Discussions

From the news release at the link below, as a result of drought conditions this year Manitoba Hydro is seeing what was originally forecast to be a profit of $190M for the current fiscal year swing to a forecast loss of $190-200M because of a $400M reduction in export revenues.  
 
In the release, Hydro states that"customers can rest assured that their energy needs will be met throughout the winter months when heating loads kick in"... going on to state that "the utlility is managing its system to maintain energy security and reliability to ensure it can continue to meet all domestic and firm export commitments."
https://www.hydro.mb.ca/articles/2021/11/extreme_drought_forecast_to_hit_manitoba_hydro_2021_22_bottom_line/  

An outlier of a year no doubt in a province that's normally quite blessed as far as energy capability. That capability leads to us be able to in normal years sell/export surplus and keep our electricity rates at the second-best in Canada:  
https://www.energyhub.org/electricity-prices/  

Though it does say that a rate increase is before the Public Utilities Board for later this month, I don't think I'd expect our status as having among the cheapest electricity in the country to be in jeopardy. 
 
At the same time the drought impact and the prospect of increased chance of drought due to climate change to me leads to questions of whether or not we're diversified enough in energy sources at a time when wind and solar are becoming more and more practical all the time. In particular Hydro ended a solar incentive program in 2018 to some controversy:
https://www.cbc.ca/news/canada/manitoba/manitoba-solar-panel-energy-rebate-program-2022-efficiency-manitoba-1.5338619 

Not clear where things have gone from there, but with us being among the sunniest areas of the country you have to think that there's a lot of unharvested energy being left on the table that can be added to our overall mix and soften the blow of years like this.

If you’re suggesting they’re saying they’ll be almost a half billion short on export revenue but they aren’t, thats a hard one to entertain. Here’s a little more on how hydro works. It’ll put into a little more context how rare low flows from severe drought means less power:  
https://www.hydro.mb.ca/corporate/teachers/producing_electricity/  
 
It’s kinda ironic because some of the more trendy modern renewable energy companies are adding hydro assets in part I think to diversify and have more stable revenue streams as they build out their wind and solar.  
 
I don’t mean to pretend to have all of the info because I don’t and would be real curious to see others’ thoughts on the topic.  Very possible that within wider context of many years this is an event that can be absorbed fairly well. If however this results in a greater than normal rate increase then it would be hard not to want answers to why we aren’t better incorporating other forms of energy to hedge against this happening again. Still learning but I think in that conversation might be best guesses on future export demand as more and more places build out renewables during the wider energy transition thats taking place.

In Manitoba's system Electricy Storage is a thing, but it doesn't actually take form in the storage of electricity, but in water, which is called "Ponding". Since HydroElectric generation can be shut off and turned on relatively quick compared to Coal/Nuclear options which take days, Manitoba Hydro use to make lots of money in the 90's early 2000's by purchasing power at cheap rates throughout the night from the US electrical companies that were generating surplus power and couldn't shut off. Manitoba Hydro would then pond water through out the night and then use that water to generate extra power to export back to the US throughout the day selling it on the spot market at a higher rate than than it was purchased for the night before. It's what helped keeping our Hydro rates down for so long.  
Since the US has gone to more Natural Gas generation it doesn't allow for the same opportunities as before and now more sales are done with guaranteed power sales.  
 
Keeyask is generating power, its not fully in service yet with more units still being commissioned, but how many units that will be actually in-service depends on the amount of water available.  
 
The biggest issue right now is the lack of water Lake Winnipeg is at 712ft and MH license only allows for it to regulate down to 711ft. Once it drops below that the Minister of Conservation and Water Stewardship determines how the outflows will be managed, so then its in the Governments hands.  
 
Now Adam in regards to your comments about Manitoba Hydro ending the solar incentive program, did you know that under that program the power being generated and sold to Manitoba Hydro was at the same rate as the residential rate. I have a friend that took part in the incentive received the rebate , his system his sized slightly larger than his usage, so at the end of the year he has a a hydro credit. He says that he is taking the amount of his old Hydro bill and paying that towards the loan for the solar system and it will be paid off in 6 to 7 years, and after that it will be money in his pocket.  
 
So effectively the MH Hydro ratepayers subsidized people to never have hydro bills again , meanwhile MH is still on the hook to maintain the service to their homes and can't make any money on the extra power that they might generate since they have to buy it at the same rate they sell it at. So I can see why he program was shut down.  
 
Now I'm not against solar, but incentives shouldn't come at the detriment of ratepayers that can't afford it and the company for which there is minimal benefit.

Thanks for an informed post. Interesting to read about opportunities on the storage side of things. Lot of interest in energy, but admittedly a lot to learn on the dollars and cents of new energy within the context of MB.  
 
Curious for your thoughts on wind and the economics around it from an MB perspective. About a decade or so ago before renewables were quite as trendy as they are now a past Brandon city councillor made it a campaign issue to look into taking advantage of the natural wind resource that we have in Westman (not necessarily directly in the city of course). Nothing really came of it but put it on my radar as something to keep an eye on.  
 
Just through the investing side of life I follow some of the renewable energy co's that are part of some of the wind setups that are getting developed all over the place. Enough to know that even though the dollars and cents are I believe getting better, there can still be fluctuations in what a wind setup nets depending on what mother nature decides. Whether it's Manitoba Hydro going it alone (if thats possible) or through a partnership, do you see wind as being a practical way we could hedge against what we've seen this year? and how would you see it working within the wider energy picture (used domestically vs exported) in a normal year?  
 
And looking at it from the other end, when we sell do you see renewable setups in other regions eventually having an impact on what Manitoba sees for demand and what it nets when it does sell?