Why we sell power
Revenue from our power exports brought in more than 22% of our total electric revenue 2010–19, or about $3.9 billion.
Every dollar we make goes back into running Manitoba Hydro to keep rates low for our customers in Manitoba.
We sell our power to utilities in the United States, and Saskatchewan and Ontario.
We sell our extra power to benefit you, our Manitoban customers. 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 and we will need this surplus power to meet future demands.
So until we need this power for our own needs, we sell it.
We’re building the Keeyask generating station for projected power use in Manitoba. Until that demand catches up to what we have projected, we will sell the excess electricity.
We’re also building 2 transmission lines to increase our export sales. The Manitoba–Minnesota Transmission Line, currently under construction, should be in service in June 2020. Construction on the Birtle Transmission Project is expected to start in the summer of 2020.
Retail vs. wholesale
When we export our power, we are selling bulk wholesale electricity in two ways: firm and surplus.
“Firm” means we have negotiated, long-term contracts to sell our power at fixed prices to neighbouring utilities. Long-term firm prices are negotiated based on the potential cost of the export customer building and operating their own generating station.
“Surplus” means extra power we can sell on top of our firm sales, but at a lesser price. Since the amount of energy available for surplus or spot sales can change in a short period of time, prices change rapidly and no sale is guaranteed.
We export wholesale power straight to other utilities. We send power from our hydroelectric generating stations over long transmission lines straight to our export customers. It is up to them to distribute that power to their customers.
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 covert it to low-voltage electricity delivered to your house.
Your retail power price reflects the cost for us to generate and bring this power to you, plus all the costs of maintaining 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 get power directly from the bulk transmission grid, and are not responsible for Manitoba Hydro’s subtransmission system – the power to our substations – or the distribution costs of bringing power to your home.
Sell or spill
We have abundant rivers and lakes. The flow of water never stops. The potential to generate power from that water never goes away. Even if we don’t need the power, we can still generate and sell it.
Prices for opportunity sales in the United States have been lower in recent years. This is 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.
Moment-by-moment prices in the short-term export market also fluctuate widely, so our export revenues can vary greatly depending on the time of the day, water conditions, wind generation, and natural gas prices.
We still pursue surplus sales because they still bring in revenue and keep our rates some of the lowest in North America.
If we didn’t sell it, the alternative would be to send the water through the spillways of our generating stations instead of the turbines, which does not make money or help keep our rates low.
Exporting 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.
We are also fortunate our neighbours have peak power seasons opposite ours. Manitobans use more power in winter than summer, which is the exact opposite to most of our export customers. In summer, when all our neighbours are using power to stay cool, we can sell them our surplus power.
So why do we sell power?
- We can generate extra electricity and not waste water.
- Our neighbours want to buy it.
- Our renewable hydroelectric power reduces greenhouse gas emissions.
- Export sales revenue keeps rates lower for Manitobans.
If you have questions, email us.
View the Canada Energy Regulator snapshot of electricity exports to the United States. It shows that Canadian electricity trade with the United States is greater than provincial trade.