Brad Wall’s report on Hydro’s Keeyask dam and Bipole III transmission line expansion is a damning verdict on Manitoba Hydro’s past boards and executives, and, also, Manitoba’s NDP and PC provincial governments. While Wall’s public criticism concentrates on the NDP, there is much room for the PC government to share the blame.
The past Doer, Selinger and current Pallister reigns directed, allowed and spurred Hydro on. The result of two decades of political and managerial incompetency, Manitoba is on track to lose the province’s best economy advantage – cheap and dependable power.
The story of the decline and fall of Manitoba Hydro, as authored by former Saskatchewan premier Brad Wall, gives Brian Pallister’s government a pass. But there is much missed in Wall’s report. To understand the full extent of the largest government boondoggle in Manitoba history, other ‘chapters’ need to be added.
Besides Bipole III and Keeyask, which was Wall’s focus, there are the Wuskwatim and Conawapa (failed) dam projects, the new Manitoba-Minnesota and Manitoba-Saskatchewan transmission expansions, plus the expensive rebuild of the Pointe du Bois dam. In Wall’s mandate from the Pallister’s government, much was left out.
Wall, limited to Bipole III and Keeyask, says the ‘boondoggle’ amounts to an over-run of $3.7 billion. But it is much, much, more. By comparing the initial projections for all of the expansion projects to current projections, the boondoggle could hit $10 billion.
First, the NDP Clean Environment Commission (CEC), with PUB members involved, reviewed Wuskwatim, giving Hydro with the green light for what was to be a merchant plant (a generating station supplying export markets exclusively). But it blew past the cost expectations (five times) and with export prices below forecast, the dam’s expensive output was merged with the revenues of much older and cheaper existing Hydro’s plants to protect the First Nation partner.
Then, eight years later, a PUB’s review of Keeyask and Conawapa left out Bipole III, it never having a stringent public review to this day. Then, in a review commissioned by then Premier Selinger, PUB concluded, with reservations, too much had been spent on Keeyask, too much to stop. (While that review halted Conawapa, it had already spent $400 million with no review.) With the PC’s gaining government in 2016, and after having pledged to suspend Bipole III and Keeyask and call a proper review, the Pallister government simply let Hydro continue spending on the two projects. As costs continued to soar, the Boston Consulting Group was commissioned to do a quiet internal review – conclusion, too much had been spent to stop.
The woeful Hydro saga, which began with a Doer NDP government, should have been reviewed by a full public enquiry. The enquiry should have been led by a judge, with a team of forensic auditors. Where was the provincial Auditor General?
While Pallister now rages against the NDP and plans to ‘protect’ Hydro from privatization, he slyly protects the status quo in which his government pulls in about $500 million a year from Hydro rate payers – the rewards of an incompetently bloated cost base at Hydro after twenty years of government blunders.
The Wall Report’s gift to Pallister’s PC government hangs the Hydro debacle only on the NDP. How he manages to avoid sharing some of the blame that lies with the Pallister government suggests political gaming.
Graham Lane is a retired CPA CA, after a lengthy career in the public and private sectors, he was Chair of PUB (2004-12).