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By Graham Lane, CA
May 26, 2014

To read the entire report click on the PDF icon below.

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Precis

This presentation questions Manitoba Hydro’s load forecast upon which its preferred development plan is absolutely reliant. It analyzes recent trends in both energy and peak load that reveal a flattening of growth in Manitoba load that began in 2005/06, well before the 2008 recession, trends which continue until today. It points to a similar flattening of demand in the region into which Manitoba seeks to export electricity and beyond. It proposes replacing Manitoba Hydro’s load forecast with a moderate forecast that is more reflective of these trends. It considers the risk of proceeding with the preferred development plan in terms of rates that escalate even more rapidly than projected. It even raises the spectre of the utility’s solvency coming into question, should the preferred development plan proceed. It proposes a pause in the implementation of any plan, a pause which would allow the utility to take advantage of the extended timeline that a more moderate load forecast would permit.
Other Groups' Submissions to the PUB:


The Public Utilities Board News Release
January 7, 2012
By Order 5/12, the Public Utilities Board (PUB or Board) denies Manitoba Hydro’s (MH or Utility) application for rate increases of 2.9% as of April 1 in both 2010 and also 2011, and, instead of leaving in place interim rate increases set previously, the Board approves on a final basis, rate increases of 1.9% as of April 1, 2010 and 2% as of April 1, 2011.

In its final order arising out of MH’s two-year General Rate Application, the Board re-affirms its concern as expressed in Order 99/11, which projected that if MH implemented its “preferred development plan” (mainly involving the construction of Bipole III and two new generation stations, Keeyask and Conawapa), which could involve aggregate capital expenditures in the order of $20 billion, domestic ratepayers are at risk of rate increases twice the over-inflation rate increases now forecast by MH. The Board notes that the Utility continues to withhold from the Board not only its export contracts, which, if filed with PUB, would be reviewed in strict confidence, but also, and perhaps of even more importance, updated forecasts of future demand, export prices and net income.

Since MH developed its plans, there have been major changes in the economic landscape. The projected capital costs associated with MH’s development plans have increased substantially; opportunity export prices have fallen; there has been market recognition and development of massive shale natural gas deposits – affecting supply plans in the United States and wholesale market electricity prices; the likelihood of premium prices for clean hydro-generated electricity has receded with the attention now being paid to the economy; industry demand for electricity and the expected growth in industrial demand has fallen; and the Canadian dollar is now near par with the USD.

The Board recommends that government subject MH’s major capital development plans to a review by an independent panel with the required level of expertise. The Board’s Chairman and Vice Chair differ as to whether Bipole III should mandatorily be considered in the review. To such a review, the Board would share its concerns and the massive information it has compiled from its regulatory jurisdiction over MH, should such review be by a separate tribunal.

A copy of Order 5/12, and past Orders concerning MH may either be reviewed on the Board’s website www.pub.gov.mb.ca, or obtained from the Board’s Office.

The Public Utilities Board
400 – 330 Portage Avenue
Winnipeg, MB R3C 0C4
Telephone: (204) 945-2638
Facsimile: (204) 945-2643
Toll Free: 1-866-854-3698
Email:publicutilities@gov.mb.ca




Executive Summary:

  • Forcing Manitoba Hydro to build Bipole III down the west side is a costly decision that cannot be justified.
  • The west side route will cost at least $1 billion more for rate payers than the more direct east side route.
  • Government data show there is no justification for the west side route.
  • At-risk caribou herds are present along both routes and their locations are constantly changing. We could not find evidence to support the argument that high voltage lines have negative impacts on caribou.
  • Annually, there is more tornado and lightning activity along the west route than the east route.
  • The portion of the east side are being set aside for UNESCO designation could receive the designation even with BiPole III running through it. A Bipole line could be build to largely avoid the area being nominated for designation.
  • Negotiations could occur with Aboriginal communities for an east side route, just as they did for the construction of northern dams.


To Members of the Manitoba Legislative Assembly October 7, 2010

Ladies and Gentlemen

I am writing to you as a concerned citizen and a former Chairman and Chief Executive Officer of Manitoba Hydro (1972-1979).

When I was appointed in November of 1972 by the Schreyer administration, I accepted the appointment on the basis that it was a non-political appointment. See Winnipeg Tribune Nov.6, 1972 and Winnipeg Free Press November 9, 1972. It was also reported in the Victoria Times on November 9, 1972. I had been an engineer with Manitoba Hydro from November 1956, when I was appointed Systems Planning Engineer, with the requirement that I organize a Planning Department and do planning for the future generation requirements of the Provincial Utility Manitoba Hydro.

My career with Manitoba Hydro was exciting. The vast resources of the Nelson River were the challenge. We entered into an agreement with the Government of Canada, where they would build a transmission line from the Kettle Rapids site on the Nelson River, if Manitoba Hydro developed that site, controlled Lake Winnipeg, and diverted the Churchill River into the Nelson River to augment the volume of water, which would make the Nelson River sites more attractive. Since that time Manitoba Hydro has acquired the ownership of the transmission system.

With the development of the Nelson, and the rapidly increasing load, the province became very vulnerable to a failure of that transmission system. I personally negotiated with the Northern States Power Co. of Minneapolis (now EXCEL) to build a 500 kV transmission line from their system to the Manitoba system. Time proved this to be a wise decision, because in 1997 a wind shear took out 19 towers on Manitoba’s DC transmission line, isolating the Nelson River Plants from supplying the southern load of the province of Manitoba. The 500 kV line, which was exporting surplus power to the US, immediately reversed its flow and supported the Manitoba system. The Manitoba Hydro customers did not experience any outage, or notice the change, which occurred in the night, however several of the larger industrial customers were requested to reduce load so that the domestic and essential loads would not be affected.

I mention this history to emphasize the importance of the Nelson Transmission System and to show that backup is essential to us as customers, relying as we do, on the Nelson River for more than 80% of our power requirements.

This is the reason that Manitoba Hydro is embarking on a new line to currently improve the reliability of the system and to handle the added generation that will be built in the future, not only to supply Manitoba Hydro customers, but also to supply the lucrative US Market and keep our rates low. Eventually an additional high voltage line will be justified to interconnect the Manitoba Hydro System with the US Network.

When the agreement with Canada was signed in 1966, the Government of Canada assigned the responsibility for building the line to AECL, who in turn engaged Teshmont Consultants to build the line. Manitoba Hydro had a voice in the decisions.

The consultants looked at a route down the east side of Lake Winnipeg and a route between the lakes. The recommendation was for the Interlake route, because of the slightly higher costs relating to the amortized cost of maintenance of the line on the east side as opposed to the amortized cost of maintenance of the Interlake line. The route called for a right-of-way parallel to the railway before heading south. However the towns along the railway saw this as a way to extract some money from the Government of Canada for right of way close to their town sites. AECL decided that they would build the line some miles south of the railway to avoid these unnecessary costs. This put the line into territory similar to that found on the east side of Lake Winnipeg. The design had progressed, and the in service date required to supply Manitoba Hydro’s firm 1970 load did not lend itself to a change of route.

You can see from this brief historic review, that the line route could very easily have been constructed on the east side of Lake Winnipeg. However, it wasn’t, and that leads to the present controversy, of east vs. west, or down Lake Winnipeg, as Professor John Ryan had advocated.

There have been many cost figures bandied around and I do not know of the accuracy of these. I do know that there is a finite cost per mile and that the west route is much longer than the east route and hence it will cost more. I also know that you cannot transmit power over a transmission line without any losses. These represent a cost to the utility and will inevitably result in less power being received at the southern end than would be received if the line was shorter, such as down the east side of Lake Winnipeg, not just for one year, but forever.

If I was asked to select a route for the line, I would do my utmost to have it routed down the shortest route possible, that is the east side. It could also provide many tangible benefits while protecting the boreal forest. Benefits, such as access to the isolated communities on the east side of Lake Winnipeg, and also access to the as yet undiscovered mineral and other resources on the vast territory east of Lake Winnipeg. It would also, in my humble opinion, provide the reliability that is so important to the power supply to the citizens of Manitoba, particularly when more than 80% of the kilowatt-hours come from the Nelson River.

It is my firm belief that the decision should be made on the basis of efficiencies and benefits to future generations rather than the ego needs of the current generation.

The Manitoba Hydro Act requires that the Hydro Board provide power at the lowest cost o the consumer, that is the citizens of this Province. Up to the present time they have been fulfilling this mandate very effectively.

The Government has overruled the Act, without passing the necessary legislation, to impose the longer, more expensive route on the utility and its customers.

Respectfully submitted,
L.A. Bateman O.M. P.Eng.

cc. Leader of the Government Premier Greg Selinger
Leader of the Official Opposition, Hugh McFadyen
Leader of the Manitoba Liberal Party, Jon Gerard
Manitoba Hydro President and CEO, Bob Brennan
Winnipeg Free Press Comment Editor, Gerald Flood



Bipole III Facts & Fiction by John Roschuk, C.E.T. Reprinted in The Carillon News - 23/12/2010

Click
here to read the report.


Bipole III Coalition Promotes East Side Route - 21/12/2010


Executive Summary:

  • Manitoba Hydro recommended that Bipole III be built on the east side of Lake Winnipeg.
  • The NDP Government rejected the recommendation and ordered Hydro to build the line on the west side of the province.
  • Retired engineers, landowners, and concerned citizens have formed the Bipole III Coalition to inform the public on the benefits of building down the east side.
  • Additional cost of building on the west side will be over $1 Billion.
  • The NDP Government is prepared to spend over $1 Billion just to save 10 sq. km of boreal forest, which represents only 0.025% of the total proposed UNESCO heritage site.
  • Calculations of costs are presented in this report.
  • Other issues pertinent to the east-west decision are also presented.

Read the entire report.....


A Thread Down a Football Field - Why a West Side Manitoba Hydro Transmission Line is Bad Environmental Policy - 12/2007

Executive Summary:


Manitoba Hydro is Manitoba’s largest Crown corporation and is responsible for providing low cost electricity to Manitobans. It is also a major exporter of hydroelectric power to the United States. Since the turn of the 20th century, Manitoba Hydro has been developing hydroelectric resources by building power generation facilities on a number of major rivers. Producing electricity requires a means to transport it, and Manitoba Hydro is responsible for the construction and operation of transmission facilities such as power lines and converter stations.

To keep up with demand, Manitoba Hydro must constantly increase both generation and transmission capacity. There are two major lines coming down from Northern Manitoba, BiPoles I and II. BiPole III is in the planning stage, and the original intention was to run that line down the east side of Lake Winnipeg (ESLW). Due to pressure from a select group of environmentalists, this plan was shelved in favour of a line down the west side of Lake Winnipegosis (WSLW) near the Saskatchewan border.

The WSLW line is much longer, and the extra distance will result in a line loss of at least 28 megawatts (MW) per year, which is enough to power 25,000 homes, about equivalent to all the residences in Brandon. The export value of this line loss is in the hundreds of millions of dollars over the expected 50-year life of the transmission line.

The environmental impact of BiPole III on the ESLW would have been minimal and easily mitigated. The land under the power line would have provided excellent wildlife habitat and would have introduced plant diversity into an area with little. Certain species of wildlife would have thrived in this new habitat.

It is evident that such poor quality decisions are only possible because the government of Manitoba is the recipient of generous equalization payments from have provinces that are net contributors to the Equalization Program.

Read the entire policy paper.....


Bipole III Transmission Routing Study - CMC Consultants Inc. September, 2007

Routing of Bipole III by the NDP government to the west side of Manitoba was based on information presented in the above report.

Read the entire report.......



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