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Utilities board urges Keeyask hydro plant construction

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A rendering of the Keeyask generating station.

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A rendering of the Keeyask generating station.

Build the Keeyask hydro-electric generating station now.

That’s the main recommendation of a sweeping review by the Public Utilities Board into Manitoba Hydro’s vision for dam development in northern Manitoba and a new transmission line to the United States.

The 306-page report was released today by the Selinger government. It comes after about three months of intensive hearings that delved into almost every area of Hydro’s operations and business philosophy. It will be posted on the PUB’s website later today.

The PUB’s main recommendation means work on the estimated $6.5 billion-Keeyask can start next month with it producing power in about five years--exactly what Hydro requested

The PUB said will Manitoba won’t need the power from Keeyask to about 2024, building it five years earlier makes sense. Hydro has forecast it can earn $6.9 billion in selling Keeyask’s power to the Americans, who are under state and federal edicts to supply more renewable energy instead of from coal.

Besides selling Keeyask’s power to the American mid-west, the PUB said the new dam will create Manitoba labour income of more than $500 million and almost 7,000 person years of employment. Plus the dam is being built in partnership with four First Nations, creating benefits to an area of the province where there is little large-scale economic opportunity.

The PUB also gave the green light to the 750-megawatt transmission line to run from south of Winnipeg to near Duluth, Minn. Hydro wants to start working on the line as soon as possible despite some opposition in south-eastern Manitoba.

The five-member PUB panel also threw cold water on proposals to building a cheaper natural-gas generating plant to produce power instead of Keeyask.

"The panel concluded that natural gas generation does not represent an acceptable alternative as it is less economic than hydro-electric generation and relies on burning fossil fuel," the PUB said. "Furthermore, any short-term capital cost advantages are offset by significant ongoing operating cost risk, primarily fuel costs."

The release of the PUB’s report came the same day the government released the Clean Environment Commissions’ report on Keeyask, which follows a separate public hearing held last year.

Conservation Minister Gord Mackintosh said Wednesday that based on the CEC’s recommendation the NDP will grant Keeyask an environmental licence.

Mackintosh said the licence has 165 conditions attached, including increased protection of lake sturgeon, caribou, wetlands and establishing mercury monitoring programs.

Mackintosh said once Keeyask is producing power, the coal-fired unit of the Brandon plant will be decommissioned.

Where the PUB did throw a bit of a curve ball in its report is that the responsibility for energy efficiency should be stripped from Manitoba Hydro and given to a new, arm’s-length entity. Manitoba Hydro, though its Power Smart programs, has long been responsible for encouraging people to conserve power.

"The panel concludes that there is an inherent conflict in Manitoba Hydro being both a seller of electricity and a purveyor of energy efficiency measures," the PUB said.

The PUB also said that the government not approve any further generation and transmission projects, or spend any money on promoting the projects, until a comprehensive review is done on the province’s future electricity needs.

That means the proposed Conawapa generating station remains just that, until such time a solid case can be needed it and its accompanying transmission facilities should be built. Manitoba Hydro has already said it doesn’t need a decision on Conawapa for four years.

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