Winnipeg Free Press - PRINT EDITION
Hydro boss attacks whistleblower's credibility
The whistleblower who raised red flags about blackouts and bankruptcy was a "disgruntled consultant" who refused to take direction and whose allegations could never be substantiated, Manitoba Hydro boss Bob Brennan said Tuesday night.
At a hearing at the Manitoba Legislature, the power company's president and board chairman Vic Schroeder defended Manitoba Hydro against a whistleblower's allegations the company could face bankruptcy and blackouts and has failed to properly forecast the province's power needs. Her allegations, combined with similar questions from the Public Utilities Board, has put the Crown power company on the hot seat in recent weeks.
Utility on the defensive
Crown power company Manitoba Hydro has been on the hot seat for several months. Here’s why:
Whistleblower complaint: A risk management expert who looked at the company’s export commitments, drought risk and building program has raised fears of blackouts and bankruptcy at Manitoba Hydro. The company could face $7 billion in losses during a multi-year drought.
Audit: The whistleblower complaint, filed more than a year ago, eventually landed in the lap of Manitoba’s auditor general, but little was done about it until some broad details became public. The NDP then asked the auditor to speed up her investigation.
Debt: The Public Utilities Board has estimated that Hydro’s debt could top $20 billion by 2022 because of the company’s huge upcoming building projects — dams, transmission lines and other upgrades.
Drought: The last drought put Hydro more than $436 million in the red and prompted the company to look seriously at how to handle a dry spell. There’s a drought every 12 to 15 years, and with export commitments and Manitobans using more and more power, a drought could be even more costly that it was in 2003/2004.
Exports: The PUB, which regulates Hydro’s rates, is worried the company is relying on overly-rosy export rate forecasts.
New dams: Hydro is building three new dams over the next decade and a huge transmission line worth billions. Construction costs have traditionally outstripped estimates and there have been questions about the effect on rates.
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Tory Leader Hugh McFadyen said it's ironic of Hydro to question the whistleblower's credibility when so many of Hydro's promises have failed to materialize. Hefty sales to Ontario evaporated. The $1.6-billion cost of the new Wuskwatim dam is now twice the original estimate. A promised 1,000 megawatts of wind power has fizzled and the new downtown headquarters was well over budget.
"How can people who so badly missed every forecast they've made take issue with another person's forecast?" McFadyen asked. "The only way to resolve this is a truly independent review, and we haven't got one."
Auditor General Carol Bellringer is reviewing the whistleblower's allegations, although the Tories have repeatedly questioned her impartiality because she was finishing a stint on the Hydro board while the whistleblower was beginning her work.
In his toughest attack yet on the whistleblower's credibility, Brennan said she was effectively terminated six months after she was hired in 2006 to review the company's risks. Brennan said she refused to take direction, ignored the original assignment and wouldn't offer any details on her methods. She also recommended that Hydro buy millions of dollars of software from a company in which she had a stake.
Others reviewed her findings and could not verify them, and staff were invited to come forward if they agreed with the whistleblower, but none did.
Schroeder said the consultant submitted a "mind-numbing" number of reports that Hydro asked her to narrow down to 10 or 20 key issues.
"There was an issue, quite frankly, of credibility," he said.
The whistleblower, who has so far refused to allow her name to be published, has said she repeatedly offered to detail her findings and was rebuffed. She said she was fired less than 24 hours after submitting a damning report directly to Brennan.
maryagnes.welch@freepress.mb.ca
Republished from the Winnipeg Free Press print edition November 18, 2009 A8
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