Confidential briefing note warns Manitoba Hydro can't service new 'energy intensive' customers

Manitoba Hydro lacks the capacity to provide electricity to any new "energy intensive" industrial customers, the Crown corporation warns in a confidential briefing note that undercuts the idea this province can lure large businesses with an ample supply of clean, green energy.

On July 28, provincial economic development officials unveiled an "energy roadmap" that said Manitoba Hydro must double or triple its generating capacity over the next two decades in order to meet industrial and consumer demand for electricity produced without burning fossil fuels.

Those officials said 18 potential new customers with high energy needs were looking at setting up operations in Manitoba — and warned the province must be careful to choose businesses that provide the greatest economic benefit as well as the lowest environmental impact.

In a briefing note dated Sept. 13, obtained by CBC News, Manitoba Hydro warns it doesn't have enough excess power to hook up any of these new heavy electricity-using customers to the provincial power grid.

There are actually 57 proposals to use large volumes of electricity, Hydro says in the note, including eight projects already in the detailed study phase and nine where the proponents are working on construction agreements.

"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 warns 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 says in the note its "near-term surplus electricity supply" is so limited, "a single energy-intensive connection may consume all remaining electrical capacity."

Adding more electrical generating capacity won't be easy, and will not happen in time to meet demands from customers looking to set up shop in the province, Hydro warns.

The Crown corporation goes on to say it's grappling with numerous requests from existing and prospective energy-intensive customers, mainly for producing hydrogen, manufacturing electric vehicle batteries and switching from fossil fuels to electricity.

Adding supply not 'easy, quick or inexpensive': Hydro

In a statement, Hydro said it wants to ensure Manitobans know the corporation is not running out of power — just the ability to meet the needs of large new customers.

"The size of loads looking to come to Manitoba are significantly larger than we typically see, and until additional supply is available, that limits our ability to connect them," Hydro spokesperson Bruce Owen said in a statement.

"Adding resources is no easy, quick or inexpensive task."

Adding wind power or battery storage, for example, would require the construction of more transmission lines, a major infrastructure project in and of itself.

Natural gas plants are relatively inexpensive to build but do not align with efforts to reduce carbon emissions. Nuclear power plants require at least a decade of lead time to build, and tend to generate local opposition.

Hydro has also ruled out building another hydroelectric dam on the Nelson River, where the Conawapa project was put on hold in 2014.

Nonetheless, both Manitoba's Progressive Conservatives and New Democrats have incorporated Hydro-fuelled economic growth into their election platforms.

In a speech to the Manitoba Chambers of Commerce earlier this month, PC Leader Heather Stefanson said Manitoba's ample supply of clean and inexpensive electricity will bring more businesses to the province.

• Here's what Manitoba's parties have promised on the major election issues

Shannon Martin, the outgoing McPhillips MLA who serves as a spokesperson for the PCs, said he is not troubled by a Hydro briefing note warning of an inability to serve the energy needs of some of those businesses.

"I have every confidence not only in our government, but more importantly in the province of Manitoba in terms of its ability to grow the economy," Martin said in an interview.

Manitoba is working to ensure consumers and businesses use energy more efficiently and thus reserve power for other needs, he said.

NDP Leader Wab Kinew, meanwhile, has promised to develop hydrogen production in Manitoba — something that may not be possible in the near future given the absence of sufficient excess power.

St. James NDP incumbent candidate Adrien Sala, who served as the party's Hydro critic during the last legislative term, blames that on the Progressive Conservatives.

"Instead of investing in Manitoba, businesses and industry are being forced to look elsewhere, all because the PCs haven't done the basic work of ensuring we have the energy needed to grow our economy," he said in an interview.

• Read full Manitoba election coverage from CBC Manitoba here