Electricity revenue sources from 2004–05 to 2013–14 shows more revenue comes from export customers.
In 2013–14 export sales totalled $439 million with 89 per cent derived from the U.S. market and 11 per cent from sales to Canadian markets. Since 2005, our export sales have totalled $5.2 billion. Our forecast total export revenues are $16 billion over the next 20 years.
Our utility customers in the United States want long-term price certainty and stability. These utilities see value in purchasing hydroelectricity from us through long-term fixed contracts that are not linked to volatile natural gas prices and will not be subject to future changes in regulatory requirements associated with emissions.
Our exports to neighbouring provinces and mid-western markets in the United States have many positive aspects.
Benefits to Manitobans
- The income from export sales help keep Manitoba Hydro's electricity rates among the lowest in North America.
- Because the construction of new hydroelectric generating stations adds a lot of capacity to our system all at once, exports provide an interim outlet for surplus electricity as the province's usage catches up.
- Exports of hydroelectricity help our export customers to reduce greenhouse gas emissions through the use of self-renewing water power.
- The seasonal demand for electricity in the U.S., our largest market, is opposite to our own, giving us extra capacity without investment. U.S. demand peaks in summer; Manitoba demand peaks in winter.
- Increased energy security and reliability; if required (i.e. extreme drought), we can import power to meet our provincial demands.
- Our province's rivers provide a vast, renewable source of clean energy, which is attractive to our export markets.
Variability of water supply
Variability of water supply since 1900. We build generating stations to the dependable flow.
Our generating stations are built to utilize our water supply's dependable flow, which is based on the lowest flow on record.
Dependable flow is consistently well below the average flow. Building to dependable flow ensures we're always capable of meeting our electricity commitments to our Manitoba customers.
In almost every year since 1900, our water supply has produced more electricity than is required in the province. Export sales provide an outlet for our excess electricity and a revenue stream that helps us keep energy prices low in the province
Export electricity sales
Our export electricity sales are made as either:
- Long-term contracts that provide a firm supply of electricity at a negotiated, fixed price that will not fluctuate due to market conditions.
- Opportunity sales, which are made from short-term surpluses of electricity – usually because of good water conditions. Since the amount of energy available for these sales can change in relatively short periods of time, it cannot be sold as firm or guaranteed energy.
Prices in the short-term export market fluctuate and, therefore, our revenues can vary extensively depending on:
- time of day;
- water conditions;
- natural gas prices;
- other factors.
Even when market prices are low, we may pursue opportunity sales because of high water conditions and our low costs associated with generating that additional electricity. The alternative would be to spill the water at our generating stations and forego making any revenue at all.
Wholesale vs. retail electricity pricing
We export electricity into a wholesale market, where customers are largely other utilities. The electricity is delivered at a very high voltage and the receiving utility is responsible for any additional costs associated with supplying that energy to their own retail customers.
A comparison can be made with rates paid by large industrial customers here in Manitoba who, like our export customers, take delivery of electricity at a high voltage and then are responsible for any internal distribution costs.
Export prices are not subsidized by Manitoba ratepayers.
Read more about electricity exports
- Power sale arrangement with SaskPower
- Power sale extension with Great River Energy
- Power purchase agreement extension with Xcel Energy
- Power purchase agreement with Minnesota Power
- Power sale arrangement with Wisconsin Public Service
- Contacts authorized to negotiate wholesale power-related transactions