Right in the centre - Manitoba Hydro is in a big mess
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- Published on Thursday, March 29, 2018
Ken Waddell
Neepawa Banner & Press
Manitoba Hydro is in a very bad place right now, but it has little to do with last week’s resignation of most of the board. The board was appointed by the current PC government and they say they came to a point where they couldn’t get action from the government on many key issues. As a result they resigned.
Premier Brian Pallister said it was because the cabinet did not approve a $70 million payment to the Manitoba Metis Federation (MMF). The now former Hydro chairman, Sandy Riley disputes that.
That Hydro was planning a $70 million payment to the MMF is very disappointing. Pallister called it persuasion money and I don’t know what else to call it. The MMF finds the term offensive, as did Riley, but I find it offensive that any group of people would be paid money to avoid future objections to Hydro lines. This pay-off practise by Hydro has been going on for decades. I also find it offensive that some First Nations groups, some environmentalists and the Manitoba NDP forced Hydro to spend 20 times that amount on the western route Bipole III hydro line. It is also offensive that the NDP, when they controlled Hydro, put the utility so far in debt by building too many dams without having contract export sales.
During the 2011 election the NDP swung the election their way by plastering the countryside with “Save Hydro” signs in the hopes that voters would assume that a PC government would sell Hydro. It worked, but the message was ironic and outdated. By the time of the 2011 election, the NDP had already sold Manitoba Hydro to the bankers and to some First Nations Communities. Hydro, even then, was so mired in debt, that it may never get out of the hole.
Last year, when it was announced that Hydro was cutting 900 jobs, it was a huge shock. At least it was a huge shock until you listened to hydro workers. Many said it was not unexpected and was long overdue. Talk to almost any retired Hydro worker and they will tell you Hydro is over staffed, should never have bought the obsolete assets of Winnipeg Hydro, that they spent way too much on BiPole III and northern dams. The new downtown Manitoba Hydro building is a building that was not necessary, cost too much and many mechanical aspects of the building simply didn’t work.
The amount of actual Hydro being used in Manitoba that is being produced by the extra dam capacity could have been produced much cheaper by natural gas powered plants and we might not have needed BiPole III at all.
Buried deep in Hydro’s books is another nasty little secret. Manitoba Hydro pays a water rental tax to the province. I have been told it is $250 million each year. Hydro is also forced to pay a loan guarantee fee to the province.
Manitoba Hydro has become an over-inflated political football and it is likely to explode. It has taken many years to get Hydro into the trouble it is now experiencing and it will take many years to get it out.
Hydro can’t go down, as we all know, but it does have to change course. The spending has to stop as does the water tax and the loan fees. Hydro rates have to go up, that is the only way energy conservation will happen. And Hydro needs to stop spending money on home and business repair programs that distort people’s view on renovations.
If Hydro didn’t pay the water rental fee, the loan fee, the many layers of persuasion money and didn’t pay people to insulate their houses and replace windows it would make a difference. It would also help if they sold some power east and west as well as south. Good luck with southern sales as long as gas fracking is cheap and the U.S. is in their never ending protectionist mode.
Maybe Hydro should be sold with a caveat that Manitobans get a fixed or formula price on electricity for 100 years. The mess is so bad that every option should be examined.
