Re: Hydro’s power play verges on arrogance (Sept. 16)
Columnist Dan Lett offered a number of selective assertions regarding Manitoba Hydro’s current financial picture that deserve proper context for a complete view of the situation surrounding our rate application at the Public Utilities Board (PUB), which I and nine other members of Manitoba Hydro’s board would like to address here.
As a board, we have approved a 10-year plan to restore Manitoba Hydro’s financial strength and protect ratepayers and taxpayers from the real risks presented by the company’s current, financially weakened state.
This plan is required because Manitoba Hydro has more than $14 billion in major projects undertaken by previous boards and government — with no realistic plan to pay for them. We believe it is our responsibility as a board to deal with this issue, no matter how difficult, because we know how Hydro’s situation is increasingly weakening Manitoba’s credit position. We understand there are no easy answers.
Our plan is designed to rebuild the equity of Manitoba Hydro within a short enough period that we can protect Manitobans from the consequences of several major operating risks the utility faces — including drought, a risk Lett himself acknowledged.
What Lett opted not to share is that Manitoba Hydro is currently cash-flow negative and, without the rate increases we have requested, will continue to experience material cash funding deficits that can be covered only by more borrowing. The longer we wait to address this, the longer the period of rate adjustments will be required.
The requirement to extend the forecast period of higher rate increases is therefore the logical outcome of the PUB’s decision to defer acting on our requested higher rate increase pending the outcome of the full rate review. It was certainly not a simple or casual decision, as Lett implied. This is what we have communicated to the PUB.
In its order on our interim rate application, the PUB noted that they needed to have access to all of the data and information that Manitoba Hydro was relying upon before they could make a significant rate increase of the type we were requesting.
The public hearings relating to our rate application begin in December. We look forward to sharing in detail with the PUB and with all Manitobans the reasons why Manitoba Hydro must see its financial strength restored.
This is an issue that arouses passions on all sides — ours included. We are proud Manitobans. It is very distressing for us to see the current financial malaise affecting what we have always considered to be Manitoba’s crown jewel. As the stewards of Manitoba Hydro, we understand it is our responsibility to restore Manitoba Hydro’s financial strength to protect future generations of Manitobans, who will face serious financial consequences if we do not act, with purpose, now.