New Brunswick’s Power Struggle: Industrial Giants Seek Grid Exit Amid Soaring Costs and Renewable Push

New Brunswick is currently navigating a complex energy landscape, where the push for industrial competitiveness clashes with the stability of its public utility and the broader transition to renewable energy. At the heart of this unfolding drama are large industrial players, spearheaded by forestry giant J.D. Irving Ltd., who are increasingly vocal about their desire to break free from the N.B. Power grid. Their aim? To generate their own renewable electricity, driven primarily by the escalating costs of power that they argue threaten the very foundation of their operations and the jobs they provide.

This initiative, which gained public traction after being presented to a committee of MLAs last September, has found a significant ally in John Herron, the province’s Liberal natural resources minister. Herron champions the cause, emphasizing that the prohibitive cost of electricity is a direct threat to the future of vital sectors like forestry. He contends that if companies can secure their own power at a more economical rate, the government’s role should be to clear any existing legal hurdles, facilitating this shift. “N.B. Power must reconsider current regulations to allow industrial players to remain competitive,” Herron asserted, highlighting how empowering firms like J.D. Irving to invest in their own renewable infrastructure serves both economic interests and corporate sustainability goals.

The Industrial Drive for Autonomy and Cost Control

For companies like J.D. Irving, the motivation behind seeking energy independence is unequivocally financial. As Irving Pulp and Paper vice-president Mark Mosher articulated, their primary objective is to leverage renewable energy to stabilize and ultimately reduce their internal electricity costs. This focus on economic viability, rather than solely environmental factors, underscores the urgency of their plea. Mosher highlighted that a straightforward amendment to the Electricity Act could grant them the autonomy they seek, allowing them to generate energy without the direct involvement of N.B. Power.

The current legislative framework, Mosher explained, is a significant impediment. It restricts industrial entities to generating electricity exclusively at their immediate consumption sites, a limitation he deems inefficient. “If I move 10 feet outside the boundaries of my property and do the same thing, by law I’m not allowed to do that,” he lamented, underscoring the need for systemic change that would enable more flexible, off-site renewable energy projects. This desire for greater flexibility isn’t just theoretical; in December, N.B. Power itself entered into a power purchase agreement (PPA) with a J.D. Irving subsidiary, Brighton Mountain Wind Limited, to procure 200 megawatts of wind power annually. While an innovative step, the legislative changes sought by Irving would, in the long run, render such agreements unnecessary for their own supply.

The stakes are high. Mosher pointed to the tangible impact of surging energy costs, referencing the closure of a production line in Saint John that resulted in the loss of 140 jobs, a stark reminder of the economic pressures at play. Other provinces have already begun exploring similar pathways; Nova Scotia’s Green Choice Program, initiated in 2023, directly connects large users to new wind farms, expecting them to be operational by late 2028. This demonstrates a broader trend towards empowering large consumers with cleaner, more reliable power solutions while attempting to keep utilities engaged.

N.B. Power’s Predicament: Balancing Stability with Shifting Demands

While the industrial sector sees an opportunity for growth and cost savings, N.B. Power views the potential mass exodus of its largest clients with considerable apprehension. Utility spokesperson Elizabeth Fraser voiced concerns that allowing major electricity consumers to generate their own power could inevitably lead to higher costs for the remaining ratepayers. The logic is straightforward: big industrial customers bear a significant portion of the fixed costs associated with maintaining the grid—the wires, upkeep, and system upgrades. Should these heavy users depart, the financial burden would simply shift to smaller customers and residential users, potentially pushing up their electricity rates.

Green Party Leader David Coon acknowledged this risk, proposing an exit fee for companies leaving the grid as a potential mitigation strategy. However, he expressed skepticism that such a fee would be adequately set to genuinely protect other ratepayers from disproportionate burdens. Coon also highlighted that forestry companies already benefit from specific legislation allowing them to sell on-site generated electricity back to the grid at favorable rates, effectively receiving a subsidy that supports their operational costs—a point that complicates the narrative of pure financial hardship.

The utility’s concerns are not unfounded. N.B. Power has been actively working to secure its energy future, signing power purchase agreements for 675 megawatts of renewable energy since 2024 and running competitive processes for more projects. However, it also faces a looming electricity generation shortfall projected as early as 2028. This critical juncture necessitates strategic decisions, as the utility scrambles to boost supply and maintain system reliability amid growing population and increasing electrification.

The Controversial Gas Plant and the Future of New Brunswick’s Energy Mix

The projected energy shortfall has led to discussions regarding the proposed construction of a controversial 400-500 megawatt natural gas generation station in Tantramar. This plant, N.B. Power argues, is crucial to serve as a backup for intermittent renewable energy sources (when the wind doesn’t blow or the sun doesn’t shine) and to meet peak demand, especially during the coldest winter days, thereby preventing rolling blackouts. The utility states the plant must be built quickly, no later than 2028.

However, this proposal has ignited fierce opposition. Critics, including the public intervenor Alain Chiasson, argue that N.B. Power has not sufficiently explored alternatives. Chiasson, whose hired experts estimate the plant could push residential and business rates up by approximately four percent in its first year, is strongly against it. He suggests large batteries could offer a viable, cleaner alternative, despite N.B. Power’s claims that batteries are 75 percent more expensive and less effective in cold weather. The Conservation Council of New Brunswick, an environmental group, estimates the gas plant could cost ratepayers between $750 million and $1 billion over its 25-year lifespan, factoring in capital costs (up to $300 million), ongoing staffing, maintenance, and an estimated $8.5 million annually for fuel.

The financial details surrounding the proposed plant, particularly the agreement with ProEnergy, remain largely shrouded in secrecy, raising further concerns. While N.B. Power cites its lack of recent experience in building such a dual-combustion fossil fuel plant and past cost overruns at projects like the Lepreau nuclear plant and Mactaquac hydro-electric station as reasons for outsourcing, critics point to internal documents suggesting the utility could have owned and operated the plant for significantly less—between $49 million and $184 million lower than the undisclosed ProEnergy deal. Despite the push for change, Energy Minister René Legacy has stated that while the government acknowledges the challenges faced by large industrial companies, discussions are ongoing, and no final decision has been reached regarding the future of electricity generation legislation.

The confluence of industrial ambition, utility stability, and environmental imperatives presents New Brunswick with a pivotal moment. While the drive for self-generated renewable energy by large industries offers a pathway to reduced costs and enhanced competitiveness, it simultaneously threatens to destabilize N.B. Power’s financial model, potentially burdening smaller ratepayers. The debate over the Tantramar gas plant further underscores the delicate balance between ensuring energy security and accelerating the transition to a cleaner, more decentralized power grid. The province’s ultimate decision will not only shape its economic landscape but also define its commitment to equitable energy access and sustainable development for decades to come.