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Public deserves Hydro Inquiry

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By: Graham Lane
Posted: Winnipeg Sun, September 9, 2016

A public inquiry into the affairs of Manitoba Hydro when under the direction of the Doer-Selinger NDP regime is long overdue. Premier Pallister should fulfill his pre-election promise for an independent review, ratepayers and taxpayers need and deserve it. During their reign, the NDP pushed the monopoly corporation into poor decisions which will damage our economy for decades ahead. Rather than being swept under the covers, Manitobans deserve to know the what, why and how of this historic boondoggle.

When the dust settles $5 -10 billion will have been wasted and our electricity bills will have soared ever higher: damaging household budgets, beggaring lower-income families and reducing industrial prospects. The boondoggle began with Hydro wildly overpaying for Winnipeg Hydro and Centra Gas, followed by bloated construction costs for Wuskwatim generating station. We still ‘patiently’ await Hydro’s new board’s decisions on Bipole III, Keeyask Dam and the supposed mothballed Conawapa Dam. Those decisions will not only determine what will be finished, built, fixed and written off, but what level of borrowing and further rate hikes Hydro will need.

With Wuskwatim, Pointe du Bois’ incredibly expensive new spillway and Hydro’s palatial new head office finished and Bipole III and Keeyask underway, all amazingly over-budget and driving ratepayer rates up, decisions to come could, at best, only hold down the eventual toll. Wuskwatim Dam: budgeted at $900 million, finished at $2 billion. Bipole III: first forecast at $1 billion, now on track to exceed $5 billion with over $2 billion spent. Keeyask: initially budgeted at under $5 billion, current outdated cost estimate $6.5 billion with over $2 billion spent. Head office: first forecast at $75 million, completed at $300 million. Conawapa: mothballed with over $400 million spent.

What has been spent and planned are only partly reflected in rates. The biggest rate jumps will come when the dust settles.

Partnerships were handed to a few First Nations. Wuskwatim – offer taken-up using funds borrowed from a Hydro that had to borrow it first. Keeyask – equity interests offered to four First Nations with Hydro lending them funds to cover their investment. First Nations received hundreds of millions from Hydro to induce their joining, with annual payments to come regardless of ongoing operational losses. Stories abound about non-tendered contracts at excessive prices and questionable inducements to go along with wasteful schemes.

Hydro’s building spree was to be supported by profitable exports of surplus energy: catastrophically, the prices obtained for the exports are less than half Hydro’s cost, with the difference picked up by ratepayers. Through questionable accounting and regulatory mechanisms, Hydro defers massive rate hikes to be required in the end, with so much spent already whether Bipole III, Keeyask and Conawapa are finished or not. Eventually, annually half a billion plus from our bills would go straight into the government’s coffers, unless the new government gives ratepayers a well-deserved break.

A full-scale public inquiry needs to be held. If not, incredible blunders, wasteful spending and questionable actions will go unmasked, leaving the public in the dark. We deserve much better. We voted for openness, transparency and change, let’s have it. Do the PCs want to ‘wear’ NDP’s mess?

Graham Lane, former PUB chair and retired C.A., leads Manitoba Forward (

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