N.B. Power's Point Lepreau nuclear power generating station
Hydro-Québec has agreed to a scaled-back deal that will see it pay $3.2-billion for New Brunswick Power's electricity generation assets but not - as initially planned - take over the utility's transmission and local distribution assets, sources say.
Hydro-Québec will act as a wholesaler, selling its electricity to New Brunswick Power Corp., but it will not get into power distribution to the New Brunswick utility's 370,000 customers, said sources close to the negotiations which led to the revamped agreement.
The revised memorandum of understanding is to be officially announced Wednesday.
The initial proposal was for Hydro-Québec to take over all of N.B. Power's assets, including the distribution grid, but it ran into fierce public opposition in New Brunswick as well as taking fire from other Atlantic provinces. Newfoundland and Labrador Premier Danny Williams slammed the proposed takeover as a move by Hydro-Québec to get a stranglehold on power generation in Eastern Canada and a monopoly on access to electricity markets in the U.S.
Under terms of the new agreement, about two-thirds of N.B. Power's employees will stay on with the utility, while the remaining one-third of staff will be transferred to Hydro-Québec, said the sources.
Quebec Premier Jean Charest confirmed that a new agreement has been negotiated between the two provinces.
"The agreement we have negotiated is, I believe, better for New Brunswick and certainly better for Quebec," Mr. Charest said in Quebec City.
The revised deal addresses concerns in New Brunswick that there would no longer be a homegrown public electricity utility dealing directly with customers, according to the sources.
Terms of the original deal would have seen Hydro-Québec take over N.B. Power's assets in exchange for assuming its $4.8-billion debt and providing a five-year rate freeze for residential and small-business customers, as well as a 30 per cent rate reduction for industrial users.
Now, Hydro-Québec will no longer take on the debt.
The rate freeze will remain in place, but the discount for industrial users will be lowered, said the sources.
Bertrand Marotte