Show Trial on the Red

Blog, Energy, Environment, Manitoba, Publius Tacitus (historic), Role of Government, Uncategorized

Introduction

At least five years and perhaps $2 billion and several made commitments late, the Selinger government has provided the Public Utilities Board (PUB) direction and terms of reference for a review of Manitoba Hydro’s long-touted development plans. In its effort to assist PUB in holding its review, it has named directly two citizens to join regular PUB members to sit on the panel, while also providing PUB the opportunity to hold a public hearing, call witnesses and receive and hear evidence and submissions.

Devil in the Detail

Less helpfully, the government has, in essence, named those that will hear the case (no competition, no all-party involvement) and  severely limited the scope of the review. PUB will not be able to consider and/or review the role Bipole III is to play in Hydro’s plans (building Bipole III adds annual costs reflecting of a 30% or more rate increase – however Hydro massages their annual rate applications to “feather” the costs in),  nor be able to review and test the arrangements Hydro has made with First Nations.  As to the contracts with American utilities that Hydro presumably has inked, the significant details are to be held back from public knowledge.

To further restrict the value of the review, the terms of reference have been designed to avoid having PUB look into both the economic disaster that is the Wuskwatim generating station (lessons can be learned from that debacle – and not only just related to cost escalation ‘surprises’) and the potential for a diversification-advantage-bringing natural gas plant being built, rather than moving on one or two more hydro stations at this time.

Worst still, there is no indication that any of those named to sit on PUB’s panel have the industry, general experience and knowledge to conduct a proper review, nor the independence to be able to come to unbiased outcome. Worst of all, Hydro has already spent over $1 billion and entered into a variety of major commitments on or related to their plans, ahead of final approval let alone an adequate review, and the government’s recent budget suggests it will spend a further $2 billion on the plans in 2013-14, before PUB’s report is released. Money spent is money gone, if the plans of government do not proceed. Problem is, proceed and the end-costs and rates for consumers could well be worse that writing off what has been spent already.

Conclusion

The review planned and now directed to be held by the government is, in essence, a ‘show trial”; no more than additional propaganda, but this time very expensive propaganda (a PUB hearing is not cheap, providing an enormous income  opportunity for lawyers  and consultants).