NB Power Presentation - Essay Example

Speech Presentation Introduction NB power is a Canadian monopoly energy utility. New Brunswick government is the owner of the firm and the firm is located in New Brunswick province. The firm has a holding firm and four more sub-firms, which include;NB energy distribution and consumer servicesNB energy productionNB energy nuclearNB energy transmission BodyOverview of firm’s financial problems;NB power uses a diversified set of fuels for its energy production. It relies on oil, thermal coal, hydro power and also nuclear energy for energy production.

Despite its best efforts to produce electricity using cheaper fuels to overcome its financial constraints, the company is facing financial crisis. Using a mix of fuels to meet its energy production needs is a way to reduce the operational costs of the company. NB power is facing the threat of Debt crisis. There has been a substantial increase in debts growth rates in recent years and in 2009, the accumulated debt was 4.75 billion. Bail out plansGraham’s government entered into a treaty with Quebec premier in the year 2009.

The sale of NB power was discussed and a memorandum of understanding was signed between New Brunswick and Quebec (Prowse, 2003). Hydro Quebec agreed to purchase some of the assets of NB Power and the deal negotiations continued for an extended period of time i.e nearly 9 months. Assets of NB Power related to its distribution, transformation and generation capabilities were to be transferred to Quebec Corporation, except its fossil fuel thermo plants.Deal gone badAlthough the business leaders of the community were in favor of such actions, a huge debate sparked between Atlantic Canada and New Brunswick.

As a result of this debate, the memorandum of understanding was rejected by the opposing parties. The public was informed of the sale through social media. An independent committee was formed led by David Ganong (McLaughlin et al, 2010) which concluded that NB Power’s selling would reduce provincial debt and also lower tax burden.Public Opinion60% of Brunswick’s residents were against while only 22% were in favor of such agreementsRevised AgreementAfter a few months a revised agreement was signed between the parties in 2010.

This time nuclear energy and hydro-electric sectors were to be moved to Hydro Quebec, the cost of which was estimated to be around 3.4 billion. Quebec hydro power which is cleaner was to take over most of the energy production responsibilities this time.Nature of DealHydro Quebec and NB Power’s purchase agreement is a long term deal this time. So, NB Power will be allowed to deliver freezed residential rates on electricity.