New Brunswick to split NB Power Private funds sought to operate utility

FREDERICTON, New Brunswick – The New Brunswick government says it won’t privatize the province’s publicly owned power utility, but it has opened the door to private ownership and operation of major generating plants.

Premier Bernard Lord announced the government’s long-awaited plans for NB Power on Thursday, promising structural changes to the debt-ridden Crown utility including the possible sale of two of its largest generating stations.

Lord said his Conservative government decided against privatization of NB Power and instead will break up the corporation into several smaller components to be run more like independent businesses.

He said that although privatization has been ruled out, the province is looking for large infusions of private money to help keep the juice flowing.

The government hopes to find private-sector partners willing to shoulder some, or all, of the estimated $1.6 billion cost of refitting two of its biggest power stations: Coleson Cove near Saint John, New Brunswick, and Point Lepreau, Atlantic Canada’s only nuclear power plant, less than 30 miles from the border with Maine.

“We want someone else to put their money on the line for these projects,” Lord said.

The premier admitted Coleson Cove and Lepreau could end up in private hands.

“It could include 100 percent equity positions,” he said. “I won’t prejudge what the offers will be. They’ll be considered on a case-by-case basis. Public safety will remain a top concern.”

Lord pointed out that NB Power has sold assets before, although nothing as major as a generating station such as Lepreau.

The nuclear plant on the shores of the Bay of Fundy generates 30 percent of New Brunswick’s power. It has been plagued by breakdowns, however, and needs a $1 billion refit to run for another 25 years.

Lord said that, combined with the Coleson Cove upgrade, the multibillion-dollar repair bills would add too much to the public debt.

Critics were skeptical of Lord’s claim that he’s not privatizing NB Power.

“They say it’s not privatization, but if it walks like a duck and quacks like a duck, chances are that’s what it is,” said John Cole, spokesman for the International Brotherhood of Electrical Workers. “There’s no question in this case we’re moving toward privatization.”

Cole said selling off Point Lepreau and Coleson Cove is like getting rid of the milk cow. He said the province will lose its ability to control costs and New Brunswickers will end up paying top market prices.

“People who buy generation will sell it where they can get the best price and the best price today is the New England market,” he said.

“If we want power in New Brunswick, we’ll be paying New England prices. Don’t have any illusions about lower rates.”

British Energy PLC, which operates the Bruce nuclear station near Kincardine, Ontario, already has expressed interest in buying Lepreau and other NB Power assets.

Stewart MacPherson, chief executive officer of NB Power, said there’s private-sector interest in both Point Lepreau and Coleson Cove.

“They’re good investments,” he said.

NB Power will be unbundled into a central company, NB Power Holding, with four subsidiary companies called NB Power Generation, NB Power Nuclear, NB Power Transmission and NB Power Distribution and Customer Service.

Lord said the utility has to change.

“The world is changing and NB Power must change as well,” he said.

He said without a structural overhaul, the utility was heading for a debt of $3.6 billion by 2006.

Lord said the changes should keep rates reasonable for homeowners.