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Other People’s Money

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13Nov

Premier Selinger loves to play Santa Claus. Using other people’s money, his gifts flow from political, economic and clever accounting game playing. The main objective: keep power.

When major infrastructure programs are announced, Selinger relies on current and future taxes, mass borrowing (with interest) and federal transfers. When convenient, his government uses the bills of the Province’s utility ratepayers (Manitoba Hydro, Centra Gas, Manitoba Public Insurance) to pay for projects and services better met out of tax revenues. Why? The NDP has used up all the room available for tax hikes and still delivers annual deficits.

Selinger taps revenues generated by Manitoba Liquor and Lotteries to fund his government’s objectives. He also buries debts for major projects of uncertain and questionable value in Crown corporations and universities. His actions are lauded by government and monopoly Crown corporations’ advertising, which flood the airwaves, print media and billboards, promoting the NDP.

With such a track record, it comes as no surprise that Manitoba Hydro’s gas distribution subsidiary, Centra Gas, purchased the operations of Swan Valley Gas Corporation (SVGC) in 2014. In merging the operations into Centra’s overall business, there were three winners out of the transaction and one loser. The winners were the former customers of SVGC, the seller (SaskEnergy, a Saskatchewan Crown corporation), and, of course, Manitoba’s NDP. The unequivocal loser is Centra’s ratepayers.

Swan River gas customers gained by being absorbed into Centra’s overall operation. Rates plunged by almost 30% for residences and up to 20% for commercial operations. And, about $170,000 held by SVGC towards meeting future natural gas bills were rebated to its former customers. SaskEnergy gained by dumping a long uneconomical Manitoba operation while retaining the profitable Saskatchewan pipeline supplying Centra’s new service area. The NDP wins as well. The MLA for Swan River, Ron Kostyshyn, can trumpet the lowering of area natural gas bills in the upcoming election campaign.

The Public Utilities Board approved the transaction, rolling over without an oral hearing. The paper-based review provided less than a deserved thorough and fully transparent process. PUB slashed bills, rebated $170,000 to SVGC’s former customers, and bailed out SaskEnergy. All by passing on the future losses for servicing the area to Centra’s overall customer base.

To arrive at its highly questionable decision, PUB allowed Hydro-Centra to employ an economic test for the proposed transaction that was different than the one normally used for gas expansion proposals. If the normal test had been made, either the transaction would not have been approved, SaskEnergy would have agreed to take a loss, or the NDP government would have had to cover the projected future losses of Centra’s operating in the new service area.

And, if the test that was used to approve the transaction was applied to proposals to further expand gas distribution in Manitoba, other areas of Manitoba could have gas. While the initial plan when Centra was bought by Hydro was to expand the gas network, now, doing so would, be contrary to Hydro’s plans, reducing future electricity load growth and lowering the need for its costly expansion.

In short, the NDP-directed Hydro has used other people’s money Centra’s customers, to benefit a small number of natural gas users in a constituency represented by a NDP MLA.

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