As part of a global transaction worth $3.2B, Hydro-Québec will acquire most of NB Power’s generation assets for $1.8B. This will include the seven hydroelectric generating facilities, two diesel peaking units located on the main grid and firm transmission rights associated with the acquired generation assets, including 670MW of transmission rights with New England. Hydro-Québec will also acquire the Point Lepreau nuclear facility for $1.4B upon its successful refurbishment in January 2011. The transmission and distribution arms of NB Power and the deferral account associated with the Point Lepreau refurbishment will be retained by New Brunswick.
Hydro-Québec will act as an electricity wholesaler to NB Power. Under a long-term power contract, Hydro-Québec will provide NB Power with an annual supply of 14 TWh of electricity. For the first five years, that supply will be provided at a price of 7.35¢ per kWh. As previously announced, after that period the price will change only according to New Brunswick’s Consumer Price Index (CPI).
New Brunswick will manage this heritage electricity by creating two pools: one of 4.5 TWh for industrial customers and one of 9.5 TWh for residential, commercial and wholesale customers.
NB Power will maintain the ownership and operation of the province’s transmission and distribution assets, as well as of the Grand Manan facility supplying electricity to the island of the same name. The thermal generating facilities at Coleson Cove and Belledune will also continue to be owned by NB Power and will supply electricity to Hydro-Québec under tolling agreements.
The transaction is expected to close on or about 31 March 2010 for the assets acquired, with the exception of the Point Lepreau facility.
This concludes the discussions undertaken by the governments of Québec and New Brunswick in early 2009, which resulted in the signature of a memorandum of understanding on 29 October 2009.
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