All of Canada Impacted by Quebec/NB Power Deal
The following letter was sent this morning to federal members of Parliament, several members of the Canadian Senate, the Premiers of New Brunswick, Ontario, PEI, NL and Nova Scotia along with the Federal Competition Bureau and copied to multiple national and provincial news agencies in Canada.
RE: Hydro-Quebec’s proposed purchase of NB Power,
Consider that if this purchase is allowed to proceed, overnight 5 of Canada’s 10 provinces will become completely dependant on a single corporation for their ability to import or export electrical energy both inside and outside of the Canadian border. The remaining Canadian Provinces, Ontario and East, will be forced to pay power prices set by that same corporation for any power they might wish to purchase from the Canadian East.
Is this the sort of business climate the Governments of Canada and its provinces, other than Quebec, really want to foster for the future of the nation?
Some have argued that even after such a purchase the rates that can be charged to wheel power across Quebec-Hydro’s grid will be set by regulators, not by the corporation itself. This is true indeed true but this argument is a false one.
The very ability to wheel power through Quebec-Hydro’s grid, at any price, will depend on the corporation’s willingness to invest in the infrastructure capacity that will permit its competitors to access the grid. In other words, true competitive freedom will no longer exist and market access will not be possible without Quebec-Hydro’s willingness to permit it.
Putting all politics and rhetoric aside, the question that needs to be answered is a simple one:
Should a single corporation, no matter where it’s located, be permitted to completely control the flow of energy from half of Canada’s Provinces into the other half of Canada and beyond?
Sincerely,
Consider that if this purchase is allowed to proceed, overnight 5 of Canada’s 10 provinces will become completely dependant on a single corporation for their ability to import or export electrical energy both inside and outside of the Canadian border. The remaining Canadian Provinces, Ontario and East, will be forced to pay power prices set by that same corporation for any power they might wish to purchase from the Canadian East.
Is this the sort of business climate the Governments of Canada and its provinces, other than Quebec, really want to foster for the future of the nation?
Some have argued that even after such a purchase the rates that can be charged to wheel power across Quebec-Hydro’s grid will be set by regulators, not by the corporation itself. This is true indeed true but this argument is a false one.
The very ability to wheel power through Quebec-Hydro’s grid, at any price, will depend on the corporation’s willingness to invest in the infrastructure capacity that will permit its competitors to access the grid. In other words, true competitive freedom will no longer exist and market access will not be possible without Quebec-Hydro’s willingness to permit it.
Putting all politics and rhetoric aside, the question that needs to be answered is a simple one:
Should a single corporation, no matter where it’s located, be permitted to completely control the flow of energy from half of Canada’s Provinces into the other half of Canada and beyond?
Sincerely,
To join the facebook campaign against this terrible situation and have your say visit: http://www.facebook.com/group.php?gid=25702989279
2 comments:
Long-term power rate cap needed: analyst
Last Updated: Friday, October 30, 2009 | 5:42 PM AT
CBC News
New Brunswick should negotiate a cap on long-term power rates with Hydro-Québec to protect residential customers before signing on the dotted line, says a public policy expert.
Under the proposed deal between NB Power and Hydro-Québec, residential rates in the province would be frozen for five years, and then be tied to the rate of inflation.
But if the inflation rate jumps, New Brunswickers would be in trouble, said Donald Savoie, an analyst at the Université de Moncton.
'Say we have a rate of inflation of ...12 per cent. Well a couple of years like that, we're doomed.'
—Donald Savoie, public policy expert"Say we have a rate of inflation of around, something remarkable like we've had in the past, late '70s, early '80s, we had inflation of a rate of 12 per cent. Well a couple of years like that, we're doomed," he said.
"When that happens, only New Brunswick will be asked to deal with it. The province of Quebec will be sheltered from it. And in terms of our private sector, it's not good in terms of residences, it's not good. We need protection."
Savoie said he is often consulted by governments in big economic decisions, but had no input on the proposed deal.
On the surface, he thinks the deal is a good one for New Brunswick.
Getting rid of NB Power's $5-billion debt, the promise of freezing rates for residents, and lowering rates for businesses adds up to good economic news for everyone, Savoie said.
It could also help the province's long-term economic growth if businesses can create more jobs.
But without some kind of further rate protection, the deal makes him nervous, he said.
Excerpts from Friday's Financial Post. This has to be stopped.
N.S., N.L. wary of Quebec's power
Richard Foot, Canwest News Service Published: Friday, October 30, 2009
Yesterday's proposed deal to sell NB Power to Hydro-Quebec has sparked anxiety across Atlantic Canada about the transfer of critical energy assets to a large and powerful province outside the region.
Hydro-Quebec, the world's largest hydroelectric producer, has emerged the early winner in a high-stakes contest with Newfoundland and Labrador to secure control -- via New Brunswick's prized transmission lines -- of Atlantic Canada's only direct route into the lucrative U.S. electricity market.
"It's a power grab and it's despicable," said Danny Williams, the Newfoundland Premier, this week.
Darrell Dexter, Nova Scotia's Premier, in more muted but no less forceful language, questioned the wisdom of "selling Maritime interests."
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Newfoundland has the most to lose.
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Newfoundland will be forced to negotiate with the company, no matter which route it finally chooses to transmit its power.
Those negotiations will be complicated by the fact that Hydro-Quebec, which exports large amounts of its own surplus power, considers Newfoundland a competitor in the U.S. market.
"The Lower Churchill will be in direct competition with Hydro-Quebec's own power sources. So the company isn't going to be all that enthusiastic about helping Newfoundland and Labrador into the marketplace at the lowest possible cost," says Charles Cirtwill, president of the Atlantic Institute for Market Studies, a Halifax-based economic think-tank.
"Hydro-Quebec will be in a position to make it more challenging for Newfoundland to sell its power to the U.S. at a competitive price.
"That's part of the reason Hydro-Quebec is doing this deal, because they see another significant competitor coming, and they're trying to put themselves in the best position.
Is it going to block the Lower Churchill development entirely? Not at all. But is it going to reduce the amount of profit Newfoundland can make from it? Absolutely."
Mr. Cirtwill says HydroQuebec can't block Newfoundland, or any other province, from using its transmission lines to export power. North American trade regulations require utilities to let competitors transmit power through their portion of the grid, at reasonable toll rates.
"The challenge for Newfoundland will be the negotiation of that toll," he says.
In a letter to Mr. Graham on Wednesday, Mr. Williams warned that if the deal to sell NB Power goes through, Hydro-Quebec will have a "stranglehold over the Atlantic region."
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"Quebec has a history of using its federal power to influence decisions made by Ottawa," Mr. Cirtwill says. "What if we end up with a situation where the New Brunswick regulator makes a decision Hydro-Quebec doesn't like? Will that friction spill over into other areas? Will it taint discussions at the next premiers' meeting or affect the next debate on equalization?
"With a very activist government the size of Quebec, you do run the risk of seeing these kinds of things."
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