I might be spoiling for a fight here with R.U. Sirius, but I couldn’t pass up the opportunity to comment on news this afternoon regarding Manitoba Hydro’s proposed rate increase for heavy industrial users.
I support the increase 100%. Why? Because providing cheap hydro power has been a complete failure as both an economic and environmental policy.
Think about it. Where are the heavy industries that cheap power should be able to attract? While we do have a vibrant manufacturing sector, it’s mostly comprised of small and mid-sized firms, who are more concerned with high corporate taxes and currency fluctuations than hydro rates.
Yet even without a large number of heavy users, Manitoba is still one of the highest per capita electricity consumers in the world. According to the Frontier Centre for Public Policy, Manitobans consume almost 9 times as much electricity as the global average.
A better system would see Hydro provide all residential consumers with a small amount of cheap electricity to cover basic household operations. Everything above that – and all commerical/industrial use – would be sold at market rates. The result?
- Manitobans make a conscious decision to save money through energy conservation, supported by a legitimate Power Smart program.
- Additional capacity is available for export, meaning Hydro can avoid/delay building expensive new dams.
- Hydro revenues increase substantially.
- The province receives a fair share of those revenues through a legislated dividend.
- The province uses hydro revenue to fund significant cuts to personal and corporate taxes.
It’s environmentally friendly. It makes us more tax-competitive with other jurisdictions. Ultimately, it saves most Manitobans money. But I’m afraid it will never happen, because it can’t be packaged up nicely for the 6 o’clock news.
Sad, because I think it represents the only chance for our province to truly harness the power of Hydro and illuminate our potential.
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Filed under: Uncategorized | Tagged: Manitoba Hydro
Good post, Frogger.
My guess is that the PUB is going to squash this rate hike like a little gray basement bug.
Your proposed system, of course, make a lot of sense, but odds-makers (me) are not being very kind to that one either.
For a quick thumb nail sketch of why it’s bad public policy and counter productive to business see:
http://www.winnipegfreepress.com/subscriber/business/local/story/4116109p-4711527c.html
Side issues of residential rates, energy conservation, etc. have no relevance to the issue at the heart of the matter.
The Frontier Center isn’t a completely unbiased and ideology free source of information.
Your comments on a “legitimate Power Smart program” might be worth some expansion. I probably agree with you but perhaps for different reasons. To date I have seen virtually no pressure to improve this as it is so carefully positioned to be good for everyone so no one wants to complain that opportunity is at risk It is a bit like Luke 19 12 to 27
After reading the article and giving it some thought, I’ve changed my odds of PUB allowing the rate hike to 3:2. Place your bets here.
R.U.S.: no surprise that the people affected by the increase are going to say those kinds of things. I think the end of the article has the key word: predictable. Maybe a gradual and predictable move towards market rates over time is the way to go.
@RU – I wouldn’t exactly classify residential rates and conservation as “side issues”, but it would be better if all these issues were dealt with as part of a comprehensive energy management strategy, rather than just going after the heavy users in isolation.
That being said, the spin from the heavy users is hilarious. My favourite line from that Freep story is:
“The implications of this could scare off development equal to two Incos in Manitoba.”
Pure twaddle.
And yes, I acknowledge the Frontier Centre isn’t ideology- or bias-free, but it does occasionally raise interesting ideas. Peter Holle and others have been banging the drum on this hydro issue for a long while, and it’s time people started listening.
For what it’s worth, some members of the environmental community have also been “banging” this drum for some time.
Conserving Electricity through Rate Reform
Market rates for power are the only way to go.
@ z – Yes, absolutely. My mistake for not acknowledging the same.
I think anytime you have environmentalists in agreement with right wing ideologues the idea deserves serious examination.
Here’s one of those high hydro use low employee job business and what they mean to the economy of this province:
http://www.winnipegfreepress.com/subscriber/business/local/story/4116744p-4712207c.html
@ RU – It appears this project is a function of geography rather than power costs. As the article notes, they’re also building 2,219 km of new pipeline through jurisdictions in the U.S. that have much higher energy rates than Manitoba.