September 22, 2019

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PUB slams Hydro over rising dam costs

Recommends exploring natural gas option

Hey there, time traveller!
This article was published 26/8/2011 (2948 days ago), so information in it may no longer be current.

The province's power regulator is so worried about the skyrocketing cost of two new dams it's asked Manitoba Hydro to consider building a natural gas-fired power plant in the meantime.

That would cause an outcry among environmentalists and scuttle Manitoba's plan to become a green-power giant and shrink its greenhouse gas emissions to combat climate change.

Plus, it's not likely to happen, says Manitoba Hydro.

In a recent written decision, the Public Utilities Board repeated what's become a familiar warning -- that the cost of the Conawapa and Keeyask dams and the Bipole III power line have increased so dramatically that export revenue might not cover them, leaving Manitoba ratepayers to pick up more of the $17-billion tab.

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Hey there, time traveller!
This article was published 26/8/2011 (2948 days ago), so information in it may no longer be current.

The Keeyask dam, shown in this artist’s rendering, is slated to be operational in 2019. But that’s only if Hydro can prove building the $5.6-billion dam is the best option for the province.

WINNIPEG FREE PRESS ARCHIVES

The Keeyask dam, shown in this artist’s rendering, is slated to be operational in 2019. But that’s only if Hydro can prove building the $5.6-billion dam is the best option for the province.

The province's power regulator is so worried about the skyrocketing cost of two new dams it's asked Manitoba Hydro to consider building a natural gas-fired power plant in the meantime.

That would cause an outcry among environmentalists and scuttle Manitoba's plan to become a green-power giant and shrink its greenhouse gas emissions to combat climate change.

Plus, it's not likely to happen, says Manitoba Hydro.

In a recent written decision, the Public Utilities Board repeated what's become a familiar warning — that the cost of the Conawapa and Keeyask dams and the Bipole III power line have increased so dramatically that export revenue might not cover them, leaving Manitoba ratepayers to pick up more of the $17-billion tab.

In a new twist, the PUB said it makes sense to look at cheaper, quicker ways to meet Manitoba's power needs, including a natural gas-fired plant in southern Manitoba that could capitalize on tantalizingly cheap gas prices.

"...the board finds it troubling that Manitoba Hydro has not explored in any depth natural gas thermal generation supply alternatives to the new major hydraulic generation and transmission projects now planned for by Manitoba Hydro," wrote the PUB in an order issued late last month.

That same order rejected Hydro's request for a 0.9 per cent rate increase.

A gas-fired plant could reduce the risk of a power shortage in drought years, when there's not enough water running through northern dams to keep the lights on.

And, gas-fired power plants are generally quick and cheap to build, while new and controversial "fracking" underway in the United States is sucking more natural has out of deep wells, keeping prices low.

Building a gas-fired plant would allow Hydro to defer construction of the two new northern dams, both of which have seen their price tags rise by 50 per cent since 2008, while export prices have dropped, the PUB suggested.

Keeyask is slated to come online starting in 2019 with the much bigger Conawapa following four or five years later.

Hydro spokesman Glenn Schneider said a gas plant is not in the company's long-term plan and is not a favoured option.

But he said when Hydro applies for a licence to build Keeyask, the company will need to prove the $5.6 billion dam is the smartest option to meet the province's power needs. That's when the cost and benefits of a gas-fired plant will be stacked up against Keeyask for comparison, a comparison the PUB has asked to see immediately.

Schneider acknowledged gas prices are low now, but said that could change, especially if a critical mass of aging American coal-fired power plants are converted to burn cleaner natural gas instead. He said it still makes more sense to deal with the massive upfront costs of hydro plants, but have operating costs locked in at low and stable prices for generations.

He said the same questions came up when the Limestone dam was built in 1990. Its $1.5-billion price tag was a bitter pill at the time but has proven to be a good investment, he said.

"We've been down this path before," said Schneider.

Manitoba Hydro already has four gas-fired units — two at the old Brandon coal plant and two at the Selkirk power plant. But those are largely used as back-up and accounted for less than 0.5 per cent of Hydro's power output last year.

maryagnes.welch@freepress.mb.ca

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