Submission to the NB Power panel

As you know I have pretty strong feelings about NB Power and its future. I had hoped to speak with the new panel stood up to make recommendations but I haven’t heard from them and likely won’t so to save them and me a step here is my submission.

I only want two outcomes: 1) NB Power to become a plain vanilla electricity utility and 2) New Brunswick to be a place where over the next 10-15 years a massive amount of clean energy is produced to attract new energy-intensive industries.

That’s it.

Firstly, I want the panel to come up with a solution that ensures NB Power can provide reliable electricity and related services to households, businesses and institutions at reasonable costs and with annual cost increases in line over time with the national inflation rate. I think any proposed model that includes 5-7% increases every year in perpetuity will be politically toxic and a serious drag on economic development not to mention its negative impact on poor households.

This little whisper going around that New Brunswickers are going to have to pay a lot more for electricity to get up to rates found in New England and elsewhere is problematic. We shouldn’t make future ratepayers pay for the mistakes of past taxpayers (i.e governments not making tough decisions in the past for political i.e. taxpayer reasons leading to where we are today). We should make future taxpayers pay for the mistakes of past taxpayers. I have written a lot in the past about the difference between a taxpayer and ratepayer - they are not the same in many respects the most notable being in their ability to pay - ratepayers pay the same rate for electricity -tax payers face a graduated income tax rate based on their ability to pay.

Some will say put up the rates 5-7% per year and then implement an aggressive and ultimately complicated scheme for the taxpayer to subsidize poor ratepayers in perpetuity (i.e a $100 million - maybe in the future even more - program using tax dollars to reduce the bills of middle and lower income households). I would much prefer the taxpayer take over a large chunk or even all of NB Power’s debt if it resulted in my plain vanilla utility with reliable service and modest annual rate increases (as a reference NB Power paid $259M to service its debt last year).

As for all the other ideas floating around - sell to Emera or Fortis or even HydroQuebec - or breaking up the utility, etc. again I refer you to my desires for my a plain vanilla utility. This doesn’t mean it can’t be innovative but I want the thing run efficiently, debt amortized/paid in a timely fashion, etc. Going forward ratepayers should pay full freight for the purchase of electricity.

Second, I stubbornly hold on to the idea that New Brunswick should be able to produce clean energy at competitive rates when comparing to other jurisdictions in North America (mostly wind and nuclear). I’m not suggesting we can compete with nat gas-fired generation in Alberta but I hold on to the notion that the large electricity users - particularly those in tech - will want clean energy in the the 2030s and 2040s. New Brunswick has vast areas with no or limited population (2/3 of the land area of the province is either Crown land or industrial freehold), pretty good transmission infrastructure already in place, cheap land for data centres, green manufacturing, etc. and ports to get stuff in and out.

You can’t make the large electricity users (current and future) pay for the mistakes of the past. You will hurt your current and future economic development. You may think you can squeeze them harder because they have steel and concrete that is hard to relocate. This is bad thinking either a) they will retire that infrastructure early or b) when it comes up for renewal they won’t renew. Companies from sole proprietors to multi-billion dollar corporations are trying to make a reasonable return on investment. For energy-intensive businesses - consistently raising costs above what they would pay in competitor jurisdictions is a recipe for long term de-industrialization.

That’s it. Simple. A plain vanilla electricity utility offering highly reliable services and reasonable costs and a framework to make New Brunswick a clean energy powerhouse.

Actually really quite hard.