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Manitoba Hydro keeps its eye on the long term

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In his Sept. 4 column, Premier's damned if he does... , Dan Lett attempts to draw a parallel between the decision not to proceed with Conawapa in the 1990s and Manitoba Hydro's current plan to develop new hydroelectric facilities.

The two situations are very different. The export customer in the '90s, Ontario, backed out of the arrangement, while today Manitoba Hydro has two U.S. utility customers signed to export deals that will see some $7 billion flow to Manitoba during the life of the contracts, helping to pay for a major part of the new generating stations in Manitoba.

Manitoba Hydro is proposing to build the Keeyask Generating Station to meet Manitoba's immediate requirements for electricity and Conawapa for the longer term. The current forecast is that this new generating resource will be needed in 2020. By coupling new export contracts with the development of new generating facilities, customers outside of Manitoba can bear part of the development costs.

This is a formula Manitoba Hydro has followed since the 1970s, contributing to decades of low electricity rates for Manitobans.

Let me be clear that this is Manitoba Hydro's preferred resource-development plan. After an exhaustive analysis of input costs and risks, which is updated annually, we believe this is the most economic plan and will result in the lowest electricity rates for Manitobans, compared to other supply options.

We expect it to be thoroughly tested in an upcoming public review process. The current slump in short-term export sales is conditioned by the ongoing problems in the U.S. economy and the drop in natural gas prices, a fuel which competes with hydroelectricity imports. I do not believe these low natural gas prices can be sustained over the longer term.

It is important to keep in mind that Manitoba Hydro's development plans cannot be driven by short-term factors. Planning for a hydroelectric generating station that takes a decade to be licensed and built and can be expected to generate power for 100 years with virtually no fuel cost must take the long view. In fact, we have been in this position before. If Hydro executives had balked at the decision to build the Limestone, Kettle and Long Spruce facilities on the Nelson River in the 1970s, Manitobans would be paying much higher hydro rates today.

We look forward to a complete public examination of our plans in the months to come.

SCOTT A. THOMSON

President and CEO

Manitoba Hydro

Winnipeg

Republished from the Winnipeg Free Press print edition September 7, 2012 A11

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