The Black Rod

The origin of the Usher of the Black Rod goes back to early fourteenth century England . Today, with no royal duties to perform, the Usher knocks on the doors of the House of Commons with the Black Rod at the start of Parliament to summon the members. The rod is a symbol for the authority of debate in the upper house. We of The Black Rod have since 2005, adopted the symbol to knock some sense and the right questions into the heads of Legislators, pundits, and other opinion makers.

Location: Winnipeg, Manitoba, Canada

We are citizen journalists in Winnipeg. When not breaking exclusive stories, we analyze news coverage by the mainstream media and highlight bias, ignorance, incompetence, flawed logic, missed angles and, where warranted, good work. We serve as the only overall news monitors in the province of Manitoba. We do the same with politicians (who require even more monitoring.) EMAIL:

Monday, November 30, 2009

Climategate melts the credibility of the Winnipeg Free Press

How should a newspaper play the biggest story of the year?

Once upon a time that was a no-brainer. Page One was the only answer possible.

Today is not that time.

The no-brainers who work at the Winnipeg Free Press have decided that the biggest story of the year should be run on the second-last page of the third section of the Saturday paper.

Reporting news, it seems, is not part of the job description of today's "professional journalists."

"Stolen e-mails suggest scientists rigged climate data." blares the headline.
"Revelation challenges accuracy of computer-modelling research" declares the sub-head.

It seems a computer hacker has posted on the Internet hundreds of e-mails and internal "research" documents from England's Climate Research Unit (CRU). The story they tell is comparable in impact to the exposure of the Pentagon Papers in the Nixon years.

"The e-mail exchanges, between a group of powerful, life-minded scientists based in Britain and the U.S., written over the past 13 years, suggest they may have rigged their data, suppressed contrary information and conspired to control what should be an independent peer review process surrounding the publication of their scientific papers." wrote Richard Foot for Canwest News Service.

Oh, is that all?

You mean that the "settled science" that proves mankind is responsible for the global warming that's going to destroy the world is bogus? And that the skeptics who have been villified for the past decade are vindicated?

Frank J. Tipler is Professor of Mathematical Physics at Tulane University, and one of the skeptics.

"The now non-secret data prove what many of us had only strongly suspected - that most of the evidence of global warming was simply made up. That is, not only are the global warming computer models unreliable, the experimental data upon which these models are built are also unreliable. As Lord Monckton has emphasized.... this deliberate destruction of data and the making up of data out of whole cloth is the real crime - the real story of Climategate."

"It is an act of treason against science. It is also an act of treason against humanity, since it has been used to justify an attempt to destroy the world economy."

Noooooo, say the defenders of the lies.

John Bennett, executive director of the Sierra Club of Canada, said the emails have been "taken out of context" and the scientists were speaking in their own "high-level code" that cannot be understood by mere mortals. The emails were written "in the heat of the moment," declared Phil Jones, director of the CRU, and surely you don't think they represent what the scientists really thought.

You mean like when they discuss inventing data that doesn't exist and destroying data that does exist.

Or when they talk about the best way to damage the reputations of scientists who disagree with them.

That sort of stuff, eh, Jonesy?

Climategate broke ten days ago.
On the Internet.
It's been the burning topic on websites for a week and a half.

Yet the mainstream media has barely mentioned it. CBC hasn't yet.

Can you ask for greater proof of the gulf between events in the real world and the manipulated coverage that passes as news in the mainstream media? Who do you trust to bring you the news first---your daily "news"paper or your favorite blogger *?

We can't say it better than Alan, a poster on the CBC-watch website

Next to being inaccurate and unreliable, the worst thing that can happen to any news outlet, large or small, is to become irrelevant?
News Rehab

The Winnipeg Free Press is three for three.

* The best and most comprehensive coverage of Climategate has been by Kate McMillan at, such as todays entry

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Wednesday, November 25, 2009

Bellringer forced to bail on investigating Hydro whistleblower complaint

Yer Out...

Less than 48 hours after The Black Rod exposed Carol Bellringer's cozy ongoing relationship with the Manitoba Hydro board of directors, she was headed for the showers in shame.

For months Auditor General Bellringer had insisted that the fact she had been a recent member of Hydro's board didn't mean she couldn't conduct an independent unbiased review of a whistleblower's complaint involving allegations of Hydro mismanagement.

Everything changed Sunday when The Black Rod revealed that Bellringer has been sending a representative to every single Hydro board meeting to take notes and report back to her on what is said.

This previously unreported unbroken connection between Bellringer and Hydro means that she has been getting one-sided reports into the whistleblower's complaint of mismanagement (at the time Bellringer was one of the managers) for months, if not years, before the whistleblower complaint wound up on her desk.


On Monday, the axe dropped. (Our Legislature mole told us.) On Tuesday the news release was released.

"A disclosure made under the Public Interest Disclosure (Whistleblower) Protection Act had been forwarded by the ombudsman to the auditor general to be dealt with in accordance with the Auditor General Act.

"Carol Bellringer, the auditor general, has advised the whistleblower that, due to the sensitivity associated with addressing that disclosure, it has been returned to Irene Hamilton, the ombudsman. Hamilton has agreed to follow up the disclosure as originally filed under the Public Interest Disclosure (Whistleblower) Protection Act."

The auditor general "then bolted out the door for the day without answering any questions from reporters", according to Kevin Engstrom of the Winnipeg Sun.

That's not like her.

Up to Monday Bellringer has been vocal and aggressive in clinging to control of the whistleblower's complaint.

She shrugged off calls by the Opposition to recuse herself. She ignored editorials pointing out her conflict of interest. She dodged the attention of the press at a Hydro accountability committee meeting one week ago.

But when The Black Rod reported the news the mainstream media missed at that meeting, she walked her last mile with the Whistleblower brief:

· The revelation of the previously unknown communications channel from Manitoba Hydro to their former board member who is conducting an investigation of a whistleblower's complaint about Manitoba Hydro.

* A declaration by the Opposition that they rejected in advance the government-ordered expedited special audit because of the Auditor General's obvious conflict of interest.

* The committee's vote to reject Hydro's annual reports, spelling trouble for the NDP in the coming session of the Legislature.

Bellringer may have fallen on her sword to save unelected Premier Greg Selinger from further pain in having to defend the indefensible, but the damage she's done lives on.

She managed to waste nine months sitting on the whistleblower's complaint without interviewing a single person. The complaint was filed with the Ombudsman last December who turned it over to the Auditor General in March, which means in almost one year, absolutely nothing has been done with it.

The so-called watchdogs of the public interest have managed to make a complete farce of the Act designed to encourage whistleblowers to come forward.

- Ombudsman Irene Hamilton has to accept partial responsibility herself.

The act reads:

20(2) An investigation is to be conducted as informally and expeditiously as possible.

Nobody can claim with a straight face that this first test of the Act has been conducted "expeditiously."

Hamilton must act immediately to minimize the damage done by Bellringer to the process.

She must assign the investigation of the whistleblower's complaint forthwith to somebody with the expertise to understand the complaint.

Forget the fanciful politicians' advice of hiring some outside retired auditor general. We don't have the time for a layman to master the learning curve of the world of generating hydroelectricity.

The most obvious investigator-designate is the Public Utilities Board, which knows this stuff inside and out. And for more than a year now they've demanded Hydro supply them with inside risk studies, and Hydro has thumbed its nose at them. What poetic justice to assign the examination of the whistleblower's complaint to the PUB.

But Hamilton's job has grown since the complaint was first slipped to her.

She must broaden her enforcement of the Public Disclosure Act to include an investigation into breaches of the whistleblower's identity by Hydro CEO Bob Brennan.

The Act reads:
Purpose of this Act
The purpose of this Act is
(a) to facilitate the disclosure and investigation of significant and serious matters in or relating to the public service, that are potentially unlawful, dangerous to the public or injurious to the public interest; and
(b) to protect persons who make those disclosures.

5(2) The procedures established under subsection (1) must include procedures
(d) for protecting the identity of persons involved in the disclosure process...

Brennan has done everything he could do to identify the consultant who filed the complaint until there isn't a person at Hydro who doesn't know who it is. This must be censured, if only to send a message to furture employers.

And Hamilton must investigate the reign of intimidation Brennan imposed on all employees who might be friends with the whistleblower. This, too, cannot be condoned. To assume these employees would now file a complaint against Brennan is ludicrous. They must be sheltered under the umbrella of the legal protection provided the whistleblower.

- At the same time Rosann Wowchuk, the minister in charge of Hydro, must be stripped of her responsibility. She has proven an egregious lack the judgement.

Wowchuk defended Bellringer's independence at every turn, right up to the legislative committee meeting last Tuesday which produced the damning information that forced Bellringer to step away from the Whistleblower's complaint. She's obviously a good soldier for the NDP, someone who can be trusted to toe the party line regardless of the truth and the facts.

She's exactly the person the public cannot trust.

- And let's not forget unelected Premier Greg Selinger who held the Hydro portfolio for the first eight months the consultant's complaint languished, first in the Ombudsman's office and then in the Auditor General's listless hands. He had the responsibility to ensure the complaint was dealt with "as expeditiously as possible", and he failed.

He must apologize to the citizens of Manitoba.

Wait up, Carol. There's obviously plenty of shame to go around.

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Monday, November 23, 2009

The easy-to-understand Risk Analysis that Manitoba Hydro doesn't want you to see---ours.

You don't need an advanced degree in Economics to understand why people are worried about Manitoba Hydro's finances.

All you need is a bank book.

Two years ago the Public Utilities Board looked at Hydro's multi-multi-billion dollar plans for expansion and it made them antsy. From what they could see, Hydro was taking risks worthy of high rollers at Monte Carlo. Maybe there was something they didn't know, so they asked Hydro to produce the risk analyses behind the expansion plans.

"Sure, sucker," replied Hydro.

So far they've managed to keep the PUB in the dark for another 14 months and counting, knowing that the government minister in charge of Hydro (and the current unelected Premier) Greg Selinger wasn't going to support the public watchdog over the NDP's milk cow.

What Hydro CEO Bob Brennan didn't plan on was the news that one of the consultants he hired to look at the risks, and who he thought he had muzzled, would be so concerned about what she discovered that she would become a whistleblower and make Hydro's high-risk expansion a topic of public debate.

Here's where you should get your bank book.

The way Hydro runs its operations is no different that the way you run your household. They just have more money to play with.

You work hard and save your money in the bank. When you have enough, you buy a GIC, a Guaranteed Investment Certificate. Your money is locked in for, say, 5 years and you collect interest that's higher than the bank pays on regular deposits. You use the money to help with the bills, buy stuff, or to build up your savings.

Hydro does the same thing. Thanks to hydro developments completed in the 1970's, we produce more power than we need in the province. We sign contracts with American power companies to sell them our surplus power at top dollar. The money we earn is used to keep our rates down.

See how simple that was.

But there will be a time when we will need that power and we won't have power to sell to the U.S. Hydro, therefore, is planning on playing the futures market.

They want to borrow (billions) to buy more GIC's (build three dams and a power line) to keep that interest (profits) coming in.

They've signed contracts with American customers who want our electricity; but it's the price that's got the PUB worried. Hydro promises the new GIC's will pay terrific rates which will pay off the loans and return big profits at the same time. The PUB is worried Hydro is promising Bernie Madoff rates but will wind up in line at the Steinbach Credit Union.

Then there's that 800 pound gorilla in the corner. For you, it's called Unemployment.

If you lose your job, you can't cash in your GIC's because they're locked in. So you borrow and hope you find a job before you need to go on welfare to cover the bills.

For Hydro, it's called Drought.

An average drought lasting an average 5 years will technically bankrupt the utility---the debt will be more than the utility is worth.

Hydro has been socking away money in a Scrooge McDuck-sized piggy bank to cover the cost of that average drought, but nobody knows how much we'll have to pay the Americans to keep up our end of the contracts we've signed.

If we can't produce the power they've bought, we have either to buy the contract out or buy the power somewhere else at whatever price its selling for and deliver it to the U.S. at the price we accepted.

That's the risk Hydro doesn't want anyone to know.

That's when Hydro goes on their own Welfare, which is another word for Y-O-U.

Now let's look at the specifics.

Hydro is currently building the Wuskwatim dam to provide power to Northern States Power starting in 2015.

Wuskwatim will be at least two years late getting into service, reducing the years of profit from 5 to 3. The PUB, in its 2008 report, said even then the dam was barely at a break even point. Two years of growing costs later, and with the Canadian dollar nowhere near the mid-80's U.S. that Hydro banked on, it's looking more and more that we're building a dam to provide subsidized power to the U.S.

The Wuskwatim dam is the last one we can build with the existing infrastructure. To build the other two dams on the books, we need a new power line---Bipole III.

The line has to be up and working in 2017 because we're committed to supplying power to Wisconsin Public Service in 2018. Hydro still has to hold two rounds of public consultations, then launch a 3 l/2 year crash construction schedule.

Only it gets worse.

* We also have to complete the Keeyask dam in 2017 as well to provide the power for Wisconsin. So we'll be building the pipeline and the dam at the same time on an extremely short margin of error.

* In 2020, only two years after Keeyask dam comes into service, our 15-year contract with Minnesota Power goes into effect.

* And Hydro has pencilled in 2022 as the in-service date for the Mother of All Manitoba Dams, the $5 billion Conawapa project to pick up the slack as the previous dams reduce the power they have for export because of the growing local demand for electricity.

Oh, and Bipole III will only carry Manitoba power to the U.S. border.

The Americans have to build their own power line to link up with it and distribute the electricity to their customers. Their line will cost at least $1 billion. And you can bet that if they are investing $1 billion, they are going to insist they get power into that line, Manitoba drought or no drought. They are in the business of business, not charity.

If there's a drought sometime during this tight construction period---all bets are off.

Now you see why Hydro is hiding its risk analyses.

Sunday, November 22, 2009

Exposed: Manitoba Auditor Carol Bellringer's secret link to Manitoba Hydro's board

There are zero degrees of separation between the board of Manitoba Hydro and the allegedly independent office of the Manitoba Auditor General.

Auditor General Carol Bellringer sends a representative to each and every Hydro board meeting to take notes and report back to her what is said.

Hydro chairman Vic Schroeder dropped this bombshell at last week's legislative committee meeting discussing, among other things, the refusal by Hydro Minister Rosann Wowchuk to acknowledge Bellringer is in a conflict of interest if she conducts an audit into a whistleblower complaint of mismanagement by Hydro.

Bellringer sat on the board of Hydro immediately prior to being appointed Auditor General---and during the time the whistleblower was working for Hydro--- and she admits herself there is at least the perception of a conflict of interest. But Schroeder's revelation undercuts Bellringer's claim that she can use safeguards to overcome any perceived bias in her work.

The previously unreported unbroken connection between Bellringer and Hydro means that she has been getting one-sided reports into the whistleblower's complaint of mismanagement (at the time Bellringer was one of the managers) for months, if not years, before the whistleblower complaint wound up on her desk.

And it goes a long way towards explaining why Bellringer has sat on the complaint for nine months, doing exactly nothing about it even though she's legally bound by the NDP's vaunted Whistleblower Act to investigate such complaints.

Even prior to Schroeder's explosive admission, Opposition leader Hugh McFadyen served notice that
"the credibility of the audit is now damaged beyond repair as a result of the lack of independence of the Auditor..."

McFadyen presented a letter Bellringer "wrote to somebody who had asked for an audit into Hydro, and in her reply dated August 14th, 2008 ... said, and I quote:
Prior to my appointment as Auditor General in July 2006, I was a member of the Manitoba Hydro board of directors and thus, neither I, nor my staff, are in a position to follow up on your request as independent auditors."

"So I wonder," McFadyen asked," how, in August of 2008, that Auditor General is not independent, but now, in the highly politicized environment we're in today, suddenly that same Auditor General and her staff are suddenly, magically, independent?"

Wowchuk's reponse?

Ms. Wowchuk:
Mr. Chairman, we had the Auditor General at Public Accounts here when the members opposite had the opportunity to ask the Auditor General about this very situation and she indicated that she had sought out advice and been given advice based on the time that she was on the Hydro board and at the time these allegations are made, that she was not in a conflict.

Wowchuk acknowledged she has no communication with Bellringer, which means that any "advice" the auditor general allegedly received is secret and known only to the Auditor General.

She told the Public Accounts committee she "had discussions" with the Institute of Chartered Accountants of Manitoba. T
he Institute of Chartered Accounts hasn't released to the public any letters providing Bellringer with loopholes to their conflict of interest regulations. So by what authority does Bellringer now claim to be cleansed of the perception of bias?

Wowchuk, the alleged watchdog of the watchdog, doesn't care.

The Opposition wasn't buying it. Having grown some backbone, they refused to pass acceptance of Manitoba Hydro's annual reports for the past 3 years, serving notice to unelected Premier Greg Selinger there's big trouble brewing just ahead of the coming mini-session of the Legislature.

* The revelation of a previously unknown communications channel from Manitoba Hydro to their former board member who is conducting an investigation of a whistleblower's complaint about Manitoba Hydro.

* A declaration by the Opposition that they reject the special audit in advance because of conflict of interest by the person doing the audit, the provincial Auditor General.

* A vote to reject Hydro's annual reports.

And not a word of this reported in the mainstream media.

Winnipeg Free Press reporter Mary Agnes Welch, who refuses to report details of the former consultant's complaint provided in an unpublished letter to the newspaper, did give Hydro another opportunity to slander the whistleblower.

Hydro boss attacks whistleblower's credibility
By: Mary Agnes Welch
18/11/2009 1:00 AM
The whistleblower who raised red flags about blackouts and bankruptcy was a "disgruntled consultant" who refused to take direction and whose allegations could never be substantiated, Manitoba Hydro boss Bob Brennan said Tuesday night.

Welch concluded with her personal shot at the consultant whose identify is protected by the Whistleblower's Act.

"The whistleblower, who has so far refused to allow her name to be published, has said she repeatedly offered to detail her findings and was rebuffed."

We wait for the Winnipeg Free Press reports on
"The rape victim, who has so far refused to allow her name to be published, has said..."

If MSM reporters had bothered to listen to the answers provided at the Nov. 17 meeting of the Standing Committee on Crown Corporations
( )
they would have learned how much Manitoba Hydro CEO confirmed specifics of the formal complaint filed by the ex-consultant we've named Miss Whistle.

Miss Whistle:
"The multi-year drought analysis on this “future generation” build, including in-service dates, and contract dates, showed exposure to the Province of $7BN. Obviously, this is more than the retained earnings, and under any definition, would wipe out the entire “solvency” of the Utility."

Bob Brennan, Manitoba Hydro
"I think in the current IFF we're looking at, I think the amount of a drought that was the same as a period of '89, '90, '91-in that period, five year-period, if the drought was the same amount as that, I think it would cost us 2.4 billion or something. So that'd wipe out our equity. "

Miss Whistle
"...what was uncovered was there were “systemic and massive” computer system flaws - with obsolete computers maintaining the calculations. Massive system errors and inadequate mathematics were found in the power calculation of “blackouts” or reliability conditions - which could lead to faulty results in keeping the lights on.

Bob Brennan (ducking the question)
Mr. Brennan: First of all, I think the report said that we have old computers. Well, I don't think that's the problem. We're talking about software systems that are continually under review.

Miss Whistle
If it was learned, that the safety methods for keeping the lights on were programmed only by 1 or 2 persons (with source code and changes known only to them), on an outdated computer which hasn’t been changed since the 80’s, I think you too would be worried.

Bob Brennan (feigning ignorance to Manitoba Liberal Party leader Jon Gerrard)
Mr. Gerrard: Now, is it true that there are only one or two of your employees who know the programming or the source code for the software which controls the power grid?
Mr. Brennan: Not to my knowledge.
Mr. Gerrard: Approximately, how many people would-in the Manitoba Hydro - would know the source code?
Mr. Brennan: Oh, I really don't know the answer to that at all, but we have a lot of people working on computer operations; they'd be in the hundreds. But, you know, as a relation to that one specific system and there's knowledgeable-but, we could-I'm sure we could always have more people with knowledge in all kinds of areas. Like, we have some jobs at Manitoba Hydro where the individuals are known internationally as being people with a real knowledge. Well, some of those people are really, really hard to replace. But we will get to find out about all that. But I don't know the answer to it.

Miss Whistle
"The ICF consultants were told not to look at the computers."

Bob Brennan
" we decided to hire ICF and we took the two major issues and said, these are the ones that are, you know, really, really serious; take a look at those and see whether, what your opinion is on those."

The transcript also proves how much Free Press Mary Agnes Welch interjected her personal opinion into her story.

Mary Agnes Welch
"She also recommended that Hydro buy millions of dollars of software from a company in which she had a stake."

Bob Brennan
"The contractor also recommended the purchase of some software and the contractor had some solution for us to consider."

- For 14 months and counting, Manitoba Hydro has managed to keep the Public Utilities Board, which allegedly has the power to oversee Hydro operations, at bay, deflecting all requests for Hydro's internal risk analysis into their $14 billion plans for new dams and power lines.

- They thought they had succeeded in stifling the risk consultant who raised big problems with their proposed plans, only to learn she had taken her concerns to the government under the Whistleblower Act.

- Their former colleague Carol Bellringer has managed to delay the required investigation of those concerns for 9 months while Hydro engages in a compaign of slander against the consultant and intimidation against anyone thinking of coming forward to support her.

But the transcript of the Crown Corporations Committee suggests that Hydro's well of goodwill has run dry.

Brennan tried to defend his colleague Carol Bellringer, a proud chartered accountant, and the new bunch of CA's Hydro has hired to churn out a report they can use to deflect criticism. He found out the usual razzle dazzle doesn't work anymore.

Mr. Brennan:
Excuse me. I think I have to defend chartered accountants. Chartered accountants are a credible organization, full of ethics, and I have every confidence in the world that KPMG is credible.

Mr. McFadyen:
I have a lot of respect for KPMG as well. I know certainly Arthur Andersen was a great audit firm as well, and they were paid handsomely by Enron to produce the results that they were looking for.

Some Honourable Members:
Oh, oh

Next: The easy-to-understand Risk Analysis that Manitoba Hydro doesn't want you to see---ours.

Monday, November 16, 2009

Hydro's own drought calculations prove whistleblowers' tune on-key

It was July 26, 2007 when Manitoba Hydro dropped the bombshell on the Public Utilities Board.

The drought of 2003-2004 had traumatized Hydro. It knocked the stuffing out of Hydro's finances-more damage in a single year than anyone ever imagined. The utility ramped up computer simulations to show the board what the cost would be of a multi-year drought like, say, the five that have happened since 1929.

It wasn't a pretty picture.

A five year drought would cost Manitoba Hydro $2.7 billion.

A seven-year drought would cost $3.5 billion.

The numbers may be gi-normous, but that's not what made the PUB blanche. It was the graphs.

A five year drought (starting in 2008 for demonstration purposes) would increase the debt-to-equity position of Hydro to 95-5. That's like making Manitoba Hydro a penny stock.

Ask the Aspers what that did for Canwest Global shares, if you can catch them between meetings with their bankruptcy lawyers.

Oh, and a seven year drought would wipe out all of Hydro's equity

Given the high stakes, the PUB has become obsessed with drought. At first glance, that might seem unwarranted.

A five-year drought is expected once in 50 years, and the last one was only 18 years ago, 1987-91.

A seven year drought is one in 100 year phenomenon and the last was 1936-42.

But…a drought like the one that ravaged Hydro in 2003-2004 happens once ever 15 years---and another one is expected in the coming decade.

The PUB is worried that Hydro's management is not taking enough precautions. A special concern is Hydro's $18 billion plan for new dams to supply American customers.

Here's how the PUB raised the issue in a recent order:

"The 2003-04 drought demonstrated that MH's generally "aggressive" approach to export energy marketing, while conducive to higher profits in median or above flow scenarios, carries the risk of increased losses during drought or low flow years. MH has acknowledged this risk, but believes its present strategy (that is, depending on median water flows) provides greater longer-term financial returns. The Board is not so certain and would prefer an independent assessment be conducted and filed."

The PUB cited one example of how this "aggressive" approach to selling power to the U.S. backfired on Manitoba customers. Hydro sold power it didn't have, then had to be bailed out by a rise in rates.

"Some of MH's exports involve three to four month advance sales of firm energy, without the certainty that the firm energy sold will be available (i.e., precipitation may not replenish water resources). Such practices lead to reasonable results in the absence of poor water conditions, but significant cost consequences when water flows fall and imports have to be purchased to fulfill contract obligations.
This situation occurred in the summer of 2006/07 and, in the Board's view, contributed to MH's request for a 2.25% interim rate increase (granted initially as an interim increase and finalized by Order 90/08)."

There's a pattern of mismanaging water resources, according to the PUB's examples. In the '03-'04 drought, Manitoba Hydro exacerbated the losses by selling off power at cheap prices, then buying it back at a higher cost to meet obligations to American customers.

"MH cannot prevent droughts from occurring, but, arguably, could do more than was done in 2003/04 to mitigate the consequences of a multi-year drought. In 2003/04, energy from water held in reserves was sold at low prices (off-peak pricing) to boost that year's annual income, only for the energy to be required to be "bought back" from the MISO market to meet MH's export commitments, and then at much higher prices than what the energy was sold for."

And the PUB warns that power shortages (the kind that lead to power brownouts) are a possibility if Hydro's dam building suffers any unpredicted delays.

"10.4 New Generation and Transmission
MH is proceeding with the Wuskwatim Generating Station with a targeted in-service date of 2012/13. An Agreement has been reached with WPLP for purchase of all output, estimated to be 1,515 GW.h on average. This arrangement is expected to provide a 1,220 GW.h increase in MH's dependable power (4%).

Bipole III is slated to be in-service in 2017/18, and is expected to add 442 GW.h/yr to MH's dependable generation, this by reducing transmission losses on the HVDC system. The loss reduction could be 1,000 GW.h under average flow conditions, based on the existing Upper Nelson generation plant.

MH's 2007/08 Power Resource Plan indicates that by 2017/18 total generation plant output under a dependable flow scenario will be 28,845 GW.h, equal to base domestic load. At that point, and until Conawapa and Keeyask G.S. are constructed, exports would have be supplied from domestic load reductions, through DSM (demand side management) and by imports or MH natural gas generation."


"In the absence of Keeyask, MH's dependable domestically generated energy of, then forecast to be, about 30,000 GW.h would just cover forecast 2022/23 base domestic load. In such a case meeting the new export commitments would require further domestic load reductions through DSM savings and additional imports or MH natural gas generation.

If either space heating conversions from natural gas to electricity occurred or new large industry or large industry expansion drew power, the situation would be more problematic."

Bankruptcy? Impossible.
Brownouts and blackouts? Impossible.

Oh yeah?


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Sunday, November 15, 2009

Explosive details of Manitoba Hydro mismanagement that are being ignored by

Here it is--- the Manitoba Hydro whistleblower's letter to the editor that the Winnipeg Free Press refuses to publish.

Among the explosive details in the letter:

* Hydro is using obsolete computers, computers more than 20 years out of date, to make the sensitive and timely decisions necessary to prevent blackouts.

* The source codes for the complex calculations that Hydro depends on to keep the lights burning are known only to one or two programmers, a fact that would horrify our American customers.

* Manitoba Hydro has hidden $7 billion in potential future losses from the Public Utilities Board.

* Bi-Pole III is so crucial to to Hydro's future plans that even a slight delay in getting it built threatens a catastrophic shortage of power. Hydro is hiding information from the PUB that shows rates would skyrocket if we have to build new gas turbines to make up for the power deficit.

* Hydro got the result it wanted from consultants hired to examine the whistleblower's complaint by telling them what NOT to look at.

The Free Press received the letter Nov. 10. A CBC I-Team report referred to the letter, but gave no details. The letter was posted on the CBC's website. This is the letter in full (with minor corrections in spelling, removal of unnecessary commas and clarification of dropped words in the earlier draft.)

Dear Editor
There have been some who think that the notion of bankruptcy and blackouts is incredulous for a Utility like Hydro.

In response, I would like to point out some facts. Even though Hydro is a Crown Corporation the word “bailouts” does not interchange with “bankruptcy” unless you are following the US model of companies like AIG.

To be specific, the risk reports that were sent to the CEO looked at the numbing $18BN spend out and proposed new debt as the Utility embarks on an ambitious spending spree, which includes sizable export contracts to the US. The multi-year drought analysis on this “future generation” build, including in-service dates, and contract dates, showed exposure to the Province of $7BN.

Obviously, this is more than the retained earnings, and under any definition, would wipe out the entire “solvency” of the Utility.

This $7BN was great cause for concern, and no responsible risk assessment would conclude that the public health of the company was fine. Subsequent consultants hired
to supposedly “look at the problems” were specifically given a scope that they not look at any of the new generation build out, Conawapa, or bi-pole III!

The risk number of $7BN was also being “withheld” from the PUB. The CFO also agreed and signed off on the number.

It was being replaced with a rubber-stamp consultant's report, whose analysis blatantly omitted any look at the bi-pole III and exposure to the Province of the future generation system. (see Page 21 of the publicly disclosed summary)

It did not include Government “bailouts” as a word to replace “bankruptcy”.

The comments about “blackouts” being impossible are also not based on fact.

To keep the lights on in the Province, Hydro’s computers rely on a complex formulae, which operates not just the reservoirs like Lake Winnipeg and Cedar Lake, but of course looks at the import tie-lines from the US, and Hydro’s ability to the run expensive gas units.

While it may be shocking to learn these problems exist, what was uncovered was there were “systemic and massive” computer system flaws - with obsolete computers
maintaining the calculations. Massive system errors and inadequate mathematics were found in the power calculation of “blackouts” or reliability conditions - which could lead to faulty results in keeping the lights on.

This could be seen as the equivalent of using rotary phones in the age of wifi and Bluetooth technology.

Manitoba Hydro now operates in US deregulation and the Midwest ISO. The rules of the game have changed. If it was learned, that the safety methods for keeping the lights on were programmed only by 1 or 2 persons (with source code and changes known only to them), on an outdated computer which hasn’t been changed since the 80’s, I think you too would be worried.

The ICF consultants were told not to look at the computers.
Don’t be too quick to assume the seriousness of the problem. In California ISO, no-one thought these things were possible - till they happened. (The California Independent System Operator is their non-profit counterpart to Manitoba Hydro....ed.)

Further, the Province, needs new generation like Wuskwatim, as quickly as possible to maintain enough energy to meet domestic demands (in other words to keep the lights on).

Beyond 2018 the shortage of generation in the Province is so extreme, that the new bipole III is in essence a “lifeline” to the Province.

Without it - you can’t stay afloat. That line, is not just a political talking point, it is an absolute necessity to keep the lights on in the Province. So who cares if it’s built west side or east side?

Without it - the lights cannot stay on in a multi-year drought.

You will face blackouts. So build it now, and build it quickly.

The risk analysis, shows catastrophic consequence, even from “slight delays” to bi-pole III going in service. Any setbacks, or any problems, would simply mean there is not enough generation to meet demand.

Just one delay in having that line come into the service is also of catastrophic risk to the Province.

In addition, the shortage of generation is so severe, that if the Export Power Marketing contracts (these US contracts being a huge contributor to Provincial risk and the bankruptcy problem) aren’t signed, the Province will need to go against its carbon friendly mantra and expedite the building of new gas turbines - dirty-old polluting thermal units - just to keep the lights on. These would have to be scheduled for 2019.
(Say bye-bye to low rates!)

These are facts. This information was also not being sent to the Public Utilities Board. The Province will need to build, potentially, new gas turbines to keep the lights on and rates would sky-rocket!

Even in 2011 and 2012 there are resource problems and a multi-year drought would threaten keeping the lights on---the same issue the PUB was raising.

Problems had accumulated in hundreds of pages of well-documented reports over 3-4 years. The CFO even paid me a bonus in Jan 2008 for my hard work and contribution!
During the fall of 2008, when I uncovered the computer-system errors in blackouts, I was so worried, I emailed the CEO directly.

The “Hydraulic Computer Report” which would have itemized line-by-line errors in massive computer system failures, which could cause the lights to go out, was sabotaged 24 hours after the CEO was notified that such problems exist.

The report was midway.

Computer failures of other exorbitant magnitude have also contributed to the billion dollars losses and the misforecasting of blackouts. Financial forecasts being incorrect also impact the Nisichawayasihk Cree Nation and profit sharing. I was told not to put any more in writing.

I realize now that what the Crown Corporation of Manitoba Hydro wants is just a “rubber stamp” consultant who will echo the publicity statements.

And I am proud to have been fired for having the courage to stand up for the truth and not just “yes” management to cover up such serious problems.

Contrary to the comments from the CEO, if I cared about money, I would have just “yessed” management to keep my job - but instead, ethics and integrity was more important. That’s called honesty ... not greed.

And that’s what WhistleBlower Protection laws are for…

Very sincerely,
A very ethical risk consultant in NY

The next legislative committee hearing on Hydro is this Tuesday.

- Will the somnambulent Opposition demand answers from Hydro CEO Bob Brennan?

- Will the Government members continue to cover for the Auditor General who has kept the whistleblower's complaint under wraps for eight months while claiming she's not in a conflict of interest just because she sat on the Hydro board of directors for two years with her pal Bob Brennan?

- Will the MLA's demand Auditor Carol Bellringer be removed for wasting a month doing absolutely nothing despite being ordered in October to prepare within, 3 or 4 months, a speedy special audit of the whistleblower's complaint?

- Will the Winnipeg Free Press give Brennan yet another free ride in its editorial pages to slander the person who is supposed to be protected under the government's own Whistleblower Act?

- Will the MSM finally start to examine the explosive specifics of the inside information provided to the alleged watchdogs of Hydro? Or is that too much to ask of professional journalists?

More Hydro tomorrow...

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Thursday, November 12, 2009

Manitoba Hydro watchdogs sleep as the Whistleblower Act degenerates into farce

Manitoba Hydro has launched a campaign of intimidation to undermine the official investigation of a whistleblower's complaint of gross mismanagement.

Employees have been told that they will be fired for the slightest contact with the whistleblower no matter how personal and non-work related it may be. One Christmas card and there goes your pension. Phone and computer records have been searched to send a message---the all-seeing eye of Big Brother is watching everything you do.

And CEO Bob Brennan has sent letters to news media referring to the whistleblower as "a disgruntled consultant" in a further assault on her character and her credibility.

So much for the innocent public face of Hydro with which Brennan proclaimed that he welcomed the investigation and would cooperate fully.

The threats come as the Auditor General was informed that she will have to speak with current Hydro employees to confirm details of Hydro's operations now that Hydro has managed to stifle any examination of the complaints for more than a year.

Not that it matters to Auditor Carol Bellringer.

Three weeks after being ordered to do a speeded-up special audit into the Hydro complaint, she has done exactly doodly-squat. Zippo. She hasn't looked at a single page of information. Her performance can be summed up in three words---told ya so.

This, the first test of the government's vaunted The Public Interest Disclosure (Whistleblower Protection) Act, is degenerating into farce.

* The Hydro whistleblower's complaint officially reached Bellringer's desk 7 l/2 months ago. Before that it sat on the Ombudsman's desk for three months. And Brennan has been aware of the details for 14 months.

Bellringer told the CBC, as an excuse for her blatant inaction, that the act governing her office doesn't set time limits for investigations.

She can take as long as she wants.

And apparently she's doing her level best to stall the investigation to benefit her former colleague on the board of Manitoba Hydro, Bob Brennan.

* Brennan, a graduate of the Mussolini School of Management, bragged to the CBC Tuesday that he hasn't received a single written complaint from anyone alleging intimidation. So, let's see... the intimidation campaign is so successful nobody dares to complain of being intimidated, and that 'proves' there was no intimidation in the first place. Of course, Il Duce.

* This isn't just a test of the Whistleblower Protection Act. It's a test of unelected Premier Greg Selinger. How will he take to respond to this open and direct challenge to the authority of the Legislature?

Brennan has done everything he can to breach the Act. He did his best to identify the whistleblower without actually naming her, despite the assurance of confidentiality in the Act.

He revealed the complainant was a woman; he revealed her job with Hydro, how long she worked there and the time she was fired.

And in a breach of the Privacy Act, he discussed how much she was paid.

He's begun to attack her character in private letters to reporters, and Hydro is threatening to fire anyone who calls her a friend. Even the Constitutional right to freedom of association must bow to Brennan's megalomania.

* The provincial Ombudsman must immediately launch an investigation into Hydro's heavy-handed threats. She can't wait for the intimidation to succeed. She is entrusted with enforcing the Whistleblower Protection Act, and a failure to take a stand now makes a laughing stock of the Protection from Reprisal provisions in the law.

* Roseann Wowchuk, the Minister in charge of Manitoba Hydro and Crown Corporations accountability, must remove Bob Brennan from any role in responding to the whistleblower's complaint. He has demonstrated he is less interested in cooperating with the government watchdogs than in counter-attacking his accuser. This, in itself, is a blatant breach of the spirit, if not the law, of the Act.

* And Selinger must publicly defend the Whistleblower Act. He must denounce Hydro's campaign to intimidate potential witnesses. He must offer the protection of the Premier's office to anyone with vital information about Hydro's operations and possible mismanagement.

And, above all, he must replace Bellringer, who not only reeks of conflict of interest but has proven herself incompetent in handling the public's interest under the Act.

* And will someone poke the official Opposition with a stick to see if you can detect any signs of life?

Opposition "leader" Hugh McFadyen contorted himself into obscene positions to pat himself on the back after the recent policy convention. He couldn't stop blathering what a fierce campaigner he had become.

Yet here's an issue involving Manitoba's largest company possibly losing a billion dollars amid threats of power brownouts and the response from the Conservatives has been a few squeaks at a committee meeting followed by a relapse into dumb silence.

Next: When Manitoba Hydro explained how it could go broke (with pictures).

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