NB Power
The proposed sale of NB Power was an attempted takeover of New Brunswick's government-owned public utility assets by Hydro-Québec, Canada's largest utility. Announced on October 29, 2009 by premiers Shawn Graham and his Quebec counterpart, Jean Charest, the deal ultimately collapsed in March 2010, after months of controversy
For a decade, NB Power, the government-owned integrated public utility serving most areas of the Canadian province of New Brunswick, was plagued by financial difficulties. Over the years, the company had built and operated a diversified generation mix, including oil and coal-fired thermal, nuclear, and hydroelectric plants. Faced with an aging generation fleet and fuel cost increases, the utility needed to find ways to meet increasing demand for electric power while keeping operation costs down.
In the late 1990s, NB Power signed a supply contract with PDVSA for Orimulsion, a cheap bitumen-based fuel, for its Coleson Cove and Dalhousie facilities. The utility then converted one of three units at the 1050 MW Coleson Cove plant, in Saint John, to burn the heavier grade while burning Orimulsion at Dalhousie. After investing hundreds of million dollars at Coleson Cove, NB Power learned of the Venezuelan supplier's decision to stop making the fuel, thus breaking the contract. After mixed success litigating the case and winning a settlement estimated at more than $200 million, the utility turned to a mix of petroleum coke, an oil refinery byproduct, and heavy oil, drawing opposition from environmentalists.
Meanwhile, NB Power and Bernard Lord's conservative government needed to decide whether to undertake the refit of the Point Lepreau Nuclear Generating Station. The nuclear plant, whose mid-life refit had been hotly debated, was authorized in July 2005, and NB Power signed a $1.4bn contract with Atomic Energy of Canada Limited (AECL). Refurbishment work began in April 2008 and was expected to last 18 months. However, due to a series of delays, the reopening was first postponed in January 2009, then further pushed back. Delays and high fuel costs in 2008 added one million dollars per day to the budget for replacement power. Premier Shawn Graham initiated informal talks on regional electricity issues with Quebec's Jean Charest during a federal-provincial meeting, on 16 January 2009.
The next month, a delegation of senior New Brunswick officials, led by Graham's chief of staff, Bernard Thériault, travelled to Quebec City for secret talks with their Quebec counterparts. In June 2009, the two neighboring provinces announced an "energy partnership". At that point, the option of selling NB Power to Hydro-Québec was largely dismissed. Outside firms were hired to advise the provinces on legal, financial and public relations issues and by September, the parties were discussing the terms of a memorandum of understanding.
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