A tale of two PUBs
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.