Another drought has Manitoba Hydro firing up Brandon natural gas plant early

Widespread drought across the Lake Winnipeg watershed has forced Manitoba Hydro to operate its Brandon generating station months before the depths of winter, when the natural gas-fired plant is usually put into service as a last resort.

The Brandon station, which usually only operates during peak periods of cold-weather demand, has been running since late October, Manitoba Hydro said Friday in a statement.

The station usually operates when Hydro needs to supplement peak loads or when it makes more financial sense to operate a gas plant than it does to import electricity from the United States, the Crown corporation said.

The Brandon plant is the last large-scale fossil fuel-driven generating station Hydro operates. Four northern Manitoba communities get their power from diesel-fired plants.

Brandon is in play for Hydro because it's contending with the lowest water levels since the 2021 drought, and Manitoba is heading into a winter that could pose similar challenges.

Rivers run low

Three key rivers that feed hydro-electric generating stations are running very low — and two of them are approaching historic droughts.

The Churchill River, which is partly diverted into the Nelson River in order to boost generating capacity at four Manitoba Hydro stations, is flowing at 18,300 cubic feet per second at Leaf Rapids, a near-record low. The lowest recorded flow on the Churchill at this time of year was 17,500 cf/s, according to Manitoba Infrastructure and Transportation.

The Winnipeg River, which powers six generating stations, is also flowing at 9,660 cf/s at Seven Sisters Falls, according to the Lake of the Woods Control Board. The record low at this time of year was 7,380 cf/s.

The Saskatchewan River, which powers the hydro station at Grand Rapids, is flowing at 8,050 cf/s, which is slightly more than half its median flow for this time of year, according to Manitoba Infrastructure Transportation.

Despite the low inputs, Manitoba Hydro won't run out of water. Lake Winnipeg, which the corporation uses as a reservoir, still holds some of the water it received from this spring's Red River flood.

Lake Winnipeg sits at 712.9 feet above sea level, which is near the middle of its operating range, even if it is lower than average for this time of year.

As a result, Hydro is meeting its both domestic and power export commitments, spokesperson Bruce Owen said.

"There is no danger of a 'power shortage' — Manitobans can rely on Manitoba Hydro for their electricity," Owen said in a statement. 

"We started reducing reservoir outflows last spring to conserve storage and ensure a reliable energy supply for our customers not just through this winter, but into next year as well in case drought conditions persist."

Financial impacts for Hydro

The low water levels, however, still affect Hydro financially. Even prior to the current drought conditions, Hydro had already reduced its projected income for the fiscal year ending on March 31, 2024.

In its first-quarter report, published in October, Hydro said net income this year is "expected to be about 50 per cent lower" than the budgeted $450 million.

The drought two years ago led the corporation to post a $248 million net loss at the end of the 2021-22 fiscal year. Owen said Hydro is just starting to determine how the low water levels this fall will affect its generating capacity and the resulting financial picture for 2023-24.

"We know now that total hydraulic generation will be below budget for fiscal year 2023-24," Owen said. "We won't have more details on this until we receive updated inflow and reservoir information from the end of October. Once received, we then prepare updated projections."

Reduced Hydro revenue or another deficit could affect the NDP government's promise to freeze Hydro rates for a year, suggested Adrien Sala, Manitoba's finance minister.

"The financial situation at Manitoba Hydro may change how we approach the rate freeze, but we're still committed to delivering on that rate freeze," Sala said in a Friday interview.

Hydro rates are slated to rise by one per cent on April 1.