Manitoba Hydro may need new sources of power by 2029

Manitoba Hydro's boss is warning the power utility may need to have new forms of electricity generation running by 2029 or 2030.

"There was a perception that we have lots and lots and lots of surplus electricity. I hate to have to say that that is not the case," CEO Jay Grewal told a breakfast event hosted Tuesday by the Manitoba Chamber of Commerce.

"We may need new electricity by 2029, 2030 — new sources of generation," she continued.

"And once you do the generation, you also need the wires to move those electrons to where they need to be. That is the impact of policy. That is the impact of decarbonization and every utility is facing this."

Grewal told reporters afterwards she anticipates Hydro will decide upon the specific capital projects it needs within two years. 

"The reason why we aren't making decisions yet is because there's so many levers that can be pulled to shape this energy landscape," she said. "To what degree will there be support from policymakers to pull those levers?"

'We will be going for wind,' says CEO

Tuesday's speech was the first time any Hydro official has stated publicly the utility could run out of capacity in five or six years without new power generation.

Grewal said it's possible the timeline could be pushed back if measures to reduce electricity consumption are successful. 

The path forward will involve Hydro entering into agreements with independent electricity producers within the province. 

"When we go to the market, we will be going for wind," Grewal said.

"Why? Because it is the lowest possible cost and we can optimise the wind with our system."

The new infrastructure needs will result in higher electricity prices for customers, but Grewal said Hydro will continue to remain one of the cheapest electricity jurisdictions in North America.

"With all of these investments, what do we know for certain? Electricity costs will go up. They have to be paid for."

But she said the province won't have to follow other jurisdictions in replacing carbon-based generating systems.

"We are in a very enviable position."

Higher rate increases to come

The independent Public Utilities Board recently granted a one per cent increase in the cost of electricity last September, and another one per cent increase scheduled to take effect in April.

Grewal anticipates future increases will exceed the one per cent approved by the utilities board, she told reporters.

The current NDP government campaigned on an election promise to freeze electricity rates for one year, but Finance Minister Adrien Sala suggested late last year it might happen later than planned because the utility is projecting a net loss this fiscal year, mainly due to drought conditions.

Grewal also said Hydro would increase its staffing count to thrive into the future.

The utility has 1,000 fewer full-time equivalents than it had in 2017, she said, "and it's impacting how we serve you."

Only 70 per cent of planned maintenance work is being completed, which is "unacceptable, given the age" of much of Hydro's infrastructure, she said. 

Grewal said Hydro will look to develop partnerships with post-secondary institutions to train its future workforce.

Manitoba Hydro sought to cut about 900 positions in 2017. The former Tory government wanted all Crown corporations to pull back on staffing counts, particularly managerial roles, to improve the province's finances.

On Tuesday, Grewal wouldn't criticize previous decisions, but said Hydro must now "rebuild" its staffing levels.

Manitoba Hydro may need new sources of power by 2029

10 months ago

Duration 2:14

Thanks to all the clean, green hydro-electric power we have in Manitoba, there's widespread belief we won't have a problem meeting our future energy needs. But that perception is not reality as Manitoba Hydro is going to need more electricity in as soon as five years.