Manitoba Hydro accused of mismanagement
Last Updated: Friday, October 16, 2009 | 6:50 PM CT
CBC News
The headquarters of Manitoba Hydro are in a new downtown Winnipeg office tower. (CBC)A whistleblower's complaint against Manitoba Hydro alleges the Crown corporation is miscalculating how much power it can generate and sell, and the province could face significant blackouts in the future.
CBC News has learned about details of the complaint, which accuses the utility of taking too many risks with the province's power supply. It also contains allegations of mismanagement that has cost Hydro more than $1 billion.
The complaint was filed with the province in 2008 and is being investigated by the office of provincial auditor general Carol Bellringer.
It suggests CEO Bob Brennan was told that future financial forecasts are incorrect. The complaint says Brennan was supplied with evidence of that but he ignored it.
But Brennan rejected the accusations in an interview with CBC Manitoba's I-Team.
"You know, it's really hard to say something about a blackout. If we had a blackout, it would be something like a major transmission line going down. It wouldn't be because of our forecasting," he said.
He said he welcomes the auditor general's investigation.
The whistleblower who filed the complaint was an outside consultant who had worked for Hydro for several years but is no longer working for the utility, Brennan added. The person was let go last fall.
"We certainly didn't like the result of what the consultant said. As a matter of fact, we thought — some of our people thought — it was flawed. But regardless, we took the issue seriously," Brennan said.
Instead of speaking to the consultant about the allegations, Brennan hired a different firm to review the findings, he said. The I-Team has learned the second firm did not get access to the report from the first consultant or even ask for any of the information.
Utilities board seeks information
The province's Public Utilities Board has demanded Hydro provide information so it can check its financial numbers. A deadline has already passed without the information being provided.
Brennan has said Hydro plans to provide the information but it needs to put it in context. Hydro spokesman Glenn Schneider said the utility has had ongoing disagreements with the PUB about how much the board should be allowed to see.
The leader of the Opposition Progressive Conservative Party in Manitoba is concerned about Hydro's lack of transparency.
Hugh McFadyen has been asking questions about Hydro for months because he has concerns about the electric utility's reliability of service and potential rate increases. Throughout September, there were several power outages in the Winnipeg area.
McFadyen said the PUB should have access to Hydro's internal information.
"The fact that Hydro has promised these documents — has been ordered to provide the analysis — and has so far disregarded those commitments and those orders, is a major red flag for us and should be a major red flag for Manitobans," McFadyen said.
"When we're talking about things like the potential insolvency of an important public asset like hydro, when we've got the potential for blackouts and power disruptions, these are issues that will impact Manitobans very directly and very negatively."
Conflict of interest alleged
McFadyen is also concerned about how fair an investigation by the auditor general will be.
Bellringer was on Hydro's board of directors and chaired its audit committee in 2004 and 2005, examining data immediately after the period when the whistleblower report alleges that mismanagement, combined with a drought, led to the loss of more than $400 million.
"While I respect Carol Bellringer immensely, I think she has to be mindful that Manitobans are going to need an assurance that there's no even perception of conflict in a situation as serious as this," McFadyen said.
"If there is a perception of conflict, the investigation should be handled by an impartial, out-of-province auditor," he said.
Hydro's Brennan feels there is no conflict, saying, "She's a very credible person. She wouldn't have known about any of this stuff at that point. This is all management."
Bellringer responded to questions by the I-Team via email, saying she feels there is no conflict.
"I have indeed seen the risk reports that management produced each year and am somewhat familiar with some of the related issues," she wrote. But says she will ask the Public Accounts Committee of the legislature for its opinion on Wednesday.
