Government was counselled not to sell NB Power

New Brunswick's Liberal government was advised against selling off NB Power and pursuing the kind of deal it eventually negotiated with Hydro-Québec by a pair of consultants it hired in 2008.

William Marshall and William Thompson submitted their report to the Department of Energy in December 2008, but the document was only made public on Thursday.

Marshall is the former president of the New Brunswick System Operator, a not-for-profit corporation that oversees the province's electrical system, and Thompson is a former deputy minister of energy in the Bernard Lord government. They were commissioned by the government of Premier Shawn Graham to do an "options analysis" of New Brunswick's electricty market and NB Power.

Progressive Conservative MLA Paul Robichaud said the Liberals didn't want Marshall  and Thompson's report released because they chose to ignore the recommendations in it and forged ahead with their plan to sell NB Power to Quebec.

"It's obvious that the government didn't follow at all the recommendations of this report, and they did just the opposite: selling the most valuable assets and keeping the most expensive ones," Robichaud said.

The report was released to CBC News on Thursday, two weeks after ombudsman Bernard Richard said the Department of Energy should disclose the document, which was requested on Sept. 18, 2009, under the Right to Information Act.

The Opposition Progressive Conservatives also requested the document during a session of the legislature in December 2009.

The Liberal government said releasing the document while discussions with Quebec were still going on might have hurt its negotiating position.

The proposed $3.2-billion power deal with Quebec fell apart in March.

Keep NB Power public: report

The 2008 report warned the Liberals that when New England governments sold nuclear and hydroelectric plants, they lost control of them and had to shoulder big costs.

The consultants' report urged the Liberal government to keep NB Power a Crown corporation.

The Graham government went against that recommendation and in October 2009 announced it would selling off the bulk of NB Power's assets to Quebec. It had quietly started negotiating the sale in January 2009, a month after the consultants submitted their report.

The report also recommended the provincial government expand the process that started in 2003 of separating off NB Power's various operations.

The consultants proposed splitting the utility into a "wires" division, consisting of NB Power Distribution, Transmission and Holding, and a "generation" division, comprising NB Power Generation, the Coleson Cove plant and the Point Lepreau nuclear plant.

Each division should have its own board of directors, president, chief executive officer and senior management team, the report suggested.

The 2008 report also urged the government to begin exploring the creation of a regional transmission company that would be responsible for the maintenance and construction of the Atlantic region's power lines, many of which serve New England and already run through New Brunswick.

The report said the province should only sell old generating stations that burn expensive fossil fuel, the opposite of what was in the proposed deal to sell NB Power's assets to Hydro-Québec.

Minister won't commit to adopting recommendations

Energy Minister Jack Keir said the consultants wrote the report before anyone knew that Quebec would offer power rate savings.

"I think when you look at where we were with Hydro-Québec and the deal we were trying to get to the finish line was different than what those folks were saying in that report," Keir said.

Keir was non-committal on other recommendations in the report, except for one that suggested beefing up the Energy and Utilities Board (EUB), an idea the minister says he likes.

Marshall and Thompson said that many of the 50 representatives of the energy sector they interviewed for their report felt more transparency could be brought to the regulatory process by ending the cabinet override of power rate decisions, disposing of the rule that NB Power can automatically raise rates by three per cent without defending it in front of the EUB and appointing a full-time public intervener.