The sale of 500 megawatts of electricity to the Wisconsin Public Service will generate $2 billion of revenue over 15 years. What that might mean in profit is difficult to determine, but what it does mean in fact is that the deal will trigger the construction of the $3.6 billion Keeyask generating station and carry that cost for at least the first 15 years of its operation starting in 2018 -- the years in which the financing and other costs are greatest -- to the benefit of domestic Manitoba Hydro customers. That will not mean that the price of electricity in Manitoba will fall, but it likely does mean that prices will remain the lowest on the continent, which is not necessarily a good thing but a fact nonetheless.
That Keeyask, the Cree word for Gull, is going ahead is good news on the job front, in particular for aboriginal people. But it is not only at Keeyask that work will be created. A new high-voltage line to the U.S. of undetermined capacity must now be built and the Bipole III line is now required for reasons of new transmission and not simply for reasons of line security and possible efficiencies. And finally, a new conversion station near Winnipeg will be required to convert Keeyask's 620 megawatts of DC output.
The conversion station near Winnipeg has been a flashpoint in the debate about whether Manitoba Hydro should construct Bipole III on the east or west side of the province.
The east-side option is both cheaper to build than the longer west side, and "greener" in that it is not as wasteful of electricity in transmission and so displaces more carbon generated electricity than the west side.
Further, because the east-side route is about the same length as existing transmission lines, the properties of electricity carried on it are the same as on existing lines and therefore it did not require a $1.1 billion converter to link into the existing system. Because the west-side line is 400 kilometres longer, however, the properties of electricity that it can carry are different than existing lines and therefore it required a converter.
These differences have sometimes confounded the debate about routing Bipole III -- leading advocates for the east side to argue that it is $1.5 billion cheaper than the west-side route ($400 million less of line costs and no need for a $1.1 billion converter). West-side advocates, meanwhile, argued that eventually a converter station would be needed on the east-side route so its $1.1 billion cost should be applied, bringing the east-side advantage down to $400 million -- the cost of 400 kilometres of additional line along the longer west-side option.
The Wisconsin deal has made the issue moot -- a converter is now needed for either option. The east-side line, however, remains the best option by at least $400 million.