New Brunswick and Quebec scrap power deal

Wed Mar 24, 2010 11:25am EDT
 
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OTTAWA (Reuters) - A controversial C$3.2 billion ($3.1 billion) deal to sell much of New Brunswick's power generating facilities to neighboring Quebec has been scrapped, the two Canadian provinces announced separately on Wednesday.

New Brunswick Premier Shawn Graham -- under heavy political pressure to ditch the deal since it was announced last year -- said he could not accept changes that Quebec wanted to make to the proposed agreement.

Hydro-Quebec had initially agreed to buy debt-laden New Brunswick Power for C$4.75 billion. Amid growing criticism, the deal was scaled back in January to exclude transmission and distribution assets.

Quebec said it walked away because closer examination showed the deal would have been riskier and more expensive than initially forecast.

The slimmed-down deal between the two provincially owned utilities included the bulk of New Brunswick Power's generating assets and a nuclear power facility at Point Lepreau when refurbishment work is complete.

Power assets included seven hydroelectric generating stations, two diesel units and firm transmission rights from those assets, including 670 megawatts with New England.

($1=$1.02 Canadian)

(Reporting by David Ljunggren and Nicole Mordant; editing by Rob Wilson)