“Sub-metering Hydro’s Excess Electricity”
By Randy Boldt, courtesy of Frontier Center for Public Policy
The world’s economy continues to grow every year by between 2 and 4%. From when civilization began, 5,000 years ago, the production of energy remains an important factor to continued growth.
In these environmentally conscious times, efforts are intensifying to reduce energy consumption and switch consumption to renewable resources. Manitoba is in a very unique situation – requiring unique solutions – being one of the world’s few jurisdictions producing all of its electricity from renewable sources. Manitoba Hydro produces significant surpluses of electricity, exporting the surplus mostly to the USA, to reduce their fossil fuel production of electricity.
When the under construction Keeyask dam is completed, Manitoba will have an additional 700 megawatts of electricity not now required for domestic consumption and for the foreseeable future all of it will be exported to the USA. Unfortunately, the export market now yields between 1-3 cents per kilowatt for opportunity sales – vs. the 13 cents cost of the dam and accompanying transmission. The difference will need to be made up by what is effectively a subsidy by Manitoba Hydro’s domestic rate payers who will have to pay higher domestic rates to pay for the unprofitable surplus production capacity.
One of the alternate options available for the use of Keeyask’s surplus power is to develop more uses for domestic consumption. Unfortunately, the thrust of Manitoba Hydro’s marketing efforts has been to reduce domestic consumption, resulting in increased surpluses which need to be sold in export markets. This made sense when export prices were profitable, but export prices have tumbled because of declining American domestic prices from the falling cost of American wind and solar renewable generation backed up by low cost gas fired generators and batteries. No change in this dynamic is expected in the future.
To reduce an electricity future rate shock Manitoba Hydro should look for ways to increase domestic demand by displacing non-renewable energy consumption. Things like electric cars and buses are obvious targets to pursue. But, one of the oddities of the Manitoba Hydro Act is that it does not allow for the purchase and resale of electricity. Currently, all electricity must be sold directly by our power monopoly Manitoba Hydro.
An unexpected consequence of this restrictive law is that it is virtually impossible for those living in multifamily buildings (condos or rental) to have access to individual charging stations for electric and plug in hybrid cars. The reason for this is that for Manitoba Hydro to sell power directly, it must have a meter directly from its feed – to the actual charging station. This means that if you own a condominium or rent in a high rise Manitoba Hydro must run new lines from its power supply directly to your charging station.
Given that the power used represents only a dollar or two per day, this is entirely uneconomic. No residential multifamily dwelling in Manitoba would ever go to this expense. Approximately 300,000 people in Winnipeg live in multifamily dwellings – all now unable to take advantage of the increasing benefit of electric and plug-in vehicles.
A simple solution for this would be for Manitoba Hydro to allow for sub-metering at low voltage (120 or possibly 240 volts). This would have the building manager installing inexpensive sub-meters at individual charging stations – and collects the money for Hydro. While building managers would expect to receive some benefit for their service, the management fee could be stipulated in revised legislation to ensure that the end user was not paying substantially above market prices for this service.
The cost benefit of low voltage with preferential night rate charging sub-metering is substantial – compared to running a line for tens of thousands of dollars to each charging station. In order to accomplish what would be a relatively simple fix, the Manitoba Hydro act would need to be amended to provide for this arrangement – which wouldn’t cost a penny of public money nor a subsidy required from Manitoba Hydro.
There are likely other ways of using Manitoba Hydro to offset fossil fuel consumption and or reduce the unprofitable export of excess electricity. The mandate of the newly formed Efficiency Manitoba should include such objectives.
Not only should this be part of its mandate, but with suffering the huge discount in which Manitoba are selling electricity to the USA. This should be Efficiency Manitoba’s primary focus:
How to use Manitoba Hydro’s renewable energy to offset non-renewable energy?
No doubt there are lots of other opportunities – but sub-metering would be a good first start.
Randy Boldt is an immigration consultant and research associate for the Frontier Centre for Public Policy.