Winnipeg Free Press - PRINT EDITION

Hydro head now a commuter

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Manitoba families can sympathize with Hydro president Scott Thomson's position now that his wife has taken a job, and their children, back to their original community of Vancouver. It is not uncommon in the modern economy for spouses to live and work across jurisdictions. Mr. Thomson has joined that club, deciding to work here and commute to British Columbia for weekends with his family.

The provincial government concedes this is not ideal. Mr. Thomson was hired in 2012 to lead the Crown utility in the midst of one of its most ambitious development phases in its history. The turbines at the Wuskwatim generating station have just begun turning, the controversial Bipole III transmission line is breaking ground, and Hydro is launching construction on the new Keeyask station on the Nelson River. Bipole III and Keeyask alone make up about half the corporation's nearly $20 billion in planned investment over the next 10 years.

The Crown agency has staked its reputation and financial health on an ambitious vision of development, egged on by an enthusiastic NDP government, and it has had a rough ride through the approval processes. Hydro believes aggressive hydroelectric development and lucrative international sales will keep it modern, competitive and positioned to serve the interest of Manitoba ratepayers well into the future. Critics have warned the plan, particularly its forecasts of returns from the future energy market in a rapidly changing energy environment, is dangerously flawed.

This is a huge, demanding job for the corporation's chief executive. The level of compensation -- he earns about $400,000 in salary -- reflects the demands on a president who must be constantly available and in touch with many complicated moving parts of Manitoba Hydro's operations. The decisions being made now to position Hydro will be felt many decades in the future and the ratepayers are backstopping the financial risks.

That is to say the leader of the corporation is expected to be present, to be committed to the job. He reasonably is expected to have roots in the community that will see the results of the decisions underpinning Hydro's "decade of development." Mr. Thomson's family is no longer residing in Winnipeg, his house is up for sale. He will continue, he says, to live here and spend weekends in Vancouver, where his wife, a doctor of Chinese medicine, has taken a job.

Major, multibillion-dollar corporations regularly deal with the competitive nature of executive recruitment. Declining profits and dividends, or the lure of a shinier prospect elsewhere, can result in sudden, perhaps frequent change at the helm. It is the job of boards of directors to explain and justify this to their stakeholders. A Crown corporation is different because its "shareholders" are taxpayers and ratepayers.

This is especially true of Hydro. Its developments are located in the traditional territories of First Nations communities in northern Manitoba, and the projects proceed with signed agreements for long-term partnerships that take years of negotiations to write, which lends added importance to the need for continuity and stability at the top.

It's not easy living 2,000 kilometres from your family. Mr. Thomson's integrity is not at question. There's no reason to believe he does not intend to serve Hydro to the best of his abilities.

Board chairman Bill Fraser says he believes Mr. Thomson intends to fulfil his five-year contract and perhaps beyond. While it was implied, residency was not a stated condition of employment in the agreement. Mr. Fraser was taken by surprise when Mr. Thomson's family returned to Vancouver.

Hydro is operating at a time some describe as a period of unparalleled uncertainty in the electricity market. Mr. Thomson has said he is committed to staying the course. Mr. Fraser and his fellow directors must prepare, nonetheless, for unforeseen developments by ensuring the utility's strength comes from its executive team, and not simply its president.

Editorials are the consensus view of the Winnipeg Free Press’ editorial board, comprising Catherine Mitchell, David O’Brien, Shannon Sampert, and Paul Samyn.

Republished from the Winnipeg Free Press print edition August 23, 2014 A16

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