Conspiracy theory

OK. Here is the way I see it now. Hydro Quebec has a huge surplus of power. This, the result of the great economic downturn that has plagued the whole of North America. Even little old Dalhousie. Apparently they have about 7 terawatts of surplus this year alone. That's about 1/2 of what New Brunswick consumes. Check out the full article here : http://www.montrealgazette.com/business/Hydro+Qu%C3%A9bec+seeks+rate+hikes/1845406/story.html.

Now why is that a problem? Well hydro stations are immensly capital intensive. It takes massive amounts of money to build a hydro station in the upper reaches of Quebec where not too many people live. Of course the fuel is free, but at the end of the month, the big bad banker from Montreal still wants his mortgage payment, and of course the Government of Quebec wants their 150 million (per month that is) to keep up their social programs. All is fine and dandy as long there is some rain in the summer and some snow in the winter and some large industrial customers to smelter some aluminum. But take away an aluminum smelter here, and a pulp mill there, and now you have a surplus. And when you have a surplus, that means you are not generating electricity. And when you are not generating electricity with a hydro station, you are not making money. In fact, your probably hemoraging a few million a week. So, how will Hydro Quebec ever make a mortgage payment without raising in province residential rates. They take a chapter from NB Power, or maybe NB Power took a chapter from them, but either way HQ sells it to the states. Our freinds south of the border need lots of cheap, renewable power. But in the ever changing economic world, I think a conversation similiar this happened:

"But wait, what's that you say, our transmision lines are full". "Well build some more."

We are Mr CEO, but we can't build them fast enough.

"Well charge our American freinds more".

We can't Sir, the North American Free Trade agreement, Article 605, states that we can't charge our American Freinds more for Power than what we charge our domestic customers. Sir, the phones for you, it's Premier Charest.

"Bonjour Premier, How are you today? (in French of course)"

Very good Terry, hope business is well, we're looking forward to a great dividend check on our investment this month.

"Well Sir, business is down, and so are profits.

Unacceptable Terry, we have fireworks displays to put on. I want a plan on my desk by the end of the day.

"Yes Sir. Well people, you heard the Premier, how can we raise profits in these tough economic times?"

Well sir, all our surrounding provinces have higher rates than us. Why don't we just sell more to them.

"You know we can't. We're already maxed out on what we can sell to our neighbours. Wait !! If our neighbours have higher rates than we do, then how can we make them our domestic customer? Then we can charge more to our American Freinds."

Sir, we'd have to own them. Hydro One in Ontario is too big to buy, plus they have too much debt, and NFLD hates us now, they'll never sell. There is just NB Power left. They're too smart to sell. They'd see right through our plan. But their rates are 40% higher than ours. Then we could charge our American freinds 40% more.

"Well, we'll just have to buy them without them knowing, then won't we. Get their Premier on the phone, what's his name. Now!!. Hello , Jean, oh sorry Shawn, have I got a deal for you"

And the rest, as they say, is history.

Of course all this is hypothetical.

BTW Article 605 is here : http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/texte/chap06.aspx?lang=en