Winnipeg Free Press - ONLINE EDITION
Selling power to Americans
So was it a blip or a sign export sales are climbing back up?
Somewhat lost in the debate over Manitoba Hydro’s plans to build the Keeyask and Conawapa generating stations are these few words in Manitoba Hydro’s recently released first quarter report:
"Extraprovincial revenues of $114 million were $27 million or 31 per cent higher than the same period last year ($87 million) reflecting higher sales volumes and higher export prices. Energy sold in the export market was 3.1 billion kilowatt-hours compared to 2.3 billion kilowatt hours sold in the same period last year."
"Manitoba Hydro incurred a net loss on consolidated electricity and natural gas operations of $5 million for the first three months of the 2013–14 fiscal year compared to a net loss of $24 million for the same period last year.
"The $19 million improvement in financial results was largely attributable to increased net extraprovincial revenues resulting from higher sales volumes due to favourable water conditions and higher export prices.
"The consolidated net loss was comprised of a $7 million loss in the natural gas sector and a $2 million profit in the electricity sector. The loss in the natural gas sector is the result of seasonal variations in the demand for natural gas and should be recouped over the winter heating season.
"Based on current water flow and export market conditions, Manitoba Hydro is forecasting that financial results will improve over the balance of the fiscal year and net income should reach approximately $70 million by March 31, 2014."
Contrast this with what Hydro’s first quarter report said one year ago.
"Extraprovincial revenues of $87 million were $14 million or 14 per cent lower than the same period last year reflecting decreased sales volumes partially offset by marginally increased prices. Energy sold in the export market was 2.3 billion kilowatt-hours compared to 3.2 billion kilowatt-hours sold in the same period last year."
"Manitoba Hydro continues to experience low export market prices as a result of low natural gas prices and lower demand for electricity due to economic conditions in the U.S.
"Low export prices are projected to result in continuing downward pressure on net income in 2012–13.
"Based on current water flow and export market conditions, Manitoba Hydro is forecasting that financial results will improve somewhat and net income should reach approximately $30 million by March 31, 2013."
The lesson in this?
Manitoba Hydro still has to justify Keeyask and Conawapa, but still, what a difference a year makes.
Postscript: RBC came out with its revised economic outlook for the provinces this week. It said the knock against Manitoba was weaker than forecast manufacturing exports due to a still-weak U.S. economy.
The bright spot? Electricity production jumped higher.
"Providing some offset to the weaker manufacturing output, electricity production in the province is surprising on the upside. Data for the first half of 2013 point to an increase of double the approximately five per cent implied after the first quarter.
"As a result, we assume utilities output growth this year of six per cent, which is more than double our assumption last quarter."
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About Larry Kusch and Bruce Owen
Larry Kusch has been a journalist for 30 years, the last 20 with the Winnipeg Free Press. His is one of the newspaper's two legislative bureau reporters.
Raised on a Saskatchewan farm, he received an honours journalism degree from Carleton University in 1975.
At the Free Press, Larry has also worked as a general assignment reporter, business reporter, copy editor and assistant city editor.
Bruce Owen joined the Winnipeg Free Press in 1990 after four years working in other media.
He's worked in a number of positions at the Freep, including pet columnist, assistant city editor and police reporter. Right now he takes up space at the Manitoba legislature.
Bruce is one of five reporters who won a National Newspaper Award for the paper’s coverage of the 1997 Flood of the Century. He's also the recipient of the 1996 Volunteer Centre of Winnipeg Media Golden Hand Award and the 1995 Canadian Federation of Humane Societies Media Commendation Award.
In a past life Bruce worked at YMCA-YWCA Camp Stephens. He has a blog where he and others write about camp and the people who worked and played there.
You can also find Bruce on Twitter where he posts and retweets all sorts of stuff.
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