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."