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DAM-L freep article Aug 24/01 on hydro



Date:  08/24/2001  10:10:30 AM
Subj:   Hydro's getting rich somehow,  WFP Aug24/01


Cash-rich Hydro pondering new dams
Winnipeg Free Press
Fri, Aug 24, 2001

By Helen Fallding

FLUSH with cash from record profits, Manitoba Hydro is in good shape to consider
new dam construction early next year, president Bob Brennan said yesterday.

"It allows us to look at everything."

Hydro's net earnings of $270 million for the year ending March 31, a figure
released yesterday in the utility's annual report, are by far the highest in the
company's history. The previous record, set last year, was $152 million.

Manitoba Hydro is expected to announce in February or March whether it will go
ahead with one or more of three proposed mid-size generating stations on the
Nelson and Burntwood rivers.

The utility always hires private contractors to build dams, but Brennan said
Hydro has no plans to allow private operators. First nations are the only
outside partners likely to be offered equity in new projects in their
traditional territories, Brennan said.

Manitoba Hydro is also in discussion with some of the more than 30 first nations
that could be affected by a new transmission line from a proposed northern dam.

Hydroelectricity exports rose to a record $480 million because of higher
electricity prices and high water flows in Manitoba's river systems. Prices rose
because competing utilities were using expensive natural gas to generate
electricity and because of uncertainty caused by deregulation in other
jurisdictions.

Manitoba Hydro exports a higher percentage of its electricity than any other
utility in Canada. Three-quarters of the power is exported to the U.S., with the
rest sold to Ontario and Saskatchewan.

Brennan does not expect this year's profits to be as high, but the extra cash
from last year will help cushion the impact of any new dam construction and
allow the utility to survive a drought without hurting customers.

"We couldn't have done that 10 years ago," he said.

It takes about a decade to complete environmental reviews and build new dams. In
the meantime, cash from this year's record profits will be used to pay down debt
and fund ongoing capital projects such as a new transmission line to the U.S.
from Glenboro.

Hydro is also moving ahead with tendering for a controversial new high-voltage
power line in East St. Paul.

Gerri Hewitt of the Manitoba Society of Seniors, who often calls for utility
rate cuts to help low-income Manitobans, was not advocating a hydro rate
decrease yesterday.

She said Manitoba's electricity rates are already the lowest of any major
utility in North America. Hydro should consider spending profits on new projects
that will ensure rates remain low in the future, she said.

Gaile Whelan Enns, Manitoba director of the Canadian Nature Federation's
wildlands campaign, said Manitoba Hydro should present the public with an
overall energy plan for the province, rather than just rolling out individual
development projects.

She also wants research on alternative power sources such as hydrogen fuel and
Hydro's support for the establishment of protected areas in the North.

Centra Gas, which merged with Manitoba Hydro in 1999, contributed only $3
million to the utility's bottom line during a year of high natural gas prices.

Manitoba Hydro's Power Smart program has cut demand for electricity by 136
megawatts to date -- the equivalent of the power produced by some dams.

helen.fallding@freepress.mb.ca


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? 2001 Winnipeg Free Press. All Rights Reserved.


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