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This article was published 13/6/2015 (1715 days ago), so information in it may no longer be current.
Manitoba Hydro says six consecutive years of losses will help reap billions in profits in the future.
Tougher environmental laws in the U.S. that require carbon reductions of 30 per cent by 2030 will help Manitoba's largest Crown corporation realize its brighter future.
Manitoba Hydro spokesman Scott Powell said the simple plan is already paying dividends. As more coal-burning power plants in the American Midwest close, the demand for electricity will be met by Hydro's northern dams, which includes the Keeyask generating station that's under construction.
"We do have a number of signed export contracts in place now and into the future with a total value of approximately $10.1 billion," Powell said. "The firm export contracts, they are signed and sealed."
Powell said besides negotiating for additional firm export contracts with U.S. utilities, Hydro also continues discussions with Saskatchewan. Hydro has signed two deals with Saskatchewan worth more than $100 million.
Manitoba Hydro is before the Public Utilities Board asking for a 3.95 per cent rate increase for the coming year. Hydro argues it needs the increase, and consecutive years of similar increases, to help it pay for the $4.6-billion Bipole III transmission line and $6.5-billion Keeyask dam on the Nelson River.
Hydro also wants approval to build a new transmission line to Minnesota and plans to spend billions in the next decade replacing older pieces of its production and distribution systems.
The utility predicts six consecutive years of losses, ranging from $75 million to $192 million, from 2018 to 2024, before it returns to the black.
Opposition Conservatives claim government interference in Hydro could bankrupt the province.
The governing NDP says building dams and transmission lines will keep power rates low here.
Powell said recent low export prices add to the confusion.
Hydro has revised its numbers to show export prices from 2016 to 2036 will be seven per cent lower, on average.
"The firm contracts are absolute," he said.
"With the spot market, the option there is you either dump the water in the spillways (without generating electricity) or you sell it on the spot market for what you can get. The option is zero and it's a waste of water."
Working on Hydro's side is its membership in the MidContinent Independent System Operator (MISO) that oversees the regional electrical grid of 15 U.S. states. Manitoba Hydro is the only Canadian utility that's part of MISO.
"It provides us access to a good market in the U.S.," Powell said. "By acting as a clearing house for all power generation created within MISO's jurisdiction, we now have electronic access into a much larger market than we used to.
"This results in higher prices for energy than may be possible if we were phoning individual customers when we had excess energy for sale."
Many of the states in the MISO market are moving to wind and solar power to replace some of the energy from coal, but it's generally accepted these renewable forms of energy are intermittent. MISO and state utilities can't depend on wind and solar to keep the lights on in winter.
Powell said that's why some U.S. utilities have inked firm deals to buy hydro power from Manitoba.
"We're working on stuff all the time," Powell said. "We are also always pursuing new deals that make sense for our ratepayers."