Wisconsin wants to buy 500 megawatts of Manitoba Hydro's electricity -- a $2-billion deal announced Thursday that green-lights the construction of two new northern dams and helps keep Manitoba's power rates the lowest in the land.
"This is a major deal," said Manitoba Hydro President and CEO Bob Brennan. "It allows us to build major plants and have other people help pay for them at the front end."
The deal is with Wisconsin Public Service, which powers the northeastern corner of the state. It won't kick in for another decade -- which gives Hydro time to build the first of two new dams -- but it will last for 15 years and funnel $2 billion into Hydro's coffers.
That, along with other export deals, helps keep domestic power rates low, said Brennan and Premier Gary Doer Thursday.
The sale also requires the construction of a small, 60-km transmission line from Winnipeg to the Minnesota border -- a project that could engender some local opposition like the kind that killed similar power lines in Alberta and British Columbia.
And the deal makes the need for BiPole III all the more pressing. That's the huge new transmission line slated to run down the west side of Lake Manitoba that has sparked controversy for the last year.
The Wisconsin deal is the latest in a trickle of fairly sizeable power sales to American states looking to ween themselves from dirty coal power. Earlier this year, Hydro signed a similar deal with Minnesota Power to sell 250 megawatts starting in 2020.
'This is a major deal. It allows us to build major plants and have other people help pay for them at the front end' - Manitoba Hydro President and CEO Bob Brennan, making the announcement with Premier Gary Doer, right.
The revenue from the Wisconsin sale alone will cover almost half the cost of Conawapa -- the granddaddy of the next generation of hydro dams planned for northern Manitoba. And it mandates the construction of Keeyask, a smaller dam that can be in service earlier, in time to start selling power to Wisconsin.
The province has already started work on the Wuskwatim dam south of Thompson, which has been troubled by cost overruns, a labour shortage and difficulties finding a willing builder.
"Right now is definitely a bad time to build anything," said Brennan. "We'll space it out in such a way to take advantage of the construction cycle."
Brennan said the dams last 100 years and continue to pump out power while inflation rises, meaning it makes sense over the long run to build the dams now despite skyrocketting construction costs.
The Wisconsin deal is also further proof that the province is making more inroads into American markets than it is in Ontario, once touted as the prime customer for Manitoba's hydro power, where a 3,000-megawatt sale could set Hydro up for years.
Both Doer and Brennan said they're still going to talk to Ontario, and they said Manitoba still has plenty of export capacity left on Conawapa. But Brennan hinted that the province could sell Ontario smaller bursts of power on the spot market.
Tory Leader Hugh McFadyen said the deal is a good one for the province, but it spotlights the folly of building BiPole III down the west side of the province when Minnesota and Wisconsin are to the east, much closer to Manitoba's northeastern generating stations.
"It highlights once and for all the daffiness of this decision," said McFadyen.
The NDP has mandated that the new transmission line be built down the west of Lake Manitoba, not the east side of Lake Winnipeg where pristine boreal forest and unpredictable First Nations exist.
The Tories say that decision wastes millions in construction costs and lost power that will leach off the much longer line.
maryagnes.welch@freepress.mb.ca
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