Final act of Hydro long con draws near
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Hey there, time traveller!
This article was published 16/06/2021 (474 days ago), so information in it may no longer be current.
Welcome to Premier Brian Pallister’s long con on Manitoba Hydro.
In the parlance of grifters, a long con is an elaborate scam that unfolds over a prolonged period of time, involving many people, props and tools, all working together in a grand act of deception.
The most recent instalment came this week, when it was learned Hydro has ignored a demand from the Public Utilities Board to turn over detailed financial information.
The PUB order was prompted by a complaint from the Consumers Coalition, an intervenor umbrella organization that includes the Consumers’ Association of Canada (Manitoba), Harvest Manitoba, and Aboriginal Council of Winnipeg. The group is concerned about the Pallister government’s intentions to pass Bill 35, a law that would significantly curtail the PUB’s role in hydro rate setting.
While Manitoba awaits the passing of Bill 35 (it has been delayed until fall), there have been no formal PUB hearings and rates have been set by cabinet decree.
In requesting financial information, the independent quasi-judicial administrative tribunal was only asking the Crown corporation to provide information it would normally submit during a rate hearing.
Hydro did provide some information, but ignored most of PUB’s requests, including key details and forecasts on operating and capital expenses.
When asked about this clear act of defiance, Crown Services Minister Jeff Wharton said Hydro did fulfill the PUB order — and, further, the information provided shows there has been no material change in the energy utility’s financial position.
That is a lie, and Wharton knows it.
Anyone with rudimentary knowledge of the PUB process and Hydro knows this is an act of contempt, and Wharton certainly qualifies as someone with rudimentary knowledge of both.
It is, however, well within the best practices of the long con. You never give up the charade, never stray from the script, no matter how ludicrous or tenuous the situation becomes.
Since they first introduced Bill 35 (Public Utilities Ratepayer Protection and Regulatory Reform Act), the premier and his ministers have insisted the law will strengthen the current regulatory regime — even though not a single informed individual or group agrees with them.
Bill 35 has been condemned by opposition parties (naturally), but also by the aforementioned consumer-oriented intervenors, other third parties concerned about rising utility rates, business organizations, and even the lobby for the biggest industrial consumers of electricity.
Those companies went so far as to warn the province Bill 35 would jeopardize future capital investment in Manitoba.
Think about that for a moment: a broad array of groups and interests, all coming from different angles, all united by a common opposition to Bill 35.
Pallister may not find it concerning, but his elected caucus knows, combined with a controversial health-care reorganization, public education reform and a woeful COVID-19 pandemic response, Bill 35 could end up as the straw that breaks the PC party’s electoral back.
Why Pallister is putting his government at risk remains a subject of great debate.
Some, such as the Consumers Coalition, have suggested Bill 35 is a Trojan horse designed to draw attention away from measures deep within the legislation that would significantly alter the debt-equity ratio for Hydro finances. This one change would require Hydro to be much more aggressive in paying off capital debt, which means much higher electricity rates for consumers.
Others believe Pallister is simply trying to hide good news about Hydro’s financial prospects.
Since elected premier in 2016, Pallister has argued the NDP’s handling of Manitoba Hydro (in particular mismanagement of the Bipole III and Keeyask construction projects) was the worst political scandal in the province’s history.
If Hydro finances are not nearly as bad as he has made them out to be, that narrative loses its political punch.
Either way, this is a pretty gross example of a group of lawmakers breaking the law, then using deception to cover their tracks.
How far would he go to protect this line of attack? Earlier this year, it was revealed the Pallister government deliberately concealed the details of $5 billion in export contracts with Saskatchewan that significantly improves the utility’s revenue picture over the next 30 years.
The PUB has a lot of options to deal with Hydro’s contempt for the regulatory process, but not a lot of time. Bill 35 will, in all likelihood, be passed by the legislature this fall, ending its ability to make any demands on Hydro.
Its passage will be the final act in a long con, years in the making, that will lock Hydro financial information away from any public scrutiny.
It should be noted: to be successful, every long con needs a sucker, a naive and unsuspecting victim ripe for the picking. In case you haven’t figured it out, the suckers in this con are Hydro ratepayers.
Well played, Mr. Premier.
Born and raised in and around Toronto, Dan Lett came to Winnipeg in 1986, less than a year out of journalism school with a lifelong dream to be a newspaper reporter.