Skip to main content

Manitoba Hydro whistleblower can say: "I told you so"

When it comes to Manitoba Hydro, the Public Utilities Board has set off more distress signals than the Titanic, with less response.

Hydro has been in the news all week after the PUB granted the utility a two percent rate hike effective April 1st. Hydro says it needs the money to forestall large losses as a result of the warm winter just past.

The mainstream media has parroted this excuse. Nobody has pointed out the strange coincidence that a rate hike denied Hydro just in January by the PUB was reinstated, with an extra 1 percent top up, exactly one day after the chairman of the oversight body retired and a new chairman, appointed by the NDP government, took his place.

If this means what it appears to mean, it's bad news all around for Manitoba ratepayers since the MSM seems unwilling or unable to report the facts about Hydro.

The Winnipeg Free Press is reporting on its front page today that Mayor Sam Katz bought season tickets to the Winnipeg Blue Bombers with $2033.00 in taxpayers' money.

But the news that Manitoba Hydro spent $1.6 billion to build a new generating station that's exporting power to the United States at less than a third of what it costs to produce only
made the bottom of an editorial on an inside page of Saturday's paper.

And that was reported in The Black Rod two weeks ago.

http://blackrod.blogspot.com/2012/03/sorry-state-of-manitobas-opposition.html

The PUB issued a report in January when denying the full rate hike that Hydro requested at the time, a report that contained a multitude of reasons why Hydro was scrambling for extra money -- a warm winter wasn't one of them.

"The Board is unable to approve the higher rate increases requested by MH because the Utility’s business plan is incomplete, lacks required detail and has not been tested through what has been promised as a “Needs For And Alternatives To” (NFAAT) review by an independent tribunal that will have full access to the economic and financial assumptions which underpin MH’s business plan."

In fact, said the PUB, Manitoba Hydro will have collected about $253 million more in the past five years than it expected to get. (That, you would think, would leave it with a healthy cushion for warm winter years like 2012, without a hike in rates.)

"MH’s financial position since the 2008 GRA is projected by MH to have improved by approximately $253 million for the fiscal years 2007/08 up to and including 2011/12. A major contribution to this improved financial position has been Board-approved rate increases which have generated over $788 million in accumulated additional revenue.

Since 2004/05, over $950 million in additional revenue has been realized by MH from Board-approved domestic rate increases (this represents over one-third of MH’s retained earnings)."


And

"The Board no longer considers IFF09-1 (Integrated Financial Forecast) as providing a ‘valid’ picture of MH’s financial position. If MH continues with its preferred development plans, the Board concludes ratepayers will undoubtedly pay higher future domestic rates than indicated in IFF09-1 or IFF10-2."

Here's some of what left the PUB concerned about Hydro's books:

* The addition of the new Wuskwatim generating station added $150 million a year to Manitoba Hydro's annual costs in interest and carrying charges on its $1.6 billion cost

* Hydro was spending $1 million to $2 million A DAY on prep work for its multi-multi-billion dollar construction plans over the coming decade "without having had its capital plans reviewed through an NFAAT (Need for, And Alternatives To) proceeding, and without the US transmission lines required to transmit MH’s electricity exports south of the border having been constructed or even been committed to, and without MH having obtained the required regulatory approvals in Canada."

* When (and if) Hydro builds its next planned generating plant to fulfill a contract with American buyers in 2016, that will add $500 million a year to the utility's annual costs, even though it, too, will likely send subsidized power to U.S. customers.

* Based on the restricted information on contracts with American buyers and economic trends it appears we'll be losing at least 3 cents a kilowatt hour on the power we'll be selling to them from the next two generating stations Hydro intends to build.

All these losses will have to be made up by rate increases on Manitoba customers. Manitoba ratepayers already pay twice as much for their power as we'll be selling Wuskwatim power to Minnesotans.

"...it is apparent that the export prices will not recover 100% of the costs incurred by MH to export that electricity. Therefore, it would fall to Manitoba’s domestic ratepayers to subsidize the export sales commitments made by MH." declared the PUB.

"Even though MH forecasts domestic rate increases in the ‘decade of investment’ that are in excess of expected inflation, it appears the projected rate increases are considerably too low to support the required subsidization."

"A significant aspect of the scope of MH’s General Rate Application was the review of MH’s risks and risk management. The Board has long requested MH to provide an indepth and independent study of MH’s risks (see Order 32/09). The study was to be a thorough and quantified risk analysis that included probabilities of all identified operational and business risks. Unfortunately, and disappointingly, MH failed to provide a comprehensive quantified risk analysis. Instead, MH unilaterally changed the terms of reference to instruct an external consultant to prepare a report, and opted for a legal strategy to try and rebut the findings of a former risk consultant previously retained by MH but subsequently terminated. However, even without the expected comprehensive risk analysis, the Board was able to gain a better understanding of the Utility’s risk.".

You can see that Manitoba Hydro continues to thumb its nose at the Public Utilities Board, knowing as it does that it has the complete support of Premier Greg Selinger, who, wouldn't you know it, just appointed a compliant new chairman.

The frightening mismanagement of Manitoba Hydro was foreshadowed by the former Hydro consultant who made a formal complaint to the Ombudsman's office under the NDP's vaunted Whistleblower Act.

The PUB refers to her as New York Consultant. We've nicknamed her Miss Whistle.

And by either name,
she was prominent in the January PUB report when the former chairman was still in charge, not that you would know it by reading the Winnipeg Free Press.

Legislature reporter Bruce Owen dismissed NYC in a blog post he made on January 18.

Does the PUB matter?
By: Bruce Owen
Posted: 01/18/2012 3:18 PM | Comments: 16 (including replies)

snip.

Over the past two years that scrutiny has included at my count three separate, independent reviews of Hydro and elements of its development plan, each looking at whether Hydro has all its ducks in a row. There were four reviews if you include a New York consultant who now, for the most part, has been written off as not credible.

Uh, Bruce. Maybe you should have read the PUB report before embarassing yourself.

It turns out that Manitoba Hydro spent $4 Million trying to discredit Miss Whistle, and the only person they convinced was Bruce Owen.

Here's how the Manitoba Public Utilities Board summed up her influence:

"NYC Allegations
The process of achieving an independent review of the NYC’s allegations was very
convoluted. The Board looks at this exercise as being largely unsatisfactory. However, it is somewhat disconcerting to find Risk Advisory, ICF and KPMG flagging potential areas of improvement for MH that in many cases mirrored areas that the NYC was critical of, and where in some instances the NYC accused MH of mismanagement. KPMG confirmed (on cross examination)that the NYC had not missed identifying any of the major risk issues faced by MH."

The PUB hired a couple of academics to assess Miss Whistle's allegations against Manitoba Hydro, but by their own account the meetings went badly.

She had, by then, come to distrust dealings with anybody from Manitoba after the Ombudsman ignored her complaint for months, then tried to pawn it off to the Auditor who got caught in a conflict-of-interest (by The Black Rod), then tried to shuffle it off to the PUB, which doesn't offer the same confidentiality protections as under the Whistleblower Act, then met with two men with little expertise in her field who were too interested in her company's proprietary information for her comfort.


The pair, identified by the Public Utilities Board as KM (Dr.Atif Kubursi and Dr. Lonnie Magee) said they were unable to confirm her specific allegations of mismanagement but:


" With respect to general issues of risk identified by NYC, areas for improvement were identified in detail in the KM report and elaborated on by KM in testimony.
Included in recommendations are subject areas of model governance, model
utility and relevance, model output and predicted accuracy, water flow analysis,
drought risk, and risk governance and management in the MH middle office."

Miss Whistle and the PUB have together raised a barrage of red flags over Manitoba Hydro's management and the risk to ratepayers.

The provincial government seems determined to overlook facts in favour of political interference based on ideology.

Popular posts from this blog

The unreported bombshell conspiracy evidence in the Trudeau/SNC-Lavelin scandal

Wow. No, double-wow. A game-changing bombshell lies buried in the supplementary evidence provided to the House of Commons Judiciary Committee by former Attorney General Jody Wilson-Raybould. It has gone virtually unreported since she submitted the material almost a week ago. As far as we can find, only one journalist-- Andrew Coyne, columnist for the National Post--- has even mentioned it and even then he badly missed what it meant, burying it in paragraph 10 of a 14 paragraph story. The gist of the greatest political scandal in modern Canadian history is well-known by now. It's bigger than Adscam, the revelation 15 years ago that prominent members of the Liberal Party of Canada and the party itself funneled tens of millions of dollars in kickbacks into their own pockets from federal spending in Quebec sponsoring ads promoting Canadian unity. That was just venal politicians and a crooked political party helping themselves to public money. The Trudeau-Snc-Lavalin scandal is

Manitoba Hydro is on its deathbed. There, we said it.

Manitoba Hydro is on its deathbed. Oh, you won't find anyone official to say it. Yet . Like relatives trying to appear cheery and optimistic around a loved one that's been diagnosed with terminal cancer, the people in power are in the first stage of grief -- denial. The prognosis for Hydro was delivered three weeks ago at hearings before the Public Utilities Board where the utility was seeking punishingly higher rates for customers in Manitoba. It took us this long to read through the hundred-plus pages of transcript, to decipher the coded language of the witnesses, to interpret what they were getting at, and, finally, to understand the terrible conclusion.  We couldn't believe it, just as, we're sure, you can't--- so we did it all again, to get a second opinion, so to speak.  Hydro conceded to the PUB that it undertook a massive expansion program--- involving three (it was once four) new dams and two new major powerlines (one in the United States)---whi

Crips and Bloodz true cultural anchors of Winnipeg's aboriginal gangs

(Bebo tribute page to Aaron Nabess on the right, his handgun-toting friend on the left) At least six murder victims in Winnipeg in the past year are linked to a network of thuglife, gangster rap-styled, mainly aboriginal street gangs calling themselves Crips and Bloods after the major black gangs of L.A. The Black Rod has been monitoring these gangs for several months ever since discovering memorial tributes to victim Josh Prince on numerous pages on Bebo.com, a social networking website like Myspace and Facebook. Josh Prince , a student of Kildonan East Collegiate, was stabbed to death the night of May 26 allegedly while breaking up a fight. His family said at the time he had once been associated with an unidentified gang, but had since broken away. But the devotion to Prince on sites like Watt Street Bloodz and Kingk Notorious Bloodz (King-K-BLOODZ4Life) shows that at the time of his death he was still accepted as one of their own. Our searches of Bebo have turned up another f

Nahanni Fontaine, the NDP's Christian-bashing, cop-smearing, other star candidate

As the vultures of the press circle over the wounded Liberal Party of Manitoba, one NDP star candidate must be laughing up her sleeve at how her extremist past has escaped the scrutiny of reporters and pundits. Parachuted into a safe NDP seat in Winnipeg's North End, she nonetheless feared a bruising campaign against a well-heeled Liberal opponent.  Ha ha.  Instead, the sleepy newspeeps have turned a blind eye to her years of vitriolic attacks on Christianity, white people, and police. * She's spent years  bashing Christianity  as the root cause of all the problems of native people in Canada. * She's called for  a boycott of white businesses . * And with her  Marxist research partner, she's  smeared city police as intransigent racists . Step up Nahanni Fontaine, running for election in St. John's riding as successor to the retiring Gord Macintosh. While her male counterpart in the NDP's galaxy of stars, Wab Kinew, has responded to the controversy over

Exposing the CBC/WFP double-team smear of a hero cop

Published since 2006 on territory ceded, released, surrendered and yielded up in 1871 to Her Majesty the Queen and successors forever. Exposing the CBC/FP double-team smear of a hero cop Some of the shoddiest journalism in recent times appeared this long August weekend when the CBC and Winnipeg Free Press doubled teamed on a blatant smear of a veteran city police officer. In the latest example of narrative journalism these media outlets spun stories with total disregard for facts that contradicted the central message of the reports which, simplified, is: police are bad and the system is covering up. Let's start with the story on the taxpayer funded CBC by Sarah Petz that can be summed up in the lead. "A February incident where an off-duty Winnipeg officer allegedly knocked a suspect unconscious wasn't reported to the province's police watchdog, and one criminologist says it shows how flawed oversight of law enforcement can be." There you have it. A policeman, not

Winnipeg needs a new police chief - ASAP

When did the magic die? A week ago the Winnipeg police department delivered the bad news---crime in the city is out of control. The picture painted by the numbers (for 2018) was appalling. Robberies up ten percent in  a single year.  (And that was the good news.) Property crimes were up almost 20 percent.  Total crime was 33 percent higher than the five year average. The measure of violent crime in Winnipeg had soared to a rating of 161.  Only four years earlier it stood at 116. That's a 38 percent deterioration in safety. How did it happen? How, when in 2015 the police and Winnipeg's police board announced they had discovered the magic solution to crime? "Smart Policing" they called it.    A team of crime analysts would pore through data to spot crime hot-spots and as soon as they identified a trend (car thefts, muggings, liquor store robberies) they could call in police resources to descend on the problem and nip it. The police