CBC: Manitoba Hydro’s walking on a tightrope — or is it?
…Manitoba Hydro and its thousands of employees constitute the province’s largest Crown corporation, holding billions of dollars in assets, but also $14 billion in long-term debt, with little equity to back it up. That debt has been projected to grow to $25 billion in the next three to four years, according to a government-ordered review of Hydro’s finances by the Boston Consulting Group.
Hydro is currently embarking on an aggressive capital expenditure campaign. Megaprojects including the $4.65-billion Bipole III transmission line and the $6.5-billion Keeyask Generating Station will be built primarily through debt financing and will significantly contribute to the corporation’s current long-term debt load….
University of Manitoba economist John Loxley argues Hydro’s 20-year plan is just par for the course for the public utility.
“The ratio recovers once the two are constructed,” said Loxley, who is also a former Hydro board member appointed under the NDP. “The idea that this is somehow new and dangerous defies logic, they have known about this for years … The reality is that Bipole and Keeyask, they are being built in the traditional way through debt financing.”
…”The basic idea that the province should borrow money to invest in Manitoba Hydro, the idea this would somehow improve the total debt of Hydro and the province is beyond me,” Loxley said.
“They are making highly political statements that is damaging to hydro and its bond rating.”