2014 big step back for MB Hydro

by Will Braun

It could have been the year Manitoba Hydro embarked on a bold new path. At minimum, it could have been the year government reconsidered a hydro expansion plan devised in a very different era.

But careful recalculation was not the defining political ethos of the year.

Fundamental questions were raised about the Keeyask and Bipole III projects, and plausible alternatives presented, but the province neither blinked nor budged, pushing both projects over their final regulatory humps.

Now, heavy machinery is on the ground and expropriations are in process.

While the government did accept the Public Utilities Board’s recommendation to put the $10.7-billion Conawapa dam on hold, it says future export contracts could revive the project.

At stake in 2014 were more than dams and power lines. Our province made a multibillion-dollar, multi-generational commitment to a particular energy path. That path is rooted in former premier Gary Doer’s vision that new dams would combine with a boom in the hydrogen fuel cell industry and a transformation of the energy landscape.

“Alberta was the energy producer for the last 50 years; Manitoba can be the energy producer for the next 50 years,” he said in 1999.

Ironically, 15 years later we learned Keeyask may end up benefiting Alberta more than us.

But first, consider the year that could have been. The government could have put everything on ice and commissioned a credible public review. Better still, it could have replaced Keeyask with industry-leading energy-efficiency programs and nixed Bipole III altogether.

Former Hydro transmission planner Dennis Woodford has said the planned new line to the U.S. along with new converter equipment could provide all the needed security benefits of Bipole III. If Bipoles I and II were knocked out, the U.S. line could supply sufficient replacement power.

As for Keeyask, its ultimate justification is to meet growing domestic demand, with export sales as a secondary rationale. But independent experts who appeared before the PUB indicated that concerted efficiency efforts in Manitoba could have delayed or eliminated the need for Keeyask. Leading jurisdictions are reducing overall electricity demand instead of building new generation. This approach is cleaner and, invariably, cheaper.

The move toward efficiency is not the only thing that has changed since the days when Doer called Hydro our “ace in the hole” and former Hydro CEO Bob Brennan said, “We wouldn’t raise rates for a new plant.”

Now, Hydro expects to raise rates by 3.95 per cent annually, in part to pay for Keeyask and Bipole III. The export market has softened considerably. American energy demand has not rebounded as expected after the recession, partly because of efficiency measures. Dramatic improvements in solar power make it harder for Hydro to compete. The estimated cost of Keeyask has jumped to $6.5 billion from $2 billion (the PUB says $7.2 billion is a “realistic possibility”). Hydrogen fuel cells have faded to niche while Alberta’s fossil-fuel sector has grown rather than shrunk.

Despite these changes, no one was able to stop, or even pause, the momentum that had gathered behind the dated Hydro expansion plan.

Two things that haven’t changed are the assumptions that rivers are made to be dammed and endless growth in energy demand is inevitable. That means ever more dams, ever more power lines and ever more demand growth.

Is there no limit? Are we going to dam every last waterfall? Is our clean energy strategy to use more and more energy forever?

Refusing to build Keeyask and Bipole III would have set a limit and pushed us toward a new path.

The kicker is that, according to the PUB, 40 per cent of the output of Keeyask is earmarked for pumping stations on two pipeline projects proposed for Enbridge’s Line 3 expansion in Manitoba and TransCanada’s Energy East project. The PUB noted that without this “pipeline load” Keeyask could have been pushed back seven years.

If both pipelines proceed, more of Keeyask’s “clean” energy will go to pump oil through the province than to displace coal-fired power plants south of the border, as had been the green selling feature of the dam. If they don’t proceed, we’ll need a new plan.

The two Calgary-based pipeline companies are already among Hydro’s industrial users that pay as little as three cents per kilowatt hour, compared with 7.3 cents for households.

We’re risking $6.5 billion, or more, on a dam that will deliver bargain-priced power to Alberta energy giants that will generate far more greenhouse gases than long-term jobs for Manitoba.

Last year was our chance to switch to a forward-looking vision. Instead, our government chose to stick with a plan that not only misses the wave of the energy future, but directly fuels the conventional energy sector it was supposed to replace.

The irony is as thick as the crude that will flow beneath us.

Will Braun writes on behalf of the Interchurch Council on Hydropower. He also works part time for Pimicikamak Okimawin.

Republished from the Winnipeg Free Press print edition January 5, 2015 A9

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