Manitoba’s New Democratic Party government appears set to announce a review of one of the most significant decisions facing our province’s future — hydro development.
The issue isn’t as sexy as provincial politicians getting free Jets tickets or a federal politician expensing a $16 glass of orange juice, but it’s an absolutely critical issue; one that ratepayers province-wide should care about as the cost is about $16,667 per person.
The hydro development in question involves the construction of two new dams and a massive new power line totalling $20 billion — the most expensive project in Manitoba’s history.
If something goes wrong, it could have huge financial ramifications for the average ratepayer in Manitoba.
That is why it is great news that NDP cabinet minister Dave Chomiak let it slip that the government is going to conduct a review of the $20 billion plan before proceeding.
Previous comments by Chomiak just months earlier suggested the government was set to plow ahead with the plan despite some recent events that made the proposal much more risky.
Make no mistake, hydro development has typically been thought of as a good thing for Manitoba and up until a few years ago, many thought the NDP’s plan, for the most part, made sense.
Develop a ton of electricity and sell a good portion of it to the Americans to help keep Manitoba’s rates low — what could go wrong?
Well, the United States has seen a dramatic increase in natural gas reserves over the last five years and new techniques for extracting the material have emerged.
Consider that the American Gas Association notes that natural gas supplies have increased by 85 per cent since 1990.
What this means is natural gas-powered electricity plants can now produce electricity to compete with Manitoba’s low-cost hydro electricity. Put simply, the American customers Hydro was relying on for sales might decide to buy natural gas-generated electricity instead.
This turn of events would even have “Field of Dreams” movie star Kevin Costner asking — if the province builds it, will they come?
To understand the impact on Manitobans if U.S. customers don’t buy our power, consider what happened in Ontario.
Ontario’s former utility, Ontario Hydro, racked up a staggering amount of debt; almost $10,000 per person by 1999. As the crown corporation’s debt costs were spiraling out of control, all three provincial political parties agreed changes needed to be made.
Part of what unfolded from the situation was a new debt retirement charge that ratepayers province-wide have to pay on each and every bill.
Closer to home, the Public Utilities Board, Manitoba’s watchdog for hydro rate decisions, has also expressed concern about Hydro’s plan. They’ve noted future Hydro revenue estimates from U.S. power sales are now down $3.2 billion from where they originally thought they would be.
One thing is certain; the NDP’s signal for a review is welcome news. Hopefully they recognize this issue has immense ramifications on our province’s future and appoint a truly independent committee to examine the matter. The committee should review Hydro’s plan, share pertinent information with the public, solicit input and make sound advice.
Urge your MLA to push for such a “power smart” process.
» Colin Craig is the Manitoba director of the Canadian Taxpayer Federation, the country’s leading non-partisan citizens’ advocacy group fighting for lower taxes, less waste and acountable goverment.
Republished from the Brandon Sun print edition July 21, 2012