The long awaited review of Manitoba Hydro’s Bipole III transmission and Keeyask generating megaprojects was released on Friday, February 26, 2021.
The report clearly lays blame for the projects cost overruns on interference from the former NDP government. The initial cost rose from $9.7 billion to $13.4 billion
The review conducted by former Saskatchewan premier Brad Wall contains 85 findings and 69 recommendations that addresses a variety of issues.
The report also provided recommendations regarding Manitoba Hydro’s future and the relationship it has with the Government of Manitoba and the Public Utilities Board (PUB).
The report indicates that the government of the day believed that hydroelectricity is “Manitoba’s oil” and was a source for economic development driven by exports. The Keeyask project was “more about electricity export development than domestic need.”
Using the western route for the Bipole III project added $400 million to the project. Some evidence suggested that had the project used the eastern route up to $1 billion in additional cost may have been avoided.
“Government action to constrain the regulatory and approval processes – drove the projects to approval and construction start dates on inflexible timelines and with incomplete analysis.” stated the commission in a release.
The report also found that once the projects were approved the government did not exercise any identifiable oversight nor consider the financial impacts on the province.
A number of key findings include the relationship Manitoba Hydro should have with the provincial government. The report suggests that as the largest commercial player in the Manitoba public sector it should have the same type of relationship as a major line department. “This would include a regular reporting relationship between the company, the Minister responsible, the Crown Corporations Secretariat and its Minister as well as the Legislative Assembly through the appropriate standing committee,” the report indicated.
Going forward hydro should focus on its core functions and wind down divisions that are counterproductive to its core mandate. The report suggests that an integrated resource plan should be developed with involvement from the PUB.
Even though the projects were not needed when construction began the report indicates that both projects will be used to provide power to the southern grid and will have value in the future.
“The recent events in Texas underscore how important a reliable electrical infrastructure is. Manitobans are fortunate to have Manitoba Hydro and the provincial electrical system.” Wall said. “These projects will deliver new generation to the southern grid and in time there will be value. However, they were not needed when approved and have significantly eroded Manitoba Hydro’s financial health. Further deterioration related to the projects has been mitigated in subsequent years by active and effective management.”
After the release of the report Crown Services Minister Jeff Wharton released a statement praising the review and slamming the former NDP government.
“This economic review demonstrates the former government sought to actively dismiss and ignore concerns regarding the need for the Keeyask generating station and the routing of the Bipole III transmission line. The review also confirms the former government directly interfered to ensure that these projects would conform to their preferences, rather than economic considerations and the clear recommendations of utility and environmental experts. In addition, the review finds that, once the projects were underway, proper government oversight was not in place, which allowed project costs to escalate by billions of dollars with no recourse,” the statement read.
Wharton said that the government will be reviewing the findings and recommendations the report.
The cost of the report on Bipole III and Keeyask was just under $1 million. It was originally budgeted at $1.8 million.
© News4.ca 2021
