If two massive northern generating stations don't get built in time to make good on export deals to the United States, Manitoba Hydro will build a natural gas-fired power plant -- a move that could compromise the province's Kyoto goal.
A gas-fired plant would cost a pittance compared to a hydro dam, and it could be built relatively fast. But it could compromise the spirit of the billion-dollar export deals reached recently with power companies in Minnesota and Wisconsin, where utilities consider hydro power clean and green compared to coal or natural gas.
That's according to testimony given by senior Manitoba Hydro officials at a recent series of hearings before the Public Utilities Board -- hearings that prompted the PUB to hike power rates by five per cent last week.
Gas-fired power plants burn the fossil fuel to make electricity, which produce greenhouse gas emissions. More emissions would be a step in the wrong direction for the Doer government, which has pledged to cut its climate change pollution by three million tonnes over the next four years to meet its Kyoto targets.
Hydro president and CEO Bob Brennan stressed that a gas-fired plant is only a remote possibility and no real work has been done to plan one. It would only be needed if something unexpected delayed construction of the Keeyask and Conawapa dams slated to be built on the Nelson River in the next decade.
"It's pretty unlikely," Brennan said. "It's not something you want to do."
Brennan said he's hoping the opposite occurs -- that Keeyask and Conawapa come online a year early. And he said if Hydro is ever forced to build a gas-fired plant, it would mostly be used as backup during droughts when northern dams can't produce enough power for Manitobans or to meet Hydro's export commitments.
Last week, the PUB ordered Hydro to raise its rates by five per cent -- about double what Hydro was asking for. In its order, the PUB raised red flags about the pace and cost of the new dams that could push Hydro's debt to $18 billion. The PUB said the company ought to hedge against such risk with a little more revenue from ratepayers.
Wuskwatim, the dam now under construction near Thompson, has increased in cost by 60 per cent since it was given the go-ahead, and Hydro has had trouble finding a contractor able and willing to build it. It's in the process of being tendered a second time.
Similar cost escalations could hit Keeyask and Conawapa in turn, and negotiations with nearby First Nations are always uncertain. Already, Fox Lake Cree Nation has said it will stall Conawapa unless the federal government makes good on an outstanding land claim.
Staff in the provincial climate change office refused to comment on the notion of a gas-fired power plant, calling it purely hypothetical.
But such a plant could hamper efforts to reach Kyoto targets.
According to new Environment Canada emissions data, a TransAlta gas-fired power plant in Lloydminster that generates 220 megawatts of electricity emitted about 750,000 tonnes of greenhouse gases in 2006. Another plant about the same size, SaskPower's Queen Elizabeth generating station in Saskatoon, emits about 566,000 tonnes a year.
"I'd be worried if Hydro ever oversells for export the power we need domestically and then we're in a situation where we need to build a thermal plant," said Curt Hull of Climate Change Connection. "It's fear and caution at this stage rather than something we really have enough information to judge."
Hull said he's worried more Manitobans will switch to heating their homes with electricity rather than expensive natural gas, a move that drives up demand for power. That's probably a sound environmental choice as long as rising domestic demand doesn't force Hydro to turn to a gas-fired plant.
maryagnes.welch@freepress.mb.ca
Dam'd if you do
Wuskwatim
Burtwood River near Thompson
200 megawatts
$1.6 billion
Construction underway, slated to open 2012
Keeyask
Nelson River near Split Lake
620 megawatts
$3.7 billion
Slated to open 2018
Conawapa
Nelson River near Gillam
1,250 megawatts
$5 billion
Slated to open 2021
Gas-fired power station
Location unknown
600 megawatts
$600 million
Roughly two years needed for construction
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