Lolli pop lolli pop ooohhh lolli pop

To quote an accommplice who has given me a topic or two for my blog, have we been offered the lolli pop?

http://www.youtube.com/watch?v=p8sZcmQr6KY

I like lolli-pops too, but I’m gonna hold out for a tastier treat too I think.

And to James on the Lower rates site, where are you? I see you have not posted since
“1.14.2010 at 10:41 am James at Government of New Brunswick :”

This was two days after that fateful meeting where somone’s world was turned upside down. Did it take that long for someone to get through to Charest’s office and utter those famous words ” Houston, we have a problem”.

James, have you been meeting with your Hill & Knowlton advisors scripting new information to feed us? We all might get a little hungry if a single lolli-pop is all you have.

But, without some concrete information to reasearch, it's hard to say how much the new MOU will really change anything. But a high five and congratulations to all those who particpated in any form for the past 2 1/2 months. From letter writing, to blogging, to protesting, to attending information meetings, to talking one on one with your mla, to being one of those 8 people who sent Keir an email, and to online partipaction in everyone's favorite social media.

The graham cracker has been broken !! Maybe the pieces are not small enough yet, but...

I imagine tomorrow will be a busy day. The comparisons will start. The spinning wheel will need to be wound up and sprung free. The teleprompter scripts will be typed up. Crib notes will be handed out to all 32 mla's of the kind required for "yah" instead of a "nay". Opposition parties will be asking for a resignation. Online news story commenters will be calling someone a liar. Again. And Again. And think about it. How many times has Graham said "this is the best deal for New Brunswickers" and now the quote is "We will present an improved deal ... that, I think, is better for Quebec and that will also be better accepted in New Brunswick," Charest said in Quebec City.

http://www.google.com/hostednews/canadianpress/article/ALeqM5jSY7d5FPdtix52TSYqG3mM2VbCHA

I think there is a structural financial issue looming behind the scenes that is quite large. I think Quebec has stepped up their desire for any form of revenue, and I will state a comment a have said previously, that Graham was in the driver's seat with this , and should have held Charest over a barrell. A simple power purchase agreement, at a very favourable rate, that would have replaced the power required while Lepreau was being overhauled, plus as much oil as would have been required in the Coleson Cove and/or Dalhousie station would have been a good start. Throw in some extra for the large wholesalers like Saint John and Edmunston, and the large industrials like, well....... you know who. HQ still has a TW surplus, and while it sits in the headponds, it generates no revenue. Selling it to NB at any price is money in their ( Charest's) pocket.

But instead, Graham has chosen to still sell off the free fuel generation. Water is free, at least when it snows and rains, and the last time I checked, I believe the uranium comes from Canada. Maybe not free, but damn cheap compared to other sources. So here we have two home grown sources of fuel, that will provide at least 50% of the provinces electrical needs, in an already constructed infrastructure, not subject to third world instability, not subject to hostile takeover of foreign governments, and providing local jobs. Lepreau replacement costs are $16 million per month (from NB Power annual report). Assuming that will become profit next year when the refurbishment is fininshed, potential profit over the next 25 years will be :

$16,000,000 per month x 12 months per years x 25 years = $4.8 Billion.

Maybe some one should tell the NERA group so they can project that over infinity and see how much money we are losing.

Hydro alone has been averaging about 3 TW per year.

http://www.nbpower.com/html/en/about/publications/sustainability/supplementarydocuments/StatisticalOverview_English_Nov%2019.pdf

3 TW hours is 3,000 Gigawatt hours, is 3,000,000 MW hours, is 3,000,000,000 KW hours.
To use 10 cents a kw hr for simplicity sake, that is $300,000,000 per year in revenue.

From the same source, Lepreau has been averaging over 4 TW per year when it runs. If the rest of the 14 TW heritage pool comes from Quebec, I feel bad for any independent power producers in NB. I think it will kinda shut them out in the cold.

Hydro Quebec's strategic plan published in September/October indicated they had 8.5 TW of surplus power because of all the industry they lost due to the economic slowdown. Their projections showed it taking almost 7 years before it started to shrink.

I don't even think HQ needs to sell us much power. I just think they need to have the higher priced revenue on their books to make it look good for those high cost dams they are building.

But 8.5 TW (HQ surplus) plus 4.1 TW (Lepreau) plus 3 TW (hydro) = 15.6 Tw . Lots to go around. Maybe that's why Charest is saying it's a better deal for Quebec. It uses up his surplus, and it didn't cost him so much. Way to go Graham.
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Huh ????? Another MOU

Well, I imagine everyone has heard the news by now. Graham shipped off to Quebec for the weekend and begged for mercy from old mighty Quebec to give him a deal suitable to his dissident fellow mla's.

Kelly Lamrock gives his version here in a CBC interview.

http://podcast.cbc.ca/mp3/spinreduxit_20100118_26018.mp3

The Canadian Press has reported this:

"The New Brunswick government has reworked the proposed deal to sell NB Power to Hydro-Quebec following a public backlash and criticism within the Liberal caucus.

The government's house leader, Greg Byrne, says caucus members voiced their concerns at a meeting last Tuesday, prompting a number of changes to the proposed deal.

Byrne says the amended deal got the support of all members during a subsequent caucus meeting on Thursday.

He says the full details of the amended agreement will be released on Wednesday.

On the weekend, a source told The Canadian Press that changes in the deal would reduce the amount of power rate reduction promised for industry in New Brunswick."


The CBC version is here. Five mla's in total that want a slim chance at re-election:

http://www.cbc.ca/canada/new-brunswick/story/2010/01/18/nb-liberal-caucus-nbpower-1241.html

The Globe and Mail version here. Even some talk of the proposed regional transmission system in Eastern Canada to foster collaboration across political boundaries.

http://www.theglobeandmail.com/news/national/in-revised-deal-nb-power-to-retain-some-assets/article1435619/

Fort Reliance, Irvings parent company, says the new system would lower energy costs, improve carbon emissions performance and facilitate economic development.

http://www.theglobeandmail.com/report-on-business/irving-firm-calls-for-regional-energy-transmission-system/article1435548/

But no details were given. Maybe Shawn sold them the rights to the "little boxes" I blogged about in December titled "I'm losing it folks". Why would Irving need to hound the province ( well NB Power) for lower rates if they can do all this themselves? Why would their pulp and paper division need handouts to the tune of several millions if they can do all this themselves?

Another article here tells of some details about selling Lepreau and the hydro system for 3.2 Billion.

New Brunswick and Quebec have made major changes to the proposed deal to sell NB Power to Hydro-Quebec.

The Telegraph Journal posted this early this morning and seems to be the first out of the gate. I searched early and this was the only new NB Power article.

http://telegraphjournal.canadaeast.com/front/article/923808

It amazes me that some of the details of the document were basically leaked out here and there, with the official announcement to only come on Wednesday. I guess it will take a awhile for Hill and Knowlton to swallow the fact that they didn't succeed with the spin the first time, and need to re-group and step up their game a notch with the new MOU.

I wonder if a new NERA report will follow soon as well. I would like to go back and see how many thousand times Shawn Graham said that this deal is the best deal for New Brunswickers as soon as we see the details. (20 seconds in : http://www.youtube.com/watch?v=GtOC26tXcSk) All it took was a couple of mla's to fess up and admit they can only vote "NO" , and all of a sudden the deal is not worth the paper it's written on.

I hope everyone is ready for round two, because the sell job is probalby going to come harder and faster this time. They basically wasted two and half months and had to go back to the drawing board and start over again. Charest's provincial debt must have ballooned more than anticipated and he's desparate for any form of revenue that HQ can get. And they still want it signed and delivered by March 31.

I also imagine you will see a press release this week from the special advisory board that Graham and company threw together the review the MOU. Their opinion won't matter much now. Or at least they will have to take another six weeks or so to review the new MOU. Graham will probably have it passed in the legislation by then. That would kinda seem like a kick in the privates if I was on that team. I imagine they will all send in a bill for their time. Asking them nicely to give a reputable opinion, and then throw out the whole deal. Maybe that's why the Hill and Knowlten rep only spent five minutes with Ganong last week. Not much point in moving forward on that report. And of top of that, Graham is rolling back their rate reduction!! Ha Ha.
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And maybe this is not the best analogy to use (I like the video), but as former President Bush said, "you fool me once and I can't get fooled again" .
about 40 seconds into this short video.http://www.youtube.com/watch?v=BCLY8zrHZ64&NR=1
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My view - of why it has to be signed by March 31

I have talked on a few subjects, but only last week realized in my own head, how some of the pieces fit together. This may be old news to some, revelations to others, but I'll try to give a little history lesson for the past year and a half. Some information is not linked, as I have previously blogged about it and linked it in previous posts.

In late 2008, the economic collapse started. http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932009
Unforeseen by most. But predicted by a few. http://www.financialsense.com/
Since then Quebec lost an aluminium smelter, paper mills, mines, and others. This resulted in a 8.5 TW loss in load. Data all publicly available published in Hydro Quebec's 5 year strategic plan. This amount of electricity is almost equal to the proposed RCW heritage pool in NB.

HQ also started a $25 billion capital expenditure program to build dams and transmission lines to feed the US. This is to be spent from 2008 to 2013.

Natural gas prices also plunged, http://tfc-charts.w2d.com/chart/NG/W which makes the merchant power plants in the States that use natural gas cheap and very competitive. All these natural gas plants currently are a lot cheaper to run than the new hydro stations coming on line in Quebec. There is a great backgrounder of information published here : http://www.iso-ne.com/nwsiss/pr/2009/final_2009_october_backgrounder_remarks.pdf . This document is from the New England Independent System operator website, so it should be a fairly knowledgeable and objective source.

Here is an excerpt from page 10 detailing the dramatic drop is prices:
"For the entire summer of 2009, average electricity prices were down 63 percent compared to summer 2008. Gas prices were down 67 percent, and oil prices were 40 percent lower. In July 2008, fuel prices were climbing to historic highs and electricity prices followed suit, with an average high at $107.98 per megawatt-hour that month. Fuel prices have dropped dramatically since then. In July 2009 alone, natural gas prices were 70 percent lower than the previous July, and oil prices were 46 percent lower. Wholesale electricity prices were 69 percent lower than in July 2008, at $33.53/MWh."

With wholesale prices at $33.53/MWh, HQ cannot afford the mortgage on those new dams.

HQ's profits in 2009 will fall from over $3B to about $2.4. This is less money available to the Quebec Gov who collected $2.2B from HQ last year. Add this to the $4B deficit that Quebec has this year, and now you have a problem. HQ NEEDS CUSTOMERS. So while all this was happening, along comes Graham and says he needs some cheap power to keep his industrials happy. Mr Charest, knowing he has a problem developing, paints Graham a pretty little picture. The premier jumps up and down with joy as he feels he has just won the lottery. A deal is struck, and the rest is in the papers for all to read.

But where's the catch? Well, heritage pool power rates in Quebec are legislated at 2.8 cents a kilowatt hour. This is under direct control of the government through legislation. Real rates are 2X after adding in transmission and distribution. But still 30 to 50% less than NB. The big rush to have everything finalized is because Quebec plans to legislate a 1 cent per kilowatt price increase to the existing heritage pool customers to cover some of it's $4B budget deficit. This is about a 15% rate hike. A selling feature of the NB power sale, according to Graham, is the lower industrial rates in NB to match Quebec's. A 30% reduction. That will be on March 31, 2010 at midnite. But, when the Quebec Gov passes legislation on April 1 to raise rates 15%. Guess what? All the industrials in NB will get the same rate increase. So that 30 % drop is only 15%. Not such a great selling feature. And then people will be really ticked off. That is why Keir keeps eluding to this window of opportunity. That window will close soon, and once the big rate reduction is gone, then they will have NO friends at all. Plus, if they are spewing a lot of crap now to get us to buy into it, if this Quebec (and NB) rate hike pops up out of nowhere, the backlash will be off the charts.

And that Folks, IMHO, is the why of why Shawn Graham chose the path he did. Inexcusable in itself , but the how is even more inexcusable.

Unfortunately Canada lacks a real Energy Policy. As the largest exporter of crude oil to the largest consumer on Earth ( the US) we have no need to be held hostage to the rest of the planet.
Unfortunatley we don't own our resources, an have a difficult time moving them across the country from the "have" provinces to the "have not" provinces. But, Newfoundland produced 100 million barrels of oil a year for at least the last eight years. http://www.economics.gov.nl.ca/EB-Oil.asp . Enough to keep Irving's refinery going at 300,000 barrels a day.

And there are over 120 to 200 years of coal supplies in North America at current consumption rates.

For those who need more reading material, check this out : http://www.mackinac.org/11309


New Brunswick hasn't even put simple things like air to air heat pumps on their list of things to do. These have advanced a lot in the last few years. And would cut the average bill of an electrically heated house by half. They extract heat for the outside air and dump it in your house. No different than a refrigerator takes heat from inside your fridge and dumps it in your kitchen. On a bigger scale, the average power plant is only 33% efficient at converting fossil fuels to electricity. Natural gas fired stations with co-generation facilites, can operate at 50% efficient. To produce electricity with natural gas, and then use it to heat a house is a waste. If a provincial policy were in place to heat houses with natural gas, the efficiency would be upwards of 97%.

Anyway Folks, I'm drifting off topic. Happy New Years to all if I'm not back before then. Check and support all the other sites I've linked too. And keep up the fight.