Stefanson’s push to reduce Hydro oversight likely fuelled by silence

Why would Premier Heather Stefanson forge ahead with plans to dramatically reduce the frequency and scope of regulatory oversight for Manitoba Hydro rates in the face of mounting opposition? The explanation may come from the last two paragraphs of a story that appeared in Wednesday’s Free Press.

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Hey there, time traveller!
This article was published 01/06/2022 (298 days ago), so information in it may no longer be current.

Why would Premier Heather Stefanson forge ahead with plans to dramatically reduce the frequency and scope of regulatory oversight for Manitoba Hydro rates in the face of mounting opposition? The explanation may come from the last two paragraphs of a story that appeared in Wednesday’s Free Press.

The story focused on a campaign launched by the Manitoba Energy Justice Coalition — a diverse group with a pronounced emphasis on environmental issues — to stop Bill 36. The coalition is just the latest voice to join a broad and powerful constituency of opponents that believe Bill 36 is dangerous: consumer advocates, anti-poverty groups, large industrial power users and First Nations lobbies.

And yet, despite all the concern that’s been expressed, Stefanson pushes forward with the bill. Why she insists on doing this is a point of great debate both inside and outside the Progressive Conservative government.

Largely thanks to former premier Brian Pallister, the Tories have been enveloped by an irrational fixation with Manitoba Hydro. In particular, the Tories contend the former NDP government mismanaged the construction of the Keeyask generating station and Bipole III transmission line, adding billions to the Crown utility’s debt.

However, although the Tories claim Bill 36 is the antidote to NDP mismanagement, there is very little in the draft law that addresses those concerns. In fact, by reducing the role of the PUB and increasing the influence of the provincial cabinet, this bill could do more to destabilize Manitoba Hydro than the NDP ever did.

More importantly, why would Stefanson pursue a bill that no one outside government thinks is a good idea? That question brings us to the last two paragraphs of the story in Wednesday’s Free Press.

The story described efforts of the Manitoba Energy Justice Coalition to urge people concerned about Bill 36 to speak up. To date, that hasn’t happened in a broad, grassroots kind of way.

The Free Press reported that when the Progressive Conservative government attempted with Bill 64 to eliminate school divisions and trustees, a tidal wave of opposition ensued. As the story noted, when that bill was sent to committee, more than 500 people and organizations registered to make presentations.

That kind of response, along with anecdotal feedback Tory MLAs were getting back in their constituencies, convinced Stefanson to withdraw the bill once she became premier last fall.

Now, compare that to the reaction the government is facing over Bill 36. As of Monday, only five delegations were registered to speak on the bill.

There is no way to get around the fact Bill 36 has not moved Manitobans the way Bill 64 did. That’s too bad because, in so many ways, Bill 36 is potentially more impactful and dangerous than anything proposed in Bill 64.

Bill 36 limits both the frequency and scope of PUB hearings. More importantly, it would impose new debt-reduction targets that interveners at the PUB have argued would trigger years of higher-than-necessary rate increases.

The targets in the bill — referred to as debt-to-equity ratios — are much more aggressive than anything Hydro has been forced to contend with in the past. When Hydro floated the possibility of tweaking the ratios by lowering the amount of debt allowable, interveners and subject matter experts in utility finances convinced the PUB they were largely unnecessary and inappropriate for a Crown-owned monopoly.

Upset the PUB turned thumbs down on these more aggressive debt-reduction targets, the Tory government has decided to take the regulator out of the picture.

That, along with allowing cabinet to set hydro rates by decree, make this one of the most cynical and potentially harmful initiatives ever undertaken by the PC government. And, as the authors of a botched hospital reorganization and one of the worst pandemic responses in the country, that is saying something.

The Energy Justice Coalition is operating on the belief that, if they can spark a groundswell of opposition, the government will blink. Based on the experience with Bill 64, they are not wrong. Even so, it’s unclear that Manitobans care that much about the Tory meddling with Hydro rates.

That is odd given that Hydro has been a potent political issue for many years now.

During the Doer-Selinger years, the NDP thrived by alleging the Tories would (if re-elected) privatize Manitoba Hydro and leave Manitobans vulnerable to the same market forces that led to skyrocketing electricity prices in Ontario and other provinces.

The Tories have never even mused about privatizing Hydro. But based on a decision by the Progressive Conservative government in the 1990s to privatize the former Manitoba Telephone System (now Bell MTS), the Hydro allegation always seemed to find some traction in the heat of an election campaign.

You would think that, after an experience like that, a PC government would be cautious about messing with Hydro rate-setting and regulatory oversight. As of yet, there’s been no evidence to suggest Stefanson sees any risk.

The premier seems content to hold course until some sort of unambiguous proof about Bill 36’s lack of popularity rears its head. Of course, if she has misjudged the level of concern about this bill, she won’t realize it until the fall of 2023, when the next general election is scheduled.

And by then, it will be too late.

Dan Lett

Dan Lett

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.

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