NB Power is turning to Hydro-Quebec for help in refurbishing its largest hydroelectric dam at Mactaquac near Fredericton.

NB Power CEO Gaëtan Thomas and Hydro-Québec CEO Éric Martel made the announcement at a Friday morning news conference at the dam.

The agreement will see the Québec utility provide its long expertise with hydro dams to NB Power to allow the dam to continue operating until 2068.

"We are happy to share the expertise of Hydro-Québec acquired over the years," Martel said, pointing out the utility recently did a similar refurbishment on its Beauharnois dam near Montreal.

The deal will also see New Brunswick's utility agree to import a substantial new amount of electricity from Québec between now and 2040.

Already buying Quebec power

NB Power has been buying hydro power from Quebec since 2012.

The 47 terawatt hours per year is about 15 per cent of NB Power's average annual generation.

That power will fill some of the gap created when Mactaquac's turbines shut down for the refurbishment and will be a positive backup plan if no alternative to coal is found for the Belledune generating station by a 2030 deadline.

The two utilities will also discuss building new transmission lines between the two provinces.

The Mactaquac dam opened in 1968 with an expected service life of 100 years. However, an alkali aggregate chemical reaction in the dam's concrete has been causing the dam to expand over the years, resulting in the expected end of life in 2030.

The cost of a complete rebuild of the dam has been estimated at between $2.7 and $3.6 billion, depending on which option was chosen, a major expense for a Crown corporation and a province already deeply in debt.
But in 2016 Thomas said it might be possible to extend the life of the existing dam without a major rebuild, a far less expensive route.

'Millions' in savings

He said Friday the contract with Hydro-Québec for the refurbishment will cost around $100 million, but will represent "hundreds of millions" in savings compared to a costlier full replacement of the dam.

And he said NB Power and its customers will also benefit from the inexpensive supply of hydro power from Québec. "It represents significant savings."

While the utility's large debt won't allow rate reductions on power bills, rate increases will be lower than they would be otherwise, he said.

The two agreements make it easier for NB Power to move towards the federal government's goal of net zero carbon emissions by 2050, Thomas added.

"Net zero doesn't happen without all the energy sources available," he said.

But he warned it may not be possible for the federal government to help pay for the refurbishment from its green infrastructure fund, which specifically mentions transmission projects and renewable energy.

Energy exports to the United States are now tax-free and tariff-free, but federal subsidies could jeopardize that and invite American trade retaliation, the CEO said.

Assuming the refurbishment is approved by the Energy and Utilities Board and through an environmental impact assessment, work could start on the dam in 2025 or 2026.

Friday's announcement comes a decade after the Liberal government of Shawn Graham attempted to sell the Crown utility to Hydro-Québec, a widely unpopular proposal that eventually collapsed.

At the time, Graham said the deal fell apart when Hydro-Québec discovered that the looming cost of refurbishing Mactaquac was greater than originally expected, creating a greater financial risk for the Québec utility.