Manitoba Hydro hosted a community consultation session Nov. 3 at the Royal Canadian Legion in Thompson regarding recent financial assessments that have found Manitoba Hydro in grave fiscal condition.
The panel presented the public with information regarding the necessity of the Bipole III and Keeyask projects, and provided the audience with the opportunity to express their concerns and grievances to a panel of Manitoba Hydro board members.
The panel included board vice-chair Steve Kroft, president and CEO Kelvin Shepherd, board members Jennifer Nepinak and Mike Pyle, and was emceed by Manitoba Hydro public affairs officer Bruce Owen.
From the outset, Kroft* reiterated Manitoba Hydro’s grave errors in the mismanagement of the Bipole III project, admitting that a staggering $900 million could have been saved had Hydro constructed the line through the east of the province.
Nonetheless, Kroft stressed that with the project well under way, it makes little sense to scrap the project. Cancellation at this point would render the Keeyask generating project isolated and useless, and result in a combined $7 billion in sunk costs; an additional $1 billion would be required to execute the project’s cancellation alone. As it stands, the two projects combined will likely require an additional $4.65 billion to complete.
In the meantime, it was noted that the aging infrastructure of Bipoles I and II poses a profound risk of failure: Kroft cited an independent review by the Boston Consulting Group that described the current state of the Bipole system (along with the Dorsey Converting Station) as “the largest single-risk exposure they have ever seen in North America.”
Kroft estimated nearly $20 billion in societal damage should the network or converting station fail. In the event of a station failure, Kroft noted it could be months before the grid would be restored.
In the meantime, if nothing changes, Manitoba Hydro’s overall debt is expected to increase from $13 to $25 billion by 2023; Shepherd noted that this has meant a freeze on the majority of hiring, and a long-term reduction in Manitoba Hydro’s workforce. Shepherd noted that roughly 75 to 80 per cent of Hydro’s expenditures go towards staff wages.
Shepherd also noted that the previously projected four per cent rate increases might not be sufficient to sustain the corporation into the future. Nonetheless, he noted that hydroelectric rates were due to rise across the country, and as Manitoba’s rates were currently the lowest, rates would remain relatively competitive. Shepherd would also note later that rate increase would be the “last lever we pull.”
Thompson Mayor Dennis Fenske noted that while the north has always been critical to the development of Manitoba’s infrastructure and raw resources, northerners have never seen their fair share of the return on that investment.
“I want to hear a commitment that there will be an increase. There are partnerships and programming, but what I want to hear is the protection of jobs in the north.”
Fenske reminded the board that Thompson was not a community where individuals put considerable faith in finding employment, and that when jobs disappeared, so did people. He stressed that this would impact not only the regional economy, but the province’s entitlement to municipal transfers from the federal government come the next census.
Shepherd noted that the Keeyask project would continue to provide northern employment during its construction and throughout its operation. However, he was hesitant to make any promises in the long term. He did note that the majority of northern hydro workers are front-line servicemen, and Manitoba Hydro would seek to protect these jobs to whatever extent possible.
Keith Fortin, a former BBE Hydro Constructors LP** employee and member of the Sayisi Dene First Nation, echoed Fenske’s comments; he described how his father, the late Tom Fortin, had overseen the construction of the northern winter roads, and was one of the first individuals to see the potential of the area near Taskinigup Falls. Fortin is certain his father died from stress, as he fought the province of Manitoba for compensation for the construction of the roads.
Fortin noted that his father’s story was one of many, and that Manitoba Hydro could do more to ensure that Manitobans, especially northerners, were hired to work on northern projects. “In two months, I found myself without a job. Guys from Quebec were coming in, and Manitobans were coming home. They called it a ‘shortage of work’ for me.”
Shepherd noted that 80 per cent of Hydro’s staff was composed of Manitobans, with indigenous people making up 40 per cent of Hydro’s workforce. However, he cited a lack of required expertise in the northern workforce as a common problem for regional recruitment.
One resident was concerned that Hydro rates would face a two-stepped adjustment much like the City of Thompson’s water utility, with the incentive to use less of a utility rising along with its cost, potentially leading to greater cost per customer than projected. He warned that this was particularly likely in the north, due to increased dependence on electricity due to heating.
Kroft noted that the board would consider the suggestion; he also noted that Manitoba Hydro regularly undertakes campaigns to minimize public use of electricity, such as the Power Smart program.
Leslie Dysart also presented the panel with an information package regarding South Indian Lake, and the regulation of water levels as part of Manitoba Hydro’s augmented flow program. He stressed that financial practices were not the only behaviour hydro was due to review in the coming years. “Having this board is a definite breath of fresh air, and I applaud you for coming forward. There’s a culture within hydro that’s goes back 50 to 60 years, of arrogance, of never being wrong, of ‘doing what we want, when we want,’ of silence and secrecy.”
Dysart noted that Manitoba Hydro was in danger of breaching the agreements of the interim licence granted to the Crown corporation in 1973, and that compliance would require a dramatic reassessment of the currently projected revenues and power output.
The panel noted that the matter could be discussed further in private.
* The article has been changed from the original version, which mistakenly attributed information provided by board vice-chair Steve Kroft to public affairs officer Bruce Owen.
** Keith Fortin was misidentified as a former Manitoba Hydro employee in the original version of this article.
