Utilities The 260-megawatt plant sells peak power to NB Power and U.S. customers

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REBECCA PENTY
Telegraph-Journal

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Halifax-based Emera Inc. (TSX:EMA) is cementing itself further into the regional energy market with the planned purchase of Bayside Power LP, a gas-fired plant owned by Irving Oil Ltd.'s holding company.

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KâtÈ LeBlanc/Telegraph-Journal

‘This transaction is going to allow us to focus and look at other opportunities to work together,’ says Jeff Matthews, director of business development for Fort Reliance Ltd., of Emera Inc.’s acquisition of Bayside Power LP. The takeover will become official pending approvals under the Canadian Competition Act and other regulations, which is expected to take about 60 days.

In a deal announced Friday, the energy company - which owns Brunswick Pipeline, Nova Scotia Power and Bangor Hydro-Electric Co. - will buy the 260-megawatt plant, which sells peak power to NB Power and U.S. customers.

Emera's move to take over operations of the Saint John facility advances the province's so-called energy hub, according to Irving Oil.

"The transaction itself is the next big step in the energy hub," said Jeff Matthews, director of business development for Fort Reliance Ltd., the holding company that negotiated the deal.

"I think what we can say is this transaction is going to allow us to focus and look at other opportunities to work together," Matthews said.

The takeover will become official pending approvals under the Canadian Competition Act and other regulations, which is expected to take about 60 days.

In a statement, Emera president and CEO Chris Huskilson said he is looking forward to the company's second investment in New Brunswick's energy sector; Brunswick Pipeline represented a first.

"We have had an existing relationship with Irving Oil at this plant for a number of years and we anticipate other opportunities will result from this acquisition and our growing relationship with Irving Oil," Huskilson said.

Emera spokeswoman Jo-Ann Hicks said one of the company's subsidiaries, Emera Energy Services Inc., has been working with Irving Oil at the plant to provide expertise on managing the energy resource for a few years.

Emera has considerable interest in a northeast energy corridor Irving Oil announced in March.

Irving Oil is studying the feasibility of building energy infrastructure, which could include a 1,500-megawatt transmission line from New Brunswick into Maine.

The firm has said it is looking at developing wind and other renewable energy sources as well as a gas-fired cogeneration plant in Saint John.

Meanwhile, Emera's subsidiary, Bangor Hydro-Electric Co. in Maine, has a preliminary agreement to build a $2-billion transmission line through Maine and into Boston, if the northeast corridor proceeds.

Matthews would not discuss whether the firms had pitched the energy corridor together, but said: "Emera and Bangor Hydro are key players in that arena and yes, we're going to focus on key ways to talk."

Irving Oil purchased part of the Saint John power plant - formerly an oil-fired plant - from NB Power and began retrofitting the facility in 1999. The firm added a natural gas turbine and heat recovery steam generator. NB Power owns the property on which the power plant sits.

With an agreement to purchase a "a large quantity of natural gas" from offshore gas produced near Nova Scotia's Sable Island, Irving Oil began introducing electricity into the Saint John market in 2001, Matthews said.

Heather MacLean, spokeswoman for NB Power, said the utility hopes to continue a similar relationship with Emera.

"We look forward to working with them," MacLean said.

Shares of Emera Inc. closed at $21.86 on the Toronto Stock Exchange Friday, up from an opening price of $21.40.