Manitoba Hydro announced late last week that it has inked two major power sales with Wisconsin Public Service (WPS), a subsidiary of Integrys Energy Group (NYSE: TEG).
The first sale, running in the 2016-2021 period, is for 108 MW of firm power. The second sale — which will use electricity produced by the proposed new Conawapa Generating Station on the Nelson River — is for 308 MW of firm power for up to 10 years. The 308-MW sale is scheduled to start in 2027. A previously announced 100-MW sale to WPS is scheduled to run from 2021 to 2026, bridging the gap between these two new deals.
The 308-MW sale also requires the new 500,000-volt Manitoba-Minnesota Transmission Line for it to be fulfilled, with that line currently in the planning stages.
"This is an historic deal for our province and for Manitoba Hydro that will create thousands of good jobs and power our economic growth for decades," said Manitoba Premier Greg Selinger. "Our plan to build for the future now will ensure we can meet strong demand in our traditional and emerging export markets, helping to keep electricity rates for Manitoba families and businesses among the lowest on the continent."
"If approved by the Public Service Commission of Wisconsin, the agreements we signed with Manitoba Hydro are going to help WPS continue to offer our customers long-term access to an affordable, reliable supply of carbon-neutral electrical energy at stable prices," said Chuck Cloninger, President of WPS. "We have had a long and successful history with Manitoba Hydro, and these latest agreements build on that relationship."
Scott Thomson, President and CEO of Manitoba Hydro, said the deals show the value of developing hydroelectric facilities in Manitoba ahead of when they are required to meet domestic load if export sales can help minimize the cost to ratepayers.
"Export opportunities are fundamental to our preferred development plan,” Thomson said. “The agreement we are announcing today validates our plan, and means all Manitobans will continue to benefit from exports through enhanced reliability and lower rates.”
The first 108-MW sale will take advantage of existing generation and transmission resources initially, then use some of the capacity from the proposed Keeyask Generating Station hydroelectric when that comes online in 2019, said Thomson. The 308-MW sale will also use approximately 30% of the energy produced by Conawapa. The total value of Manitoba Hydro's recently signed export contracts now totals over C$9bn.
"Between these new and existing sales to WPS, and previously-announced energy sales to SaskPower, Minnesota Power, and Xcel Energy — plus ongoing growth in Manitoba energy consumption and load - the proposed Keeyask Generating Station is already 'sold out' and significant capacity utilization of Conawapa is already starting," said Thomson.
The 695-MW Keeyask Generating Station is being developed in partnership with four local first nations. Keeyask would be located 35 kilometers upstream of the existing Kettle Generating station, where Gull Lake flows into Stephens Lake. The utility has said that Keeyask could go into construction this year and be completed in 2019.
The Conawapa generation site is currently being studied for possible hydroelectric development and is well behind Keeyask in the development process. It is located in northern Manitoba in the Fox Lake Resource Management Areaa, approximately 30 kilometers downstream of the existing Limestone Generating Station. With 1,485 MW of capacity, the Conawapa station would produce about 7,000 gigawatt hours (GWh).
The Manitoba–Minnesota Transmission Project includes construction of a 500-kV (AC) transmission line in southeastern Manitoba. The proposed route will originate at the Dorsey Converter Station (located near Rosser, northwest of Winnipeg), and connect to the Great Northern Transmission Line. The Great Northern Transmission Line is to be constructed by Minnesota Power. It will terminate at the Blackberry Station located northwest of Duluth, Minn.
Manitoba Hydro is a Crown Corporation and the Canadian province's major energy utility. It operates 15 hydroelectric facilities and two thermal facilities and has a total generating capacity of 5,685 MW.
This article was originally published on GenerationHub and was republished with permission.
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