Hydro plan for Brandon could be cut to one-third, premier says

WINNIPEG — Premier Wab Kinew says a Public Utilities Board report shows the province needs to build just one combustion power turbine, not three that Manitoba Hydro has recommended.

“This is good news, because this PUB report is saying that now the facility in Brandon should cost more like $1 billion instead of the previous estimates,” Kinew told reporters Friday ahead of the report’s release expected in the coming days.

Hydro’s proposed $3-billion gas-turbine project in Brandon to generate more power by installing three natural gas-powered turbines was reviewed by the province’s rate-setting watchdog.

“They don’t think Hydro needs to build three turbines. In fact, what the PUB is now recommending to us is they’re saying we only need to build one turbine,” the premier said.

“That’s a big change. This is exactly why you have a Public Utilities Board.”

Kinew said the PUB rejected Hydro’s methodology of calculating both the peak winter demand and also some of the economics and the impact on rate pressure going forward.

“I think they, they accepted what Hydro brought forward as fact and they applied a critical lens to it and came up with their own conclusion,” he said.

“One of the things that they’re saying in this analysis … is that the amount of power that we’re going to need in 2030 and 2031 is less than you’ve been warned (about) in the past. As a result, we can make some decisions that are better for your wallet and your bank account and better for the environment.”

The PUB analysis comes at a time when Hydro is upgrading or replacing $1.2-billion worth of aging infrastructure, dealing with a $26.5-billion debt and projecting an electricity shortfall by the end of 2030.

“Hydro does very, very good work, but they are a monopoly and you need a regulator with independent expertise to keep a monopoly in check so that your rates stay affordable,” Kinew said.

The PUB normally reviews public utility rates by looking at all the financial information behind a rate increase request. In this case, it reviewed the Crown utility’s proposal to build up major facilities with three turbines in Brandon to provide backup power to the province’s electricity grid during peak-demand periods.

The PUB recommendations were shared with the government this past week in a “pretty substantial report” that the premier said Hydro hadn’t yet received.

“We’re currently reviewing it,” Kinew said. “Obviously, our folks in cabinet, the civil service, political staff are going to take some time to digest it.”

He said Manitobans will have an opportunity to weigh in on the matter, as well.

“From my perspective, finding out that maybe we’re going to save a few billion dollars and that there’s going to be a more environment-friendly path forward seems like a pretty good perspective for me,” he said. “And one that’ll allow us to stay warm in the wintertime, on top of all that.”

He said the PUB recommendation of one turbine is good news for those who’ve raised concerns about the impact of burning fossil fuels.

“It’s not going to be firing year-round. It’s just on those cold winter mornings in January where we all have got to heat up our homes at the same time,” he said. “It’ll be firing during those periods.”

He said the one dual-fuel turbine recommended by the PUB could swap from natural gas to clean hydrogen in the future. The PUB is also recommending building it in a facility where two turbines could be added in the future.

“I think they’re giving us a more modular, bite-size approach that’s more affordable for us, better for the environment to meet the needs that we have,”Kinew said.

“If you’re somebody who’s been looking at this from the environmental perspective, one turbine is a source for fewer emissions than three turbines — 250 megawatts has fewer pollutants than 750 megawatts.”

Manitoba Hydro, which is in the process of hiring a new CEO, “did their best effort and they operated based on what was the right decision in their mind at the time,” Kinew said.

“But at the end of the day, they are a monopoly. And in some cases it’s good to have a monopoly because we have lower hydro rates here than almost anywhere else in the country. But in situations like this, it reminds you that you do need oversight of a monopoly just to keep everyone honest.”

» Winnipeg Free Press