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Here’s an interesting thought: in Manitoba, the provincially owned electrical utility is planning a massive expansion of its hydroelectric operations, even though its profits from the sale of electric power have fallen dramatically, to the point that Manitoba ratepayers are actually subsidizing the sale of cheap power into the U.S. grid.

It’s a situation that sounds somehow familiar. Here is a sample of comments from Graham Lane, a former head of Manitoba’s public utilities board, talking about the wisdom of using ratepayers to pay for power for others. Lane was presenting a paper for the Frontier Centre for Public Policy.

“While many Manitobans are aware of the provine’s massive expansion of Manitoba Hydro’s northern hydroelectric generation and transmission facilities, few understand the negative implications for their own pocketbooks. Recently, Manitoba’s NDP government has unleashed a barrage of propaganda in support of the planned costly development, including the repeating of an implausible claim originally made by former Manitoba premier (Gary) Doer that hydroelectric power is ‘Manitoba’s oil,’ in essence, equating Manitoba’s hydroelectricity prospects with Alberta’s oil and gas opportunities. …

“Despite the fact that Hydro’s ratepayers will be required to meet the full rate implications of the government’s direction, the level of openness and transparency with respect to these plans have been woefully and long absent. Hydro has already spent billions and made commitments to First Nations, American utilities, contractors, manufacturers, employees and trainees, all before an independent and expert review of the plans and options has been undertaken and final approvals for proceeding secured.

“I make the case that the revenue, cost, demand and export price forecasts provided by Hydro (often cited by the government in support of its plans) are not worth ‘a grain of salt‚‘ as every major forecast made by Hydro over the past decade has been widely off the mark. There have been major cost overruns and other forecasting errors, and circumstances have changed following the inauguration of the plans. …

“The challenges faced by Hydro do not exist in a vacuum — the province’s own balance sheet is laden with debt, with annual deficits in the past as well as in the future outlook (without even considering the prospects of future restraint by the federal government as to the transfer grants that keep this province ‘alive’). This paper supports the position that the underlying financial position and prospects of the province and Hydro, and the risk inherent in the government’s Hydro expansion plans, doesn’t support a gamble of tens of billions.”

The whole paper’s only 30 pages, and you can read it at http://www.fcpp.org/file//PS153_DamNation_JN04F2.pdf.

It’s a different province, different projects than Muskrat Falls, but interesting reading nonetheless.

Almost an echo of things heard here: “I hold that the bodies presently providing ‘oversight’ with Hydro are conflicted and unable to properly protect ratepayers. The planned Public Utilities Board Needs For and Alternatives To Review is, unfortunately, a sham. Other matters associated with Manitoba Hydro’s actions clearly require independent audits, along with a proper independent review and reconsideration of the present plans. … The ratepayer communities, which, in the end pay the bills, must be truly involved in the process.”

Indeed.

Organizations: Manitoba Hydro, Frontier Centre for Public Policy, First Nations Public Utilities Board

Geographic location: Manitoba, U.S., Alberta

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  • Just Sayin
    June 11, 2013 - 15:37

    Cyril, you ask are we that stupid, to fall for the Muskrat Falls scheme. I guess no more stupid than our ancestors who believed the Nfld Railway would be profitable of give them some short term work. It helped bankrupt us in 1934.

  • lonenewfwolf
    June 07, 2013 - 22:41

    This from a wikileaks cable (http://wikileaks.antibaro.gr/cable/2008/01/08OTTAWA135.html#par6) Early in 2001, with energy policy at the top of the new Administration's agenda, then Canadian Prime Minister Jean Chretien suggested to President Bush that transmission grid improvements could unlock major undeveloped electric generating resources in Qcould unlock major undeveloped electric generating resources in Canada. While Chretien focused particularly on hydroelectric sites in northern Manitoba (Nelson River), there was considerable potential in hydro resources in other regions (such as Labrador and Quebec) and in oilsands cogeneration in Alberta. Cross reference what he said with Lavalin / MHI's involvement and start asking who they are working for...cause it sure ain't us.

  • Cyril Rogers
    June 07, 2013 - 13:57

    I took the time this morning to read the "Dam-Nation" report out of Manitoba and it is almost like reading your own obituary. Our government has relied on the "experts" from MHI and Manitoba Hydro, who have been anything but, in terms of project outcomes. Are we that stupid?? It is obvious to me that something more sinister than stupidity is at work here....because all the signs point to a fiscal catastrophe out of this Muskrat Falls debacle. Given the secrecy surrounding the project, and the fortifications around NALCOR, the problem for me is that we will not know, until too late, what exactly is driving this monstrosity. Whatever it is....it is NOT common sense and NOT for the benefit of the common person! I would urge every resident of NL to read this document and put partisan politics aside because our very future, in terms of fiscal strength or fiscal uncertainty, depends on the government coming to its senses and cancelling this project. It is simply not workable and it is time to cut our losses.

  • Tony Rockel
    June 07, 2013 - 12:36

    Art Meaney says Muskrat Falls is the best thing that could ever happen to us, so I guess I was wrong after all.

  • James G. Learning
    June 07, 2013 - 11:10

    After attending a portion of the NS regulatory board we can see no justification for NS taking Labrador power and Nalcor serious. It is hard to imagine so called intelligent people blundering through anything as far fetched as a Maritime Link. A small power cord from somewhere in the mid Atlantic Ocean is clearly stupid. Especially when put up against the availability of Hydro Quebec. Never mind the practical, when NS and NL are playing to subverting the big bad Quebec power brokers. These are monsters and NS and NL need to go around them at all costs. Talk about stupid. What is this country coming to? Or is only poor provinces such as NL and NS which get roped into this sort of tax grab by their politicians? If so its the greedy leading the stupid. Time for us, NS and NL to wake up. For God's sake get on the internet and try and figure out what the rest of the world is doing. You never know we might like it and get a whole lot smarter. We have to. How could we possibly get any dumber. Imagine being victims of Emira and Nalcor. Muskrat Falls is one crooked stupid Project, ask SNC Lavalin. And look again at Nalcor. Imagine a two hour AGM. Talk about ducking and running. Premier Ed Martin needs his head read. Short read really.

  • Corporate Psycho
    June 07, 2013 - 10:48

    We are getting screwed so a few special interests can get richer. I'm voting for the first party that says it will stop this madness.

  • saelcove
    June 07, 2013 - 10:26

    Ontario does the same thing while ratepayers pick up the bill

  • Richard
    June 07, 2013 - 09:08

    No wonder we hired the Manitobans to give a "neutral" assessment of the Muskrat project.

  • Eli
    June 07, 2013 - 08:39

    We knew about Manitoba Hydro's awful reputation when Williams, Dunderdale, Marshall, King, and Kennedy were all in favour of their (Manatoba Hydro) stupid assessment. But like Joey in days long gone, Danny had NL spellbound. His rear-end likkers wouldn't dare object.

  • Just Sayin
    June 07, 2013 - 08:05

    And Manitoba Hydro concurred with Nalcor that we will need more power for our winter heating because "we are approaching saturation in efficiency gain improvements" for our housing in Nfld. Therefore their forecast for about 1 percent more energy needed each year remains the basis for this fatally flawed project. Efficiency saturation is the spin, and a false statement. Here is the fact: 1. Our new housing code reduces energy consumption by 27 percent according to the government document. 2. Over the last 20 years, average power consumption for houses dropped about 1 percent per year. 3. efficient heating reduces energy consumption for heating by 50 percent for older houses and about 30 percent for the new code house ( on top of the 27 percent from the new code construction). These are some of what is called "disruptive technologies" that the Edison Institute report warns is a risk to any power company. Ed Martin 2 days ago said he has not read the Edison report. Perhaps he doesn't know who Edison was? Such is the man, Martin, we entrust 10 billion of public funds, and our future!. Perhaps the Telegram should ask Mr Martin when he might read and comment on the Edison Report and the implications for this MF project? The report was published in January and only 19 pages.

  • Steve
    June 07, 2013 - 07:20

    Interesting that Manitoba Hydro was the "independent third party" asked to do the review of Muskrat Falls that the govt. likes to trumpet. Manitoba Hydro could hardly have put itself in a position of saying something was a bad idea in NL when they are pursuing the exact same course of action in their home province. They had too much at stake to step back and be objective.