Canada’s Hydro-Québec inks C$3.2-billion deal with NB Power
21 Jan 2010
Canada's government-owned public utility companies Hydro-Québec and New Brunswick Power (NB Power) have concluded a C$3.2-billion ($3.05 billion) energy deal by which the former will acquire most of NB Power's power generation assets.
The deal announced yesterday by New Brunswick premier Shawn Graham and Quebec premier Jean Charest brought an end to the ongoing discussions between the two provinces since last October when both the sides signed a memorandum of understanding for a C$4.5 billion energy pact.
The earlier agreement, which raised widespread criticism in New Brunswick over the province's reduced responsibility for its energy strategy ,was revamped to address the concerns, and as a result, New Brunswick will benefit from advantageous electricity rates, a significant reduction in provincial debt and a secure, long-term source of electricity.
Montreal-based Hydro-Québec is the largest power generator in Canada and the world's largest hydropower company. The company operates 59 hydroelectric power plants and a nuclear generating station with a total capacity of over 36,400 megawatts (MW) and a distribution network served over 3.9 million customers in 2008.
As part of the C$3.2 billion transaction, Hydro-Québec will acquire NB Power's generation assets for $1.8 billion. This will comprise 7 hydroelectric generating facilities and 2 diesel units located on the main grid as well as firm transmission rights associated with the acquired generation assets, including 670 MW of transmission rights with New England.
Hydro-Québec will also acquire a nuclear power plant in Point Lepreau for $1.4 billion upon its successful refurbishment, by January 2011, while the transmission and distribution arms of NB Power and the deferral account associated with the refurbishment will be retained by New Brunswick.
"Our partnership with Québec will secure lower energy costs for our province, leave NB Power as a New Brunswick-owned entity, and reaffirm our province's control over decisions affecting energy policy," Shawn Graham said.
