A special audit of Manitoba Hydro has been ordered by the province because of recent allegations about the power company's risk-management strategies.

Finance Minister Rosann Wowchuk, who is also responsible for Hydro, announced on Wednesday that she has made the request to the provincial auditor general.

"We have asked the auditor general to prioritize this special audit, and we have offered special assistance to the OAG [Office of the Auditor General] to bring in out-of-province expertise to assist with the review," said Wowchuk.

'We have also asked the auditor to report her findings to the legislative assembly as soon as possible.'—Manitoba Finance Minister Rosann Wowchuk

"We have also asked the auditor to report her findings to the legislative assembly as soon as possible."

CBC News reported last week that a whistleblower's complaint against 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.

The complaint, filed with the province in 2008, accuses the utility of taking too many risks with the province's power supply and alleges mismanagement has cost Hydro more than $1 billion.

Hydro rejects accusations

The complaint also suggests CEO Bob Brennan was told that future financial forecasts are incorrect. When he was supplied with evidence of that, he ignored it, the complaint states.

Brennan rejected the accusations in an interview with CBC Manitoba's investigative team.

'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.'—Bob Brennan, Manitoba Hydro CEO

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, he said. The person was let go last fall.

"We certainly didn't like the result of what the consultant said," Brennan 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.

The province's Public Utilities Board has demanded Hydro turn over its financial information so it can check the numbers. A deadline has already passed without the requested documentation 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 utilities board about how much the board should be allowed to see.

External review also planned

In the summer of 2009, the OAG indicated in its annual report that it would be reviewing Manitoba Hydro's risk-management practices, Wowchuk said. A special audit and additional resources will allow the office to complete its work on a more timely basis, she said.

"This government is committed to transparency and public accountability," Wowchuk said. "I am confident the office of the auditor general has the knowledge and the capacity to carry out this audit to address any concerns."

The special audit will also review the specifics of the external consultant's work for Manitoba Hydro as well as Manitoba Hydro's management of the consultant's contract, Wowchuk said.

"Additionally, we have been advised by Manitoba Hydro that they have committed to engage auditing firm KPMG to do a further in-depth and independent review of the corporation's risk management practices," she said. "The Public Utilities Board will be asked to assist with drafting the terms of reference for this external review."

The next meeting of the legislature's standing committee on Crown corporations to discuss the Manitoba Hydro matter will be called shortly, Wowchuk also said.