EDITORIAL: Keeping Manitoba Hydro publicly owned is important

Hey there, time traveller!
This article was published 11/02/2024 (453 days ago), so information in it may no longer be current.

A Manitoba Hydro plan to reach out to the private sector to build and operate new hydro generation projects in the province was not exactly greeted as welcome news by the NDP government.

Last week Manitoba Hydro CEO Jay Grewal outlined the plan which would address the requirement for more electricity generation by the end of the decade.

But Finance Minister Adrien Sala indicted the NDP was not in favour of the plan.

“There’s no question that we need to find ways of building new capacity here in Manitoba, and we do have energy needs that need to be met, but our position is that the new generation should be publicly owned,” he told the Winnipeg Free Press.

This position attracted criticism from the PC party, who it’s worth noting spent more than a decade denying NDP accusations that they were planning to privatize Manitoba Hydro completely.

Grant Jackson, PC shadow minister for Manitoba Hydro called it “NDP interference with Manitoba Hydro” and criticized NDP “ideology” for their rationale.

He pointed to Hydro’s already large debt burden, much of which is due to mismanagement of Bipole III and Keeyask.

The NDP government of the time ordered Manitoba Hydro to divert Bipole III down a much longer route rather than the preferred plan along the east side of Lake Winnipeg.

That debt load is something to be concerned about.

Right now according to Manitoba Hydro, 33 cents of every dollar charged on a hydro bill goes to interest payments on the debt.

Acquiring even more debt is not something Manitoba Hydro wants to do.

Other PC party members have expressed their criticism of the NDP as well.

Some have suggested it makes no difference to Manitobans where Manitoba Hydro gets their power, be it from private companies or publicly funded projects.

This won’t be the first time Manitoba Hydro will involve the private sector.

The Pattern Energy Group-owned 138 megawatt St Joseph wind farm in Montcalm was commissioned in 2011 at a cost of $345 million. Manitoba Hydro has a 27-year purchase agreement with the utility.

Algonquin Power and Utilities Corp. owns the $241 million St Leon wind farm in the RM of Lorne and Pembina, producing 120 megawatts since 2006. A 25-year purchase agreement is in place for that project.

Both of those projects were done under an NDP government.

Because these are private entities however, Manitobans do not know the details of the purchase agreements. Simply put, we don’t know if we’re getting value for our money.

Sala is not wrong when he says it’s important to keep our electricity utility public.

A publicly owned company does not need to make a profit, but only must break-even.

Electricity rates will remain lower under a well-managed publicly funded system.

But the fact is that utility has not always been well managed. Government interference has hobbled them in the past.

It’s true that there’s no business case for taking on still more debt for large projects.

If the debt load increases, credit will begin to cost more, and even more of Manitobans’ Hydro bills will go toward interest payments.

But interest rates are high for everyone. If a private company invests in a major project, they will need to turn a profit. That means paying for their debt they’ll need in order to build the facility, plus covering their annual costs and enriching their shareholders.

In the end Manitoba electricity users will pay the price, no matter what.

So what can be done?

If Sala and the NDP agree that working with private companies is not the answer they will have to reach into Manitobans’ wallets in order to fund these projects up front.

This will simply transfer the debt to Manitoba taxpayers.

While using independent power generators is something that should be considered, it must also fit into a larger plan.

Manitobans do not want to wake up one day and realize they are now hostage to a private power company which rewards shareholders but cares not for the people of this province.

A plan must be developed, but neither the NDP rejection of private partnerships with no alternatives nor the PC’s giddy support of all things private seem to be the right solution.