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NDP leave Hydro mess for PCs

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By: Graham Lane
Posted 6/29/2016

Manitobans mistake that Manitoba Hydro has worked for them. For the last 17 years it hasn’t. Under the NDP Hydro went from being the Province’s crown jewel to an albatross hung around the necks of ratepayers. As to selling it, no worries, there are no buyers.

The Manitoba Advantage — lowest electricity rates — survives only through creative accounting pushing out the implementation of further major rate hikes until an uneconomic expansion is finished. When Hydro’s accounting and rate-setting get ‘real’ and the house of cards comes tumbling down, then Manitobans will awaken and realize that the only winners from the unwise expansion were insiders, NDP politicians, suppliers of goods and services, American utilities, government’s core budget, and some First Nations — all showered by borrowed money that ratepayers will end up reimbursing.

Hydro initially operated with two objectives — reliable electricity at lowest cost; this before being burdened by new prime directives by the Doer-Selinger regime.

While the provincial government hasn’t invested a dime in the utility, Hydro annually provides it with massive dollops of money (last year, $356 million), the true supplier of that being ratepayers. The NDP prevented Hydro from considering a much cheaper natural gas plant instead of risky expensive new dams. A gas plant in southern Manitoba would cost 3% of Hydro’s capital expansion plan, providing in-province reliability security against drought, operating only when needed.

Besides, a gas plant would be a 25-year commitment, not one for 100 years in a uncertain fast-changing market. By building new dams and transmission instead, the NDP boosted the short-term provincial economy, provided thousands of short-term jobs, enriched manufacturers and suppliers, trumpeted its allegiance to the ‘green’ lobby and assisted northern First Nations: all through borrowing. Politics trumping good policy — all to help the NDP win elections.

Billions are being paid or committed from ratepayers’ current and future bills as Hydro borrows for its foolish expansion. And this follows billions for First Nations’ negotiations, mitigation, enticement, community development and even equity participation in new dams — seeking cooperation and votes. And, an unnecessary Bipole 3 is being built on a nonsensical route, wasting nearly half of its almost $5 billion cost. Hydro has already spent $7 billion on projects likely to cost, if finished, $30 billion — then requiring ongoing annual financing, operating and maintenance expenses.

Ratepayer rates, already up about 50%, will likely double again. Low-income households, including those in the north, heating their homes with electricity, will suffer the reality of energy poverty. Industrial growth could stall further while Hydro’s debt, guaranteed by the Province jumps, using up Manitoba’s credit flexibility.

The massive expansion, flawed from the beginning, became even more woefully and painfully wrong as market changes were ignored. After the election, Hydro finally proposed a practical energy efficiency plan that makes the building of Keeyask and Conawapa beyond just not being needed but a beacon of utter silliness. On top of its misadventures on new projects, Hydro now admits its pre-expansion infrastructure requires a $14 billion upgrade.

What a fine mess the NDP handed to the new PC government! They will need the wisdom of Solomon to find ways to hold down the eventual cost/loss to ratepayers and taxpayers.

— Graham Lane, formerly Chair of PUB, leads Manitoba Forward

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