Winnipeg Free Press - PRINT EDITION

Time is right for an independent energy authority in Manitoba

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Manitoba Hydro president Scott Thomson has extolled the Public Utilities Board report on the Crown corporation's development plans in his article Business case for Keeyask, additional exports solid: Hydro (July 5).

But Thomson conveniently ignores the PUB's many criticisms of how Hydro has failed to look at the value of integrating alternative forms of energy and has hid greater conservation of energy use through its limited Power Smart efforts.

This weakness of Hydro's work on these two critical elements of energy planning is why the PUB recommended further generation and transmission projects be "examined through a comprehensive and regularly occurring integrated resource-planning system."

Thomson's rosy view of the report was possible only because the PUB gave Hydro's proposed Keeyask generating station a "free ride" -- accepting as a "sunk cost" $1.3 billion spent on it prior to regulatory approval.

Further, he failed to acknowledge the $200-million to $300-million carrying charges of the new transmission line, Bipole III -- key to Keeyask generation -- are not reflected in the costs of exporting that dam's energy to American customers.

Bipole III was forced upon us for "reliability" reasons, no questions allowed, and therefore was, itself, out of the scope of the PUB's recent review of the needs for and alternatives to Hydro's development plan, detracting from the financial case for the utility's planned multibillion-dollar decade of development.

His selective promotion of Hydro's preferred development plan -- begrudgingly supported by PUB -- ignores the PUB's significant recommendation that: "The Government of Manitoba not approve any further generation and transmission projects, or approve the commencement of spending on such projects, unless such projects have been examined through a comprehensive and regularly occurring integrated resource-planning process."

This recommendation implies the NDP government's licensing of Bipole III and Keeyask projects is unacceptable. It seems to indicate the process to date has left domestic ratepayers at high risk of shouldering the high costs of what may be uneconomic development.

Look at the record: The recently completed Wuskwatim hydroelectric generating station, for example, was built for export of electricity to the U.S., at a cost double the original estimate even while using existing domestic and export transmission capability. It produces electricity at 10 cents a kilowatt hour, while the U.S. market for that electricity now is around four cents a kilowatt hour. This scheme went astray and we are paying for it with increased Hydro rates.

This does not bode well for the ratepayers, given the extraordinary costs they would shoulder should the business case for Bipole III and the PUB-approved Keeyask dam and Manitoba-Minnesota transmission also go astray.

The PUB's recommendation further generation and transmission projects be examined through a comprehensive and regularly occurring integrated resource planning process is useful.

Such planning happens routinely in other jurisdictions. The California Energy Commission is the state's principal energy policy and planning agency. My firm worked with the commission from 2002 to propose transmission and energy storage for renewable energy sources for that state. The work lasted over the course of both Democratic and Republican administrations without any change of direction, and it was finally adopted under the seal of former Republican governor Arnold Schwarzenegger.

The PUB recommended a separate authority be established in Manitoba to plan for energy efficiency. But while it stressed the need for resource planning -- how to look at other energy sources, such as wind and solar and integrate them with hydroelectric supply -- it did not address who specifically should have control of this.

Manitoba needs an independent energy authority, but its mandate must be broader than energy efficiency. The authority's objectives must include evaluating all available and developing energy resources for all types of energy and its storage, with emphasis on the transition to those renewables whose cost is dropping. It should develop economic, technical, social and environmentally acceptable options that minimize risk on all accounts and co-ordinate Hydro's development plans with other provinces and the U.S.

Manitoba's energy planning must be prepared to reset course for unexpected changes in technologies, weather, economic conditions, forecast load and transmission. All are needed to minimize risk of our future energy schemes from going astray with us still holding the bag.

The record shows, as the PUB found, that job cannot be left to Manitoba Hydro, controlled by the government. It must go to an independent energy authority that is not hide-bound by a history of seeing hydroelectricity as the solution to all Manitoba's energy needs.

 

Dennis Woodford was a transmission planning engineer at Manitoba Hydro for 15 years and now is president of Electranix Corporation.

 

HYDRO'S DEVELOPMENT PLAN: HOW DID THINGS GO SO BADLY WRONG?

Will Tishinski, a former Manitoba Hydro vice-president, describes how Hydro's development plan spun out of control at wfp.to/comment

Republished from the Winnipeg Free Press print edition July 9, 2014 A9

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