The Truth About BiPole 3 Costs

by bruce.owen@freepress.mb.ca

Source: Winnipeg Free Press

Here’s a partial transcript of what happened Monday night at the legislative building.

It was sent to me by the NDP.

The Selinger government sees itself increasingly under pressure from Hugh McFadyen’s Tories on the Bipole III file, and whether the line should be built down the short, and less expensive, east side of Lake Winnipeg instead of the west side of the province.

The NDP is feeling that pressure as we inch closer to the Oct. 4 provincial election.

McFadyen has said if he becomes premier he’ll cancel the more expensive west side route for the transmission line and build it down the east side of the province.

McFadyen said Tuesday he stuck by his number.

“Our number is absolutely firm,” McFadyen said. “It’s very clear it’s the cost of west side minus cost of east side divided by the number of Manitoba families. It means $11,748 in extra cost for every family in Manitoba going west versus east.

“No matter how desperate the NDP gets going into committee meetings or elections, no matter how much they want to resort to their ‘Crocus’ calculator, it doesn’t change the fact that every family pays $11,748 more.”

Here’s what the NDP sent me. Here is the full transcript.

The exchange below is between NDP Minister of Labour Jennifer Howard and Manitoba Hydro president Bob Brennan:

standing committee on crown corporations (manitoba hydro)

May 30, 2011

Partial transcript

Minister Howard: (speaking of the PC hydro mailer, that is designed to look like a Hydro bill)

It says that people’s Hydro bills, of the average Manitoba family, are going to go up more than $11,000. I want you to take a look at that. Now I see your logo on that piece of advertising and I know it’s a claim that’s been repeated by Members of the Opposition. I find it to be a very misleading claim. But I wonder if you can tell us if the use of the Manitoba Hydro logo was authorized for that document.

Mr. Brennan:

It was not authorized.

Minister Howard:

Thank you very much, thank you very much for that. Now I did a little math with that number. I did take a lot of math in school, no electrical engineering, but a fair bit of math. So when I multiply that number by the number of families that the chief statistician tell us exist in Manitoba, I get a total amount of $3.8 billion. Now I’ve looked at the presentation you made. The total cost estimate of the bipole is $3.2 billion. So this advertising seems to suggest a total that’s more than the cost, the estimated cost you told us was for the bipole. Would that be accurate? Does your math match up with my math on that or am I off?

Mr. Brennan:

First of all, I got tons of these mailed to me as well (inaudible) probably approaching 50 or so. And then I got quite a few phone calls as well.

I assumed that the amount, I had a hard time with the arithmetic myself. I assumed it was talking about the incremental cost of going one route vs. the other, that’s what I assumed it was. So I went through my own calculations and I seemed to get quite a bit of a different number. I took the distance in the length, made some notes… yeah, I took the difference in length between the two routes. I took the total transmission cost, calculated the cost per kilometre, which really works out to quite an expensive amount I think it was $940,000 a kilometre, and applied that to the incremental length and got a number of  $428 million, I did not include what Mr. McFadyen was talking about, increases losses that occur, I excluded that. But that, it wouldn’t double this number, that’s for sure, it would be even less than that.

So then I took the number of households, escalated up to 2017. And that number’s less than the current number of customers, and I took the incremental cost per household (inaudible…)

That number came out to $821 per household.

And then I said, well, that’s over the life of the line so I divided that by 60. And so the annual cost would be $13.68.

Then I figured, well, if we’re talking households, households only use a third of the total amount power that’s used in our system.

So I thought that number should be divided by a third but I didn’t go that far.

Minister Howard:

Thank you very much. You did a lot more math than I did on that.

So by your calculation, $13, and it could be lower than that. That’s seems less than $11,478. Do you think by that math, the numbers contained in this partisan mailing are entirely inaccurate and misleading. Would you characterize it that way?

Mr. Brennan:

It’s definitely a different number.

bruce.owen@freepress.mb.ca