Manitoba Hydro has signed a $2 billion deal to sell hydro electricity to the U.S.
The deal will send 500 megawatts of power to Wisconsin Public Service over a 15-year period, starting in 2018.
The power will begin to flow the year after the scheduled completion of the controversial new transmission line -- Bipole III -- planned to be built down the west side of the province at a cost of $1.5 billion.
"I can't tell you how pleased we are," said Manitoba Hydro CEO Bob Brennan. "It puts Manitoba Hydro in a position to continue to have us as a leading utility in the country."
Manitoba Premier Gary Doer said the deal will go a long way to pay for the investment in the new transmission line.
"Increased sales with increased revenue allow us to have increased production and have the capital paid for by revenues outside Manitoba," said Manitoba Premier Gary Doer.
Sale depends on new line
The deal will mean Manitoba will have to build a new transmission line to the U.S., on top of Bipole III.
The location of that line has proven contentious. Manitoba Hydro had originally planned to run it along the east side of Lake Winnipeg, but that plan was overruled by the provincial government in 2005 due to environmental concerns raised by aboriginals.
The province announced last year the line would go down the west side of the massive lake.
The eastern route would have been shorter, but it would have cut a swath through pristine boreal forest that the government hopes to turn into a prestigious UNESCO World Heritage Site.
Brennan downplayed questions about whether a delay building the transmission line would hurt the U.S. deals. Instead he suggested the new line would be required to boost the reliability of the system serving customers within Manitoba, too.
"We need it virtually the same time for both. I think people can realize that. I think it's not an unreasonable thing.''
Gary Doer said the project is important for all Manitobans.
"Their children, potentially, will have increased economic opportunity with capital construction and the next generation of Manitobans will have hydro electric rates that continue to be the lowest in North America,'' he said.
Another deal in the works
The Wisconsin deal is on top of another one that was inked in January with Minnesota Power.
Minnesota Power agreed to buy surplus energy from Manitoba Hydro starting this year.
The Crown corporation will also supply Minnesota with 250 megawatts of power over 15 years starting in 2020.
To put things in perspective, one megawatt of electricity can power 500 average homes.
The deal calls for Minnesota to build a transmission line of its own, and triggered the construction of the Conawapa dam project -- which had previously been contingent on a deal with Ontario.
According to the provincial government, electricity exports generated $592 million in revenues for Manitoba Hydro last year and are expected to produce $5.5 billion in revenues over the next 10 years.
Manitoba Hydro export sales, on average, account for more than 40 per cent of Manitoba Hydro's electricity revenues.
The Minnesota deal is subject to approval by the Minnesota Public Utilities Commission, while this latest deal still needs final apporoval from Wisconsin authorities.
With files from The Canadian Press and a report from CTV's Caroline Barghout.
