Manitoba Hydro reaches $2B power agreement with Wisconsin

Manitoba Hydro has announced a deal to sell more than $2 billion in hydroelectric power to the state of Wisconsin.

The Crown corporation has signed a term sheet to provide up to 500 megawatts of power to the Wisconsin Public Service over 15 years, starting in 2018, Premier Gary Doer said Thursday.

Doer said the deal allows the province to maintain low energy rates for Manitobans for years to come, while at the same time reducing the production of greenhouse gases by reducing the need for thermal generation in the United States.

"We're very concerned about trying to manage our carbon footprint,"Charlie Severance, general manager for wholesale electricity and renewable energy at Wisconsin Public Service, told CBC News on Thursday.

"We are fairly dependant on coal at this point in time. We were looking for resources that would hopefully be carbon neutral, and what Manitoba has proposed as a project really fit the bill for us."

The long-term sale will require the construction of the controversial BiPole III transmission line, as well as hydroelectric facilities in northern Manitoba and a major transmission line between Canada and the United States, provincial officials said.

"We are moving forward with construction on the Wuskwatim dam, working on a co-operative agreement with First Nations on Keeyask [generating station] and continuing development work on the Conawapa generating station," Finance Minister Greg Selinger said in a release.

Conawapa, on the Nelson River 90 kilometres from Gillam, Man., would be the largest hydroelectric project ever built in northern Manitoba, capable of generating 1,380 megawatts of electricity. Keeyask, also on the Nelson River, would produce about 600 megawatts, while Wuskwatim would produce 200 megawatts on the Burntwood River, southwest of Thompson.

BiPole III, Manitoba Hydro's third high-voltage direct-current transmission line, has been the subject of intense controversy since provincial officials announced last year that it would take a longer, more expensive route through the west side of the province, rather than cutting a shorter route through prime boreal forest on the east side of Lake Winnipeg.

The projects will cost a total of around $12 billion, but Hydro president Bob Brennan said it's a good deal for this province, positioning Manitoba as a leader in North America for selling clean, renewable power.

In order to meet the target sale date of 2018, construction on the projects must begin within the next four to five years, said Brennan.

The deal is still subject to public scrutiny: It will have to be reviewed by the Clean Environment Commission and the Public Utilities Board.

Manitoba Hydro recently signed a term sheet with Minnesota Power to provide 250 megawatts of power over 15 years, starting in 2020, as well as surplus energy starting this year.

In early 2007, Hydro and the Wisconsin Public Service renewed an existing 100-megawatt agreement.