N.B. Tories promise energy rate freeze, but expert questions wisdom behind plan

Kevin Bissett, The Canadian Press
Winnipeg Free Press
August 24, 2010

FREDERICTON – New Brunswick’s Conservative leader is promising to freeze power rates for 2 1/2 years if he’s elected next month, but one expert questioned the wisdom of that proposal as the province’s utility grapples with a massive debt.

In his first major policy announcement ahead of the Sept. 27 vote, David Alward said Tuesday energy bills for residential and industrial customers would hold until March 2013 if he were elected premier.

Alward said New Brunswickers need price certainty and that the freeze would give him time to develop an energy plan.

Even though the province’s 90-year-old public power utility is saddled with a debt of $4.75 billion, Alward said his idea was feasible based on an analysis done by a former NB Power vice-president and two consultants.

“This is something that people with a bunch of experience and expertise have put a tremendous amount of work into and we feel very confident with the work that they’ve done,” Alward said in an interview after making the announcement in Saint John, N.B.

“Not only can New Brunswickers receive a rate freeze but also NB Power will still be profitable and we will be able to pay down debt as well.”

Alward said the analysis would be made public Wednesday.

Norm Rubin with Toronto-based energy watchdog group Energy Probe said he was concerned NB Power might be forced to go too far in efforts to cut costs in order to freeze the power rate, postponing such things as maintenance.

“You have to be careful that you don’t put too much financial pressure on a utility, especially one that’s always been Crown-owned and hasn’t been pressed before,” he said.

Rubin said freezing rates without knowing when Atomic Energy of Canada Ltd. will complete the refurbishment of the Point Lepreau nuclear power plant, which is 2 1/2 years behind schedule, is “a recipe for disaster.”

He said rising energy costs have to be paid at some point.

“Eventually the rising costs have to be met with rising rates.”

Liberal Energy Minister Jack Keir said it’s irresponsible to promise a rate freeze without knowing what oil prices will be in six months or when Point Lepreau will be back in service.

“Without knowing any of the unknowns in the electricity sector he’s determining right now that NB Power doesn’t need an increase,” said Keir. “I’m bewildered and don’t understand what he’s doing other than electioneering.”

Keir said the government has made efforts to control power rates by putting the various divisions of NB Power back together as one company and giving the energy and utilities board more teeth to regulate the utility.

He said the government is also continuing to press Ottawa to pay for cost overruns arising from the refurbishment of Point Lepreau.

The government attempted to sell NB Power to Hydro-Quebec last year in an effort to stablize energy rates. But the deal was scrapped earlier this year after the government faced fierce public outcry over the proposal.

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