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Pallister Government Starts to Wear the Bipole Mess

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18Jan

By: Dennis Woodford
Published: January 10, 2017 (commenting in the Winnipeg Free Press letters section).

The Conservatives promised to halt the Bipole III construction right after the election but didn’t. And this was after many voted and experts presented valid alternatives for them in anticipation they would do so. Why did they benefit from this support and fail to meet their promise?

Instead, they appointed a new board with business expertise and little engineering capability. They hired the credible Boston Consulting Group (BCG) to review the situation of Bipole III sized to 2300 MW to carry the 695 MW of the Keeyask generating station. Bipole III being justified for “reliability” but no probability based reliability study was tabled by Manitoba Hydro to back up this need – as is accepted practice for such developments. Instead, alarmist statements of disaster were made to scare the daylights out of everyone, statements the BCG picked up on.

The board of Manitoba Hydro fed data from Manitoba Hydro to the BCG which was based on higher load growths in Manitoba than is really happening, particularly with their aggressive Power Smart Program released the day after the provincial election that is resulting in a much lower load growth. Furthermore, the data the board fed BCG an optimistic price for exported electricity than is really happening.

As a consequence, the BCG recommended continue with the development of Bipole III west side route and Keeyask as “the project is too far along to change it”. While waiting half a year for this momentous conclusion to be reached by BCG based on garbage in gives garbage out, the questionable Bipole III and Keeyask projects were racking up $10 million per day.

A benefit is an economic growth from the construction and related industries giving Manitoba a good current economy. A very severe consequence in addition to the disaster to farming and the environment is the $25 billion which the province has to borrow for Manitoba Hydro. This brings nearly $0.5 billion annually to the treasury from loan guarantees, water rentals and capital taxes all paid for from our hydro rates.

Manitoba Hydro warned the Crown Corporations Committee at the legislature several months ago that the 3.95% hydro rate increase will be inadequate. So expect a request soon from Manitoba Hydro in its general rate application for an increase of 7% or more. This will be a disaster for businesses and low-income earners on electric heat who will face energy poverty as is being experienced in Ontario. Thermostats will be turned down, and food purchases will be scrimped resulting in increased sickness and death rate – factors that appear to not be considered by the Hydro board.

To address energy poverty, the provincial government should be prepared to allocate the $0.5 billion it will receive annually into the treasury from Manitoba Hydro to compensate households with electric heat and low-income including a way to help struggling business that would be taken out by significantly increased hydro rates.

To read the original letter click here.

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