'Premature' to speculate about more provincial cash for Hydro, Premier says

Premier Brian Pallister said Manitoba Hydro needs to dig a little deeper into its own pockets before the province will talk about forking over more cash to the ailing utility.

Premier says Hydro needs to look at its own budget before province looks at equity injection

Premier Brian Pallister said it's too soon to speculate about a provincial cash injection to Manitoba Hydro. (CBC News )

Premier Brian Pallister said Manitoba Hydro needs to dig a little deeper into its own pockets before the province will talk about forking over more cash to the ailing utility.

On Wednesday, the Premier told reporters it's "premature" to have discussions about a province-funded equity injection to the Crown corporation.

His comments come after new Hydro chairman Sanford Riley said the utility was considering asking for an equity investment at a public consultation meeting on Tuesday evening. At the time, Riley said that was just one of a handful of strategies the utility was considering to get its finances back on track.

"I think speculation around (equity injections) will be natural given the increasing massive indebtedness of Hydro under the previous administration, but I would say, you know, first look within, that's what we're doing here, that's what Hydro has to do there," Pallister told reporters Wednesday.

Pallister said Hydro needs to look for savings within its own budget before the province considers putting in more cash.

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"In small business, looking for savings and more effective use of the dollar is essential to creating jobs and surviving and thriving, and it should be no different in a monopoly public utility," Pallister said. 

"There's efficiencies that must be found in the operations at Manitoba Hydro. I expect that those efficiencies will be pursued with enthusiasm by the management at Manitoba Hydro."

Byron Williams, director of the Public Interest Law Centre, said the rate hike Riley warned about Tuesday shouldn't be the only answer, either.

Williams represents low-income Manitobans to the Public Utilities Board when utilities seek to increase their rates.

Williams said the Crown corporation should look at curtailing day-to-day expenditures on sustaining capital such as poles and wires. Those expenses jumped to more than $550 million from $400 million in just a few years, he said, and there's room to trim the sails.

Williams said his organization has been warning about mounting Hydro debt for half a decade, but called Riley's comments "unduly pessimistic."

"Consumers should not be thrown under the bus, and ... there are positive sides and opportunities to this as well," Williams said, saying low interest rates could also save the utility money.

"Even in April, the Public Utilities Board reduced about half a percentage point off a (requested) rate increase because it saw opportunities for Hydro to run its business better," Williams said.

Uncertain energy future

There's also a chance Hydro could see return on its investments in large-scale infrastructure projects down the line, but a changing energy market means the utility shouldn't bank on it, Williams said.

Williams said big projects like the Keeyask dam mean the utility is primed to export energy outside the province, but electricity demand in Canada and the United States isn't growing as rapidly as it used to. Other renewables like solar and wind energy are also gaining momentum, he said, and could be competitive in the future.

"You do have to realize that the energy market is changing in profound ways," he said.

"That marketplace that we think we were building into may not be there a decade or 15 years from now. In fact, the odds are even that it will look very different with lower energy demand and with a lot more reliance on (other) renewables."

Manitoba Hydro will be holding more public consultations in the future, with upcoming sessions slated for Oct. 25 in Winkler, Nov. 3 in Thompson and Nov. 9 in Brandon.