Manitoba Hydro Reports Higher Export Revenues Help Improve Third Quarter Results
Higher export sales and colder temperatures helped Manitoba Hydro achieve a consolidated net income of $72 million for the first nine months of the 2013/14 fiscal year, compared to a net loss of $38 million for the same period last year.
The corporation has released its quarterly report to December 31, 2013, showing extraprovincial revenues of $338 million, an increase of $58 million compared to last year, primarily due to higher export electricity sales volumes resulting from favourable water conditions and higher export prices. Domestic electricity revenue also increased over last year as a result of rate adjustments and colder weather resulting in higher heating loads.
Manitoba Hydro's third quarter results consisted of a $78 million profit in the electricity sector and a $6 million loss in the natural gas sector. The loss in the natural gas sector should be recouped over the remainder of the winter heating season.
Natural gas commodity prices are volatile, and prices continued to increase over the course of 2013. The quarterly report noted that Manitoba Hydro's natural gas rates changed effective November 1, 2013. The annual bill for the typical residential customer increased by approximately 1.4 per cent or $11 per year as a result. Larger volume customers saw annualized bill impacts ranging from 1.6 per cent to 3.2 per cent depending on rate class and level of consumption.
December saw Manitoba Hydro set a new record for electrical demand in the province, when the system saw a peak demand of 4,632 megawatts (MW) on December 31. Increased heating load due to the colder than average weather - combined with a growing provincial population and economy - were factors in establishing this new record. For comparison, Manitoba Hydro's total installed generating capability is 5,675 megawatts.
Based on the continuation of current water flows and export market conditions, Manitoba Hydro is forecasting that net income could exceed $130 million by March 31, 2014.
The report also highlighted the start in September 2013 of public hearings by the Manitoba Clean Environment Commission to review the Keeyask Generating Station project's environmental impact statement and supplemental information. The hearings were completed in January of 2014. Pending regulatory approvals, construction of the proposed 695-megawatt Keeyask Generating Station is scheduled to start later in 2014 with an expected in-service date of 2019.
In addition, the report described two new export electricity agreements: a $100 million power sale to Saskatchewan over eight years and a 200-megawatt seasonal diversity exchange with Great River Energy of Minnesota. Seasonal diversity exchanges take advantage of the fact that Manitoba Hydro's load peaks during winter - due to the demand for heating - while most U.S. utilities like Great River Energy experience their peak loads in the summer, due to higher air conditioning use.
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