I’m not going to go into much detail as that’s already been covered before. There are a few points that I feel are important and are getting drowned out in the noise:

  • There really isn’t much to gain in the long term. The value of the assets is about the same as the amount of the debt. Sure it erases the debt, but you lose assets that have potential to generate revenue.
  • The 5 year rate freeze won’t be free. The loss of revenue for the frozen rates will have to be made up somehow. Presumably it will be made up from the revenues generated from exporting power to the US over NB’s transmission lines.
  • Outside of the rate freeze, there appears to be little long-term benefit to NB. NB Power’s debt does not affect the borrowing capabilities or the interest rate for any other debt.
  • In the long term, there will be no choice but to close down the thermal plants. Building replacement power plants will be expensive and difficult as they will have to be non-carbon plants (like nuclear). The easiest option is to purchase power from Quebec. In fact, they are currently supplying the power to replace the power that would have been generated by Pt. Lepreau.

NB Power’s reputation has been tainted recently due to some high-profile blunders. Rather than solving the real problem of incompetent executives that got their jobs through patronage appointments, Shawn Graham has opted to walk away from it.