A tale of two PUBs

Northern Pen - - Front page -

To quote Yogi Berra, “It’s déjà vu all over again.” Or maybe it’s more like the say­ing “mis­ery loves com­pany.” Or, “Physi­cian, heal thy­self.” Any way you de­scribe it, it isn’t pretty.

Think back to Septem­ber 2012: then-premier Kathy Dun­derdale’s gov­ern­ment booked the Sher­a­ton Ho­tel to an­nounce that Muskrat Falls’ most re­cent cost es­ti­mate was $7 bil­lion, and that an out­side con­sul­tant, Man­i­toba Hy­dro In­ter­na­tional (MHI), agreed with her gov­ern­ment’s anal­y­sis that the project was the right choice for this prov­ince.

“Muskrat Falls sets the stage for us to fi­nally take con­trol of our destiny and achieve the en­vi­able po­si­tion of to­tal en­ergy in­de­pen­dence in the in­ter­na­tional mar­ket­place,” Dun­derdale said at a news con­fer­ence in St. John’s. “This project will have a tremen­dous im­pact on the peo­ple of New­found­land and Labrador for years to come.” (She might be right about that last line, but not in the way she thought.) Fast for­ward to the present, and it’s in­ter­est­ing to see what’s go­ing on with MHI’s par­ent com­pany, Man­i­toba Hy­dro.

Man­i­toba Premier Brian Pal­lis­ter says he in­tends to or­der a re­view of Man­i­toba Hy­dro’s de­ci­sions to in­vest in over-bud­get hy­dro­elec­tric projects and trans­mis­sion lines.

“(We’ll) see if we can’t learn from past de­ci­sion-mak­ing pro­cesses how to do a bet­ter job of Hy­dro in the fu­ture,” Pal­lis­ter told re­porters. “It’s ob­vi­ous that there’s a con­cern about the debt lev­els at Man­i­toba Hy­dro.”

He told Bloomberg News, “It’s a his­toric mis­take or mis­takes that led us to where we are now … I think what we have to do is com­mis­sion ex­pert ad­vice on this file.”

One hy­dro­elec­tric project, the Keeyaask, has bal­looned from a 2009 es­ti­mate of $4.59 bil­lion to an es­ti­mated $8.7 bil­lion now, with con­trac­tors sug­gest­ing con­tin­u­ing de­lays could move that price tag to more than $10 bil­lion.

Echoes of the Muskrat in the room? You bet. Per­haps, in ret­ro­spect, it was not the best crew to have been tak­ing project ad­vice from.

One dif­fer­ence? In Man­i­toba, the prov­ince’s Pub­lic Util­i­ties Board just cut a re­quest for power rate hikes in half to 3.6 per cent, say­ing, “The board has long been con­cerned with util­ity bill af­ford­abil­ity is­sues.”

Man­i­toba Hy­dro had said it needs six con­sec­u­tive years of 7.9 per cent in­creases to main­tain its fi­nan­cial sta­bil­ity, a 10-year cu­mu­la­tive rate in­crease of 77 per cent.

The dif­fer­ence in this prov­ince?

The in­creased costs from our over­priced dam project can’t be ques­tioned by our Pub­lic Util­i­ties Board. The Dun­derdale gov­ern­ment specif­i­cally changed the PUB’s leg­is­lated man­date to ex­clude Muskrat Falls from re­view by cab­i­net or­der — and, in the process, or­dered the PUB to re­cover the costs of the project from cus­tomers on the is­land in­ter­con­nected grid, and pay­ment of those costs can­not be reviewed, re­duced or al­tered by the board.

The Man­i­toba PUB may be able to worry about af­ford­abil­ity. As far as Muskrat Falls goes, ours can’t.

The in­creased costs from our over­priced dam project can’t be ques­tioned by our Pub­lic Util­i­ties Board.

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