Hey there, time traveller!
This article was published 20/6/2011 (2256 days ago), so information in it may no longer be current.
Recently, an exchange at an evening meeting of a legislative standing committee focused on assessments by Hydro and the provincial Conservatives of the cost to Manitobans of the longer west-side route for Bipole III -- Manitoba Hydro's $13.68 vs. the Progressive Conservative's $11,000.
The bases for these two estimates are quite different, and the numbers are not directly comparable. This is political theatre at its best.
Conservative leader Hugh McFadyen appears to take an earlier Hydro estimate of the total cost of the west-side line and spreads it among all Manitoba families. Hydro president Bob Brennan takes the additional cost of the west-side line over the east-side line, and spreads it among customers over a 60-year period.
In January, I appeared at the Public Utilities Board for the Bipole III Coalition. I asked Manitoba Hydro to provide updated numbers for capital costs, losses, and reliability benefits for east-side and west-side routes. We would then have a set of numbers that reflected the changes in the additional cost of the west-side route. Hydro, responding in a letter, said "Manitoba Hydro has reviewed these questions, and notes that the intent of the questions posed appears to be a consideration of the merits of the alternative routes for Bipole III, down either the east side of Lake Winnipeg or west of Lake Winnipeg." It noted it "has no current information on a hypothetical east-side route."
It is interesting that Brennan has made a simplistic calculation on his own of the decreased east-side (line cost only), which forms the basis of his calculations.
The coalition estimated the additional cost of the west-side route using Hydro's 2008 submission to PUB, but with updated values from leaked Hydro documents. Including project construction costs, sales lost due to extra line losses, and costs related to the compromised reliability of the west-side route, the coalition calculated the west-side route's additional cost to be $1 billion, more than twice Brennan's estimate.
Consider the effect on hydro rates. The Consumers Association of Canada calculates the lower cost east-side route (which includes interest, depreciation, operating, maintenance and administration, losses and reliability) would be $60 million, equivalent to a 3.5 per cent decrease in 2018/19 rates using the 2008 project cost estimate of $2.2 billion; the 2009 cost estimate of $3.9 billion would result in an $80-million decrease, or 4.8 per cent. Hydro's annual projection is for a 3.5 per cent increase each year through to 2020/21.
The PUB has spent 10 months, six months of hearings trying to decide if Hydro requires a 2.9 per cent increase for 2011/12. What the government has forced on Hydro customers needs to be brought to the attention of the public.
Retired vice-president, business development, Manitoba Hydro