PC Government Fear-Mongering An Excuse to Raise Hydro Rates, Favour Gas Generating Plants

On Wednesday, the Pallister government reneged on a promise to have the Public Utility Board do an independent review of Bipole III – instead his ministers paraded a U.S. consulting firm’s report as though it had discovered new and startling data that can only be a prelude to raising rates, NDP MLA James Allum said today.

“Brian Pallister promised an independent review. Instead, Manitobans witnessed the government parading a private U.S. consultant’s review that presents little new information, but whose report is being used to mislead Manitobans about the real value of Hydro’s major investments and undermine our public utility,” Allum said. “They’re looking for an excuse to raise rates to market levels instead of aggressively pursuing export sales that would keep rates low.”

The U.S. consultant’s report simply confirms what is already known from public documents about Hydro’s investments in long-term infrastructure:

  • Manitoba’s hydro rates are among the lowest in North America;
  • Bipole III is justified and is needed for reliability;
  • Hydro has signed $4.5-billion worth of export contracts for Keeyask;
  • Bipole III is too far along to be stopped, which should have been obvious by publicly available information from Hydro, or by a simple phone call to Hydro executives when Pallister took office;
  • The cost difference between the East Side and the West Side because of its greater length has been part of public discussion for about a decade; and
  • Hydro is increasing its long-term debt due to its infrastructure building program, which billions of dollars of export contracts help service. These figures are publically released annually.

What is new is that the Manitoba PCs put stock in an American report that thinks gas-fired plants should have been considered over building Keeyask. This is despite the fact that historically low interest rates and the coming need to service domestic electricity demand will make Keeyask necessary in the coming years.

A transparent and public review by the PUB, which has many years of experience in dealing with Hydro finances, approved the Keeyask project and explicitly rejected gas plants in part because of deep concerns about the environmental implications of gas generation.

“Brian Pallister is undermining our public institutions by ignoring the PUB,” Allum said. “His government is signalling that if Keeyask was not so far along, they would kill the jobs, rip up export contracts that service debt and make us reliant on foreign gas providers. This approach was already explicitly rejected by the PUB, which is why he had to do an end-run around an open and transparent process.”

Allum noted the new Hydro board chair said about rates: “Probably, they've been maintained at too low a level”. The NDP government always sided with families in ensuring Hydro rates were kept affordable and the PUB agreed with that approach, Allum said.

“The Pallister government still clings to the mistaken belief that Bipole 3 should have been built down the East Side, while ignoring the reality that the East Side route presented significant financial and environmental risks,” Allum said. “The Pallister government must stop pretending it would have been easier or cheaper to build on the East Side and he should commit to keeping rates low for Manitobans.”