Winnipeg Free Press - PRINT EDITION

Hydro headed 'off a cliff:' former PUB head

Says NDP treating utility like toy; Selinger insists planning is sound

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Manitoba is like bus speeding towards a cliff.

Some would argue the front tires are already airborne and the brakes are wonky.

And the driver is Premier Greg Selinger.

That was the theme Wednesday at a noon-hour speech given by Graham Lane, the retired chairman of the province's Public Utilities Board, on the future of Manitoba Hydro.

For Lane, Manitoba Hydro isn't so much the publicly owned power utility that keeps the lights on and water warm, but a plaything of the NDP.

"History is marked by past government boondoggles," Lane told the Frontier Centre for Public Policy luncheon of about 150. "It's no surprise that an overly long-tooth government believes it has a mandate to do as it pleases and is now embarking on a new boondoggle, one that the ratepayers will pay for."

Members of the right-of-centre Frontier Centre for Public Policy have in the past argued governance of Manitoba Hydro should be strengthened to be more in line with publicly traded companies.

What makes Lane's criticism of the NDP's handling of the Hydro file unique is his former position with the PUB from 2004-12 and his intimate knowledge of the inner workings of Hydro. While Lane often tangled with Hydro as board chairman over rate increases and alleged Hydro secrecy in sharing the deals it has with its U.S. customers, he never spoke his mind publicly.

Until now.

"I kept waiting to see some more information that would come out that would sedate me in a way and that maybe I could drink the Kool-Aid and carry on," he said. "Nothing's changed. They just seem damned and determined that they're going to drive the bus over the cliff."

Lane also said he decided to speak out, almost a year into retirement, because of a need to bring badly needed clarity to the debate over Hydro's $20-billion plan to build the Keeyask and Conawapa generating stations on the Nelson River and the Bipole III transmission line down the west side of the province.

He called this plan the largest gamble in the province's history that needs a proper independent review beyond the restrictive Needs For and Alternatives To ordered by the province last November.

"Slow down the bus. Truly look. Consider alternatives. Look for them. Compare the risks. Return Hydro's emphasis to serving domestic ratepayers."

Lane argues, as he did when he was PUB chairman, that a natural gas-burning plant to generate electricity should be built in western Manitoba to take advantage of low gas prices.

"Natural gas prices would have to go very much higher before Keeyask and Conawapa and Bipole III could be judged economically viable," he said.

Premier Selinger said he, his government and Manitoba Hydro are well aware of the economic and market challenges Lane and other critics have raised.

However, he said Hydro's customers in Minnesota and Wisconsin want to buy hydroelectric power from Manitoba and the province's own increasing energy demands require new dam development.

"It totally makes sense to build it before you need it to sell it as export energy, which pays down the costs of building the new dams, which keeps our rates lower in Manitoba," Selinger said.

Lane also said for Hydro and the Selinger government to steam ahead with building Keeyask and Conawapa is folly in light of the lingering after-effects of 2008 recession and the advent of shale natural gas, the abundance of which has dramatically altered the North American energy landscape with a cheap supply for the next few decades.

"I think it's a bad deal. That's the truth of it. I don't say it with any happiness in my voice."

Selinger said it's too speculative to suggest natural gas prices will stay low.

"Why would we want to import a carbon (natural gas) to Manitoba when we can have our own source energy that we can export and at the same time have a clean, low-cost energy for Manitoba?" he said.

Republished from the Winnipeg Free Press print edition June 6, 2013 A7


Updated on Thursday, June 6, 2013 at 8:03 AM CDT: adds fact box

10:14 AM: Removes incorrect information regarding solar and wind power from the end of the article

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