Manitoba has hydro to burn. Surplus power a lure to industry, an export boon
Manitobans don't yet see themselves as moneyed sheikhs of the north, but they do have a faint glint in their eyes because of their huge resources of exportable hydroelectric power. Premier Howard Pawley and Energy and Mines Minister Wilson Parasiuk last month announced a $4.3 billion (US $3 billion) sale of power from the provincially owned Manitoba Hydro-Electric Board to a group of utilities in the Northern United States.Skip to next paragraph
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That's in addition to the export of $3.2 billion of electricity to Northern States Power Company of Minneapolis, approved last year by the National Energy Board in Ottawa.
The timing of the latest agreement was fortunate for the province's New Democratic Party government, the only NDP regime in Canada. Premier Pawley has called an election for March 18. Such good news helps in a political campaign.
Though his party is usually considered left of center, Mr. Pawley has taken a generally pro-business stand. Opposition leader Gary Filmon has questioned whether the government has been pushing power export sales too hard.
Energy Minister Parasiuk says 50 percent of the profits of the power sales would be used to maintain low electricity costs in the province. These are said to be the lowest in North America at 2.34 cents (US) per kilowatt-hour for 200,000 kw. That compares with 3.21 cents in Montreal, 10.5 cents in New York, and 6.38 cents in Chicago.
``We see great potential for many firms being attracted to Manitoba,'' says Mark Eliesen, head of both the operating utility, Manitoba Hydro, and the provincial body that negotiates power sales and sets power strategy, the Manitoba Energy Authority.
Provincial business boosters have been talking with, among others, makers of silicon wafers for computer chips about locating in the province. The process requires considerable power.
The remaining 50 percent of profits from power sales is to be put into a Manitoba Energy Foundation, with its income used for ``industrial and social development purposes.'' Legislation to create this fund has yet to be introduced into the provincial legislature. But it is assumed it would be similar to the Alberta Heritage Fund, a savings account set up by the Alberta government when its oil revenues surged during the late 1970s.
Manitoba's new power exports don't start in volume until 1993. But Mr. Parasiuk sees the possibility of the foundation's having $1 billion (US$710 million) in its coffers by the year 2000.
The province's energy authority has been discussing power exports with three other parties as well: a group of utilities dubbed the Minnesota-Wisconsin Power Suppliers, talking of taking 1,100 megawatts for 15 to 30 years; the Western Area Power Administration, a US federal agency negotiating to buy 1,200 MW for 35 years; and the provincial utilities in neighboring Saskatchewan and Ontario.
The income may ease the provincial tax burden after the turn of the century. For now, new dams and power plants mean jobs and income for a province with 8.1 percent unemployment (which is high, even though it's 2 percent below the national average).
The sale to Northern States Power of 500 MW for 12 years starting in April of 1993 prompted the start of construction last fall of the 1,200 MW Limestone Generating Station on the Nelson River. It was originally expected to cost around $3 billion. The cost estimate, however, has been reduced to $1.94 billion.
``We are building at a period when there is significant overcapacity in the construction industry worldwide,'' notes Mr. Eliesen. The general contract was won by a combination of Bechtel Corporation of San Francisco and Kumagai-Gumi Company of Tokyo.
Because of the latest power sales, the province is studying construction of another power facility -- probably the 1,400 MW Conawapa Station, which would involve a new dam to be constructed farther down the Nelson River, which drains Lake Winnipeg into the Hudson Bay.
Meanwhile, the province on its northern rivers still has ``an awful lot of untapped energy resources,'' Eliesen says.
The Nelson-Churchill River system's total power capacity is estimated at 8,900 MW, some of this included in the province's current total capacity of 4,100 MW.