July 22, 1998

Report released on future of NB electricity industry by the NB government.

FREDERICTON (CNB) – A task force dealing with options surrounding the future of the electricity industry in New Brunswick released its report today. This completes the second of a three-stage process to provide formal recommendations to the provincial government.

The first stage of the public consultation process was the release of a discussion paper entitled Electricity in New Brunswick Beyond 2000, followed by the task force which asked for public input on the paper. The third stage will be public hearings conducted by a select committee of the Legislative Assembly. The select committee will present formal recommendations to the provincial government, which has the responsibility to regulate electricity.

Set up in February 1998, the task force was co-chaired by economist Dr. Donald J. Savoie of the Université de Moncton and David Douglas Hay, managing director of a financial services advisory firm. Two others assisted the process: Doug Goss, senior advisor, New Brunswick Public Utilities Board, and David Folster, executive director, Canadian Forestry Association – New Brunswick Division.

“Our main duty was to consult directly with stakeholder groups, including special interest groups, large industrial users, labor and other interested parties,” said co-chair Dr. Donald Savoie. “The task force held meetings this winter and spring in Fredericton, and we met or spoke to 32 groups and individuals. Nine written submissions were received.”

Hay said he hopes the report will be a useful tool in assisting the public, industry and government in focusing on the main issues to be dealt with during the public hearing stage. “Obviously, one of the larger issues with which the provincial government will have to deal is the future of NB Power and the various structures which the utility could have down the road,” he said.

The task force report outlines two major directions open to the select committee and government. The first scenario is maintaining NB Power as a monopoly provider of electricity distribution in New Brunswick, which the task force suggested could be problematic because of the utility’s large debt and its effect on the ability of NB Power to adapt to the rapidly changing North American energy market. However, the task force suggested ways to change the manner in which NB Power does business, should the government choose this route.

Should the select committee conclude the first scenario is not sustainable, the task force has identified other options and issues which the committee would want to discuss and study in detail, including: public vs. private ownership; monopoly vs. competitive market, and an integrated vs. segmented industry.

The task force suggests the following issues be tackled by the select committee, regardless of which overall direction is chosen by government. These include: power generation; future of the Point Lepreau nuclear generating station; the wires business; marketing of electricity; technical implementation and overall system administration in a deregulated environment; stranded costs; the environment; cross-subsidization of residential rates; the impact and implications of natural gas, and methods of privatization.

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A copy of the report is also available on-line Electricity in New Brunswick and Options for its Future – released July 1998

MEDIA CONTACTS: Dr. Donald Savoie, tel: (506)858-4467; David Hay, tel: (506)454-8432.