Manitoba Hydro: Powering Our Province Winnipeg Real Estate Forum 2016 Kelvin Shepherd President & CEO Manitoba Hydro May 17, 2016
Manitoba Hydro • One of the largest energy utilities in Canada – $2 Billion in annual revenue – Capital assets in service in excess of $17 Billion – Major employer with approximately 6,400 equivalent full time employees • Integrated natural gas and electric utility • 567,000+ electric customers • 276,000+ natural gas customers 2
The Power In Our Province • Core generation is from water power - 15 hydropower stations • 5,200 MW developed • 5,000 MW remaining potential • 99% of electricity generated in Manitoba is renewable • Two thermal generating stations primarily for backup • US import capability critical to meet seasonal peaks and provide backup in event of failure or prolonged drought 3
Natural Gas Is Important to Manitobans • Serving nearly 100 communities across southern Manitoba • 9,700+ km’s of natural gas lines – 2.1 billion cubic metres of natural gas delivered per year – Over 80% used for space, water and process heating • About 60% of Manitoba homes heat with natural gas 4
Manitoba Hydro mandate 5
Delivering on our mandate – Providing reliable, safe, cost effective energy for Manitobans today and in the future • Delivering amongst lowest electric rates in Canada and North America • Continuing to drive improvement in operations while maintaining high customer satisfaction • Leveraging export opportunities to help keep rates low for Manitobans • Investing in and driving energy conservation through Demand Side Management (DSM/Power Smart) • Investing in new generation and transmission to meet future growth in Manitoba • Reinvesting in upgrades and modernization of aging infrastructure to provide capacity, improve safety and reliability • Supporting research & adoption of alternative renewable energy sources 6
Manitoba’s Electricity Usage Is Growing 38,000 36,000 34,000 32,000 30,000 (Energy (GW.h) 28,000 26,000 24,000 22,000 20,000 18,000 16,000 1994/95 1999/00 2004/05 2009/10 2014/15 2019/20 2024/25 2029/30 Forecast growth - Electricity *1.5% including Codes & Standards, 7 before Demand Side Management programming
Required Investment In Canada’s Electricity System – 20 years 8
Bipole III Transmission Reliability Project • Primarily a reliability improvement initiative but also provides additional capacity • 500kV DC Transmission Line • 2 HVDC Converter Stations (Riel, Keewatinohk) • 230kV AC Collector Lines (5) • More than half way through construction time frame (August 2013-July 2018) • $4.65 Billion control budget • $1.8 Billion spent through March/16 9
System reliability 10 Riel Converter Station
• 695 MW, 7-unit generating station • Developed by the Keeyask Hydropower Limited Partnership • July 2014 generating station construction began • November 2019 first unit in service • $6.5 Billion control budget • $2.37 Billion spent through March/16 11
Keeyask Generating Station 12
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First Nations Partnership • Manitoba Hydro together with Tataskweyak Cree Nation, War Lake First Nation, York Factory First Nation and Fox Lake Cree Nation have negotiated the Joint Keeyask Development Agreement • It governs how the Keeyask project will be developed and sets out understandings related to potential income opportunities, training and employment. • Manitoba Hydro will own at least 75 per cent of the equity of the partnership. • The four Manitoba First Nations, known collectively as the Keeyask Cree Nations, together have the right to own up to 25 per cent of the partnership 14
Manitoba-Minnesota Transmission Project • Second 500kV AC transmission line from Manitoba to the US • Firm transfer capability (import and export) increase • Project In-Service Date: June 2020 • Manitoba Hydro Final Preferred Route was selected after extensive public and community consultations • Expect Clean Environment Commission to hold public hearings beginning late 2016 or early 2017 15
Growing city, growing need for power “There is this renewal and confidence that has been building in Winnipeg for a number of years and a renewed sense of pride and swagger that is only limited by our community’s ambition.” – Mayor Brian Bowman (Globe and Mail April 30, 2016) 16
Growing province, growing need for power • Economic growth forecast to expand 2.5% in 2016, the fastest since 2008, and 3% in 2017 • Manitoba’s economy will be among the strongest in Canada in 2016 and be the second strongest in 2017 • Lower Loonie should boost exports, lifting manufacturing output growth to 3.1% in 2016 • Construction to see 3.7% growth in 2016 driven by public infrastructure spending • Finance, insurance and real estate sectors to see average gains of 3.4% in 2016-17 - Conference Board of Canada 17
Manitoba Hydro maintains high levels of system reliability – Power is an essential service • Generation and transmission often get a higher profile, but distribution is the last leg to our customers and represents a huge part of Manitoba Hydro’s system • The age and poorer condition of our distribution system is starting to impact reliability, leading to more frequent and longer outages • The distribution system’s ability to accommodate further load growth is a real and growing issue
King Street Station (1913) 19
New - Adelaide Station 20
New - Madison Station 21
Manitoba electric rates are among the lowest in North America • Manitoba Hydro’s plan addresses the need for investment while recognizing there is a real impact on customers from higher rates – Seeking moderate annual increases – Staged in over time – Predictable 22
Average Retail Price of Electricity Ten Lowest Cost Provinces/ States in North America 11.0 10.05 10.02 10.02 9.84 9.82 10.0 Cents / kW.h (Canadian) 9.03 9.01 9.0 8.26 8.0 6.81 6.45 7.0 6.0 5.0 Source: US Dept of Energy (December 2015) & Edison Electric Survey (December 2015) (Exchange rate as of April 15, 2016: 1 US$ = 1.2858 Cdn) 23
Export revenues are used to keep rates low for Manitobans • Last decade – export sales contributed $4.9 Residential Exports billion or 29% of total $4.9 billion $4.9 billion revenues 29.3% 29.3% Industrial/ Commercial $7.0 billion 41.4% Share of Total Electric Revenues 2006-2015 24
Over 25 years of effective Demand Side Management (DSM) • Key Component of Manitoba Hydro’s strategy for meeting Manitoba’s energy requirements • Target - offset 60% of anticipated electricity growth over next 20 years • $1.4 Billion planned investment by Manitoba Hydro over the next 15 years • Assisting customers reduce their energy bills …a savings for customers of $2.5 Billion over 15 years • Reducing annual greenhouse gas emissions equivalent to removing 700,000 cars from the road by 2029/30 25
Race To Reduce 26
Different image required 27
Thank you 28
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