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N.B. Power made decisions about its proposed Tantramar gas plant before a proper analysis of other options, according to a new report by the province’s auditor general.
Paul Martin presented his latest report to a committee of MLAs on Tuesday morning, including a chapter focused on N.B. Power’s 25-year deal with ProEnergy to build a 500-megawatt gas and diesel power plant in a rural area north of Sackville.
“There’s just gaping holes in this whole assessment and decision model taken,” Martin told MLAs during questioning.
“It may be the right decision,
“How would you know?”
WATCH | ‘It’s alarming, let’s be honest about it’: Gas plant deal under scrutiny:
Auditor general raises new questions about Tantramar gas plant
Report says N.B. Power didn’t examine alternatives and bypassed standard processes to advance the project.
Agreement leaves utility open to risks
Martin also said that N.B. Power’s agreement with ProEnergy leaves the crown corporation exposed to financial and contractual risks.
Martin’s report found that if ProEnergy is not successful in finalizing a partnership with an Indigenous group by mid-2026, the company would be able to “withdraw from the project and recover pre-development costs.”
In 2024, the North Shore Mi’kmaq Tribal Council expressed interest in becoming an equity partner in the project, but no further announcements have been made.
“I’d say we’re darn close to mid-2026,” Martin told MLAs.
‘We’re paying dearly for it’
Martin said he was surprised to find that a $46-million US performance assurance payment in the original agreement with ProEnergy was reduced to $10 million US in an expansion contract in December.
The auditor general was also critical of N.B. Power’s decision to sign a deal with ProEnergy before getting Energy and Utilities board approval.
N.B. Power executives appear before the Energy and Utilities Board in February to defend the proposed Tantramar gas and diesel power plant project. (CBC News)
The board approved the project last week, but the report notes that without that approval, N.B. Power could have been on the hook for early construction costs of up to $55 million US.
The report also highlights that under the agreement, N.B. Power is responsible for “emissions-related costs, environmental and carbon tax exposure, and future compliance obligations.”
“It feels like we’re signing up for someone to take care of this for us,” Martin said. “But we’re paying dearly for it.”
The auditor general’s report estimates the ProEnergy deal could cost N.B. Power at least $2.8 billion over the next 25 years.
Analysis came ‘after the fact’
The report outlines a number of early choices where it says N.B. Power’s analysis was deficient before decisions were made, including the choice of combustion turbine technology to meet capacity needs, and the choice between owning the plant or partnering with a builder and operator.
The Tantramar gas plant is expected to be similar in design to this facility in Rosharon, Texas, according the proponent ProEnergy. (Submitted by ProEnergy)
Martin said most of the documentation prepared by N.B. Power on these questions “appeared to be prepared when they were prepping for the utility board hearings, and after the fact, after decisions had been already made and direction taken.”
N.B. Power spent over $550,000 between September 2025 and March 2026 on expert reports and testimony to help make its case to the Energy and Utilities board, according to invoices obtained by CBC News.
Martin said N.B. Power’s own early comparison of ownership and partnership models showed that the latter choice would cost $425-$700 million more, but management continued to pursue the more expensive partnership option. The reasons it gave its board of directors for the choice included a long lead time for equipment.
But the report says no direct supplier quotes had been obtained to support that assertion.
N.B. Power board oversight lacking
Martin said that corporate board oversight of N.B. Power management was lacking.
“Had the board made similar inquiries that we are making or asked for more information … some of these things could have been identified much earlier,” Martin said.
Martin pointed out that the Energy and Utilities board also highlighted deficiencies in N.B. Power’s process in its recent decision approving of the project.
The utility originally argued that the ProEnergy agreement should not face EUB scrutiny at all, and so did not follow its own investment governance framework.
PC MLA Ian Lee asked Martin if he agreed that N.B. Power’s governance process was “replaced by urgency and momentum.”
Martin agreed that the deficiency in capacity identified by N.B. Power warranted some urgency, but also noted that that risk was first identified in 2023, nearly three years ago.
“I just think this was done in a haphazard manner,” Martin said.
Neighbouring utilities ‘envious’
Martin’s report includes a letter from N.B. Power CEO Lori Clark defending the utility’s decisions regarding the gas plant.
“Complex infrastructure decisions made under time pressure and heightened system risk can reasonably give rise to differing perspectives,” Clark wrote.
Clark said the utility had “rigorously assessed” different technologies to address capacity issues during the development of its 2023 resource plan.
Clark also said she has had conversation with “CEOs of neighbouring utilities who are envious of our foresight in procuring this arrangement, including its favourable terms and pricing.”
