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Winnipeg Free Press

Time to pay the piper for Hydro's old, ignored infrastructure

Opinion Manitoba Hydro's decision to spend an estimated $7 billion to upgrade the Bipole I and II transmission lines may be a necessary investment, but let's be clear: it's just the tip of the iceberg. The Crown utility has been falling behind on asset upgrades for decades which has allowed a critical backlog of aging infrastructure to pile up. It's not a new problem, and it's not limited to the Bipoles. Hydro's own 2022 asset management report says the corporation faces a mountain of long-overdue upgrades in nearly every part of its system — from substations to transformers, aging wooden poles to buried cables, and even dams. Some of the infrastructure is decades past its best-before date. The longer it gets put off, the more expensive the fixes become. JOHN WOODS / FREE PRESS FILES Manitoba Hydro must be transparent with the public about the full scope of its infrastructure backlog, writes Brodbeck. About 27 per cent of Hydro's generator assets exceed the economic life cycle of 60 years 'where there is an increased risk of a prolonged outage should a failure occur,' the report says. Another 23 per cent fall within the 40- to 60-year range 'where planning of unit overhauls should be initiated,' it says. 'Manitoba Hydro is projecting that many of its asset populations will require significant intervention today, and increasing in the near future, in order to avoid accelerated system performance degradation and diminished supply,' the report says. 'Manitoba Hydro can anticipate a large number of generator assets approaching economic end-of-life prior to intervention, if the current intervention pace is not significantly accelerated.' If you're shocked by the $7-billion price tag for Bipole I and II, wait until you see the full bill coming due for the rest of Hydro's neglected infrastructure. We're not just talking hundreds of millions here — we're talking billions more. Hydro's asset management report pulls no punches. The utility admits it has not replaced aging assets fast enough to keep pace with their deterioration. Take wooden distribution poles, for example — thousands across the province are well past their expected life span; some are approaching 60 or even 70 years in service. Hydro estimates that a significant portion of its assets are in 'poor' or 'very poor' condition. And no, that doesn't mean they'll all fall apart tomorrow. It does mean they're more prone to failure, harder to repair, and more expensive to replace in emergency situations. That's a dangerous place for a power utility to be. Manitobans shouldn't be too shocked, though. The 2022 report was not the first to shine a light on Hydro's failure to keep up with infrastructure upgrades. Countless reports have detailed how far behind Hydro has fallen in infrastructure upgrades. So how did it get this bad? Part of the problem is systemic. Like many large public utilities, Hydro has struggled with balancing long-term maintenance needs against short-term financial pressures. For years, the Crown corporation kept rates artificially low by putting off major maintenance in favour of keeping electricity affordable. That may have worked politically — who doesn't love cheap power? — but it came at the expense of sustainability. Then there's the legacy of major capital projects, such as Bipole III and the Keeyask Generating Station, which drained billions from Hydro's borrowing capacity and diverted attention and resources away from basic asset renewal. By the time Keeyask was completed — years late and billions over budget — Hydro was facing serious debt challenges. Meanwhile, the quiet deterioration of the system continued. Now, the chickens are coming home to roost. But identifying the problem is only half the battle. Fixing it is going to require sustained investment and political will. Unfortunately, the current political climate doesn't bode well for that. Premier Wab Kinew's NDP government is under pressure to keep electricity rates low and deliver on promises to freeze hydro bills for at least a year. Tuesdays A weekly look at politics close to home and around the world. That's the bind the province is in: everyone agrees Hydro needs to fix its aging infrastructure, but no one wants to pay for it. Delaying it further will only compound the problem. What's needed now is honesty. Manitoba Hydro must be transparent with the public about the full scope of its infrastructure backlog. How many substations are past due for replacement? How many kilometres of transmission lines are vulnerable to weather events? What's the real price tag to get the system back into good shape? Manitobans deserve to know. Likewise, the provincial government must stop pretending that rate freezes and deferred maintenance are a long-term strategy. They're not. The cost of rebuilding Hydro's system is going to be substantial — and there's no getting around it. Whether it's through modest rate increases, government support, or some combination of both, someone is going to have to foot the bill. Bipole I and II are just the beginning. If Manitoba wants to keep the lights on — and its economy humming — it needs to stop kicking the can down the road. The time to invest in Hydro's aging infrastructure is now, before the problems get worse and the cost skyrockets. Tom BrodbeckColumnist Tom Brodbeck is a columnist with the Free Press and has over 30 years experience in print media. He joined the Free Press in 2019. Born and raised in Montreal, Tom graduated from the University of Manitoba in 1993 with a Bachelor of Arts degree in economics and commerce. Read more about Tom. Tom provides commentary and analysis on political and related issues at the municipal, provincial and federal level. 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