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Bruno Roy

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Issuing a statement such as a corporation should be operated as a business seems benign, if not redundant.

However, when Bernard Lord said words to that effect about NB Power during his time as premier of the province it became a politically charged statement. That's because people familiar with the public utility knew that such a mandate meant not only higher power rates, but most likely much higher power rates.

The options were fairly cut and dry. Charge what it costs to produce and deliver power to the people of New Brunswick, or increase the utility's debt which currently stands at a crippling $4.75 billion.

Bernard Lord's dilemma became Shawn Graham's dilemma when the government changed hands in 2006. Power rates were stunting our economic growth, and becoming an increasing burden on low income New Brunswickers who have been fighting a seemingly losing battle to keep the lights and stove working and stay warm during the winter months.

Now, by entering into a potential energy partnership with Quebec, Premier Graham has found a long-term solution to a problem that has plagued New Brunswickers, our businesses, and our politicians for years.

People are understandably nervous about the scale of the proposed agreement with Quebec, but the bottom line is that it secures the most competitive power rates in North America for New Brunswick into the future.

People want to know what that means for the average New Brunswicker.

Under the agreement, rates for homeowners would be frozen for the next five years and tied to the rate of inflation forever more after that.

Approximately 60 per cent of New Brunswickers use electric heat, a very high percentage compared with other jurisdictions. Pursuant to this agreement, using a conservative estimate of a three per cent hike per year if the status quo was maintained, the average electrically heated household will save $1,400 over a five-year period on their power bills.

There are legitimate concerns among New Brunswickers about what happens beyond the initial five-year period. There is more good news on that front.

If you look at New Brunswick's economy over the past 15 years, inflation averages out at lower than two per cent annually. If you look at the trends on power rates over the last 15 years, our electricity bills have been going up on average in excess of three per cent annually. In other words our power rates have been going up 50 per cent more than the rate of inflation, which explains why power bills are becoming an increasing concern for the average New Brunswicker.

With rate hikes exceeding inflation the power bill cuts deeper and deeper into everyone's budget year after year. That trend will continue if this deal is not finalized.

Beyond the average five-year freeze savings of $1,400 for homeowners, the agreement to tie increases going forward to the rate of inflation is projected to save the average electrically heated household at least $465 a year beyond the five-years. That, more than anything, is why people should be embracing this agreement.

There have been rumblings from opposition ranks that beyond five years, we can't trust this deal because rates will be set in the province of Quebec for New Brunswickers. That is fundamentally untrue.

Power rates are currently set in New Brunswick by the New Brunswick Energy and Utilities Board. When NB Power wants to increase rates, it needs approval by the province's EUB.

That does not change one iota. In 2015, NB Power (the company will keep its name and remain largely unchanged except for ownership) will still have to go before New Brunswickers on the New Brunswick EUB to have those rate hikes approved. Despite what David Alward claims, those decisions will not be made at l'Assemblée nationale in Quebec. We maintain control over our rates, our energy policy, and our natural resources as stated in the memorandum of understanding.

There are obvious benefits in this deal for economic growth, given that we will share with Quebec the most competitive power rates in North America if this deal is concluded. That's a discussion for another day.

But what strikes me most about this proposed agreement is the profound positive impact it will have on every New Brunswicker that receives a power bill. This deal solves a problem that has festered for decades in New Brunswick. Without this deal things are unfortunately only going to get worse.

The only risk here is political in doing what is best for New Brunswick in the long run.

* A resident of Dieppe, Bruno Roy was a Liberal candidate in the 2006 Provincial General Election. He is a past Executive Director of the New Brunswick Liberal Association. His column appears every second Saturday.