Electricity Exports
In 2011-12 export sales totalled $363 million with 87 per cent derived from the U.S. market and 13 per cent from sales to Canadian markets.
Since 2003, our export sales have totalled $5.2 billion. Our forecast total export revenues are $16 billion over the next 20 years; $29 billion over the next 30 years.
 Electricity revenue sources from 2002/03 to 2011/12. More revenue from export customers than Manitoba residential customers. Click for larger image. |
Our exports to neighbouring provinces and mid-western markets in the United States have many positive aspects.
Benefits to Manitobans
- The income from export sales help keep Manitoba Hydro's electricity rates among the lowest in North America.
- Because new dam construction adds a lot of capacity to our system all at once, exports provide an interim outlet for surplus electricity as the province's usage catches up.
- Exports of hydroelectricity help our export customers to reduce greenhouse gas emissions through the use of self-renewing water power.
- The seasonal demand for electricity in the U.S., our largest market, is opposite to our own, giving us extra capacity without investment. U.S. demand peaks in summer; Manitoba demand peaks in winter.
- Energy security & reliability – we can import power, if required (i.e. extreme drought).
- Our province's rivers provide a vast, renewable source of clean energy, which is attractive to our export markets.
Variability of Water Supply
 Variability of water supply since 1900. We build generating stations to the dependable flow. Click for larger image. |
Our generating stations are built to utilize our water supply's dependable flow, which is based on the lowest flow on record.
Dependable flow is consistently well below the average flow. Building to dependable flow ensures we're always capable of meeting our electricity commitments to our Manitoba customers.
In almost every year since 1900, our water supply has produced more electricity than is required in the province. Export sales provide an outlet for our excess electricity and a revenue stream that helps us keep energy prices low in the province
Export Electricity Sales
Our export electricity sales are made as either:
- Long-term contracts that provide a firm supply of electricity at a negotiated, fixed price that will not fluctuate due to market conditions.
- Opportunity sales, which are made from short-term surpluses of electricity – usually because of good water conditions. Since the amount of energy available for these sales can change in relatively short periods of time, it cannot be sold as firm or guaranteed energy.
Prices in the short-term export market fluctuate and, therefore, our revenues can vary extensively depending on:
- time of day;
- water conditions;
- natural gas prices;
- other factors.
Even when market prices are low, we may pursue opportunity sales because of high water conditions and our low costs associated with generating that additional electricity. The alternative would be to spill the water at our generating stations and forego making any revenue at all.
Wholesale vs. Retail Electricity Pricing
We export electricity into a wholesale market, where customers are largely other utilities. The electricity is delivered at a very high voltage and the receiving utility is responsible for any additional costs associated with supplying that energy to their own retail customers.
A comparison can be made with rates paid by large industrial customers here in Manitoba who, like our export customers, take delivery of electricity at a high voltage and then are responsible for any internal distribution costs.
Wholesale electricity sold to U.S. customers under firm contracts at fixed rates is currently priced 50 per cent higher than what large industrial customers in Manitoba pay.
Export prices are not subsidized by Manitoba ratepayers.
