Complete Surrender

Blog, Commentary, Energy, Environment, Manitoba, Poverty, Publius Tacitus, Regulation, Role of Government, Taxation

Over the space of two days late last week, the prior good reputation of Manitoba’s Public Utilities Board (PUB) was soiled and lost, perhaps forever.  Unfortunately, Manitobans have not only lost a check on Manitoba’s government-owned monopolies, but will have to pay more for electricity much more in the future).

Those sitting on Manitoba’s administrative tribunals, PUB the most prominent, are all appointed by the Selinger government (without a competition and all-party vetting), serve at the pleasure of that government, and operate pursuant to mandates provided by that government. Given these circumstances, one would be forgiven for suggesting of a real, not just perceived, conflict of interest.

PUB’s surrender began last Thursday, when the agency accepted the government’s restricted and inadequate terms of reference for a review PUB is to undertake of Manitoba Hydro’s capital development and export plans.  The surrender became a rout the next day, last Friday, when PUB not only approved Hydro’s latest rate increases  but announced it had withdrawn a subpoena it had served on Hydro almost two years ago. The subpoena demanded the production of Hydro’s export contracts, to allow PUB to assess the validity of Hydro’s export volumes and prices (those forecasts underlie Hydro’s development plans).

For 100 years, despite the conflicted and faulty appointment process, a succession of PUB members laboured in the public interest to ensure just and reasonable utility rates based on reasonable actions, costs and supportable forecasts. PUB attempted to hold the monopolies it regulated to account, honouring the premise that, from an adjudicative perspective, PUB was independent of the government of the day.

Before moving on to highlight and condemn the three elements of PUB’s recent surrender, Publius takes a moment to lament the loss of ‘innocence’, with these recent actions PUB’s independent adjudicative status has been compromised.

Ratepayers had an ally with the pre-2012 PUB (PUB’s member roster was totally revamped in April 2012). No more. And, with the Auditor General, who was on the Board of Directors of Hydro before taking up her new post, having recused herself and her Office from reviewing Hydro, after the Ombudsman had referred the Hydro file for investigation to the Auditor General, PUB had been the only body exercising any substantive external and transparent oversight over Hydro.

(Neither the Board of Directors of Hydro nor Crown Corporation Council, with all the members of both agencies appointed by government, can be expected to exercise any degree of independent oversight of Hydro, given the government’s oft-stated, incredibly expensive and risky plans for the Utility.)

PUB never should have agreed to hold what can only be described as a sham review of the plans for Hydro. Nor should PUB have agreed to up the rates further without first having conducted a proper and truly independent review of Hydro’s plans, this requiring access to the export contracts, an ability to consider all options to the plans, and, reviewing already incurred expenses and related actions.  (Giving up on the subpoena represents yet another catastrophic failure on PUB’s part.)

With Hydro already having spent at least a billion on an

Publius Publius

incredibly risky plan, and with no government-related agency standing up for ratepayers-taxpayers, it seems that absent a miraculous intervention the government has a clear path to ‘drive’ the utility ‘over the cliff’.

The costs to ratepayers and taxpayers of the unfolding disaster cannot be calculated.

What has been spent cannot be recovered, and commitments made, however unsound, are very difficult to unwind.

Publius cries for Manitoba.