Michael Giberson
Power consumers in New York and New England markets rely on imports from Canada, so they may be interested in discussions between Quebec and New Brunswick that would give Quebec more control over power delivered from Eastern Canada into the Northeastern United States.
Quebec and New Brunswick are closing in on a $10-billion deal that would see Hydro-Québec take over key assets of debt-laden New Brunswick Power, a controversial move that would give Quebec a stranglehold over access to electricity markets in the northeastern United States.
A final agreement must still be approved by the respective governments, but could be announced early next week.
… [Under the deal] Hydro-Québec would acquire assets of New Brunswick Power, take over its $4.7-billion debt, and supply the province with power at rates that represent $5-billion in savings for residential and industrial power users.In exchange, Quebec would get greater access to the New Brunswick market and the transmission corridor to major U.S. markets – a significant benefit given Hydro-Québec’s expansion plans and the slump in electricity demand in North America.
While U.S. regulators clearly have no jurisdiction over a deal between power companies and Provincial governments in Canada, U.S. law and regulations do require companies that sell power at market-based rates in U.S. wholesale power markets to allow non-discriminatory third-party access on affiliated transmission systems.
Hydro-Quebec sells a great deal of power into both New York and New England. Consumers in New York and New England benefit from those sales, and wouldn’t gain from having Hydro-Quebec caught up in some Washington DC-based regulatory snafu. But independent power producers in Quebec have complained in the past about the difficulty of securing transmission services in the province, and as the linked story indicates, power company representatives in Newfoundland are concerned that the deal will hinder its efforts to reach U.S. markets.
I don’t think market concentration in the New England will be much of an issue if Hydro-Québec purchases NB Power, regardless of what Danny Williams says (and he says a lot of things).
First, everybody talks about wheeling more Quebec power to New England, but I’m not convinced that would be Hydro’s objective here. People tend to forget that Hydro has already secured 300 MW from the new 1,000 MW interconnection between NB and ME for the next 15 years.
On the other hand, securing the <a href="“>New Brunswick market (p. 60) is interesting from an Hydro perspective: the province consumes 14 TWh annually, half of which is generated with oil. If HQ buys NB Power, it would make a tidy profit by shutting down some of the fossil fuel plants and substituting oil by hydro, without selling any extra power to Maine.
Last point: HQ interconnections with NB are limited to 1,000 MW and upgrading this path from Lévis substation to the New Brunswick border to 735 kV (200 miles) while adding extra capacity to the HVDC back-to-back setup in the east would be much more expensive than the plan to feed New Hampshire from the Des Cantons substation.