New Brunswick-Quebec energy deal off

Friday, 26 March 2010

The Canadian provinces of New Brunswick and Quebec have pulled out of an agreement that would have seen Hydro-Quebec acquire most of NB Power's generation assets including the Point Lepreau nuclear power station. 

Point Lepreau (Image: NB Power)

New Brunswick premier Shawn Graham announced that the province would not be proceeding with the agreement-in-principle, which was signed in January and had been due for completion by the end of March. According to Graham, a number of issues had emerged during the process to move to a legal contract that had resulted in Hydro-Quebec proposing further changes, meaning that the deal would no longer be in the best interests of the province. "The reality is that, when Hydro-Quebec did its due diligence, it found that there were more risks than it was willing to take on," he said. This led to a change in position from Hydro Quebec. "Our government could not accept that," Graham said.

Quebec premier Jean Charest said that Quebec would not be pursuing the transaction. According to a release from the Quebec government, the initial memorandum of understanding for the deal, announced in October 2009, had hinged on several conditions and it had now become apparent that "certain assets" included in the transaction required a greater level of re-investment than previously anticipated. This would have resulted in a significantly higher level of risk for Hydro-Quebec, according to the provincial government.

The government statements offer no details on the assets in question, although New Brunswick's Point Lepreau nuclear power station, currently undergoing major refurbishment, had been included in the deal. The refurbishment will extend the life of the CANDU reactor to 2034 or beyond, but has gone over time and over the original C$1.4 billion ($1.3 billion) budget. Point Lepreau was not due to be transferred to Hydro Quebec until the reactor was back on line.

 

Researched and written

by World Nuclear News