Why we export power

This article was published in March 2020 and may be outdated.

Revenue from our power exports brought in more than 22% of our total electric revenue from 2010–19, or about $3.9 billion.

Every dollar goes back into running Manitoba Hydro and to keep rates low for our customers in Manitoba. Without our export sales, your electricity rates would be about 20% higher than they are today.

We have an abundance of renewable hydroelectric power. With our lakes and rivers, we can generate more electricity than we need in Manitoba — for now. The province is steadily growing. We’re building the Keeyask Generating Station for projected power use in Manitoba. Until that demand catches up to what we’ve projected, we’ll sell the excess electricity to utilities in the United States, Saskatchewan, and Ontario.

We’re also building two transmission lines to increase our export sales. We anticipate the Manitoba–Minnesota Transmission Line, currently under construction, will be in service in June 2020. Construction on the Birtle Transmission Project is expected to start in the summer of 2020 and be in service in June 2021.

Wholesale vs. retail

When we export our power, we sell bulk wholesale electricity in two ways: firm and spot.

“Firm” means we’ve negotiated long-term contracts to export our power at fixed prices to neighbouring utilities. Long-term contracts reflect the potential cost of the utility building and operating their own generating station.

“Spot” means extra electricity we might have available for sale on top of our firm sales, but usually at a lesser price. The amount of electricity available for spot sales can change in a short period of time. Prices change rapidly and no sale is guaranteed.

“Bulk” means the electricity is sold in large quantities – blocks of power that would serve entire towns or cities.

What we sell to Manitobans is retail power.

“Retail” power is what you pay us to generate the power, carry it down our transmission lines, and then convert it to low-voltage electricity delivered to your house.

Your retail power price reflects all the costs for us to produce and bring this power to you, plus all the costs of maintaining, repairing and improving our grid. Your price ensures when you turn on a light, it’s always there.

Wholesale costs don’t reflect this. Our export customers only pay us to produce the power and deliver it to the border at high voltage, and are not responsible for any of Manitoba Hydro’s costs of bringing power to your home.

Sell or spill

Prices for spot sales in the United States have been lower in recent years, due to the increased use of low-cost natural gas to generate electricity and expanded use of tax-subsidized wind turbines that produce energy at a low cost.

Our spot sales can also vary depending on the time of the day, water conditions, wind generation, and natural gas prices.

We still pursue spot sales because they still bring in revenue and keep our rates some of the lowest in North America.

If we didn’t, the alternative would be to send the water through the spillways of our generating stations instead of the turbines, wasting water.

Exporting our power can also lower greenhouse gases for neighbouring utilities. The more renewable hydroelectric power our export customers buy from us, the less they have to use coal or natural gas to generate power. Everyone benefits.