Manitoba Hydro is poised to enter a new era of aggressive energy conservation as part of its plan to build two new generating stations and a new transmission line to the United States.
Details of Hydro's new conservation efforts are to be formally announced in several weeks -- if approved by the Selinger government. However, much of what the Crown utility has in store for its customers was filed with the Public Utilities Board last week during its ongoing hearing to weigh whether Hydro's capital plan makes economic sense. Manitoba Hydro also recently submitted it to government as required by the province's Energy Savings Act.
Hydro calls it DSM level 2 in its paperwork with the PUB, or demand-side management kicked up a few notches from what the Crown corporation has been doing under its Power Smart conservation program. Hydro says DSM level 2 represents approximately 3.8 times the level of savings identified under the 2013 Power Smart Plan.
'These opportunities are considered to be economic, however, they involve broader considerations beyond simply energy-savings objectives'
Besides encouraging more Manitobans to conserve electricity, Hydro officials have told the PUB their game plan is to sell that new-found hydro power to U.S. utilities that are turning north for hydro power as aging coal-burning power plants are retired and because of state laws that require more renewable energy.
"I think it's safe to say this: That because we're using a portion, at least, of the DSM savings to meet the firm requirements in the export contracts, that at least a portion of the DSM savings are going to the long-term firm contracts," Ed Wojczynski, Hydro's manager of portfolio projects, told the PUB panel at a recent hearing.
DSM level 2 features three elements that would touch every Manitoba Hydro customer, the biggest being conservation rates. If adopted, it would see residential customers pay a set rate per kilowatt hour for the first step or bloc of power they use in a billing period. If they go above that amount, customers would pay more for the balance of the electricity used during the billing period.
The intent is for consumers to conserve electricity by offering a price incentive, the easiest and most effective way to encourage reduced consumption.
Hydro is looking at two other ways to further reduce domestic power consumption. Fuel switching would see more consumers switch to natural gas to heat their homes and load displacement would encourage larger users to generate their own power to displace their own electrical load. When possible, Hydro would agree to purchase electricity from the projects to add to Manitoba's grid.
Hydro spokesman Scott Powell said all the options are under consideration.
"These opportunities are considered to be economic, however, they involve broader considerations beyond simply energy-savings objectives," he wrote in an email.
Powell said if adopted, over the next three years, the plan sets out to capture electricity savings of 411 megawatts. (Hydro's newest dam, Wuskatim, has a 200-MW capacity). The full plan is to be posted on Hydro's website.
In its filings to the PUB, Hydro says under its 2013 load forecast, domestic energy demand is projected to grow at an average rate of 1.5 per cent per year over 20 years. Existing conservation efforts under PowerSmart, such as getting rid of old power-sucking fridges and promoting energy-efficient light bulbs, reduce the average annual growth to 1.4 per cent. Under DSM level 2, it declines to 0.9 per cent.
La Capra Associates, an independent consultant hired by the PUB to advise it on Hydro's plan to build the Keeyask and Conawapa dams and the proposed transmission line to the U.S., has said the reductions with enhanced DSM potentially push the year a new dam would be needed to 2030.
Hydro wants the $6.5-billion Keeyask in service by 2019 to take advantage of lucrative power sales to the U.S. Midwest. It's already said it doesn't need a decision on Conawapa until four years from now. The proposed in-service date for the $10.7-billion Conawapa dam is 2025.
Powell said more aggressive conservation does not mean Keeyask should be put on hold as it's a big unknown if Hydro will meet its new conservation target.