Saint John Telegraph-Journal
June 19, 2002
The ties that bind government to energy markets are beginning to loosen.
Yesterday in Saint John, Fredericton and Washington, D.C., things happened that will change how New Brunswickers buy, sell and use energy in the years to come.
Things got started in the Delta Brunswick Hotel’s ballroom in Saint John’s uptown, where lawyers for NB Power and Atomic Energy of Canada Limited came face-to-face with an old nemesis – Tom Adams, the executive director of Energy Probe, a Toronto-based consumer advocacy group that has long fought the forces of nuclear power.
His opposition to NB Power is two-fold; he wants the utility to get rid of Point Lepreau and he wants the New Brunswick government to rid itself of NB Power and its $2.9-billion debt.
Lawyers for AECL and NB Power spent about an hour trying to discredit Mr. Adams and his opinions during his morning appearance before the Public Utilities Board as it prepared to wrap up hearings to examine the Point Lepreau application.
They pointed out he isn’t from New Brunswick, that no one from the province sits on Energy Probe’s board and that – horrors of horrors – he’d be against nuclear power regardless of how much a retrofit would cost.
“If Point Lepreau could be refurbished for nothing, you’d still be opposed to it,” said NB Power lawyer David Hashey.
But in reality, it doesn’t matter whether Mr. Hachey and AECL lawyer Bernard Miller were able to discredit Mr. Adams before the PUB. The man from Energy Probe has already made his mark.
His ongoing public attacks contributed to a change of opinion in New Brunswick that culminated in last month’s announcement that NB Power is to be broken into four companies and private investors sought for Coleson Cove and Point Lepreau.
Mr. Adams wasn’t the only person sounding the alarm about NB Power, but he was one of the only ones willing to speak publicly, particularly after June, 1999 when Norm Betts – another staunch critic – joined Bernard Lord’s cabinet and fell silent on NB Power’s fate.
Although he doubts the government will find a partner for Point Lepreau, Mr. Adams likes the idea of breaking the corporation up and the government’s continuing move towards wholesale energy competition.
The province took a major step towards that a few hours after Mr. Adams’ morning appearance, with its own event in Fredericton.
New Brunswick’s Market Design Committee – the group responsible for figuring out how the wholesale market will work – released its final report.
Its recommendations included setting aside a portion of the electricity produced in New Brunswick for customers either unwilling or unable to participate in a competitive marketplace.
This power, known as a heritage pool, will be the amount of power used by all NB Power customers in 1999, about 61 per cent of the maximum amount of power able to be produced in the province.
That heritage pool will be produced by NB Generation, which will sell it to the newly created NB Distribution at a price set by the government.
NB Distribution will then sell that power to consumers.
Any portion of the heritage pool not sold this way – known in energy parlance as a standard offer service – will be sold by NB Generation either through New Brunswick’s wholesale market or as an export to other provinces or the U.S.
The aim of the committee is to prepare NB Power for competition and ensure it does not have an unfair advantage over its competitors when the market opens next April.
They might get some ideas on how to accomplish that from a sobering report released yesterday in Washington.
The General Accounting Office, the investigative arm of the U.S. Congress, has concluded that the American regulatory body, the Federal Energy Regulatory Commission, remains ill-prepared to properly regulate and protect consumers from high electricity rates as the U.S.’s energy markets become increasingly competitive.
Of most interest to New Brunswick may be the report’s conclusion that FERC lacks adequate enforcement power to deter anticompetitive behaviour because it can’t impose meaningful penalties.
In a province where concern that one major corporation could dominate a market is never far from consumers’ minds, the Congressional study may stand as a warning of things to come if we fail to tread carefully as we venture down this deregulated path.