Sparks fly over Hydro CEO firing Tory critic calls timing ‘suspicious’; board chair defends decision-making process By: Danielle Da Silva Posted: 6:28 PM CST Thursday, Feb. 22, 2024 Last Modified: 11:52 AM CST Friday, Feb. 23, 2024 Updates

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The board that oversees Manitoba’s largest Crown corporation was accused of underhanded tactics Thursday in the sudden firing of its longtime chief executive officer this month.

Under intense questioning from Progressive Conservative finance critic Obby Khan at a legislative committee meeting, Manitoba Hydro chairman Ben Graham insisted the decision to fire Jay Grewal was made following a months-long executive leadership assessment, which is in line with best practices in board governance.

“The board came in and after discussing the next steps of where we need to go, delivering on the (government’s) mandate letter, we felt that fresh perspective was required,” Graham told legislators and Hydro executives gathered to discuss the utility’s 2022-23 annual report.

Graham was appointed chairman on Dec. 4 as part of an overhaul of the board of directors by the NDP government, which included a new mandate to the board. In one of his first actions as chair, Graham let Grewal go on Feb. 13, citing the need for change. Grewal had been CEO for five years.

Questions about her dismissal dominated the nearly four-hour meeting, which at times became combative, as the Opposition PCs tried to characterize Grewal’s firing as political.

Graham countered that the decision to let Grewal go followed very strong, confidential discussions by the new board regarding the leadership team.

He confirmed Grewal was assessed against the mandate letter issued by the NDP government for her ability to deliver on its priorities.

The government did not mandate the board to conduct a leadership review, he said.

“To see a change in leadership after a new board is appointed is nothing new. It’s happened many times before and it will happen many times in the future,” Graham said.

Khan questioned the timing of the CEO’s departure, which was two weeks after a public disagreement with Finance Minister Adrien Sala over the involvement of the private sector in building new electricity generating infrastructure.

Khan repeatedly described the dismissal as suspicious, stating the board ought to have conducted a formal performance review before firing Grewal.

He argued the former CEO’s work on the utility’s first integrated resource plan and its long-term corporate strategy demonstrated she was moving the utility in a positive direction.

“It’s clear that there is suspicious behaviour here and that there is reason for concern,” Khan said. “It’s very concerning. Manitobans need to be concerned of what’s happening on that side, and they need to be concerned with the minister’s direction on where we want to take this Crown corporation.”

Graham called the timing of Grewal’s dismissal coincidental and rejected the characterization of the board’s actions as suspicious. He declined to disclose the value of Grewal’s severance package, though a ball park figure will be publicized as part of routine compensation reporting.

“It is our duty to make sure that the right executive team is there to deliver on the mandate letter that was given to the board,” Graham said.

Exactly how the executive team will deliver on the mandate to the board is still up for discussion, said interim Hydro CEO Hal Turner, who made his first appearance in front of legislators on Thursday.

The NDP government has mandated the board to deliver a net-zero energy grid by 2035, develop a plan to freeze electricity rates for one year, and ensure Hydro’s executives are people who “will never privatize” the Crown corporation.

The mandate was delivered as Hydro confronts a raft of issues: its approximately $24-billion debt, drought conditions that have resulted in a forecast $190-million loss for the corporation this year and rapidly increasing demand for clean energy — forecasts suggest Manitoba must bring new generating infrastructure on line as soon as 2029 or 2030.

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Turner said the corporation has not made any decisions about new generating infrastructure, be that new hydro-electric dams, wind farms or even natural gas plants. The utility continues to look at increasing the capacity of the existing grid, demand-side management options and export contracts as they expire, some as soon as next year, he said.

The corporation is waiting on the NDP government to complete its energy policy, which will inform how the utility moves forward with the integrated resource plan.

“We’re looking forward to working with the board and doing the work that’s required to make those decisions,” said Turner, who has been with Hydro since 1995, most recently as vice-president of asset planning and delivery.

“There is a lot of work to do, there’s a number of options we need to explore with our new board, and we’re looking forward to doing that work with them and finding that right path forward for Manitoba.”

Speaking to reporters after the meeting, Sala said it is important for the corporation to look at all available options — including private-sector involvement — when evaluating how to increase energy capacity and a decision will be made at that time.

“We take meeting our energy needs very seriously, plans are in development, we look forward to bringing those forward when we’re able”–Finance Minister Adrien Sala

However, the government wants the infrastructure to be publicly owned, he said.

“We take meeting our energy needs very seriously, plans are in development, we look forward to bringing those forward when we’re able,” Sala said.

He declined to commit his government to a timeline for releasing its energy policy.

“It’s a big priority, so it’s something that Manitobans can expect we’re focused on right now.”

The lack of plan to guide Hydro development is worrisome, Khan said.

“When you have no plan, they’re just shooting from the hip, and that’s going to result in some catastrophic damage for this province,” Khan said.

danielle.dasilva@freepress.mb.ca