Newfoundland and Labrador has signed a historic deal that allows it to route power through Quebec and sell electricity to the United States.

Quebec's regulators approved the deal to allow Nalcor Energy, Newfoundland's energy corporation, to send power from the Churchill Falls hydroelectric project through Quebec's power lines and sell it elsewhere.

As of April 1, the province began selling energy from the Churchill Falls project in Labrador to New York state, premier Danny Williams announced.

"This is a very important deal and a proud moment," Williams told CTV Newsnet's Power Play Thursday. "This is the first time that Newfoundland and Labrador have been able to wield power through Quebec to a distant market.

"So we are in a position now where we can sell our own power to either other Canadian jurisdictions or into the United States."

The much-maligned contract between Newfoundland and Labrador and Quebec on the Churchill Falls project was signed in 1969. It has been a continuous issue between the two provinces ever since.

The agreement between the two provinces doesn't end until 2041, and the N.L. government charges that Quebec has made $19 billion in profits, compared to only $1 billion for Newfoundland since 1971.

"It's a very lopsided, unconscionable deal," Williams said. "Obviously, there's huge benefits for Quebec . . . that's something Newfoundlanders and Labradoreans have had to live with for a long time."

In 1998, under then-Liberal premier Brian Tobin, Newfoundland and Labrador Hydro signed a deal with Hydro Quebec, giving it the right to recall 300 megawatts of power from Churchill Falls.

Most of that energy had been used in Labrador.

On Wednesday, the hydro company began selling 130 megawatts of power to Nova Scotia's Emera Energy Inc., which is selling it to New York, Williams said.

The province is able to sell 250 megawatts of energy to the North American grid, the premier said. That's enough to power 160,000 homes.

Not without controversy

But the Liberal opposition in Newfoundland charges that the deal is not as significant as to what Williams is touting.

"Obviously, what we got here today is another tweaking of a Liberal government initiative," Liberal Leader Yvonne Jones said. "The premier today talks about our first opportunity to sell power directly into the U.S. markets, but why didn't you do it before when you renewed the deal in 2004?"

The Churchill Falls hydroelectric station has a total generating capacity of almost 5,500 megawatts.

The five-year term of the new agreement, will net Nalcor Energy about $40 to $80 million annually at current energy prices.

"It's a small first step but a significant first step," Williams said Thursday at a news conference.

He says that a precedent has been set that his province can only build on.

"We've now broken that blockade at the border," Williams said on Power Play.