Newfoundland and Manitoba examples to consider
Letter to the Editor
Recently, we have learned that the Muskrat Falls Hydro dam construction in Newfoundland has run into major financial difficulties. The price tag for this project has nearly doubled from $6.2 billion to $11.3 billion. Nalcor’s own CEO (Utility for Newfoundland) has called the Muskrat Falls project a “boondoggle.”
It now appears that it is in good company. A CBC report is now indicating that Manitoba Hydro customers could see their rates double in the next two years, due to the mounting debt load brought on by cost over runs such as the Keeyask dam project. It now appears that Manitoba Hydro’s debt load will soon burgeon from $13 billion to about $25 billion within the next three to four years.
If this sounds familiar, there is certainly a parallel with BC Hydro and the Site C dam project.
The overall debt load on BC Hydro is now escalating upwards to about $19 billion, without Site C, due to a variety of factors very similar to both Manitoba and Newfoundland utility companies. In addition, the IPPs or Independent Power Producers in B.C. have contractual agreements in place with BC Hydro requiring it to pay $50 billion for new power generation over the next 10 to 20 years.
None of this is sustainable for B.C. ratepayers. With Site C in the very early stages of development, one would think that the BC Liberal government would have a serious look at the mess both Newfoundland and Manitoba ratepayers find themselves in.
Rick Koechl and Mike Kroecher,