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FM
Former Member

Manitoba Hydro must get its act together

By: Dennis Woodford, Posted: 08/16/2015 6:06 PM, Source

 

Producing electricity out of large generating stations and distributing it to users under the control of one regional operator is beginning to show signs of being a thing of the past. The Manitoba Hydro Act has served Manitobans well in the past, but it’s time it was studied and revised to anticipate and accommodate changes that are coming to electricity markets.

 

Under the Hydro Act, any producer or purchaser of electricity in the province must do so through Manitoba Hydro. That arrangement did work well, but storm clouds are gathering on the horizon. Pushing this old act forward to build big new generating stations (Keeyask and Conawapa) and Bipole III, all at tremendous short-and-intermediate-term economic losses, is raising electricity rates beyond the ability of low-income consumers to pay.

 

Significant additional revenue is needed to meet loan payments on deep borrowing and the amortization and operations of new infrastructure. The thunder from the storm is rumbling louder as Manitobans realize these very large investments are not profitable for them.

 

In parts of the U.S. and Europe, where electricity rates are higher than ours, there is a strong trend away from large utility generators to electricity being generated more economically in homes, corporations and small communities. Their electric generators, which are falling in price, include solar panels, advanced batteries and wind turbines.

 

These customers produce and consume electricity, coining the new word "prosumer," recently coined by Transmission and Distribution World.

 

This is how it works: A business or homeowner owns solar panels and perhaps batteries to store power; whatever isn’t used can be sold to the grid for credits or cash.

 

Prosumers, however, are often in conflict with their traditional electricity suppliers, which lose revenue but must maintain the grid. To head off future conflict here in Manitoba when parity is reached as Hydro rates increase while the price of prosumer generators fall, a change in the Manitoba Hydro Act to benefit all Manitobans is essential.

 

T&D World reports regulators of electricity in New York, for example, are pushing for legislation accommodating independent distribution operators who would handle energy transactions from one customer to another.

 

The Manitoba Hydro Act now says all electricity in the province must be transacted by and through Manitoba Hydro, which also sets the rates.

 

Changing the Hydro Act to allow for a freer market of electricity controlled locally would produce the needed competition for reliable, green energy and help to preclude extravagant projects and consequent unacceptable increases in electricity rates. Similar to what happened in the telecommunication industry, Manitoba Hydro would still provide the necessary transmission services with acceptable user fees and operate its existing generation, but it should not control electricity rates.

 

Manitoba Hydro would have to compete with the prosumers and the independent distribution operators.

 

As we move to the possibility of a new provincial government next April, the future of Manitoba Hydro, the projects it has embarked upon and the act under which it operates, must be part of a major policy review.

 

Dennis Woodford was a transmission planning engineer at Manitoba Hydro for 15 years and now is president of Electranix Corporation.

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