Who do you trust: PUB or the NDP?

Hey there, time traveller!
This article was published 02/08/2011 (5420 days ago), so information in it may no longer be current.

As the October provincial election looms large on the horizon, it’s quite clear that Manitoba Hydro and the location for a proposed transmission line has become a significant factor in the race.

Among the various bills and flyers that found their way into Manitoba mailboxes last week was an election advertisement from the NDP attacking Progressive Conservative Leader Hugh McFadyen over the Bipole III project.

In large letters, next to a black and white photo of the PC leader, the New Democrats proclaimed that “Hugh McFadyen isn’t telling the truth about the Bipole — and he knows it.” Of the various claims made by the ad, the NDP states as “fact” that the project will not cost taxpayers “a single cent,” and that McFadyen is making numbers up.

This is hardly new. For months now, the two political parties have been haggling over differing sets of cost estimates for the project, a debate that has only added to the confusion of whether to build the project on the shorter and ultimately cheaper east side of Manitoba, or the west side as the province prefers, in order to preserve the east’s pristine boreal forest.

Since last October, government critics have estimated the cost of Bipole III to be as high as $4.1 billion, though Manitoba Hydro’s latest cost estimate for the construction of Bipole III on the west side was tallied at $3.28 billion as of last April.

The Tories maintain that hydro customers in Manitoba will pay more in power costs over the long terms as a direct result of the Bipole III project.

“It is clear from Hydro’s own internal documents — the longer west side route is less reliable, wastes power, costs more, and has no environmental benefit,” McFadyen said in a party media release. “Those extra costs will fall straight on the bills of Manitoba families. Manitoba Hydro is already in front of the Public Utilities Board asking for rate increases, and that will only continue with the west side route. (Premier) Greg Selinger needs to understand that Manitoba families don’t need a burden of $11,748 for no reason.”

In May, Selinger announced that Manitoba Hydro signed agreements for a 250-megawatt sale of electricity to Minnesota Power and a 100-MW sale to Wisconsin Public Service. The announcement, combined with a previously completed 125 MW sale to Northern States Power, total 475 megawatts, with an estimated value of $4 billion. These deals, he said, would essentially pay for the construction of Bipole III, paid for by Manitoba Hydro’s U.S. customers, not Manitoba ratepayers.

Thus the NDP seeks to paint McFadyen as a liar. Yet in spite of all the cash they’re pumping into negative ad campaigns, they’re having a difficult time doing so, especially as the PUB shares McFadyen’s concerns.

Just last week, the PUB published its decision to reject Manitoba Hydro’s request for a 0.9 per cent rate increase. And in that same release, the board warned that consumers could face soaring electricity rates over the next 20 years to subsidize the power company’s export sales.

Hydro faces rising construction costs on three new generating stations and a new transmission line, when export prices are falling, the board said.

“The board fears that (Manitoba Hydro) has both understated the costs of its preferred development plan and overstated future export sale revenue,” the board wrote.

As the Winnipeg Free Press reported last week, the government may make the curious decision to sideline the PUB regarding formal approval for Hydro’s construction plans, with Selinger promising a thorough review of Hydro’s future.

This comes at a time when Manitoba Hydro has refused to allow the PUB to view its export contracts and failed to provide an updated financial forecast to the regulator.

It comes down to which entity is more trustworthy on this issue: The PUB, which not only regulates the industry but has been trying to keep Manitoba Hydro honest, or the long-in-the-tooth New Democrats, who have been desperately slinging all the mud they can at Hugh McFadyen and the Progressive Conservatives to stay in power.