New Brunswick Power Privatization Plans

New Brunswick Power (NB Power) is a Crown corporation owned by the government of New Brunswick. It is the primary electric utility in the Canadian province of New Brunswick and serves all residential and industrial power consumers in the province, except those in Saint John, Edmundston, and Perth-Andover. NB Power operates 13 generating stations with a total installed capacity of 3,513 MW as of 2013, using a variety of energy sources, including heavy fuel oil, water, uranium, diesel, and coal. While NB Power has faced financial difficulties and challenges with ageing infrastructure, there have been attempts to sell its assets to Hydro-Québec, which have ultimately failed due to public opposition and political controversies.

NB Power is a Crown corporation

NB Power, or the New Brunswick Electric Power Corporation, is a Crown corporation owned by the government of New Brunswick. It is the primary electric utility in the Canadian province of New Brunswick and serves all residential and industrial power consumers in the province, except those in Saint John, Edmundston, and Perth-Andover. These three areas are served by Saint John Energy, Energy Edmundston, and the Perth-Andover Electric Light Commission, respectively.

The history of NB Power dates back to the 1880s when small private power plants began to emerge in Saint John, Fredericton, and Moncton. Over the next 30 years, electrification spread to other cities, and by 1918, more than 20 companies were active in the electricity business. However, this led to inconsistent levels of service and prices across the province.

Recognizing the importance of electricity for economic development, Premier Walter E. Foster proposed the creation of a provincially owned electric company. On April 24, 1920, the Legislative Assembly passed a bill establishing the New Brunswick Electric Power Commission (NBEPC). The commission immediately embarked on constructing a hydroelectric dam and a high-voltage power line to supply electricity to several cities.

While NB Power has faced challenges and controversies over the years, including a proposed sale to Hydro-Québec in 2009, it remains a Crown corporation today. The company operates 13 generating stations with a diverse range of energy sources, including heavy fuel oil, water, uranium, diesel, and coal. As of 2020, NB Power's grid also includes wind energy, further diversifying its energy portfolio.

NB Power's history of financial difficulties

NB Power, the public utility corporation serving most of the Canadian province of New Brunswick, has faced financial difficulties for over a decade. The company operates a diverse generation mix, including oil and coal-fired thermal, nuclear, and hydroelectric plants. However, it has struggled to meet the increasing demand for electric power while keeping operational costs down, especially with an aging generation fleet and rising fuel costs.

One significant challenge for NB Power was its supply contract with PDVSA for Orimulsion, a cheap bitumen-based fuel. After investing hundreds of millions of dollars to convert its Coleson Cove plant to burn Orimulsion, NB Power learned that the Venezuelan supplier was discontinuing the production of this fuel, breaking their contract. This forced the utility to turn to a mix of petroleum coke and heavy oil, drawing opposition from environmentalists.

NB Power also faced challenges with its nuclear operations. The decision to refit the Point Lepreau Nuclear Generating Station was highly debated, and the refurbishment work encountered a series of delays, pushing back the reopening date. These delays, coupled with high fuel costs, added significantly to the budget. Additionally, NB Power's nuclear generation station at Point Lepreau had a challenging year, forcing the utility to purchase replacement power from Quebec at a cost of $269 million.

The company's financial struggles were further exacerbated by issues at its Bayside natural gas plant, which required a new turbine and generator at a cost of around $46 million. These challenges contributed to a total loss of $43 million in fiscal 2022-23 and a total debt of $5.4 billion. As a result, NB Power customers faced the possibility of additional surcharges on their electricity bills.

NB Power's financial difficulties have been a concern for successive New Brunswick governments, and various assessments and restructuring efforts have been undertaken to improve the company's viability and ensure its sustainability in the long term.

NB Power's aging generation fleet

NB Power, the primary electric utility in the Canadian province of New Brunswick, has faced challenges due to its aging generation fleet. The company operates a diverse range of power plants, including oil and coal-fired thermal, nuclear, and hydroelectric facilities. However, the aging infrastructure has led to concerns about its reliability and efficiency.

The issues with NB Power's generation fleet began as early as the 1920s, when a newly constructed earth dam collapsed due to a spring flood. While the province continued to invest in new facilities and expand its electricity infrastructure, the demand for electricity, particularly during World War II, often outpaced their supply. This led to a constant struggle to meet the province's power demands.

By the 1960s and 1970s, the imbalance between supply and demand became more pronounced, with an annual growth rate of 12% from 1960 to 1975. This prompted NB Power to explore alternative energy sources and led to the construction of oil-fired power plants and New Brunswick's first nuclear power plant. However, the oil crisis in the 1970s caused a sharp increase in oil prices, making the operation of thermal plants significantly more expensive.

The aging generation fleet, combined with increasing fuel costs, put NB Power in a difficult financial position. The company needed to find ways to meet the ever-increasing demand for electricity while also managing rising operational costs. This led to a proposed sale of NB Power's assets to Hydro-Québec in 2009, which ultimately fell through due to political and public opposition, as well as concerns over risks and costs associated with the deal.

The failure of the proposed sale left NB Power with the challenge of addressing its aging infrastructure and meeting electricity demands. The company has continued to explore alternative energy sources and invest in new technologies, but the province's energy future remains a concern. With the constant pressure to balance supply and demand, manage costs, and navigate environmental and political considerations, NB Power's aging generation fleet remains a critical issue that requires careful planning and strategic decision-making.

NB Power's failed sale to Hydro-Québec

On October 29, 2009, the premiers of New Brunswick and Quebec, Shawn Graham and Jean Charest, respectively, signed a memorandum of understanding (MOU) to sell most of NB Power's assets to Hydro-Québec. This agreement was reached after nine months of negotiations undertaken at the request of New Brunswick. The deal would have transferred most of the generation, transmission, and distribution assets of the New Brunswick utility to a subsidiary of the Quebec-based Crown corporation, including the Point Lepreau Nuclear Generating Station and seven hydroelectric plants. However, it would have excluded fossil-fuel-fired plants in Dalhousie, Belledune, and Coleson Cove.

The memorandum of understanding sparked a spirited public debate in New Brunswick and Atlantic Canada. Despite positive feedback from the province's business leaders, many reactions to the MOU were hostile. Opposition parties, the union representing most NB Power employees, and wind energy supporters quickly condemned the agreement as detrimental to the interests of New Brunswick. Opponents used social media to express their displeasure and contest the arguments for the deal. A demonstration organized by opposition groups and trade unions drew approximately 600 people outside the Legislative Assembly building on November 17, 2009.

After months of controversy, a second agreement was signed in January 2010, reducing the scope of the sale. Under the revised agreement, the sale would have transferred NB Power's hydroelectric and nuclear power plants to Hydro-Quebec for $3.4 billion. The government of New Brunswick would have retained the transmission and distribution divisions of NB Power and entered into a long-term power purchase agreement (PPA) with Hydro-Québec.

On March 24, 2010, Premier Graham announced the failure of the second agreement due to Hydro-Québec's concerns over unanticipated risks and costs associated with matters such as dam security and water levels. This interpretation was contested by analysts, who blamed the collapse of the deal on the political situation in New Brunswick, just six months before a scheduled provincial election. The failed sale of NB Power to Hydro-Québec fueled public anger and drove opposition support, with 38% of respondents in a poll opposing the sale and stating that it was important to their vote.

NB Power's customer base

NB Power, or the New Brunswick Electric Power Corporation, is the primary electric utility in the Canadian province of New Brunswick. It is a vertically-integrated Crown corporation, responsible for the generation, transmission, and distribution of electricity. NB Power serves all residential and industrial power consumers in New Brunswick, except those in Saint John, Edmundston, and Perth-Andover, who are served by alternative energy providers.

NB Power operates 13 generating stations with a total installed capacity of 3,513 MW as of 2013. The generation fleet uses a variety of energy sources, including heavy fuel oil, water, uranium, diesel, and coal. As of 2020, NB Power's grid includes 355 MW of wind energy. The generation facilities are spread across the province, with the Saint John area accounting for nearly half of the total NB Power-owned generation capacity.

In 2019, NB Power generated a total of 13.4 TW.h of electricity, which is approximately 2% of total Canadian generation. The company has an estimated generating capacity of 4,520 MW. In the same year, approximately 38% of NB Power's electricity generation was from nuclear power, 30% from fossil fuels (natural gas, coal, and petroleum), and 22% from hydroelectricity. The remainder was produced from wind and biomass sources.

NB Power operates the Point Lepreau Nuclear Generating Station, which is the only active nuclear generating station in Canada outside of Ontario. It has a generation capacity of 660 MW. In addition, NB Power operates seven hydroelectric dams in the province, with a combined generating capacity of 889 MW. The main hydroelectric facilities are located on the Saint John River, with the largest being the Mactaquac Generating Station, which has a capacity of 668 MW.

NB Power's transmission grid includes over 6,849 kilometres of high voltage transmission lines ranging from 69 kV AC to 345 kV AC. The company has interconnections with Hydro-Québec, Nova Scotia Power, Maritime Electric in Prince Edward Island, and the ISO New England network in the United States. The network is operated by the Transmission & System Operator division of NB Power.

NB Power supplies electricity to Maritime Electric in Prince Edward Island through a sub-sea interconnection cable and imports/exports electricity from/to Nova Scotia via Canada's first electrical interconnection between two provinces. NB Power also has interconnections with the US state of Maine.

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