Thoughts on Hydro CEO Brennan

As reported, Manitoba Hydro Big Cheese Bob Brennan is retiring. Dan Lett suggests in his commentary that "it is meaningless to ask why he is stepping down." I think otherwise. Being at 70 years of age you certainly can't blame the guy for packing it in, however the timing is meaningful in that it tells a story about how Hydro has been run over the past 11 years.

I have been very critical of Bob Brennan in the past, however I don't doubt that, if left to his own devices, he could have been an excellent CEO. As Dan points out, many of the more controversial decisions were not made by Brennan, but by the very "hands-on" (nice-speak for politically interfering) NDP government. The decision to spend an extra billion dollars on the less environmentally friendly and technically inferior west-side route was made by the government, not by Brennan. Likewise, the decision to plow ahead with aggressive northern Hydro development for export, regardless of the financial viability and irrespective of the risks, was made by the Provincial government, not by the CEO.

My beef with Brennan is not in making these decisions, but in so willingly supporting them. He sold out faster than a Winnipeg Jets home opener. He fudged numbers about Bipole III, he fired a consultant who dared to expose the risks of the Hydro development strategy, and he never wavered from the arm of his political masters. What I question is the man's integrity. If he had any, he would have put up more of a fight. He would have said: "look, according to our engineers the west-side route is inferior to the east-side route. I don't think we should do that." or "there is no need to rush into low-margin, high-risk export contracts." But he did not. Instead he committed to the ill-advised policies of the government of the day, and that now puts him in a bit of a pickle...

With an election pending and a potential change in administration on the horizon, Brennan has pulled the plug. I don't think this is a coincidence. Brennan's willing support of the indefensible NDP policies would make his relationship with a new PC government unworkable. He would either have to reverse course on everything he stood for in the previous years, or he would be in conflict with his new masters and would be forced out. Leaving now allows him to avoid that conundrum and leave on his own terms.

The announcement of his retirement is therefore a smart move, and it is not insignificant. It tells the story of a senior civil servant who too willingly steered the ship in the wrong direction, and fled in a life boat just short of it hitting the iceberg. The question now is: will we get a new captain that will direct it to safety?