Hydro-Québec's purchase of NB Power is not the "dangerous situation" Newfoundland and Labrador Premier Danny Williams, a frequent Hydro-Québec critic, makes it out to be. Rather, it is a sensible economic move that enhances co-operation while relieving New Brunswick of its energy-related debt.
The deal would make NB Power a subsidiary of Hydro-Québec. Residential electricity rates for New Brunswickers would be frozen until 2015, industrial and commercial rates would go down, and Hydro-Québec would acquire NB Power's $4.75-billion debt. Hydro-Québec gains new customers and an additional entry point into the New England electricity market.
Mr. Williams is galled by the amounts of cash being thrown around in the face of Quebec's persistent status as a recipient of equalization payments. But Hydro-Québec is an economic engine in Quebec, and one that returns an annual dividend to taxpayers that has exceeded $2-billion in recent years. Mr. Williams's criticism carries echoes of the 1969 Churchill Falls deal, under which Hydro-Québec has greatly profited by acquiring cheap Labrador hydropower. Even Mr. Williams has changed his tune on this one, agreeing in April to export Churchill Falls power to the United States via Hydro-Québec power lines.
And fears about a rapacious Hydro-Québec ignore a larger reality. New Brunswick will sacrifice some of its control over energy policy, but as companies extend electricity grids and trade power into neighbouring jurisdictions, energy markets have become more regionally based. NB Power was a local monopoly, to be succeeded by a larger, more solvent, monopoly that generates clean electricity and has the reach and scale to profitably serve more markets.
This arrangement could actually strengthen national unity. Hydro-Québec is showing a willingness to engage beyond its borders, just as large Quebec financial institutions, such as Desjardins Securities and National Bank, serve customers outside the province. (If the shoe were on the other foot, and Quebec's power company was being acquired, we might well have a national-unity crisis; but unlike Hydro-Québec, NB Power is not an icon of nation-building for the people of its province.)
New Brunswickers will have their say once a bill enabling the deal goes to the provincial legislature. They should make economic development and energy co-operation, not the amount of noise coming from another premier, the criteria for deciding whether it deserves their support.