The conflict between Manitoba Hydro and the Public Utilities Board over the latter's authority to demand documents from the Crown utility is long-standing. It has delayed board orders on Hydro rate applications. The point of law, an interpretation of PUB powers under provincial legislation, needs to be resolved.
Indeed, the argument -- the PUB subpoenaed Manitoba Hydro export contracts as part of a rate application in 2009 -- now sits before the Manitoba Court of Appeal. The Appeal Court is an appropriate arbiter in this protracted fight.
Manitoba Hydro says the PUB does not have the authority to subpoena its export contracts with American customers. Those sales, for years, helped keep domestic hydro rates down because surplus power was getting a good price for Hydro. Today, the market for hydroelectric export sales is depressed for a number of reasons, and the revenues have fallen dramatically. The PUB insists in order to review the financial risks Hydro faces -- which it says are central to its analysis of whether rate hikes are justified -- it must know the terms of the contracts.
The dispute obstructed the PUB's final decision of Hydro's rate application for years. Last year, Manitoba Hydro decided to ask the Court of Appeal to quash a PUB order to turn over the contracts.
At a meeting with the Free Press editorial board Wednesday, Manitoba Hydro president Scott Thomson said the utility wants to resolve the dispute out of court. Mr. Thomson said prior to the Appeal Court application, he began discussions with PUB board chairman Regis Gosselin about releasing the export contracts, under agreement that sensitive information would be redacted. (Such a provision for confidentiality is included in the PUB's authority.) The discussion broke down due to "technical" issues, hence the application to the court.
Now, the two bodies are looking at mediation, again in advance of a court decision, expected this summer.
An early voluntary agreement would have been preferable to avoid the lengthy delay. Manitoba Hydro, however, refuses to agree the PUB has authority to subpoena its contracts. Whether an out-of-court agreement is reached or not, this source of conflict needs to be resolved as it may trigger similar disputes because Hydro's development plans far into the future are predicated upon export sales. Hydro and the PUB should allow the Appeal Court to settle the PUB's authority over export contracts.