Manitoba Hydro’s debt could end up exceeding non-Hydro provincial debt. Will Premier Brian Pallister bail out the utility and take responsibility for failed expansion? Or, will he continue to cover the disaster up at a cost of hundreds of millions a year from Hydro ratepayers?
In decades past, when Alberta’s oil was king, Hydro was declared Manitoba’s oil by past NDP and PC provincial governments. Thanks to the foresight of Len Bateman (a past visionary President), efficient, low cost northern hydro-electric generation stations were built – all the way up to the Limestone Dam in 1990. These served Manitobans economically for generations.
Then, Hydro had low rates and its books didn’t hide billions of dollars of costs for future ratepayers to cover.
‘Thank’ past NDP premiers Gary Doer and Greg Selinger, and still-reigning Brian Pallister, for more overinflation rate hikes to come. Why? For building, with massive cost over-runs, the Wuskwatim and Keeyask generating stations, the Bipole 3 transmission line, and for another transmission line to Minnesota to serve an unprofitable export market.
After Limestone, there were better safer and much cheaper options.
Due to these disastrous expansions and ongoing shifting of hundreds of millions (and growing) from ratepayers’ pockets to the provincial government, expect rates to end up soaring. And, with Pallister’s ‘clever’ move (Bill 44) to silent the Public Utilities Board and interveners in rate hearings, it is likely Pallister will be soaking up the sun in Costa Rica before ratepayers catch on.
The latest financial update from Hydro was released over six months ago. What would happen to a company on the stock market if its financial results were left unknown for seven months? You know: the stock would be delisted and lawsuits would fly. Not here in Manitoba, we are left to guess.
When Pallister took office in 2016, he promised Crown corporations would be led by their board of directors, not by him. His promise was quickly dropped when the-then Hydro board chair Sandy Riley sought urgent financial relief for Hydro from Pallister’s government. Even a modest concession on the millions of dollars a day taken by the government for so-called ‘levies’ was refused. Riley swiftly departed and his board mates walked with him.
The commissioning of Limestone, 30 years ago, was built for under $2 billion, providing an opportunity for low rates for generations. But, instead of stopping, allowing ratepayers to keep a true “Hydro advantage”, the government and then/Hydro board and executives went ahead with a foolhardy ‘build’ agenda. The result, an enormous extra debt of $20 billion to pay for money-losing ‘assets’ — Wuskwatim, Bipole III, Keeyask, and another expensive ratepayer Manitoba-Minnesota transmission line.
Ratepayers await the long-delayed Hydro’s 2019-2020 annual report, and a report to come from a Pallister promised restricted review by former Saskatchewan Premier Brad Wall; all consumers can do is to get ready to watch their bills soar.
Manitobans deserve a fully independent examination of Hydro’s past 20 years of an expansion that turned what was Manitoba’s ‘oil’ into a nightmare of blown cost estimates and money-losing exports.
With PCs and the NDP co-culprits in Hydro’s economic disaster, ratepayers have only the hope of a truly independent non-governmental review to find the truth about the Hydro fiasco.
— Graham Lane, a retired CPA CA, was chair of Manitoba’s Public Utility Board (2004-2012).