Manitoba consumers enjoy some of the lowest power rates in the developed world. The factors making this possible include favourable geography for hydro-electric development including large natural forebays, reliance on depreciated hydro-electric generation, and government supports such as provincial loan guarantees and earlier federal subsidies for north-south transmission. In recent years, government interference in the operation and oversight of Manitoba Hydro has threatened the province’s rate advantage.
Here is a review of recent initiatives of the previous NDP government, just voted out of office.
Our thesis is that political meddling justified on the grounds of fighting global warming has driven uneconomic investments that are driving up rates far faster than the rate of inflation.
The review is co-authored with Graham Lane, Chair of the advocacy group Manitoba Forward and for eight years chair of the Manitoba Public Utilities Board.
Without the encouragement of Peter Holle of the Frontier Centre for Public Policy, this project would not have come together.
There are already encouraging signs that the newly elected Conservative government in Manitoba is prepared to reconsider some of the most careless of the NDP’s spending plans for the Manitoba Hydro.
Manitoba Hydro’s descent in the vortex of government-directed waste to promote interest group politics, justified on the grounds of fighting global warming, has been part of a national trend that has crept into electricity policy in almost every corner of the country. Manitoba Hydro itself played a role in promoting this trend when it provided an enthusiastic endorsement for Muskrat Madness in Labrador in a report issued in February 2012. If the new government in Manitoba adopts a policy direction for Manitoba Hydro whereby the new purpose of the utility is to serve customers at lowest long-term cost consistent with providing reliable service, such a change in direction could have national implications.