Prices and discontent with the utility are already high - and a viable operational model for the utility has yet to be unveiled by NB's official opposition or the opponents to the Hydro Quebec deal.
Now major renovations are underway at the Point Lepreau nuclear facility and several old coal generating stations are due to be refurbished or scrapped, which, when all is said and done will add perhaps billions more to the debtload.
Not surprisingly, the announced sale to HQ has caught New Brunswickers in an already owly mood. And it's not getting any sweeter.
Frantic commentators on message boards, news story comment rants and blogs have stated things like, "Quebec is trying to spread French across Atlantic Canada", "no truck nor trade with separatists", "this deal will be NB's Churchill Falls", or... "I'm not paying one cent to the separatists". Obviously, there is already a severe brainpower shortage in certain parts of NB, (as is the case everywhere!). The fact remains though that there is a huge opposition to the deal even though New Brunswick business (i.e. McCains & Irvings) and government are very much in favour of it.
Really, it comes down to a perceived loss of sovereignty and a (simply unthinkable) perception of getting shown up by Quebec. New Brunswickers, especially the English-speaking population, just cannot bear the humiliation of having mismanaged their utility into the ground, only to have it magnanimously 'rescued' by Quebec.
In all the hyperbole written over this deal, I don't think I have seen a single reference to price vs. value. Meanwhile, HQ is already supplying over one-third of the electricity consumed in New Brunswick, so the question of sovereignty over energy supply is already well watered down.
I think that if one person (like, say, a "news reporter") in New Brunswick would actually take the trouble to discover that B.C. Hydro is now in the process of buying a one-third share in the 450Mw Waneta Dam for $825 million, then the already high decibel level of the protest going on would be increased by tenfold!
The trouble is, the nature of the protest in NB is totally knee-jerk and emotional, so no one seems to care about finding actual reasons why the deal should be opposed.
And, having just said that, I think it is the B.C. Hydro - Waneta deal with Teck Resources that is the exceptional case, going against the grain of market price logic. The NB Power deal seems to be well justified by market conditions, even if the pending BC deal makes it look like a giveaway.
So... what would make the deal palatable to New Brunswickers?
This would answer the problems that most people have with the deal:
1. A clause that would tend to narrow the difference paid by NB and HQ residential customers after the five-year rate freeze already agreed by HQ
2. Some way of making the sovereignty of the assets less of an issue
If the deal succeeds, it opens up opportunity for greater synergies. With the NB coal-burning generating stations nearing the end of their useful lives, it must be assumed that HQ has in mind to replace a lot of this high-emission dirty energy with clean sustainable energy from the HQ grid.
The other possibility is that HQ would take advantage of the opportunity to introduce new elements of alternative sustainable power into NB, leaving the utility free to sell additional excess hydro power to the U.S.
Although New Brunswick and Quebec share many common features, there are also many differences that could prove interesting as the search for plausible future models of heating and power generation are concerned.
For one thing, has anyone thought of this...?:
Geo-thermal conversion for New Brunswick
Someone out there ought to be researching practical ways of introducing geo-thermal heating into the mix, for example. Say the New Brunswick government, using a small portion of the theoretical debt carrying potential that is freed up with this deal, were to sponsor a geo-thermal installation program that could be implemented on an individual home-by-home basis... This would effectively put the heat-generating capability in the hands of the individual homeowners of New Brunswick.
Do the math. There are 300,000 households in New Brunswick. Let's say, for example, that an individual geo-thermal system could be engineered to sell for $10,000. And let's say that 100,000 households would qualify and take advantage of an initial 10-year program.
That would represent a $1 billion price tag - a pretty small price to pay for the virtual guarantee of sovereignty and sustainability for heating in an entire province! We see, though, that the $1 billion doesn't really need to be paid by N.B. The price would largely be paid by home owners (perhaps via a system of provincially guaranteed loans) and this, largely, out of savings they would realize in their heating bills.
The program could include aspects of manufacturing to be handled in New Brunswick, and of course there would be the jobs benefit of the contracting to install the systems. The resale value of the homes would be greatly increased. The high concentration of geo-thermal heating in N.B would set the province up as a center of excellence and expertise in sustainable energy, potentially developing export products.
A substantial portion of geo-thermal conversions would be from oil, as well as electric, so both heating oil and electricity suppliers would be losing sales. However, since Irving and HQ are seen to be big winners in the deal to sell NB Power, it seems like a no-brainer that they would be on board for such as deal as this. Not to mention that any electricity not needed to heat N.B. homes could be heating U.S. homes more profitably.
The province, meanwhile, wouldn't have to actually go into debt to manage the program - it could be a cooperative arrangement amongst all stakeholders - the province, banks, utilities, contractors and home owners.
The project could be run in conjunction with other projects for commercial and industrial buildings.
The whole thing would contribute to massively reduce the carbon footprint of New Brunswick at virtually no cost to the province, or to anyone, at the same time as building a new industry and providing thousands of permanent jobs.
Frankly, it appears to me that it would be so easy to turn this thing into a massive positive for New Brunswick, that my "conspiracy theory" sensors are starting to tingle...!