The Selinger government "tied the hands" of the Public Utilities Board in the board's decision this week to approve Manitoba Hydro's estimated $6.5-billion Keeyask generating station, the Opposition Tories say.
"The PUB is in a very difficult position mainly because of the position the government has put them in," Progressive Conservative Hydro critic Ralph Eichler said Friday. "They tied the hands of what they really can and cannot do."
Eichler said that's because Hydro, with the government's blessing, had already spent $1.4 billion on the Keeyask dam prior to the PUB's examining the need for the Nelson River dam.
The PUB said in a report released earlier this week recommending cancelling the dam would put Manitoba ratepayers on the hook for that loss.
"There are realities of the Keeyask project over which the panel had no influence," the PUB said in its report.
The PUB panel also said there were compelling economic and social reasons to proceed with Keeyask five years before Manitobans require the power in 2024. Hydro is building the dam in partnership with four northern First Nations, and when it's up and running by 2019 its electricity will be sold to American utilities. Manitoba Hydro says it expects to see $6.9 billion in contract revenue.
Besides approving Keeyask, the board also approved a new transmission line to Minnesota, a line Hydro says it needs to export more power and to import power when required, such as during a drought.
The PUB also said not another dime should be spend by Hydro or the province on Conawapa, a second proposed dam. The PUB said Hydro did not make a business case for the need for Conawapa, although Hydro has said it does not need a decision on Conawapa for four years.
The PUB made a total of 16 recommendations NDP Hydro Minister Stan Struthers said he will honour, including freezing spending on pre-construction work on Conawapa until Hydro can firm up more export deals with American utilities.
Eichler also said the PUB was correct to find Hydro is in an inherent conflict of promoting energy efficiency while at the same time building new dams and transmission lines to sell power.
The PUB said energy-efficiency programs, administered through a new, independent entity, should be treated equally as power generation, be it hydro, wind, solar or something else.
"The ratepayers of Manitoba own Manitoba Hydro," Eichler said. "We need to look at the best deal, whether it be wind energy, dam energy, solar-powered energy. We need to be sure that that's the best investment for Manitobans when we look at any of the increased projects and the revenue returns."
The PUB also said Hydro has to go beyond what it is already doing to contain internal costs as way to minimize future rate increases. Hydro has already signalled it will need annual rate increases of almost four per cent over the next 20 years to pay for Keeyask, the new U.S. transmission line, the already-approved Bipole III transmission to run down the west side of the province from northern Manitoba to Winnipeg, and to replace or fix some of its older infrastructure, such as replacing older wooden hydro poles throughout the province.