In Our Backyard, Recall Hydro’s Bill 36

Commentary, Crown Corporations, Energy, Utilities, Graham Lane

Manitobans interested in politics, economics, indigenous and/or environment issues should read a new book, “In Our Backyard, Keeyask and the Legacy of Hydro Development”.  After digesting the information and messages provided by this worthy work, you might find yourself, like me, opposed to the Stefanson PC government’s Bill 36 now before the Manitoba’s Legislature.  Passing Bill 36 would effectively obliterate the usefulness of the Public Utilities Board.

Bill 36 would not allow PUB to call Hydro hearings – PUB should decide when hearings are needed.  Bill 36 would bar PUB from making recommendations on Hydro’s capital expenditure program and Hydro’s debt to capitalization ratio.  It would fully leash PUB, leaving politicians, in this case those in the Stefanson government, in complete control of the largest Crown enterprise which PUB regulates precisely because it is a monopoly.  Bill 36 would also restrict PUB from making recommendations about Hydro’s operations and capital expenditures – that is unless the government allows it. The politicians, now the Stefanson PCs, not PUB, would set Hydro’s electricity and natural gas rates.

Bill 36 should not proceed.  If it does pass into law, PUB would be useless. Then, why bother with it?

Manitoba Hydro, the queen and largest of Manitoba’s Crown corporations, is important not only to homeowners, businesses and industries, but to the government in power. The NDP’s win in Manitoba’s 1999 provincial election brought Gary Doer to the helm, whose government quickly pursued Hydro’s expansion, drawing on initial plans largely supported by Filmon’s PC government (1988-1999) when they were in power. Manitoba Hydro’s Limestone Dam project started under another NDP premier, Howard Pawley, followed by Doer (then, first as a cabinet minister), and finishing under PC’s Filmon.

Hydro’s modern expansion began with Limestone, built for $1.43 billion with a 1,350 MW capacity, followed a decade and a half later by the Wuskwatim Dam – a $1.3 billion expenditure for only 211 MW capacity – being 91% of the cost of Limestone for only 15% of it’s power.  Then, after Bipole 3, a major $5 billion transmission line  – over twice the initial forecast for its construction, came the Keeyask Dam.  It is to cost a sky-high $9 billion or 6 times Limestone’s cost for only 51% of its power.

Despite these billions in over-runs, the expansion is generating revenue for the government.

The Stefanson PC government will be stripping over $600 million a year off Hydro’s revenues, with Keeyask in operation.  Both PC and NDP governments have dibbled with Hydro, thinking of Hydro as being “Manitoba’s oil”, all the while pushing up customer rates and damaging long-term economic prospects for Manitobans.

Recently published by the University of Manitoba, “In Our Backyard”, brings together needed sharp comments about Manitoba Hydro’s northern expansion. The work has terrific chapters penned by insiders of the saga – that being a brilliant effort from Byron Williams Director of the Manitoba Public Interest Law Centre.  Other contributors include Terry Sargeant,  former chair of the Clean Environment Commission, and others plus an interesting excerpt drawn from a report by former Saskatchewan premier Brad Wall, now a consultant, on Manitoba Hydro’s expansion.

Bill 36 makes no sense – especially when it gives our politicians the power to regulate themselves. The poachers must not become the gamekeepers. Having no PUB can only end badly for the ratepayers.

Therefore, Bill 36 should just be pitched. Period. In its place, re-write the 60-year-old Hydro Act. This would ensure a competitive marketplace, keeping prices low and reaping huge benefits from future electrification.

 

Graham Lane, a retired CPA CA, served as PUB Chair (2004-12), after a 35 year career as an executive with public and private firms. He is a member of the Frontier Centre’s Expert Advisory Panel.