The big con: Manitoba Hydro-style, according to the Hydro Whistleblower
We know, at last, why Manitoba Hydro launched its balls-to-the-wall, take-no-prisoners assault on Miss Whistle, their former consultant who filed a Whistleblower complaint over Hydro mismanagement.
* said Manitobans were being overcharged
* said Hydro was deliberately overestimating the chance of a record drought in order to dupe the PUB into approving the higher-than-needed rates, and
*said Hydro could make more money with less risk without embarking on a decade-long spending orgy on new dams to fulfill long-term contracts to sell power to the U.S.
MS. ANITA SOUTHALL (PUB counsel):
11 ... There is -- there is the allegation by the
12 NYC that:
13 "Only one (1) to (2) select personnel
14 know the source code in HERMES, and
15 there is no documentation in the
16 system. It is known as a black box and
17 nobody knows what is going on in
19 Do you see those statements that I've
20 selected from the NYC public document assertion 232?
21 DR. ATIF KUBURSI: Yeah, I recognize she
22 made these things, but they're a contradiction because
23 she says two (2) people know, and then in the same
24 sentence says nobody knows.
Oooh. Snap! Nothing escapes an egghead economist, eh?
Then he acknowledged that NYC had raised a perfectly valid point.
DR. ATIF KUBURSI: But we -- we've argued
4 very strongly that we'd like documentation, formal
5 documentation of these models. That would be a good
6 idea. I mean, there is no question there is a tremendous
7 amount of knowledge. We've seen it demonstrated in every
8 model that we work with, and I'm sure you -- look, you
9 have Excel, you have Quattro, you have things. There is
10 always a very thick documentation that comes with it. It
11 would be nice, and this is something that's not beyond
12 the resources and the abilities at Manitoba Hydro to have
13 this formal documentation.
14 Maybe they are there, but we did not see
15 that formal, exactly commercial-like type of
16 documentation, what we call technical manuals, user
17 manuals. That would be great -- great help in one sense
18 or the other. Again, this goes to the institutional
19 memory. You would codify something that, if there is a
20 turnover or somebody goes, there is something codified,
21 formal exists there for others to use.
23 ask how many people know the source code of HERMES?
24 DR. ATIF KUBURSI: We argued too, and we
25 -- one (1) time I know we -- we got them all in one (1)
1 room, and everybody was, What on earth are you doing. I
2 said, I would like to really see the number of people who
3 are familiar with these models (Note, NOT how many know the source code...ed). And some of them have
4 worked on this model, went into another one. No, there
5 are people, and there is a good community. We want it to
6 be more formal, we want it to be more explicit, more
7 overt, and that they could work and learn from each
8 other. This is something that we have recommended.
9 MR. ROBERT MAYER: How many people were
10 in the room, Doctor?
11 DR. ATIF KUBURSI: Yeah, yeah. I don't
12 know. I didn't count heads, but I would say, you know --
13 how much would you say? Like twelve (12)?
14 DR. LONNIE MAGEE: I'd guess ten (10) or
15 twelve (12).
16 DR. ATIF KUBURSI: Yeah.
20 two (2).
In plain language, only about 10 of Hydro's 6000 employees, at best, knows anything at all about one of the three key modelling systems that keep the power flowing. And nobody has a manual on hand in case there's a problem and one of the fixers isn't available.
But the most egregious conclusions by Kuburskia and Magee involve NYC's concerns about the risks of long-term contracts to the U.S.
They scoffed at her suggestion that selling power at spot prices would be safer and more lucrative than locking in sales with long contracts.
DR. ATIF KUBURSI: We found that the
19 contract prices, the historic contract prices, with the
20 exception maybe of a year or two (2), 2007, maybe a
21 little bit at the edge of 2006, that the contract prices
22 were sufficiently higher than MISO opportunity prices.
11 .... I
12 mean, the claims of NYC was that Manitoba Hydro should
13 stop immediately any long-term contracts. That the terms
14 of the contracts, the prices that were negotiated are all
15 defective, they are far below what the spot prices were.
16 I mean, she was right on one (1) thing, in
17 2006/2007, the spot off-peak prices were really higher
18 than some of the con -- but in every other year if you
19 look at them in the whole sweep over the contract, the
20 average price of the contracts were higher than the spot
21 peak or off-peak prices for most of them.
22 So the -- the way the things came out is
23 that her recommendations and assessment of the long-term
24 contracts were a bit on the exaggerated side. And her
25 recommendations were, to some extent, a -- a bit farreaching. They're not reasonable. I mean, completely
2 stop any long-term contracts, cut out all the long-term
JUST THE BIGGEST STOCK MARKET COLLAPSE SINCE THE GREAT DEPRESSION.