Value of electricity exports

Revenue from 2009 to 2018: Exports 4 billion dollars; Residential: 5.5 billion dollars; Industrial/Commercial: 7.6 billion dollars.

Electricity revenue sources from 2009–18.
Enlarge image Revenue from 2009 to 2018: Exports 4 billion dollars; Residential: 5.5 billion dollars; Industrial/Commercial: 7.6 billion dollars.

Our province’s rivers provide a vast, renewable source of clean energy.

This natural resource benefits Manitobans through affordable energy rates. It’s also attractive to our main export markets in the United States, Saskatchewan and Ontario.

Our export revenues brought in more than 23% of our total electric revenue over the 10-year period 2009–18. Without export revenues, all of the costs associated with the utility would need to be covered by our Manitoba customers.

Exports benefit customers in Manitoba

  • Income from our export sales help keep Manitoba Hydro’s electricity rates among the lowest in North America.
  • Construction of a new hydroelectric generating station, such as the Keeyask Generating Station, adds a lot of capacity to our system all at once. This extra generation allows us to sell surplus electricity until the province’s usage catches up.
  • Seasonal demand for electricity in the U.S., our largest market, is opposite to our own. U.S. demand peaks in summer; Manitoba demand peaks in winter. It’s called seasonal diversity, and it gives us extra capacity without investment.
  • Exports provide increased energy security and reliability. If required, we can import power form the U.S. to meet our own demands, such as in an extreme drought.

Exports benefit our utility customers

  • Our utility partners in the U. S. and Canada want long-term price certainty and stability. These utilities see value in purchasing dependable 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.
  • Exports of hydroelectricity also help our export customers to reduce greenhouse gas emissions through the use of self-renewing water power.
  • Our major utility customers are: Great River Energy; Minnesota Power; Northern States Power; SaskPower; Wisconsin Public Service.

Two types of export sales

  1. Long-term contracts – these contracts provide a firm supply of electricity at a negotiated, fixed price that will not change due to market conditions. These contracts are at prices considerably higher than what we charge to our largest industrial customers in Manitoba, and in some cases, even residential customers.
  2. Opportunity sales – these sales are made from short-term surpluses of electricity, usually because of good water conditions. Since the amount of energy available for these spot sales can change in relatively short periods of time, it cannot be sold as firm or guaranteed energy.

Opportunity sales in the U.S. 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 to produce additional energy.

We still pursue opportunity sales as these sales still contribute positively to our bottom line. We do not lose money on exports. Manitoba customers do not subsidize American utilities.

Our cost to generate this additional electricity, when water conditions are high, is relatively low. The alternative would be to spill the water at our generating stations and not earn any revenue to benefit Manitobans.

Prices in the short-term export market fluctuate and, meaning our revenues can vary extensively depending on:

  • time of day;
  • water conditions;
  • natural gas prices.

Our new transmission expansion projects will help to ensure we continue to serve the province with a reliable supply of electricity, as well as meet the requirements of neighbouring utility customers.