Hydro CEO needs to reckon with winds of change

Methinks Hydro CEO Allan Danroth protests too much.

At a recent hearing in front of the Public Utilities Board, Danroth suggested Hydro’s plan to build a $3-billion natural-gas-powered generating plant near Brandon was being subjected to unfair criticism. The gas turbines are meant to bolster Hydro’s grid in the event that drought lowers output from hydro-generating stations.

After hearing submissions from interveners concerned about the gas-turbine plan, Danroth lashed out at the “constant, uninformed criticism” that has not only shaken trust in Hydro but also triggered threatening responses from the public.

Danroth said Hydro is monitoring “eight credible threats” against employees, five of which targeted the CEO himself. Although Danroth cited some specific incidents — employees being threatened with guns, and one where a homeowner set his dogs on a meter reader — he refused to elaborate on the circumstances.

It is disconcerting to hear that any Hydro employee is being threatened for any reason.

However, is equally disconcerting for Danroth to suggest these threats were somehow triggered by criticisms of Hydro’s plan at the PUB, and to suggest the criticism is unfair or uninformed. Particularly when Hydro’s plan is tenuous at best.

A number of intervenors, led by the omnipresent Consumers Coalition, have argued Hydro has failed to make a compelling case for a gas-turbine generating plant. Specifically, interveners suggested Hydro overestimated the cost of alternatives — such as battery storage — and underestimated the cost of the gas turbines.

We know this was informed criticism because Hydro agreed to revise its calculations on both battery storage (less than Hydro initially suggested) and cost of the gas turbines (more than initial estimates). Although this technically weakens the argument for building a gas-powered generating plant, Hydro remains committed to the plan.

Still, these adjustments strongly suggest the criticism expressed at the PUB was fair and informed.

The bottom line: gas turbines are certainly one way to provide additional electrical capacity on peak-demand days. But it is not the only idea and — when you listen to what interveners have said — may not even be the best idea.

Unfortunately for those who are concerned that building a gas-powered plant is a bad for climate change, it appears that political motivation for this project will trump any concerns expressed by the PUB.

Premier Wab Kinew has touted the $3-billion plant as one of three major projects he believes will move the province to “have” status in the federation from its current “have not” status. In addition to the Brandon generating station, Kinew has promoted a major expansion of the Port of Churchill, which may involve a new pipeline from Alberta, and a series of Indigenous-owned wind farms the province hopes to have built by 2035.

Can these projects transform Manitoba’s economy?

The “have” argument, advanced by generations of Manitoba premiers, suggests that with careful development of public and private assets, Manitoba’s economy could grow to the point where it no longer needs equalization payments from Ottawa. This is the annual transfer federal tax dollars from bigger provinces with bigger economies — many benefiting from gratuitous oil and gas revenues — to smaller, petroleum-free provinces.

Leaders like Kinew may fret over the term “have not,” but accepting equalization is hardly the economic Scarlet Letter some would have us believe.

All three of Kinew’s projects could be framed as drivers of economic growth; years of construction activity associated with these projects will add to GDP growth. Still, once they are built, the boost to GDP largely disappears. Thus, these projects will not tilt the economic playing field towards “have.”

In that context, Kinew’s repeated insistence on mentioning the Brandon gas-turbine plant as an economic development project — rather than just a backup for our grid — is troubling given that it is, according to submissions before the PUB, arguably not the best way to make Manitoba more energy self-sufficient.

Danroth may not want to admit it, but Hydro has been a laggard in developing alternatives to hydro-electric generation. While surrounding jurisdictions have invested heavily in solar and wind, Manitoba has generally held back in favor of more traditional mega-projects such as gas turbines or hydro generating stations.

Consider that North Dakota, a state of identical topography and weather, and which produces enormous quantities of oil and gas, generates 4,500 megawatts of electricity from wind, which is 35 per cent of its total electricity demand.

Manitoba, on the other hand, currently generates slightly more than 250 megawatts from wind.

Manitoba Hydro’s traditional position is that we have abundant hydro-electricity, and that wind and solar are unreliable in peak demand days in the winter. However, quantum leaps in battery storage technology have been a game-changer in that debate, giving a cold-climate province like Manitoba the possibility of storing electricity from wind and solar power to be used on peak days.

Unfortunately, when interveners make those arguments at the PUB, Hydro continues to demonstrate that it’s not interested in alternatives to big-money gas and hydro-generating projects.

Danroth and his staff should be not subjected to threats of any kind.

On the other hand, it would be nice if the Hydro CEO didn’t wait until he was threatened to start looking at alternatives to gas-powered generation.

dan.lett@freepress.mb.ca