WINNIPEG -- Manitoba Hydro announced two export agreements with a utility in Wisconsin Friday -- deals which prove the need for billions of dollars in new generating stations, says Premier Greg Selinger.
Wisconsin Public Service has agreed to buy 108 megawatts of power between 2016 and 2021 -- enough to power about 40,000 homes. The second deal with see the utility buy 308 megawatts starting in 2027.
Selinger says financial details, such as how much money the Wisconsin utility will pay, will be filed with the province's Public Utilities Board. He said the sales support his NDP government's plan to help Hydro build new generating stations, including the Conawapa project on the Nelson River.
Manitoba's Opposition Progressive Conservatives have questioned the need for new dams, because hydro exports are currently competing against very low natural gas prices on the U.S. market.
The Public Utilities Board, the provincial regulator, warned in 2011 that low prices could force Manitoba consumers to subsidize exports and see domestic prices jump by 140 per cent over the next 20 years.
Selinger disagrees.
"Our plan to build for the future now will ensure we can meet strong demand in our traditional and emerging export markets, keeping rates for Manitoba families and businesses among the lowest on the continent," he said in a release Friday.
Manitoba Hydro, a Crown utility, plans to spend $20 billion over the next dozen years to build two new generating stations -- Keeyask and Conawapa -- on rivers in the north, along with a new transmission line to bring the power south.
The expansion is part of the reason why the utility expects to raise rates by 3.9 per cent each year for the foreseeable future.
The plan is undergoing review hearings.
In its most recent financial report, Manitoba Hydro said export sales were rebounding.
The utility reported export revenues of $338 million for the nine-month period that ended Dec. 31. That was $58 million higher than the same period last year, primarily due to higher sales volumes and higher export prices.
Selinger said he's confident the deal will be profitable.
"We've seen a rise in natural gas prices. They were at a historic low awhile back but now they're rising," he said in an interview from Toronto, where he attended an energy conference.
"The Environmental Protection Agency (in the U.S.) is putting more regulations in place that requires the phase-out of coal plants in the United States and our customers are saying to us 'we want a diverse supply of clean, reliable energy."'
