May 29, 2015


Local

Power surge

Manitoba Hydro is planning to spend $33 billion during the next two decades on a host of new dams, power lines and converter stations. That's nearly three times the provincial government's annual budget. The details of Hydro's spending plans have come under intense scrutiny lately, which will culminate, likely before the end of the year, in a huge regulatory hearing on the future of Hydro. Among the criticisms? Hydro's inability to make accurate budget forecasts for big projects.

 Here's a look at the financial state of Hydro's three marquee projects -- two northern dams and the controversial Bipole transmission line -- which have skyrocketed in price in five years.

TREVOR HAGAN / WINNIPEG FREE PRESS

-- Mary Agnes Welch

Bipole III

Cost est. in 2008 -- $2.25 billion

Cost est. in 2012 -- $3.28 billion

Increase -- 46%

WHY? -- Converter stations at either end of the power line increased dramatically in price. An independent review of Hydro's early cost forecast found the company had underestimated the cost of preparing the site for building.

Keeyask

Cost est. in 2008 -- $3.7 billion

Cost est. in 2012 -- $6.22 billion

Increase -- 68%

WHY? -- Manitoba Hydro says it learned from the cost overruns for the new Wuskwatim dam and upped the estimates for wages, materials and equipment costs. Hydro added a series of reserve funds to cover unexpected risks, such as lower labour productivity.

Conawapa

Cost est. in 2008 -- $4.98 billion

Cost est. in 2012 -- $10.19 billion

Increase -- 105%

WHY? -- Same as Keeyask. Hydro learned from Wuskwatim. Also, Conawapa's in-service date was postponed two years to 2026. That increased labour-cost estimates.

-- source: Public Utilities Board documents, Manitoba Hydro

Republished from the Winnipeg Free Press print edition July 13, 2013 D3

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