Powering Our Province Winnipeg Real Estate Forum 2016 Kelvin - - PowerPoint PPT Presentation

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

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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

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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

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Manitoba Hydro mandate

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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

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16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 32,000 34,000 36,000 38,000 1994/95 1999/00 2004/05 2009/10 2014/15 2019/20 2024/25 2029/30 (Energy (GW.h)

Manitoba’s Electricity Usage Is Growing

Forecast growth - Electricity 7 *1.5% including Codes & Standards, before Demand Side Management programming

Required Investment In Canada’s Electricity System – 20 years

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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

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System reliability

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

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Keeyask Generating Station

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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

Manitoba-Minnesota Transmission Project

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• 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

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)

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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

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Manitoba Hydro maintains high levels of system reliability – Power is an essential service

• Generation and transmission
• ften 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
• f 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)

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New - Adelaide Station

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New - Madison Station

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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

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Average Retail Price of Electricity

6.45 6.81 8.26 9.01 9.03 9.82 9.84 10.02 10.02 10.05

5.0 6.0 7.0 8.0 9.0 10.0 11.0

Cents / kW.h (Canadian)

Ten Lowest Cost Provinces/ States in North America

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 billion or 29% of total revenues

Residential $4.9 billion 29.3% Industrial/ Commercial $7.0 billion 41.4% Exports $4.9 billion 29.3% Share of Total Electric Revenues 2006-2015

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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

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Race To Reduce

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Different image required

Thank you

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