Hydro-Quebec sees U.S. growth via NB Power assets
By John McCrank
TORONTO (Reuters) - Hydro-Quebec said on Thursday it will buy most of the assets of debt-laden New Brunswick Power in a C$4.75 billion ($4.4 billion) deal that will give it better access to power-hungry markets in the U.S. Northeast.
Under the tentative agreement between the provincially owned utilities, Hydro-Quebec will own NB Power's transmission system, which runs into the state of Maine.
"From Hydro-Quebec's perspective, this is about geography and access to northeast regional markets in terms of gaining further access to the New England market, but also supplying New Brunswick with power," Hydro-Quebec Chief Executive Thierry Vandal said in an interview.
Strategically, the deal makes sense as a way for Hydro-Quebec to make bigger inroads into the U.S. market, said Michael Caranci, an energy analyst at DBRS.
"Right now Hydro-Quebec has good connections to New England through Vermont, so this will expand that because they will have some going through New Brunswick into Maine."
Hydro-Quebec's Vandal said the new assets will initially add a little more than 500 megawatts transmission access to the New England market.
"In the overall scheme of things in Quebec, we have roughly 5,000 megawatts of interconnections, so this addition, it's important, but this is something that may grow over time also," he said.
Currently, Hydro-Quebec has to negotiate access to the New Brunswick transmission system and pay regulated tariffs to NB Power, said Allan McLean, an energy analyst at Moody's Investors Service in Toronto. Continued...