01/27/2012 04:33 EST | Updated 03/28/2012 05:12 EDT

Prominent Tory at odds with N.B. government over natural gas regulations

FREDERICTON - A prominent New Brunswick Tory is taking Premier David Alward's Conservative government to task over legislation aimed at lowering natural gas distribution costs, saying the law is unfair to Enbridge Gas.

Bud Bird, a former Conservative MP and a director of Calgary-based Enbridge, said Friday the legislation breaches a franchise agreement the province reached with company 1999. At the time, the deal stated Enbridge would be the only natural gas distributor in the province until 2020.

However, the new law — passed in December — says that even though Enbridge will maintain exclusive rights to its pipeline system in southern New Brunswick, other companies will be allowed to ship natural gas to other parts of the province.

"In my view, Bill 18 is likely the most oppressive legislation in the history of New Brunswick," Bird said in a prepared statement. "It places the province's reputation for trust and integrity in jeopardy."

Brent Staeben, a spokesman for the Energy Department, said Energy Minister Craig Leonard was unavailable for comment.

Staeben said the government negotiated with Enbridge for about a year without success, but changes were needed to provide rate relief for customers.

"It is government’s belief that the current natural gas system is unsustainable," Staeben said in an email.

"We are not breaking the franchise agreement as that agreement is subject to the Gas Distribution Act, but we are making changes that will lower most distribution rates and provide greater incentives for customers to join the system."

Gas distribution rates are based on a variety of factors, including the price of home-heating oil and electricity. They are also based on a deferral account established to recover the costs of setting up the province's gas pipeline network.

The network has a capacity for 30,000 homes and businesses, but so far there are only 11,000 customers.

When the legislation was introduced, Leonard said the changes should result in 10 to 15 per cent savings for residents and upwards to 40 or 50 per cent for larger customers.