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Hydro exports may not cover new line: Tories

U.S. utilities often pay one-third of price Manitobans shell out

Hey there, time traveller!
This article was published 17/9/2010 (3612 days ago), so information in it may no longer be current.

Manitoba Hydro is selling power to the United States for a third of the price Manitoba homeowners pay, and that could make it tough to fund the new power line down the west side of the province, the Tories said Friday.

The results of a freedom of information request show that most of Manitoba Hydro's export sales last year were made on the spot market and sold for an average of 2.37 cents per kilowatt hour, down dramatically from 2008-09 and a fraction of what Manitoba homeowners pay. Domestic residential rates are about 6.38 cents per kilowatt hour.

Manitoba Hydro CEO Bob Brennan notes U.S. utilities pay less because Hydro doesn't have to pay their local distribution costs.


Manitoba Hydro CEO Bob Brennan notes U.S. utilities pay less because Hydro doesn't have to pay their local distribution costs.

That ought to worry Manitobans because the NDP government has promised that export revenue will cover hundreds of millions in extra cash needed to run Bipole III down the west side of the province instead of the east.

"The NDP can't continue to claim the extra cost of Bipole III will be covered by U.S. power sales," said Tory Leader Hugh McFadyen.

The $2.2-billion line, slated to be built starting in 2012, will go down the western side of Lake Manitoba instead of the east side of Lake Winnipeg, the faster, cheaper but less green route. The Tories have long argued that the west side will cost $1.75 billion more and is a waste of money.

Manitoba Hydro President and CEO Bob Brennan said the drop in spot-market export prices last year was a blip caused by the low cost of natural gas, the downturn in the American economy and a slowing of demand. Already this year, spot export prices have rebounded by 80 per cent, he said.

Brennan said only long-term, locked-in deals with American power companies will be used to backstop Bipole III. Until those are signed, the company won't go ahead with any big building project.

Asked why Manitobans pay so much more for power than the export price, Brennan said it's cheap to sell pure power over one or two huge transmission lines to the United States.

Manitoba customers pay for a host of other things -- thousands of distribution lines and converter stations to each neighbourhood and home as well as maintenance costs, customer service systems and safety and energy-efficiency programs.


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