During the Hydro-Quebec debate, many of the opponents of the deal that I talked with were adamant that this was a deal cooked up just for the large industrial users and that NB Power should not be sold just to keep these large users happy. When I asked what should be done about the escalating cost of power for large industrials some took the hard line – they should leave the province if their power costs are too high – in fact, several (including one I debated in public) suggested these firms were a problem and the government should not support “sunset industries”. Others with a little more sensitivity to economic development suggested to me these large industrials should be encouraged to do deals with Hydro-Quebec themselves and the government should help them – rather than sell NB Power outright.
Now that the deal has been scrapped, we are stuck with this very real problem of uncompetitive power rates for large industrials and a viable option would be to let them do more self-generation or find other mechanisms to lower their rates or at least keep them from escalating further.
But as the new CEO of NB Power has said multiple times – he absolutely needs these customers. The loss of revenue from the large users (including PEI) could seriously screw up the utilities business model. There might be some marginal savings from lower fuel purchase costs during peak times but across the year the loses – in his words – would be consequential.
So the gordian knot remains. At power rates 40%-70% more than other competitive jursidictions like Quebec and BC, how long can these large users remain reasonably competitive here?