I am pleased to be here, but before I start, I would like to commend you all for your service to the democracy of this province. This is so precious these days, and being here is evidence of our democracy in action. Thank you.
My name is Dennis Woodford, a professional engineer. I first started work at Manitoba Hydro in 1973 in the Transmission Planning Dept. working on Bipoles I and II and the Winnipeg – Twin Cities 500 kV interconnection commissioned in May 1980. In 1986 I was appointed Executive Director of the newly formed Manitoba HVDC Research Centre. In 2001 I left and formed an electric power system consulting company, Electranix Corporation and am its President. Electranix undertakes high level electric grid studies around the world with developed countries moving towards renewable energy. I am also chair the Manitoba Energy Council.
My emphasis today is on the PUB and Manitoba Hydro. Electranix Corporation undertakes a lot of work in the US helping electric utilities, independent system operators and developers. Each US state has a Public Utilities Commission, the equivalent of our Public Utilities Board. I can say with confidence that I am well qualified to comment of Bill 36. This Bill 36 would effectively neuter our PUB, which over on the short term this Bill 36 appears to keep our electricity rates below inflation. It keeps the Manitoba Hydro debt high and therefore, maintains a high level for loan guarantees into the provincial treasury – all good for the government, but not so good for the debt load of Manitoba Hydro.
In this regard, we see a conflict of interest. You have the Minister of Finance also Minister of Manitoba Hydro. This is having a poacher being the gamekeeper. Please change this. Electrification is the energy of the future and needs exceptional attention such as we are beginning to see in our federal government and in the US.
But what about the long term? As the world turns to electrification as the main source of energy, there is expectation that the need for low-cost electricity will increase much faster than most anticipate today. How does this impact Bill 36?
First, Bill 36 is based on a 20th century Manitoba Hydro monopoly. The changes to electricity delivery and use will be dramatic over the next 15 years or more. Ms. Jay Grewall, the President of Manitoba Hydro alluded to this in her September 25th, 2019 address to the Manitoba Chambers of Commerce where she referenced many future developments in use of electricity. These include the “prosumer,” “the grid of today is not the grid of tomorrow,” and “the shift from fossil fuel to electric powered transportation will have wide ranging impact to commerce and industry in Manitoba.”
To achieve these changes, there will be a significant need for experts from outside the province. For the Integrated Resource Plan required by Bill 36 to be effective, it must be fast acting. To propose development of any major new facility over the next 20 years is dreaming in fantasyland because of the rapid changes coming at us at express speed. By way of example, we have been working with the Hawaiian Electric Company known as HECO for about 16 years. They are moving quickly forward to get off shipped in oil and coal and will soon have completely renewable energy. The mandate for the PUC in Hawaii is from the public and the state government. We as one of the experts for HECO we have sat across the table from their PUC and their experts – some of which are from the mainland - to agree on plans and developments for the clean electric energy future for the islands – for public and government approval. These plans are for a much shorter time frame than 20 years. When approved, it must be followed until a change – perhaps by the same process as needed. It must be emphasized that the PUC in Hawaii plays a centre role in moving electrification forward and quickly. Planning must be flexible.
Bill 36 requires that “the retail supply of power by persons other than Manitoba Hydro is allowed in limited circumstances. Outdated provisions are repealed.” This requirement of Bill 36 goes against the Brad Wall report instigated by this government which states in recommendation #1.5 to allow ‘merchant plants” and in recommendation #2.5 it states “Fostering competition for merchant plants will likely drive efficiencies and cost reduction for all such projects, including those pursued by Manitoba Hydro”, Why weren’t the recommendations of Brad Wall followed in Bill 36? This is the way most utilities around the world are operating – all to keep electricity prices competitive for their customers.
There are minimal allowances in the Manitoba Hydro Act that Bill 36 proposes for small producers of electricity can connect to Hydro’s transmission, but these are not significant enough to meet Brad Wall’s recommendation to allow “merchant Plants” to foster competition. This is the way most utilities in the US, Australia, Europe, the UK, and New Zealand operate. Transmission in these countries is generally open access, but not in Manitoba. Competition for electric energy is not competitive here. Hence, addition savings to the user are not possible.
To emphasize the role of the PUB and relate it to the work we do in California with their PUC. We have worked for the California Energy Commission – the energy arm of the California government. One project was to evaluate the northern hydro in California for much needed energy storage, and the other was to investigate bringing renewable energy from Nevada into California. Even though we were working for the state government, we had to comply with the state’s PUC requirements.
In Manitoba, we rely on the independent oversight of the Public Utilities Board to set rates and examine the business practices at Manitoba Hydro. The PUB maintains a delicate balance between the interests of the Manitoba Hydro monopoly and ratepayers by improving accessibility and ratepayer protections. Complaining about the cost of the PUB puts at risk the real savings possible in the future.
Where action is required is in the reliability of supply of electricity. Bill 36 does not address this. As I prepared this this afternoon, I went to the Manitoba Hydro outages link. At 12:15 PM today, there were 10 outages effecting 431 customers. In the past year, our company office has had two unplanned outages, and as just one effected customer, we lost about $25,000 billable hours with the worst outage.
In addition, the public needs the opportunity to provide meaningful input. By stripping the PUB of much of its authority and many public processes, Bill 36 takes away our right, as Manitobans of all interests, to question the government monopoly of Manitoba Hydro and to have a meaningful voice in making decisions for the ratepayers. While we may not agree with every PUB decision, we have confidence in the evidence-based process.
An independent PUB with having access to the world’s leading experts in electricity, its generation, transmission and use, the PUB will have the ability to evaluate and propose the best plans forward to tackle this rapid development of electrification. In doing so, the consumers as they develop into producers and storers of electric energy will receive PUB guidelines on how this can be achieved. Bill 36 makes no indication whatsoever of a process that addresses this rapid development of electricity – instead requires a questionable 20-year way forward from their Integrated Resource Plan.
Manitoba should be a leader in electrification. Bill 36 does the opposite. How is it going to help this government move forward – except by maintaining annual levies at the expense of increasing Hydro’s debt?
Bill 36 must be repealed as it leaves Manitoban’s driving a pedal car in the Indy 500.
Thank you for the opportunity to make this presentation.