Manitoba Hydro revives international consulting arm discontinued under previous board in 2021

Manitoba Hydro'sdiscontinued international consulting business is backeffective immediately, and the province says the inflow of cash is expected to lower hydro rates in the province within five years.

"Today we are announcing that Manitoba Hydro International a longstanding subsidiary of Manitoba Hydro will be resuming operations of its international consulting line of business," Ben Graham, board chair of the Crown corporation, said at a Monday news conference.

The business's operations, which began in 1998, were ended by Hydro's previous board in 2021 under the then Progressive Conservative government.

Graham says Hydro's new board, introduced after the NDP took office last fall, saw the business's continued potential during a subsequent review of the public utility, as ithad netted an average of $6 million to $8 millionannually in the two decades that it was in operation.

The move will allow Manitoba Hydro to share its more than century-old experience with the world and provide additional dollars to go directly toward lowering hydro rates for Manitobans, he said.

"Manitoba is back on the map for utility consulting and technological services," Graham said.

"Getting back into the market means that we can boost Manitoba's profile on the international stage and shine a well-deserved light on the talent and expertise that exists here in our province."

The return of the international consulting business also comes amid staggering financial deficitsfor the Crown corporation, whichprojected a $190-million loss for the 2023-24 fiscal year last February.

Finance Minister Adrien Sala says the additional revenue willhelp keep Manitoba Hydro public.

"It will also allow Manitoba to share our expertise with the world, further cementing our role as a leader in the low-carbon economy and the transition to a greener future," he said at the news conference.

Manitoba doesn't need to choose between lowering costs for residents and growing lower carbon energy, he said.

"Today, we are taking a step that will do both at the same time."

Results will 'take a little while'

There were about 30 opportunities that MHI was not able to respond to over the last year, which Graham estimated were worth tens of millions of dollars, though it's not certain that Hydro would have secured each project.

"We saw a large number of opportunities pass us by. We were asked to submit applications and proposals for a large number of jobs and we just had to let them go," he said.

Graham said there were between 140 to 160 staff employed by the consulting business, and a lot of them stayed with the Crown corporation after the business halted operations and will be transferred back. There could be about 20 or more positions added in the next two years.

"We're very proud of this restart, but we're going to be very prudent, very methodical in the contracts that we take on, so you might start to see those positive returns starting to flow through in say, four to five years," he said.

"This isn't going to be an overnight thing, so it's going to take a little while to ramp this up over time, but the previous staff of MHI are very excited by this opportunity."

Manitoba PC Hydro critic Obby Khan accused the NDP of failing to keep its promise to freeze Hydro ratesand eliminating the mandate for Hydro to pay down its $25-billion debt.

"Hydro's mandate is to provide clean and affordable power to Manitobans, not be a global consulting firm," Khan said in an email statement.

"The NDP needs to put Manitobans first and focus on energy needs and costs right here at home."

Byron Williams, a lawyer with the Consumers Coalition, wrote in an email statement that the organization, which advocates for consumers at official bodies like the Public Utilities Board, does not have a position on the merits of restarting Manitoba Hydro International.

"On the positive side, there is the prospect for a modest increase in revenues, as well as the opportunity for Manitoba Hydro staff to participate in interesting projects which also may provide opportunities for other Manitoba consultants," he wrote.

"On the negative side, there is risk especially when Manitoba Hydro is offering consulting services on high-risk projects in other jurisdictions. Those risks can be financial or reputational."

Williams pointed outManitoba Hydro International's advice related to the Muskrat Falls project in Newfoundland was heavily criticized for lacking independence.

WATCH | Manitoba Hydro resumes operations of its international consulting business:

Manitoba Hydro resumes operations of its international consulting business

1 month ago

Duration 1:44

Manitoba Hydro's discontinued international consulting business is back effective immediately, and the province says the inflow of cash is expected to lower electricity rates in the province within five years.