Why does Hydro want to pull plug on MHI?

Opinion

Hey there, time traveller!
This article was published 16/09/2020 (1464 days ago), so information in it may no longer be current.

Economic realities in the world today are stark.

Not only has the COVID-19 pandemic incited the most severe global recession since the Great Recession, it is also happening at a time when the realities of global warming have become manifest.

There are many very sad stories of people losing their livelihoods from business failures caused by the pandemic.

In that context it becomes so much harder to imagine why Manitoba Hydro is on the verge of winding down its Manitoba Hydro International (MHI) division, which has not only remained profitable and employs about 125 people in well-paying positions, but is engaged in hydroelectric consulting projects in many places around the world in need of the kind of green energy expertise housed at MHI.

Although staff at MHI are waiting for some kind of Manitoba Hydro board decision to decide their fate on Oct. 8 there now seems to be little doubt of Hydro’s intention to wind down the enterprise.

Internal documents show that business development efforts have been ordered to be drastically curtailed. Any new business contract has to include a provision allowing it to be cancelled with 90 days notice.

As one staffer said, that eliminates about 99 per cent of MHI’s work, much of which includes engagements that last for years.

Most believe Hydro is not interested in selling any component of MHI because that would be viewed as a move to privatization, something that would be political dynamite in Manitoba. (There is currently a request for proposal outstanding for a third-party operator of Manitoba Hydro Telecom, a division of MHI. While there is outrage from provincial internet service providers who rely on that broadband network to get at seriously underserviced clients in the North, at least in that case the Crown would retain ownership of the asset.)

So while government and Hydro officials refuse to say what is happening publicly or to its own staff, MHI employees are quietly being advised by friendly supervisors to look for other work.

Families are in the process of making the hard decision about whether or not they need to leave the province because many believe they won’t find other jobs in Manitoba doing the kind of work they do at MHI.

Some believe the decision to wind down this profitable and prestigious enterprise — MHI’s work provided a rare opportunity to burnish Manitoba’s reputation on the world stage — is being done for ideological reasons, including the conservative inclination towards smaller government. Also they might say a provincial Crown corporation shouldn’t be involved in international work or work that is ostensibly in competition with the private sector.

Nigel Wills, a former managing director of MHI and currently the head of a private sector group of energy industry consultants called the Energy Sector Alliance of Manitoba, believes that sort of analysis is largely misguided.

While he said he might agree with it regarding competition at home — and even there MHI has also been a significant economic contributor over the years to the power sector engineering and consulting community — MHI’s presence in the international markets is another matter.

“In the case of MHI, it is utility versus utility,” Wills said. “The major competition to MHI is from electrical utilities in Ireland, France, Australia and South Africa. If you do away with MHI all you do is export those jobs to those countries out of Manitoba.”

MHI has been Manitoba Hydro’s international consulting arm for more than 30 years. Recently it has run large projects in countries including Kenya, Benin and the Democratic Republic of Congo.

Two separate consultants reports have been undertaken, one an overview of the entirety of Manitoba Hydro and another specifically about (and commissioned by) MHI itself, according to sources.

The contents of the reports have remained locked down but many believe the economic case for MHI is fairly solid.

But while Manitoba Hydro is under pressure to manage its multi-billion debt load, some believe the board and senior management at Hydro no longer include the skill sets or perhaps the world view that would embrace an international division that bids on World Bank, USAID and CIDA contracts overseas partly because of liability concerns about involvement with regimes around the world where the rule of law is not always a priority.

Notwithstanding all that, if an enterprise in Manitoba were to create 125 good-paying green energy jobs it would be front-page news.

But the same kind of public interest would suggest there is a right to know why a Crown corporation seems to be on the verge of getting rid of 125 high-paying jobs in the green economy, from an enterprise that is making money where nothing apparently is going wrong.

martin.cash@freepress.mb.ca