November 3, 2006
$2.2-Billion Power Sale Arrangement Reached By Manitoba Hydro, Minnesota
Manitoba Hydro has signed a ‘term sheet’ with Northern States Power (NSP) Company – Minnesota, an Xcel Energy company, to provide approximately $2.2 billion in clean, renewable hydro power over 10 years, starting in 2015.
“This arrangement reinforces Manitoba’s continued leadership and determination to build our economy through the development and export of clean, renewable energy,” said Premier Gary Doer, who made the announcement with Manitoba Hydro president and CEO Bob Brennan and Finance Minister Greg Selinger, minister responsible for the Crown corporation.
“This is an excellent opportunity for Manitoba Hydro, Xcel Energy and an overall benefit to the environment,” added Brennan. “As a preferred supplier, Manitoba Hydro continues to power an important export market, while Xcel gains reliable, cost-competitive energy. And we are able to do this while reducing greenhouse gases.”
Doer noted that with this agreement, Manitoba’s Limestone generating station will have supported about $5.5 billion in sales to Xcel alone. Once completed, this will be the third large power sale Manitoba Hydro has arranged with Xcel. The previous sale, for the period 2005 to 2015, is worth $1.7 billion. Limestone cost $1.4 billion to build over a five-year period from 1985 to 1990.
“Limestone has proven to be the investment that keeps on giving to Manitobans, fuelling our economy and helping us keep energy rates affordable for Manitoba families and businesses,” Doer said. “We are fortunate the provincial government of the day viewed hydro power as the key to a prosperous future. We are proud to work with Manitoba Hydro to continue this vision.”
Manitoba Hydro and NSP have signed a term sheet for the sale, which will now enter the approval process and formal contract negotiations. The arrangement with NSP provides 375 megawatts of power in 2015, with the potential to increase to 500 megawatts after 2021.
Brennan said the agreement secures a market for the company’s expanding generating system which includes existing and planned wind power, the 200 megawatt Wuskwatim generating station under construction in partnership with the Nisichawaysihk Cree Nation and aggressive energy conservation initiatives.
As part of Xcel Energy’s proposal to meet the future energy needs of its customers in the upper Midwest of the United States, the Minnesota Public Utilities Commission (MPUC) must approve the arrangement with Manitoba Hydro. In 2002, the MPUC approved the 10-year, $1.7-billion contract between Manitoba Hydro and Xcel Energy. The new contract will also require approval of the National Energy Board of Canada.
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