I’ve been writing articles on energy and politics for the past four years. This is the op-ed article that the Telegraph Journal wouldn’t publish. It is the 8th on the deal between NB Power and Hydro Quebec.
I sent this article to my opinion page editor on March 8, 2010. Some communication followed. On the 15th, I wrote indicating that I would interpret no response as a negative to publication. I included my thanks for the opportunity to have published articles in the past (more than 80, I think) but will not be writing again for the TJ under these conditions.
I have not heard back that they would or would not publish. Sadly, we have a problem of media concentration that is unparalleled in the free world, when virtually all of the print media in New Brunswick is owned by one industrialist family, the Irvings. This concentration affects the politics of the province and the level of democratic communication.
To be fair to the paper, they have published letters and op-ed pieces against the deal. However, that doesn’t really compare to the constant barrage of editorials and front page news articles that trumpeted the public relations framework of the government. One can expect a newspaper to exhibit a bias at times, but where it becomes problematic to society is when the owners of the papers are the beneficiaries of the government deal they are promoting through their media. That’s what we call a conflict of interest that is beyond acceptable levels to our democracy. On Wednesday, the 24th of March, Premier Graham announce the end of the deal.
Is the NB Power–HQ deal a little clearer now that four months have slipped by? Are we getting answers? A parallel might be drawn between the changing reasons given for the Iraq war and this humble deal.
Initial spin suggested that the Iraq war was about weapons of mass destruction, or bringing democracy to people formerly living under a dictator. That changed as journalists woke up and realized the inconsistencies. Actually, the Iraq war was about oil, the geopolitics of the Middle East – control of which countries get a share of the diminishing oil supply in coming years. American soldiers aren’t leaving the Middle East in the near future.
Logically, the NB Power sale was never about the debt of NB Power, and it wasn’t about reducing carbon based electricity and its pollution. The Premier is selectively worried about debt, abandoning the debt reduction work of Bernard Lord, and becoming the deficit king of New Brunswick. Further deficits are promised until 2014 including Mr. Graham’s plan to waste a billion dollars twinning Route 11 in the twilight of the petroleum age.
If the goal was to reduce our use of carbon fuel in our electricity mix and stabilize the volatility of fuel in our expenses, then a simple power purchase agreement with Quebec for roughly 7 TWh per year would have sufficed. But that isn’t what happened. The deal was exceptionally complicated, and to make matters worse, the public relations campaign purposely did not release much information or answer questions leading to a frenzy of concern among a large number of New Brunswick residents.
The government’s handling of the deal isn’t getting much better but the newspapers of the province are ensuring that proponents of the deal are given excellent coverage in all papers. A quick guess is that 9 out of 10 stories covering the deal have been favourable.
The Irving family owns virtually all of the daily and weekly newspapers in the province and most of the largest industries. They will benefit the most from this deal, to the tune of roughly $40 million a year. Is the favourable media coverage given related to the benefits obtained from this deal? Perhaps this is just a coincidence.
Many are questioning the independence of the media and searching for ways to create an independent media who ask the right questions. Are the interests of the Irvings aligned with the interests of the province? On a recent CBC panel on media concentration, three political parties acknowledged the problem, calling for a review and changes to the ownership of media in New Brunswick. According to host Terry Seguin, “The Liberal party declined our invitation to participate”.
The media campaign has had some success in promoting panic about NB Power’s debt. As well, the tactic of the PR campaign has been to always compare the proposed deal to doing nothing. Alternative ideas aren’t to be discussed.
Some of the basic questions that are not being asked or answered are: Why is there no cap on inflation in this deal? After all, HQ’s costs are largely immune to inflation, being largely long-term debt on power dams. Does the lesson that Newfoundland is painfully learning with their contract until 2041 mean nothing to us? Professor Donald Savoie is worried about inflation, but Jack Keir isn’t concerned. In fact, why would we use a CPI based price adjustment mechanism at all? Cost based regulation plus a profit is a much more responsible method.
Why are large industries being given a permanent untargeted subsidy on rates without EUB consideration and approval? For example, why do profitable businesses like Molson-Coors, among others, require lower rates?
What will be the role of the public regulator who can’t examine 80% of the cost structure of the utility and can’t address industrial rates? I suppose that they will still be able to calculate the rate for gas and fuel oil each week, so it may keep someone busy.
When changes are made to the deal but benefits to industry remain, it indicates clearly what is the central part of the deal. The size of the bailout is close to two Atcons per year. The 41 industrials get the savings up front and when the deal goes sour, they are given an exit ramp to find other sources, while the citizens of New Brunswick are on the hook forever.
Based on public opposition, legislative hearings are now scheduled but no changes in the deal are planned. We should remember that although Quebec has ten times our population, it has 100 times the political clout in Ottawa. As Newfoundland found out, there will be no political salvation for New Brunswick if any error exists in the deal.