Hydro's attempted end run around the PUB

Winnipeg Free Press

24-04-2025

Opinion
Premier Wab Kinew has promised a Hydro rate freeze for 2025, but Manitoba Hydro's application to the Public Utilities Board asks permission to plan to add at least $1.4 billion to its debt to build a fossil gas turbine plant before the public even has a chance to comment.
For Manitobans concerned about climate change, planning to use more natural gas makes no sense. The Manitoba economy will also suffer, as more fossil fuel consumption means many more millions of dollars flowing out of our province, reducing our energy resilience.
Hydro has tried to do an end-run on the PUB by claiming that 'procurement of equipment requires an early tendering process… suppliers will require deposits this fall…' Hydro must submit its large, long-term Integrated Resource Plan (IRP) by the end of 2025. In submitting this letter before that happens, Hydro wants to lock in the commitment to buying the turbines before intervenors can comment. The PUB has no power to stop Hydro on their end-run; it can only 'comment.'
Hydro has two reasons for wanting these two new turbines — one real and one based on a deeply embedded corporate culture. Their letter says: based on Manitoba Hydro's recent analysis, new capacity resources could be required as early as 2029/30, due to sustained winter peak capacity deficits. That's Hydro's first reason, based on internal needs not verified by PUB. The second reason is that for at least 25 years, Hydro has done everything it could to avoid using wind energy at any scale. Neighbouring North Dakota, with the same wind potential, has installed 4,000 MW, 14 times Manitoba's paltry 280 MW. Without government direction, even this very low level of wind generation would not have happened.
Hydro's only answer? Spend $1.36 billion for unclear and unproven needs. The recent PUB response shows that PUB thinks there is a high probability that costs will be much higher. However, PUB legislation means it cannot disallow Hydro's determination to commit funds to make a deposit for these turbines before anyone else has a say.
To understand what is behind Hydro's first reason for needing new winter generation, we need to look at what winter does to our generating capacity. Manitoba's total winter generating capacity is actually frozen in ice. Whatever water levels are in the huge storage lakes at freeze-up dictates the total potential energy storage used to drive the turbines at our northern dams. As our peak winter demands grow, Hydro is rightly concerned to find ways to bolster power generation in low-level freeze-up years.
When this happens now, we simply import power as needed through transmission lines to Minnesota, Wisconsin and North Dakota. In fact, we import some power almost every year in winter. Why can't this continue? Hydro doesn't say.
Hydro is like the carpenter who saw every problem as a nail, and hence only needed a hammer in the toolbox. Every problem just needs them to build something, usually something big and costly. Hydro finds it hard to actually look at what other solutions are available, and what other jurisdictions do when faced with similar problems. Let's look now at their second reason, their disdain for wind energy.
How can wind, an intermittent energy source, help with Hydro's stated problem? Hydro says that our big storage lakes sometimes don't have enough water to allow needed power generation over the winter. Expanded wind power can be used in low-water years to bolster storage of water by using wind energy to reduce the draw-down of summer/fall water levels. This not only increases our overall system capacity, it also can help manage extremes of lake levels that badly affect communities and fisheries. North Dakota makes 36 per cent of all its electricity from wind (2022). We get only 2.6 per cent from wind. Ironically, Manitoba provides North Dakota with back-up using our water storage resources. Does Hydro think the wind stops at the border?
Expanded wind energy used strategically to increase the levels of stored energy of water can insure against the scenarios that Hydro puts forward. New wind energy is available at under 4 cents a kilowatt hour, cheaper than gas generation and of course, much more climate friendly. Best of all, it generates permanent, skilled employment and benefits to landowners and municipalities for turbine placements.
Instead of putting $1.36 billion of debt on Hydro's books, the capital can come from private sector developers, who then sell their power to Hydro at a fixed price, usually for 20-25 years. Wind development is also scalable; that is, we can build it as we need it. Given world conditions, building a 150MW wind farm in Manitoba should not take more than 18 months. We already have lots of wind data to guide placement of the turbines. All that is needed is provincial direction.
With U.S. President Donald Trump destroying America's renewable energy industries, Manitoba is in a prime position to secure a good price for wind turbines from outside the U.S.
Or we could waste $1.36 billion on a fossil gas plant that should be declared a stranded asset and cancelled before construction even begins.
Kinew needs to inform Hydro which approach makes the most sense for Manitobans.
Peter Kidd is a retired engineer who worked with Hydro and Efficiency Manitoba. Tim Sale is a former minister of energy for Manitoba.