reporters will stop carrying the transmission line line as if it was anything vaguely close to reality.

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NB Power Collection

Following are links to some stories on the memorandum of understanding to sell  of NB Power to Hydro-Quebec:

1.  There’s strong positive reaction side Quebec to news of the MOU.  La Presse Canadienne from metromontreal.

2.  A 30% drop in electricity rates could save the Edmundston pulp and paper mill.   Bet people in Corner Brook would be looking hard at that right now if they were in the same spot, not to mention what would have happened in Stephenville or Grand falls-Windsor under the same circumstances.

3.  NB Premier Shawn Graham accuses NB Opposition leader …err…Newfoundland and Labrador Premier Danny Williams of misleading the people of New Brunswick.  From the Gleaner.

4.  A long term rate cap is needed in New Brunswick, according to some analysts.  Considering the province has the highest residential electricity rates in Canada that would seem to be a good point. maybe opponents of the deal – including the gigantic facebook site  - could explain how to keep NB Power and lower public debt and reduce rates simultaneously.

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Whine, moan, bitch and complain

Danny Williams muses on his political past and future in the weekend Telegram. All of it is very much old hat for the locals after six years, but the mainlanders might find it revealing, especially those who are looking for some perspective on NB Power. 

The constant negativity the Premier displays really starts to get wearisome after a while.

Relentless negativity.  There’s hardly anything positive to the guy. And then he accuses others of always harping on the bad stuff.

It’s all vintage Danny:  things were so much better (for him, of course) when he was in the private sector and didn’t have to be accountable to anyone.  If only things could be like that now, with no criticism or complaints from anyone, all following dutifully behind  - unquestioningly - and jumping at his every bleat. 

He doesn’t even seem to take heart that he still has the Fan Klub, as the comments section to the story shows.  Some are so smitten with the aging leader that it seems only a matter of time before they start holding conventions, like Elvis groupies.  There they’ll be, some with their hair in Mullet Danny and others in the Silver Fox Danny of later years, either version – of course - perfectly parted down the middle.

Either version always tanned, as if fresh from yet another vacation.  Of all Canadian premiers, only Richard Hatfield spent more time out of the province he ran during the course of a year than Danny.

Perhaps they’ll hold shoulder twitching contests and if he should deign to make an appearance perhaps the Fan Klubbers will be like Ontario and fall on their knees, on a go forward basis.  Can’t you just see it?  There he is in the director’s chair, a lone spotlight glinting off his cufflinks as he takes questions from the audience about his career as a politician who loathes being a politician.  What was it like in episode one, when you did battle with the evil emperor of Canada that first time? they will ask.

Then they will mouth the lines they have memorized from countless viewings of his previous scrums as he repeats his answer, complete with the quite-franklys at just the right spot.  All designed, it seems,  to send their Fan Klubber hearts a-twitter. 

Sometimes all you can do is chuckle at it all.

Some of his fans no doubt have not heard all his past rants about what he would like do, if only he had the time.

Like no free speech in the legislature.  That’s right.  He once mused about stripping the legislature of the right of members to speak their minds without fear of persecution. A right hard won centuries ago by English parliamentarians and cherished by all elected to such a body ever since.

Well, all but one, so it seems.

It’s hard for Williams to get things done, apparently, when half his time is taken up with pesky things like speaking to reporters  -  or editorial boards too? - or blocked off with nuisances like going to cabinet and caucus meetings.

In the past, he has worried about whistleblowers and what they might get up to if they are not properly controlled.  No mention this time of the headache of trying to keep his speeches from being made public.  You know, speeches that were in public in the first place.  These are the sorts of things that prevent from doing more. 

Uneasy lies the head, he is wont to remind us all constantly.

If only people would focus on the positives instead of the negatives, he complains.  Danny has been on this complaint track quite a bit this year.  Much more so than usual, even for him.  Ranting at Randy Simms seemed like only yesterday.

But thankfully – for the Fan Klub and Tony’s sanity -  he’s going to stick around in a job he evidently despises for some totally incomprehensible, unexplained reason.

Unless, of course…

"I'm definitely going to hang around to see if I can get it [the Lower Churchill]  done," said the premier.

But Williams said he's not going to stick around forever "to beat a dead horse" if a deal cannot be sealed, nor will he sign a bad deal for the sake of getting one done while in office.

Dead horse, eh?

Keep clicking those heels, Tony.

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The Can Opener II

Just in time for Halloween, there’s a remake of an old horrorshow:  the local economist who makes dubious assessments that seem a wee bit tinged by things non-economical.

Used to be Wade Locke was the regime-supportive economist of record.

Now it’s Jim Feehan, a guy with a record of producing dubious bits of research on partisan political subjects.  He also co-wrote a paper on another local partisan favourite, the 1969 Churchill Falls contract.  The article  was titled “The Origins of a Coming Crisis” but at no point in the article is the crisis ever described. That should make you scratch your head just a wee bit in scepticism.  

Anyway…

Jim Feehan told local CBC radio listeners Friday morning that while this New Brunswick power deal looks like a good one in that rates will be stabilised after a series of increases, public debt will be hacked down and pulp and paper mills will benefit from lower rates, this deal isn’t really so good because once it is sold, NB Power can never come back again.

In other words, even though this deal is great from the standpoint of an economist, people should maybe think twice because of things the economist commenting knows nothing about.

Like say law.

You see, as the Fortis expropriation in this province demonstrates, even in the worst possible case in New Brunswick, there is nothing like this that can’t be undone. 

But why would you want to expropriate or buy back a debt pig like NB Power if the new arrangement delivers all the economic benefits the economist noted but downplayed?

Well, there’s a question for us to ponder as we wait for the great news in Labrador Feehan’s predecessor once predicted. In the meantime, don’t hold your breath expect an answer to that one from Feehan.

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Emera silent on NS Power sale

With Hydro-Quebec reportedly casting covetous eyes on Nova Scotia Power, the company’s current owner – Emera – is keeping to a strict “no comment” policy, according to reports.

In related news, Nova Scotia Premier Darrell Dexter said his government has not been contacted with respect to any sale of NS Power.  He also said he doubted HQ was even interested in NS Power, despite some media reports.

Dexter also backed away from joining Newfoundland and Labrador Premier cum New Brunswick Opposition Leader Danny Williams in his crusade against the recent deal to sell NB Power to Hydro-Quebec:

"At this point, it’s certainly not my intention to pick a side in this," Mr. Dexter said.

"Those decisions with respect to what New Brunswick does are New Brunswick’s decisions. We are going to have to deal with the system operator, no matter who it is, and so we respect their right to make those decisions."

Danny Williams reportedly fears being isolated.

Too late to worry about that now.

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Williams fears wheeling partner will bail, too

New Brunswick Tory Opposition leader Danny Williams said today that New Brunswickers should rise up and oppose the plan to sell NB Power to Hydro-Quebec.

Williams, who is also Premier of Newfoundland and Labrador, said that "if [Quebec also] acquires P.E.I. and Nova Scotia [power], we will find ourselves in a situation where one province will have energy control of the entire Maritime provinces. It will be attempting to strand Newfoundland and Labrador. So good, cheap, competitively priced energy, can't be offered to that whole region.”

Williams is worried that HQ might also buy Nova Scotia Power?

Of course, that would be the  Nova Scotia Power that is owned by the same company  - Emera – that Williams is paying to sell electricity from Churchill Falls into New York state. 

Yes that’s right.  While Williams was frothing about the negative impact of the NB Power deal on Lower Churchill power sales to the United States, he is already selling power through Quebec and happily agreed to pay $19 million annually to do so. 

So much for blocking the Lower Churchill, right?

And now Williams is concerned that Emera will bail on him in favour of selling their Nova Scotia subsidiary to HQ.

Things must be getting really bad for Williams if he believes that even his business partners are abandoning him.  That’s on top of reports that have his party organizers blaming Trevor Taylor, the former member of the provincial legislature, for Williams’ loss in the Tuesday by-election.  Talk about clubbing the fans.

Next thing you know he’ll be accusing his campaign donors of screwing him over too.

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The NB Power/Hydro-Quebec Memorandum of Understanding

The Governments of Quebec and New Brunswick unveiled the deal today that will see Hydro-Quebec buy most of the assets of NB Power.

The full text of the memorandum of understanding is available online.

Key points of the deal (quoted from the official news release):

• Under the terms of the MOU, Hydro-Québec would acquire most of the assets of NB Power for an amount equivalent to NB Power's debt, $4.75 billion. The utility's debt would thereby be completely eliminated.
• As a pre-condition to the negotiations, New Brunswick has established a revised rate structure to benefit New Brunswickers. It is estimated by New Brunswick to have a value to ratepayers of about $5 billion. The proposed transaction would have no impact on Hydro-Québec's electricity rates in Quebec.
• NB Power would continue as a separate, New Brunswick entity, headquartered in Fredericton, and would use the existing name and corporate identity. Hydro-Québec would offer employment to all employees of NB Power at the time of closing, and respect the collective agreements in place.
• The nuclear generating facility at Point Lepreau (after completion of the plant's refurbishment), the hydro facilities, the peaking power plants and the transmission and distribution assets of NB Power are part of the proposed transaction. Hydro-Québec would not assume any liabilities with respect to the Point Lepreau refurbishment project.
• Thermal generation facilities at Coleson Cove and Belledune would continue to be owned and operated by the Province of New Brunswick, and would supply electricity to Hydro-Québec under the terms of tolling agreements.

The upside for the New Brunswick provincial government appears to be that it offloads a debt pig while guaranteeing stable rates for residential consumers and lower- and hence more attractive  - rates for industrial consumers.

The one curious part of the MOU is that Hydro-Quebec continues to operate the company as if it were a Crown corporation in that it will pay no taxes of any kind to the provincial government. 

Interestingly, Premier Shawn Graham acknowledged the role played  by his predecessors Frank McKenna and Bernard Lord in laying the ground work for the disposal of NB Power. 

Lord’s successor as Tory party leader has been opposed to the deal since before he knew what it was about. 

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Shawn to Danny: sod off, mate

New Brunswick Premier Shawn Graham sent Newfoundland and Labrador premier Danny Williams a polite letter on Wednesday telling him to keep his nose out of the NB Power talks and stick to running his own province.

Graham also repeats the point that others have made, namely that any suggestion that the grid through new Brunswick might be somehow closed or restricted as a result of any deal with Hydro-Quebec is without merit or foundation. Click that image, by the way, and you’ll get the whole letter, courtesy of cbc.ca/nb.

Stunning.  Not.

Incidentally, there’s also no small irony in Williams’ comments warning about New Brunswick selling off its natural resources to Hydro-Quebec.

In September natural resources minister Kathy Dunderdale revealed some details about Danny Williams’ previously secret offers to Hydro-Quebec to take an ownership stake in the Lower Churchill.

labradore offers chunks of the transcript of Dunderdale’s interview. So much for “despicable.” 

Those Dunderdale comments were all the more stunning in light of Williams’ previous position about demanding redress for the Churchill Falls contract before there would be any deal on the Lower Churchill.  According Dunderdale, Williams was willing to set the whole issue of the odious 1969 contract to one side in the interest of giving Quebec a fair return on its investment in the new project.

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$10 billion for NB Power

A deal is close according to the Globe and Mail that would see Hydro-Quebec buy all of NB Power for $10 billion.

But the Globe story contains some of its characteristic shit reporting in the sub-head: “blocking access of other provinces' utilities to U.S. markets”.

There’s more the same drivel farther down the story but don’t buy most of it because it just isn’t true.

This sale can’t block access for anyone to NB’s power grid.  It can’t, not if NB Power and HQ want to keep selling power into the US.

And from the looks of it at least one statement could be completely false:  “Newfoundland and Labrador Hydro has complained to regulators in Quebec and the United States that Hydro-Québec's transmission arm is not providing it fair access to U.S. markets.”

You see Danny Williams has bitched alright, but he was bitching because he couldn’t get HQ to buy into the Lower Churchill. 

But…

According to Ed Martin, Williams right-hand on any of a number of issues, there is no problem whatsoever with Hydro-Quebec.  Thus it would be very odd if the company Martin runs was doing things – as the Globe reports -  like filing formal complaints alleging some pretty serious unfair market practices against HQ. 

All they have actually done is pursue a tariff through Quebec which they duly got.  Your see – Shawn and Rheal take note – NL Hydro has already been wheeling power into the United States across lines in Quebec in a deal touted by none other than …wait for it…Danny Williams Hisself.

Notice there is no further detail on that in the Globe story.  That’s a pretty good clue that Rheal Seguin and and Shawn McCarthy just didn’t do their homework.   Instead, they seem to have opted for a half-backed paraphrase of an equally a half-baked version of the old Danny story and not rely on what Danny’s energy minister said. 

In the process, the bitching morphed into a complaint filed with a Canadian or American utility regulator.  Look farther on in the story and that’s exactly what they do, and as you can see they got the bitching story and the bit about the alternate transmission line wrong too.  That’s what you get for quoting Liz’s thumbs and not doing any real research.

There’s also another completely asinine comment about HQ getting greater access to the US as a result.  If the guys at the Globe even bothered to check their facts, they’d know that HQ already owns capacity on the grid through New Brunswick. The story has been out there since the spring. That’s definitely not the motivation for this deal.

The upside to this story is that New Brunswickers will shed a 90-year-old chronic debt pig and retire in the process what the Globe describes as 40% of public debt in one fell swoop.

Let’s just hope that while about half the story appears to be complete fiction, the bit about New Brunswickers shedding their debt burden turns out to be true.

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