In a stunning and perhaps unprecedented move, Manitoba Hydro’s Tory-appointed board of directors resigned virtually en masse Wednesday morning, claiming it has not been able to meet with Premier Brian Pallister to “resolve a number of critical issues.”
Pallister shot back hours later, saying the real reason for the resignations was the provincial cabinet’s decision to veto a planned Hydro payment of $70 million to the Manitoba Metis Federation to keep the organization from pressing for extended environmental hearings on the proposed Manitoba-Minnesota transmission line.
“We expressed our opposition to that and that has led to the decision that you see here today,” the premier said.
Pallister told reporters that had the payment been allowed, it could have opened the floodgates to other such payments — not only from Hydro, but from other government entities.
“I don’t believe it’s right to stand back as a government that’s committed to trying to fix the finances in this province for Manitobans… and then watch as a Crown corporation makes a $70-million payment to a special-interest group,” he said.
Pallister said Manitoba Hydro informed the government of its intention to make the payment “some weeks ago,” and “they were immediately informed by the minister (of Crown Services, Cliff Cullen) not to do so.”
A cabinet order Wednesday backed up that refusal.
Earlier in the day, the Manitoba Hydro board issued a statement saying that all but one board member — Progressive Conservative MLA Cliff Graydon (Emerson) — had tendered their resignations.
Along with chairman Sanford Riley, these board members resigned from the Manitoba Hydro board
The departing board members include: chairman Sanford Riley, Dave Brown, Earl Edmondson, Steve Kroft, Jennefer Nepinak, Michael Pyle, Allen Snyder, Dayna Spiring and Anette Trimbee.
The Free Press has attempted to contact each of the board members for comment. Some have indicated that they would not comment; others have yet to return an email or telephone call.
“For over a year we have attempted to meet with the Premier to resolve a number of critical issues related to the finances and governance of Manitoba Hydro, including matters related to Hydro’s efforts to further develop its relationship with Indigenous peoples,” the departing board members said in a statement.
“Despite repeated attempts we have not been able to have a meaningful dialogue with the government and we have reached an impasse. We have been informed that the government intends to remove the Chair (Riley) and has therefore lost confidence in the Board. Accordingly we have determined it is necessary to resign.”
Pallister said he had planned to appoint Riley to a different board. He didn’t identify which one. He said he soon plans to make major changes to board appointments — including naming more women — as his government reaches its mid-term mark.
Asked when he last met with Riley, Pallister said “not recently,” then added it was “a fair number of months ago.” He said government officials have communicated with the board chairman.
Hydro has asked the Public Utilities Board to approve an annual rate increase of 7.9 per cent, which the Crown corporation wants to levy annually for the next six years.
The mass resignation will not affect this year’s rate decision, which the PUB expects to issue near the end of April, said secretary and executive director Darren Christle.
“This decision will have no impact on the content or timing of PUB’s decision of the Manitoba Hydro general rate application,” Christle said.
“Despite repeated attempts we have not been able to have a meaningful dialogue with the government and we have reached an impasse.” – Manitoba Hydro board statement
“The application public hearing has concluded and the PUB panel is currently deliberating. The new Manitoba Hydro board may choose to submit a general rate application next year which looks different than the one that has been presented by Manitoba Hydro in this hearing, but this is only speculation. A new Manitoba Hydro board cannot withdraw the current application at this point in time. I’m not aware of any precedent.”
When Pallister appointed the board on May 7, 2016, he said: “We are proud to assemble a versatile and experienced group of executives who will bring valuable input to the direction of Manitoba Hydro. It is a tremendous responsibility serving on this board as Manitoba Hydro endeavours to enhance energy service for the province and evaluates opportunities to employ renewable energy strategies.”
Riley has been an outspoken board chair, blaming the former NDP government for blunders in approving the Bipole III transmission line and Keeyask generating station megaprojects that he said will cripple Manitoba with debt that could reach $25 billion.
“If we had been the board at that time, we would not have proceeded,” Riley said in September 2016. He said getting Hydro’s finances under control is the responsibility of the Crown corporation, the province and consumers.
“There’s no secret right now, ratepayers are going to be part of the solution,” he said. “We have to fix Manitoba Hydro.”
Pallister ordered the government and its Crown corporations to cut 15 per cent of management, but the Hydro board went far beyond that order, opting to buy out 15 per cent of its workforce, totalling 900 workers.
In February 2017, Riley went off script with the Pallister program and publicly asked the Tory government to pump billions of dollars into Hydro or face a potential financial debt disaster. Without that money that he vehemently denied was a bailout, Hydro would have to seek annual double-digit rate increases, maybe as high as 20 per cent.
“The province would invest a certain amount of money in Hydro as an equity investment,” Riley said 13 months ago. “They’d buy common equity in Hydro. It’s severely undercapitalized.”
Without an injection of provincial money, he said, “As a board, we’d have to look at even more draconian (rate) increases.”
But Pallister rejected any notion of putting billions of dollars into the utility.
Just this past December, Riley put even more public heat on Pallister by telling a Manitoba Chambers of Commerce breakfast that Pallister should use the coming carbon tax revenues to reduce the looming Hydro rate shock for low-income Manitobans.