Manitoba Hydro announced that the reorganization of its subsidiary Manitoba Hydro International (MHI). The reorganization follows an independent review of MHI operations and helps ensure the subsidiary’s business aligns with Strategy 2040, Manitoba Hydro’s long-term strategic plan – developed to enhance the focus on the utility’s core business of delivering clean, affordable and reliable energy to Manitobans.
The comprehensive review determined that MHI was operating in higher-risk international countries that exposed Manitoba customers to potential liabilities, including security risks for employees and financial risks. It was also identified Manitoba Hydro customers effectively subsidized MHI through MHI’s use of Manitoba Hydro assets.
Unlike Manitoba Hydro, MHI was established outside the purview of the Public Utilities Board as it has been operating in a global competitive environment. This contributed to insufficient accountability and transparency. MHI’s arms-length operational structure was designed to keep it separate, however, this does not support Manitoba Hydro’s commitment to Manitobans for full transparency and accountability.
International consulting is the line of business that is least aligned with Manitoba Hydro’s core operations. It is also a highly competitive field dominated by large international firms whose sole focus is consulting, unlike Manitoba Hydro. Other Canadian utilities have already exited the international consulting business for similar reasons.
“The reorganization will further strengthen our governance, oversight and public accountability that Manitobans expect and deserve,” said Marina R. James, Manitoba Hydro-Electric Board Chair.
As part of this reorganization, MHI will continue to operate as a subsidiary of Manitoba Hydro. Additionally, the lines of business of MHI focused on technology solutions will continue to operate under the Manitoba Hydro International banner. As part of the reorganization, the international consulting business of MHI, operating under Manitoba Hydro International Utility Services (MHIUS), will be gradually wound down as current contracts expire. Existing contracts with MHIUS customers will be honoured and supported.
All permanent MHI staff will be offered employment at Manitoba Hydro.
“Offering MHI’s highly skilled employees a chance to join Manitoba Hydro’s team provides a tremendous opportunity to contribute to the value of Manitoba Hydro,” said Jay Grewal, Manitoba Hydro President and CEO. “This is an important step as we focus on Strategy 2040, bringing greater focus to our core business of providing our customers with safe, clean, efficient, and reliable energy at the lowest possible cost. This timing of this decision made sense following our examination of the business realities, including the highly competitive nature of the industry and risks that come from operating the consulting business in international and developing markets. Today’s announcement brings an even greater focus to our core business while retaining access to and continuing to market the world-class made-in-Manitoba technology offered by MHI. As part of Strategy 2040 we are learning from the past to move forward and become even stronger.”
Grewal pointed out that there is a tremendous amount of work still to do as part of the reorganization, including ensuring that all MHI employees are treated fairly throughout the transition.
“Better alignment and improved efficiencies across our entire organization, including MHI, will be an important part of how we navigate through today’s dynamic and evolving energy landscape,” added Grewal. “We are confident that this reorganization will benefit Manitobans, who are our customers and owners, while protecting jobs and ensuring we leverage the considerable expertise of MHI employees in the months and years ahead.”
