Who is David Hay's new boss?
Published Saturday October 31st, 2009
Governance: It remains unclear how the role of NB Power's president and chief executive officer will change in the face the proposed Hydro-Québec deal
FREDERICTON - David Hay has weathered more than a few political and corporate storms during his time at the helm of NB Power and many now wonder how he will navigate the utility's proposed takeover by Hydro-Québec.
It remains unclear, should the deal go through, how exactly Hay's role as president and chief executive officer of NB Power would change.
Energy Minister Jack Keir says that New Brunswick would still have "full control" of its energy policy, but acknowledged the Liberal government's relationship with David Hay and the utility would change.
"The difference is going to be that instead of me talking to David Hay as NB Power, I'm going to be talking to David Hay at NB Power as a subsidiary of Hydro-Québec, that's the only difference," Keir said during a meeting with the Telegraph-Journal's editorial board Thursday.
When asked whether Hay would have to answer to a board of directors in Quebec, however, Keir was less certain.
"One of the details that's going to have to be worked out over the next five months is how that governance is going to work," he said.
"It's not there yet."
Though his role in the proposed deal is uncertain, Premier Shawn Graham is giving Hay a vote of confidence.
"We've signed a contract with Mr. Hay that's going to be honoured,"
Graham told reporters in Fredericton Friday. "He plays a critical role in the management of NB Power. When that contract is expired, that's a decision of the new shareholder on whether to renew that contract or not."
Hay, who has been at the head of the public utility since 2004, signed a new three-year deal back in March. Discussions between NB Power and Quebec began in early 2009, and Graham said Friday that Hay was well aware of the discussions when he signed the contract.
Francis McGuire, chairman of the board, praised Hay when the contract was signed, arguing that his time at NB Power has been highlighted by the lowest electricity rates in the region.
McGuire also pointed to Hay's ability to reach a $338-million settlement of the Orimulsion fuel debacle in which a Venezuelan oil company declined to honour a 20-year fuel agreement with the province.
Hay's tenure, however, has not been without controversy, including hefty salary increases and secret bonuses, the delayed refurbishment of Point Lepreau, and the public utility's mounting debt - which is at the centre of the proposed deal with Quebec.
Despite all that, Conservative MLA Jeannot Volpé, who was a member of the Lord government when Hay was brought on with NB Power, says Hay has all the tools to continue to lead the public utility - intelligence, negotiation skills, and a solid grasp of the energy market.
But Volpé believes the Liberal government didn't make Hay a major part of the negotiations with Quebec, and is now faced with the task of finalizing an agreement in which he had little or no say.
"He probably feels like he's been pushed aside," Volpé, a former energy minister, said Friday.
Volpé is not in favour of the agreement, but says that if it does go through, he hopes Hay will continue to play an important role with NB Power.
"I would hope that Quebec Hydro will see the potential in that guy," he said.
Originally from Stratford, Ont., Hay studied law before joining financial behemoth Merrill Lynch. He worked as an executive with the firm in London for 10 years, before joining NB Power as president and CEO in March 2004.
Hay was chosen unanimously by the utility's board, from among 80 candidates, for his business knowledge, private-sector experience and familiarity with the province's electrical set-up.
In 1998, he co-authored a report looking at the future of electricity production in New Brunswick. The report was critical of the utility's monopoly over the market, and was seen as a road map to deregulation.
In 2004, soon after Hay took over, the utility was broken into five companies - an initial step toward dissolving the monopoly. But over the years, as the energy landscape changed, so too did Hay's optimism for deregulation.
"People have these grand schemes of open, deregulated markets where people are bidding for electricity," Hay said in a 2007 interview.
"The grand schemes have just proven not possible in the market place."
Hay's recent years, under the Liberal government, have been marked by the costly delayed refurbishment of Point Lepreau, which at last count was 18 months behind schedule.
He also pushed, as the price of oil climbed and concerns about greenhouse gas grew louder, for the increased development of sustainable energy projects such as wind farms.
But Hay, who declined to be interviewed for this story, has never publicly advocated for an energy agreement like the one announced this week.
At Thursday's news conference, Hay appeared unsettled as he sat alongside Energy Minister Jack Keir and Premier Shawn Graham. But when a reporter asked about Hay's future role with the utility, both he and Graham downplayed the significance of a possible change in ownership.
"We're no longer the shareholder, but it's been very clear that David's going to be playing a key role," Graham said.
"We just recently renewed a new contract at NB Power, to see the refurbishment through, to see this transition through, and I have full confidence."
Hay said that he fully expects "to stay here at the helm, to bring all the professionalism, the energy and the expertise that we have at NB Power, to fulfill the vision that our two premiers have."
He explained that as the head of NB Power, he continues to have commitments following the announcement - to keep the power flowing, to keep in dialogue with reporters, and to bring the agreement to fruition.
"My dance card is full, and I'm delighted to hear the premier confirm that for me," Hay told the packed room, to nervous laughter.
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