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Business case for Keeyask, additional exports solid: Hydro

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The provincial government's approval of Manitoba Hydro's plans to develop the Keeyask Generating Station and a new transmission interconnection to Minnesota -- based on the recently released Public Utilities Board (PUB) review -- is good news for Manitoba's energy future.

Keeyask will allow us to continue to supply reliable, cost-effective electricity to Manitobans for generations to come. In addition to energy, this project with our First Nations partners provides significant benefits -- training, employment and economic growth -- not only in Manitoba's north, but in the province as a whole.

The PUB review also categorically rejected using natural gas for electrical generation. In light of the Obama administration's proposed new standards for carbon emissions from power plants in the United States, the value of carbon-free hydropower from Manitoba can only increase. This further enhances exports as a way of helping to keep rates low for Manitobans.

The approval of the new Manitoba-Minnesota transmission line recognizes the value of enhancing both our export and import capacity. This new interconnection will improve the reliability and security of Manitoba's electricity supply.

The decision on Conawapa was not a surprise. In fact, my testimony to the PUB made it clear it would be premature to make a final decision on Conawapa at this time. When we feel we have a solid business case and it makes sense to develop, we will revisit Conawapa. In the interim, we will continue to pursue additional energy exports with customers in Canada and the United States.

Our more aggressive demand-side management (DSM) plan is also supported by the provincial government. With an investment of almost $1 billion in enhanced Power Smart programs over the next 15 years, we are targeting an additional 250 per cent in energy savings versus our prior plan. This will help our customers keep their energy bills lower in the coming years.

The PUB made a number of other recommendations that the provincial government indicated they are considering, including the establishment of an independent arms-length entity to deliver DSM programs. We will work with the province to review the various options available for the most effective delivery of Power Smart programs to our customers.

We understand rates are a concern for Manitobans. Small, regular rate increases -- as opposed to large one-time or variable increases that are being seen in other jurisdictions -- make it easier for Manitoba businesses and families to budget their energy costs.

The increases we require today are to fund ongoing renewal and enhancements to our existing system: new substations and distribution lines, rebuilding manholes and replacing wooden poles. In the future, when Keeyask and the Manitoba-Minnesota transmission line come into service, those same modest increases -- combined with enhanced revenues from export sales -- will help pay for these projects, along with the ongoing renewal and expansion of our distribution system.

The result will be that Manitoba will still have some of the lowest electricity rates in Canada ... a position we enjoy today thanks to the careful and responsible development of our hydroelectric resources over the last century.

Will everyone agree our plan is the best option? Probably not. But our plan is the right path to ensure the next generation of Manitobans will enjoy the same affordable, reliable and renewable energy that we do.

And that certainly is good news.


Scott Thomson is president and CEO of Manitoba Hydro.

Republished from the Winnipeg Free Press print edition July 5, 2014 A13

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