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If He's Worried, You Should Be Too

Author: Colin Craig 2013/06/05

For 12 years Graham Lane was the NDP government’s top person when it came to watching over Manitoba Hydro rates.

He had access to all kinds of financial analysis and other information from Manitoba Hydro about its proposed $20 billion expansion plan. One could easily make the argument that Grahame Lane is one of the most knowledgeable people on hydro in the province today.

And he’s worried about the expansion plan. Very worried.

If he is extremely worried about Manitoba Hydro’s massive expansion plan and the possibility it could triple your hydro bill, shouldn’t you be scared too?

Lane isn’t some flunky who was appointed to a do-nothing government board. He served as chair of the Public Utilities Board (the board that approves rate changes) from 2004 until 2012; he knows what he’s talking about.

While his term on the board expired in 2012, he continues to speak out about his concerns on this issue; he recently spoke to a Frontier Centre for Public Policy lunch and submitted a column to a local newspaper. Why would he continue to devote so much time to the matter?

Probably because he too plans on living in Manitoba for years and is also worried about what will happen to his own hydro bill. Not to mention he was a good former civil servant who is genuinely concerned for the public.

So what’s the problem?

The Manitoba government isn’t listening.

Manitoba is still acting like it’s 1970 and seems to be thinking ‘oh well, we’re going to run out of power in a decade so, might as well start planning to build new dams.’

In the past that approach has worked. Historically, Manitoba Hydro has served Manitobans pretty well. However, it’s 2013 now and everything has changed.

As Lane has pointed out, when Manitoba Hydro drafted its expansion proposal, it planned on building two new dams and selling the extra power to the United States.

Yet, the American buyers now have an abundance of cheap natural gas power at their disposal. Throw in a higher Canadian dollar and stalled U.S. economy, and Manitoba Hydro’s power sales to the U.S. could be a fraction of what they projected.

Further, if one considers cost overruns on the recently completed Wuskwatim dam in northern Manitoba (was supposed to cost $900 million, came in at $1.8 billion), it’s easy to see how the government’s cost estimates for the two new dams it wants to build gets riskier and riskier.

Anyone can figure out, if Hydro’s $20 billion plan doesn’t work out, Manitobans are either going to pay for the boondoggle through their hydro bills or higher taxes.

The bottom line is that instead of running a $750,000 ad campaign to convince Manitobans their plan is the best option, the government should be consulting with Manitobans and industry experts like Lane to critically analyze Manitoba Hydro’s proposal.

Divide the $20 billion plan by Manitoba’s population of nearly 1.3 million people and you can see your share of the risk; at least $15,384. Clearly, this plan is absolutely enormous.

If people like Graham Lane are very concerned, you should be too.

 

 

 

 

 

 

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