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Hydro projects going ahead, Chomiak vows

Budget woes won't derail plan

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The Selinger government is not letting Manitoba Hydro's short-term fiscal woes derail plans to build a new power-transmission line or bring new hydro-generating stations on stream.

Dave Chomiak, the minister responsible for the Crown corporation, said Tuesday the NDP government is confident domestic and export demand for Manitoba power will be strong over the long term.

"Overall, we're optimistic. There's always short-term bumps," Chomiak said in an interview Tuesday.

"What we've found in the past... is that if you just looked at the day-to-day considerations you wouldn't build anything."

After years of generating huge profits, Manitoba Hydro is experiencing a cash crunch brought on by a warm Prairie winter and soft export markets.

For the fiscal year that ended March 31, Hydro estimates it earned a profit of $73 million, down $52 million from the $125 million it first projected. It received approval Saturday from the Public Utilities Board for a two per cent hike to all customers effective April 1.

In light of shifting energy-market conditions, some observers have called for a review of looming multibillion-dollar projects such as the BiPole III transmission line and the proposed Keeyask and Conawapa dams.

Chomiak, who also serves as innovation, energy and mines minister, acknowledged that the U.S. recession has depressed electricity prices, as has the increased potential for shale-gas extraction.

But fossil fuel prices are unlikely to remain low, he said, quoting the assessment of international experts. And placing a hold on hydro dam construction could jeopardize Hydro's export markets, not to mention Manitoba's own supplies, Chomiak said.

Nunavut, Saskatchewan and Ontario all need power, and Hydro has just signed significant power deals with Wisconsin and Minnesota, he noted. "We've never built a dam; we've never produced any power that has not been utilized," he said.

But Progressive Conservative Hydro critic Reg Helwer said it is irresponsible of Chomiak to continue to beat the drum for expensive construction projects given the current economic climate. "How much more do they expect that we'll be able to afford to pay?" Helwer asked of Hydro customers. "I would continue to urge the government to look at a capital projects review."

Although hydro consumers are being hit with a new rate hike, the provincial NDP remains committed to ensuring Manitobans enjoy the lowest combined price in Canada for electricity, home heating and car insurance, Chomiak said. The party made that a campaign promise during last fall's election.

Manitoba is believed to have the lowest combined rates in the country for these goods and services. Enabling legislation, expected to be tabled this spring, would require utilities to pay rebates to consumers if they failed to deliver on the government's promise.

Chomiak said Tuesday the province has hired the accounting firm Deloitte to measure consumer prices in every province. The government will pay to conduct such comparisons annually. Deloitte's initial report is expected this month.

Republished from the Winnipeg Free Press print edition April 4, 2012 A4

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