Already Greg Selinger is pulling out the bogyman of privatization of Manitoba Hydro to scare the voters into supporting the status quo.
The Conservative attacks on Hydro are a prelude, the premier said, to selling the Crown corporation if they gain power, just as they did with the Manitoba Telephone System in 1996.
Unfortunately, with an election scheduled for later this year, we cannot have a grown up conversation about Manitoba Hydro and the merits of loading the corporation up with debt to chase speculative US demand. In his speech, Selinger claims that export customers will pay for the increased cost of Bi-Pole III. I will believe that when he can release a signed export contract with even one US customer that is based on a cost-plus payment method. Until then, his school yard like taunts ring hollow.
Unfortunately, the opposition parties do not trust voters enough to engage in a mature discussion about the future of Manitoba Hydro. Next door in Ontario, we can observe the result of poor decision making in the management of a government owned utility. Over the last 20 years, Ontario went from being one of the lowest cost jurisdictions for power to one of the highest. Is that a future Selinger wants to avoid talking about here in Manitoba?
The simple facts of the matter are the following:
- Manitoba Hydro sells power to US customers in US currency and fixed prices
- Since those deals were negotiated, the projected Wuskwatim dam cost has increased 78% from $900 million to $$1.6 billion
- The projected Bi-Pole III cost has increased 50% from $2.2 billion to $3.28 billion
- The Canadian dollar’s value has increased 36% from 65.33 cents to $1.04 per US dollar
- Converted to US currency, which is the terms of the export sales to the US
- Wuskwatim cost has increased by over 140%
- Bi-Pole III costs have increased by over 100%
This would be a good time for the opposition leaders to challenge the Premier to release the document that proves the US customers are prepared to pay 100% more for Manitoba power than they were when the contracts were negotiated 5 years ago. That could be a challenge because the spot price of power in the US has decreased since that time.
The other question is if the US customers are not paying more for the power that will be produced by these higher cost assets, then who is going to pay for the increase costs for Manitoba Hydro assets?
Why can we not have a grown up conversation about the risk entailed in the expansion plans of Manitoba Hydro and then let each rate payer decide if they want to participate in the deal instead of being forced to invest by government fiat?
