Opposition Leader Brian Pallister deserves some credit for opposing a new $700,000 Manitoba Hydro advertising campaign.
Pallister is showing much-needed leadership on this file.
The provincial hydro utility got into hot water recently for the ad campaign designed to promote its new energy projects around the province.
The problem is that building these hydro drams is speculative at best. The province hopes to sell into the Midwestern United States markets. These new markets, however, have become much more accustomed to a new found natural gas supply untapped by hydraulic fracturing or fracking. This natural gas is then converted into electricity. The bottom line is the price of natural gas-fuelled power for places such as Wisconsin or Minnesota is cheaper than with Manitoba Hydro prices.
Moreover, American promises of implementing carbon pricing have not materialized.
So, Manitoba Hydro should not waste money on a campaign to sell these questionable projects to Manitobans.
Tom Adams, an independent energy and environmental advisor, has criticized the Manitoba government’s decisions to build new dams. Back in July of last year, he argued that Manitoba electricity ratepayers were subsidizing export sales from the province’s new generators, including Wuskwatim and new wind farms.
Adams said that subsidies to exports will only grow in the near term and persist for the foreseeable future.
Adams is right in asserting that Manitoba should not squander its one definite asset — cheap electricity.
Premier Greg Selinger was quite proud when he opened the Wuskwatim hydroelectric project this past July. But, that project, as Adams also pointed out, was already ballooning out of control in terms of cost, back then. Then forecast at $900 million, the Clean Energy Commission (CEC) claimed “with a 90% confidence level, costs will be within minus 8% to plus 9% of the estimated cost.”
Months from completion, the final cost of the project was estimated by Manitoba Hydro at $1.67 billion.
The CEC estimated the price to be at the 2003 export value when it was built to supply out-of-province consumers for a decade. However, as Adams noted again, the market price peaked in 2003.
Now, Manitoba Hydro must deal with the $5.6-billion Keeyask Dam, which has its own political problems.
Partnerships with First Nations have been the main goods to come from these projects, but even this is suspect. Manitoba Hydro deserves credit for bringing together a historic partnership with the Nisichawayasihk Cree Nation (NCN) in northern Manitoba. However, NCN initially claimed that not enough local jobs for community members were created through the project. Then, the federal government accused NCN of misappropriating federal job training funds.
So, not only is the economic case tenuous, but so is the political. Resource partnerships with First Nations are the wave of the future, so we must not squander these historic opportunities.
Large legacy hydroelectric projects may sell well politically, but we need to make an effective economic case to citizens and ratepayers first.
So, kudos to Pallister for asking tough questions about Manitoba Hydro’s spending priorities on behalf of all of us.