Kinew dismisses warnings about looming capacity crunch at Manitoba Hydro

Premier Wab Kinew says the province has enough electricity to serve large new industrial customers in spite of warnings from Manitoba Hydro about a looming capacity crunch and the need to generate more power.

Kinew said Wednesday Manitoba Hydro will be able to serve the needs of large, energy-intensive businesses considering developments in Manitoba over the next three to five years.

“We’re looking at a lot of serious economic development projects, including some large-scale manufacturing opportunities, as well as the housing needs that we know that we need to continue to build,” Kinew said in a telephone interview.

“We have the hydroelectric capacity to meet those needs this year, next year and the coming years.”

In a September 2023 briefing note obtained by CBC News, Manitoba Hydro warned the former PC government it was already being forced to choose among 57 proposals to use large volumes of electricity, including 17 projects well past the initial study phase.

“Manitoba Hydro is unable to offer firm commitments to prospective customers that may align with Manitoba’s energy roadmap and/or provincial economic development objectives,” Hydro warned in the note, explaining it is legally obliged to serve all existing customers who need more electricity.

“As such, Manitoba Hydro cannot reserve electric supply for particular projects.”

Hydro said in the note its “near-term surplus electricity supply” is so limited, “a single energy-intensive connection may consume all remaining electrical capacity.”

When asked last week how this might affect Canadian Premium Sand’s plans to build a solar glass manufacturing plant in Selkirk, the premier said there is no capacity crunch.

“We have tons of megawatts of clean, low-carbon hydroelectricity in Manitoba and it’s going to power our economic advantage for generations to come,” Kinew said on Friday during an unrelated press conference.

Manitoba Hydro spokesperson Bruce Owen suggested in a statement the briefing note did not refer to the solar glass plant in Selkirk or a proposal to build an electric car battery manufacturing facility in Winnipeg.

Hydro has enough capacity to service both projects, Owen said.

“The briefing note spoke to the requirements of meeting all the prospective customers who are inquiring or could come our way to electrify. It didn’t speak to specific projects or timelines,” he said.

Premier Wab Kinew holds said there is enough capacity to add large customers for the next three to five years. (Aaron Vincent Elkaim/The Canadian Press)

Manitoba Hydro also made separate warnings about the need to ramp up its capacity to generate electricity.

In an energy “roadmap” issued in July, Hydro said it needs to double or nearly triple its generating capacity, from the current 6,100 megawatts to 10,000 to 16,000 megawatts by the 2040s, in order to meet a growing demand for electricity.

Hydro planned to accomplish this feat by partnering up with private wind farms and relying on natural-gas power to some extent over the next 15 years.

Then in January, Hydro then-CEO Jay Grewal told a Winnipeg Chamber of Commerce audience Hydro may hit a capacity wall by 2029.

“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,” Grewal said.

Two weeks later, Hydro’s NDP-appointed board dismissed Grewal, who was hired by a PC-appointed board.

New Hydro board chair Ben Graham and Manitoba Finance Minister Adrien Sala said at the time her departure had nothing to do with differences of opinion with the NDP government over private wind farms or the continued use of natural gas.

Nonetheless, Graham and Sala said Hydro will find ways to ramp up generating capacity through fully public means.

Kinew doubled down on this sentiment on Wednesday but would not say what his government will do if Hydro determines it would be less expensive to purchase power from private wind farms.

“That’s all hypothetical,” Kinew said.

The premier said he’s confident Hydro can find a way to keep rates down while it builds up generating capacity as well as new transmission lines to carry electricity, a project expected to cost in the tens of billions.

Kinew also said this could be accomplished without significantly adding to Hydro’s debt, which already stands at $24.6 billion.

PC Hydro critic Grant Jackson said this is impossible.

“Manitobans are learning that this NDP premier thinks he knows better than experts. We are quickly running out of grid power, and the NDP ripped up Manitoba Hydro’s strategic plan while firing the CEO,” the Spruce Woods MLA said in a statement.

Kinew said his government will rely on some of the work Hydro has already undertaken but said Manitoba will pursue a carbon-free energy policy that will make this province more attractive to European and Asian markets.

“We are definitely going to put our own plan at the forefront, which is to lean into what is our advantage globally at this moment,” he said.

Veteran political observer Paul Thomas said the NDP government has made conditions challenging for Manitoba Hydro.

“The new NDP board will almost have to start from scratch in terms of developing a strategic plan which aligns with the thinking of the NDP government,” said Thomas, professor emeritus of political studies at the University of Manitoba.

“That difficult task will have to begin at the same time there is a search for a new CEO.”