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Hydro’s Mega Project Should Be Halted

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15Jan

Manitoba’s NDP government forced Manitoba Hydro to ditch a plan for an east-side routing for Bipole III. The routing direction, made on purely political and ideological grounds, led to an overall massive hydro development plan that is unsound, will cost Manitobans dearly and should be halted.

The much longer western route was set without regard for the engineering, economic, environmental and sociological implications for wildlife and people, Hydro ratepayers in particular. Especially affected are landowners who have the misfortune to farm and live in the right-of way, First Nations and Metis whose lifestyles and livelihoods will be interrupted by the transmission line, and lower-income households relying on electricity for heating. They all have had little to no influence on either the route or the mega project itself, despite Manitoba Hydro’s protestations to the contrary.

Forecasts for power requirements that might have been valid in 2007 are no longer applicable. Consumers are now using electricity more conservatively and the export market has changed significantly, that due in large part to inexpensive fracked natural gas and American incentives for wind and solar generation. As well, construction cost forecasts have exploded, basically doubling already, while spot export electricity prices have tanked.

With a damn-the-torpedoes approach, the government and Hydro have proceeded as though these market changes never occurred. Together, they called the shots in a regulatory process that was intentionally flawed and deliberately biased to achieve a predetermined and financially disastrous outcome — new expensive northern dams and north-south transmission that will produce and deliver more energy than Manitobans need, with a strategy to feed the excess into an export market that will buy it only at rates significantly lower than cost.

And, while the provincial government’s revenue from Manitoba Hydro operations will skyrocket, it will be all at the cost of ratepayers. Manitoba ratepayers are being expected to backstop this ill-conceived plan that will bring long-term advantage only to Americans.

I fully expect that, if this wrong-headed and risky plan proceeds to completion, Manitoba rates will triple, severely crippling the finances of lower-income households, indeed all households that rely on electricity for heating, and industry. As well, Manitoba will be at significant risk — drought (now overdue), interest rate increases (virtually inevitable) and further construction cost increases (predictable).

Taking into account that concurrent system refurbishment is forecast to require $12 billion in any case, should the $22-billion-plus gamble on the future American market for imported power proceed? No!

After 144 years as a province, Manitoba’s provincial government debt has risen to about $30 billion, having grown at an accelerated pace over the past 15 years. How will the long-term credit market view a potential doubling of debt over the next decade?

The Hydro mega project is unnecessary, risky and wildly expensive. If the residents of Cross Lake have trouble meeting $600 monthly electricity bills in winter, how will they make out when rates triple? Some of Manitoba’s largest industries have said they are here largely because of low electricity costs. Will they stay and others come if the so-called Manitoba advantage is gone?

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