Hydro plans $1-B deal with Minnesota Power

January 30, 2008
Winnipeg Free Press
Written by: Carol Sanders

This is the future site of the Wuskwatim generating station, at the outlet of Wuskwatim Lake, with Taskinigup Falls on­the Burntwood River in the foreground.

MANITOBA Hydro plans to sell more than $1 billion of additional hydroelectricity to Minnesota Power, bolstering plans for major new power plants in northern Manitoba.

The U.S. company has agreed to buy surplus energy from Manitoba Hydro starting this year, and it has a 15-year term agreement starting in 2020 to buy 250 megawatts of power, worth about $1 billion alone, said Manitoba Hydro spokesman Glenn Schneider.

"We've had a great relationship with Manitoba (Hydro) going back decades," said Eric Olson, spokesman for ALLETE Inc., which owns Minnesota Power. He pointed to another deal Minnesota Power has in place for 50 megawatts from May 2009 to April 2015.

The billion-dollar agreement announced Tuesday will require the construction of hydroelectric facilities in northern Manitoba and new transmission lines between Canada and the United States, according to Bob Brennan, president and CEO of Manitoba Hydro.

Manitoba Finance Minister Greg Selinger said the development of "clean, renewable energy" is part of the government's long-term vision to build the province's economy.

"Construction is well underway on the Wuskwatim dam -- a partnership between Manitoba Hydro and Nisichawayasihk Cree Nation -- and development work continues on projects like Conawapa Generating Station as well as the Bipole III transmission line that will improve reliability of Manitoba's power system and increase our export markets," Selinger said.

This year, a decision will be made on whether or not to proceed with construction of the Keeyask generating station.

Keeyask, also known as Gull Rapids, will flood a 46-square-kilometre swath of northern Manitoba and produce enough electricity to power every household in Winnipeg. Meanwhile, the $1.1-billion dam at Wuskwatim, southwest of Thompson, hit a speed bump on Friday, when the only bidder pulled out of negotiations.

Keeyask will churn out three times as much power as Wuskwatim and is almost as expensive as Conawapa, the largest of the northern dams slated to be up and running in 2021.

Manitoba Hydro spokesman Glenn Schneider said the export sale to Minnesota is timely.

"We would not need all the power from Keeyask or Conawapa when they come on line, and an export sale of 250 megawatts is timely to take up some of the output."

He said the deal was announced Tuesday because the board of Minnesota Power's parent company, ALLETE Inc., had just approved it. Because they are shareholder-owned, they wanted to make the announcement before the markets opened Tuesday.

A spokesman for Chief John Miswagon of the Pimicikamak Cree Nation said hydro development isn't such a good deal for the environment.

He noted that past flooding for dams that still generate electricity wrecked fish habitat and people have died after floating logs in flooded areas hit boats.

"They keep trashing the environment, and people regard that as renewable?"

The billion-dollar Minnesota Power sale agreement will take a year to finalize and is subject to the approval of the Minnesota Public Utilities Commission.

carol.sanders@freepress.mb.ca