Conawapa Dam — who needs it? Who wants it? Again, it’s that difference between need, and public purpose, and what it is that the utilities want. WANT. DESIRE. It’s anything but need.
A deal was struck so this damn dam would be built, but things have changed, and the Wuskwatim dam is losing money. Now Conawapa, to throw good money after bad? Why? So Manitoba Hydro can make even more electricity to export for profit? Minnesota Power too? Will this business plan be any better?
It hasn’t worked out that way. According to Hydro, NCN’s share of Wuskwatim’s losses will total $24 million for the past fiscal year and a combined $134 million over the first decade of the dam’s operation.
That’s worth another take. The community of 4,800 people, 80 kilometres west of Thompson, has invested $108.4 million — most of it borrowed from Hydro — in a venture that is predicted to lose the community $134 million over 10 years.
Hydro has said NCN will not actually have to pay the utility for its share of annual losses, as the original agreement would have required. Hydro will cover those losses for now, incorporating them into its long-term financial agreement with NCN, essentially borrowing from NCN’s future profits to pay for present losses.
Hydro is also stuck with its share of losses, but that’s different. It simply passes them on to ratepayers. But NCN doesn’t have the option of raising anyone’s rates because its revenue stream is based on export prices, not domestic rates.
To be fair, NCN’s benefits from Wuskwatim also included a $5.7-million adverse-effects settlement as well as training and employment opportunities. Hydro and governments spent $60 million on a training program centred at NCN. About one-third of person-hours of employment during the construction of the dam went to NCN members. Less impressive were the turnover rate of 41 per cent and the average duration of employment: eight months.
Now four other First Nations — Tataskweyak, York Factory, Fox Lake and War Lake — are lined up for similar “new era” agreements on the proposed $6.5-billion Keeyask dam. They can purchase a combined stake of up to 25 per cent in the dam if they come up with about $375 million.
The “Keeyask Cree Nations” negotiated another option that would amount to a roughly two per cent stake in the dam, with a guaranteed minimum annual payment whether or not the dam makes money. Of course, the payments to the communities would be far less than the windfall once touted under the 25 per cent share.
These communities agreed to the dams based in part on the bold talk of hefty profits and a prosperous future. But the deals were negotiated before the recession and the spike in shale-gas production sank the export market, which is key to the profitability of the dams.
What happens if they toss their partnership agreements in the murky old-era waters of the Nelson River, either now or in a decade? Legally they can’t, but morally who could fault future generations for defying this form of partnership?
By July, when Hydro wants to start building Keeyask, our utility is likely to have an Environment Act licence and a Water Power Act licence for the megaproject. But will it have a legitimate social licence?