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Hydro boss attacks whistleblower's credibility

By: Mary Agnes Welch

18/11/2009 1:00 AM | Comments: 22

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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22 Commentscomment icon

Good point. I don't think the allegations would have reached the Auditor General and the Ombudsman and the PUB without something behind them.. No regulator has spoken out against them.. I think its bad news for Hydro....


Posted by: MyOpinion

There must be something to the credibility of the Whistlerblower's facts. She is risking her company and career on this. If the allegations are proven false, I doubt her name and company will stay hidden.

Also, why hasn't anyone looked at the details she says she willing to provide? Instead of working from scratch, just look at the details and see if anyone can prove them false?

I think I believe her because no one seems to want to look at any of the details she's willing to provide.

Goodbye Bob! I think your days are numbered.... the NDP party should fire you and Schroeder for this scandal mess ..Hooray! Time for some new management... from the wiseguy:)

I don't understand the whistle blower protection act. Why is Brennan able to blast this person and not be held responsible for violating the Act? It doesn't bode well for the legitimacy of the process and he doesn't sound like a very credible or diplomatic CEO.. I think Brennan needs to come down from his high horse.

Of course he's going to attack the accuser, but, a better tactic would be take the high road. Hydro is beginning to appear to me like a bunch of ruthless cowboys.

I agree with whosays..I don't think Bob Brennan is being very professional and this just hurts his own credibility.

whosays writes: Well...if you don't like what you're hearing, just fire the person, expose that she was a she, and then discredit and malign her in the press.

True professionalism.

This is a great case study on reporting and PR.

A newspaper's objective is to sell papers and ads, and so promoting "David vs. Goliath" stories is in the newspaper's best interest. Additionally, Whistleblower legislation makes it very easy to question the credibility of the accused while impossible to explore the credibility of the accuser.

If you're Manitoba Hydro, even if you're innocent, is there any way you come out of this situation ahead? Hydro could...
1) Remain silent, in which case they look like they're clamming up for fear of incriminating themselves;
2) Defending themselves against the unknown accuser, in which case they look like Goliath circumventing Whistleblower rules to attack David;
3) Defending themselves against the accusation, in which case they rely on the general public --comprised almost exclusively of people not in the industry-- to understand the electricity business.

Number 3 looks like the only rational alternative, but even that's the best of a bad set of options. So, Manitoba Hydro, even if the balance of guilt does not lie with you, best of luck; you'll need it. And if the balance of guilt does lie with you, well, I suppose you're getting what you deserved!

Bellringer was on the board of directors for Manitoba Hydro in 2006.
Bellringer also chaired Hydro's audit committee in 2004 and 2005.
Why can't Rosann Wowchuk appoint someone who doesn't risk an apperance of conflict of interest ?
Seems like a no-brainer.

I don't believe Hydro. This is a public owned company so open the books, what are you hiding? Same with MPIC. Every year they sould put out a report on there buisness for all to see. Zero transparency.

People this is what happens when a company with the potential to provide us Manitoban's billions in profits is run just like another government ministry. Hydro lines costing half a billion more for no recognized benefit? Are we really saving the environment by going down the west side of the lake when the line has to be cut through an additional 400-600 kms of greens space?

We want a public review and truly independent one. You dont put a Crocus board member to review to the Crocus fund.. You dont put a Hydro board member to review the Hydro mess.

The opposition need to call for their own audit. That's the only way people will know.

Schroeder says "the consultant submitted a mind-numbing number of reports" and Brennan says she didn't provide any work.

If you Hydro people are going to lie - get your facts straight. If Schroeder is right - then it sounds like the consultant sent in a mind-numbing number of reports to substantiate her allegations

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