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Coalition Cops Out With Advice To PUB

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by Graham Lane

Published in the Winnipeg Sun, February 16, 2018

The Consumers Association and Winnipeg Harvest (the Coalition) copped out, giving weak advice to PUB, recommending Hydro get a 2.95% rate hike. If the Public Utilities Board (PUB) goes along, Hydro would get only a smidgin of the financial help it needs.

If the Coalition had simply stated that Manitoba households and economy could not deal with the massive hikes Hydro claims it needs, and sought help from the Pallister government to allow annual rate hikes closer to inflation, its recommendation would have made more sense. Driving up electricity rates as much as Hydro seeks would damage not only households but the economy itself.

Unfortunately the Coalition challenged and then ignored the large cost and debt pressures on Hydro, pressures brought on by a foolish and poorly managed expansion, that, without help from government, requires even more than the massive hikes Hydro now seeks.

Annual electricity rate hikes at the rate of general inflation (1% to 3%) would have been attainable if Hydro had not been pushed by the Doer-Selinger NDP government to build Wuskwatim, Keeyask, a now stalled Conawapa, and a ‘loopy’ Bipole III. But, even after the Pallister PC regime took power, Hydro arrogantly pushed on. A Hydro debt load of $25 billion looms as interest rates head higher.

A Hydro debt level of $25 billion would place a $20,000 mortgage on every man, woman and child in Manitoba.  Export prices available to Hydro are a fraction of what is needed, the result of shale gas and wind and solar renewables. And, a drought is ‘overdue’.

The situation is dire, either massive annual hikes or help from the provincial government is required. Government, Hydro’s single shareholder, should either slash the approaching $500 million of annual levies it rakes of ratepayers bills or absorb a good share of Hydro’s debt.  One or the other, otherwise ridiculous high rate hikes.

Going with the Coalition’s advice would result in greater Hydro debt, debt repayments and interest, eventually to risk ruining Manitoba’s debt rating. This is not the time to bury our heads in the sand. It is the time for acknowledging the situation and acting sensibly. First, we should acknowledge that none of the available options are ‘good’. The damage done by the ill-fated and not-needed expansion cannot be ‘wished away’.

Even at this eleventh hour, before the PUB ruling, Pallister should properly recognize government’s major role in the boondoggle and either take debt off Hydro’s back or slash the levies it now annually burdens Hydro’s ratepayers with. This would save consumers and the economy, allowing a work-out of the debt burden over decades. Remember, if PUB goes along with Hydro and approves 7.9% annual increases through to at least 2024, both ratepayers and the overall Manitoba economy will be severely damaged.

PUB should recognize that the Coalition’s recommendation as a cry for ‘mercy’; consumers being asked to shoulder huge debts arising from the sins of a monopoly Crowns corporation and its government. PUB should recognize this as the real problem, and make smarter and safer recommendations to the government.

And, it’s never too late to hold that inquiry into Hydro that Kinew hopes never happens and Pallister has so far reneged on. Much better than a future ‘post mortem’.

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