Province considering review of Manitoba Hydro projects: Pallister
Says learning about past decisions will help future planning
Premier Brian Pallister says he's considering a review of Manitoba Hydro's major projects after the Public Utilities Board granted a rate increase for less than half of what the crown corporation asked for.
The PUB announced earlier this week they are allowing the provincial power utility a 3.6 per cent increase for average electricity rates in 2018-19, nowhere near the asked-for increase of 7.9 per cent.
That, combined with Hydro's current and projected debt levels, may require a "deeper dive" into Hydro's operations, said Pallister.
"There are some questions there that have been raised, and other questions that have been raised previously that may well require us to do a little deeper dig," said Pallister on the phone from New York Friday, where he and finance minister Cameron Friesen have been meeting with financial lenders.
"[We need to] learn from past decision-making processes how to do a better job with Hydro in the future."
Manitoba Hydro is currently completing a number of projects, including the two mega-projects: Keeyask Generating Station and a power transmission line running down the west side of Manitoba called Bipole III. Both projects have been plagued by substantial cost overruns.
That debt contributed to a credit downgrade for the province last year to an A+ from an AA- due to projected budget deficits and further predicted growth in its debt, mostly tied to Hydro.
S&P Global Ratings, formerly known as Standard & Poor's, predicted Manitoba would not be able to prevent more deficits from being posted despite cost-cutting efforts and a seven-year plan to get back to an operating balance.
"While these steps bode well for strengthening budget performances in the medium term, they will not prevent the government from posting large after-capital deficits over the next two years, in our view," they said.
Pallister and Friesen were in New York in an effort to show the province now has its debt under control in the hopes of negotiating a better interest rate with lenders. He said the feedback has been positive so far.
"We're going to have to borrow billions of dollars over the next few years to complete Keeyask and the Bipole Line," said Pallister.
"So we're all of us, in the government and at Hydro, are working really in lockstep with each other to make sure we have the best and strongest Manitoba Hydro we can possibly have."
When asked whether the province should take on some of Manitoba Hydro's debt, Pallister said it's all the same.
"Hydro's debt is Manitoba's debt, so regardless of what box you put it in, it's shared with all Manitobans."
The premier promised more information once the government has fully reviewed the PUB's latest decision.
With files from Sean Kavanaugh and Meaghan Ketcheson