Power deal lights up faces at city hall
Published Tuesday November 24th, 2009
Savings to be had | Assistant treasurer says municipality would save $50,000 per year during five-year rate freeze
The City of Fredericton will save nearly $50,000 a year if the deal to sell NB Power to Hydro-Quebec goes through, says an official at city hall.
Tina Tapley-Jones, assistant city treasurer, said Monday that the capital's electricity bill in 2009 was budgeted at $2.59 million.
When street lights are factored in, the city bought $1.59 million worth of electricity, she said.
"For 2009 ... we budget three per cent for a rate increase or inflation costs," said Tapley-Jones.
"We would have saved $46,421 if there had been a rate freeze."
The Liberal government is planning to sell NB Power to Hydro-Quebec for $4.75 billion, which would pay off NB Power's debt.
The deal also includes $5 billion in rate relief.
Residential and commercial power users would receive a five-year rate freeze and industry would get an immediate 30 per cent rate cut.
"The majority of our city facilities are billed at the commercial rate," said Tapley-Jones.
That means the city would qualify for the five-year rate freeze under the deal to sell NB Power, she said.
Street light power costs aren't included in the equation because they're based on an unmetered, per pole cost and city hall doesn't know how that will be affected by the deal because it's not mentioned in the memorandum of understanding.
"I based the rate freeze on our commercial rate power budget," said Tapley-Jones.
The total savings over the five-year rate freeze for the city would be greater than $250,000 because the government is projecting NB Power would need a rate increase of three per cent a year and those increases would compound year after year.
The deal to sell most of NB Power's assets to Hydro-Quebec is expected to be signed by the end of March 2010.
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I'm curious about this, as well, as I have one on my property (that I pay a monthly fee on) and would like to know if the price of this will go UP or DOWN. Yet another thing on a bill that isn't "rate" related that isn't explained in the MOU.
People against this deal need to get their heads around the fact that the entire province of NB has about the same number of people as the city of Hamilton ON, except they are spread out over an area 60 TIMES the size. It is very expensive to power this province. On top of this half of the province is using aging dirty coal power plants that desperately need to be replaced.
Just be sure, if this deal does not go through, your power rates WILL continue to go up year after year after year.
Also, your "facts" are wrong Bob. Provincial debt and NB Power debt are seperate, and NB Power's debt is not going up. The Auditor General already disproved everything Shawn Graham has said about debt in this deal.
In fact this makes provincial debt worse, the province loses $100 million a year in taxes that NB Power pays, since according to the MOU Hydro Quebec's NB Subsidiary is tax exempt.
This deal doesn't make debt magically go away. It takes the debt, and the revenue that is paying the debt. What we get instead is a wing and a prayer that we won't simply get gouged by Quebec in 5 years or on any new power (since any new power isn't covered by the rate freeze anyway).