Hydro is getting ahead of itself

Manitoba Hydro is pressing ahead with its proposed $3-billion gas-turbine project in Brandon as though approval was a foregone conclusion. Six weeks of Public Utilities Board hearings exposed serious doubts about the need for three turbines, their escalating cost and whether more affordable alternatives have been adequately examined. Yet before the PUB has delivered its recommendations and the government has authorized the investment, Hydro applied for an environmental license on Oct. 8.

Starting the environmental review early may save time but proceeding before the premier and his cabinet have made a decision risks reducing regulatory scrutiny and political approval to mere formalities. Has the government already given Hydro the green light?

Few dispute that Manitoba will need more capacity as demand grows. Daymark Energy Advisors, the PUB’s independent consultant, concluded that Hydro had established a need for additional capacity by 2030. However, Daymark questioned the size of the projected shortfall, Hydro’s load forecasts and its turbine cost assumptions. Hydro itself acknowledged that its planning costs were based on 2024 information, and that surging North American demand for gas turbines has since put significant upward pressure on prices. Then there’s the impact of Trump’s trade war. These are not minor details, but updated costs have not been obtained.

The bigger problem is how Hydro has framed the alternatives. Interim CEO Hal Turner recently argued that wind and battery storage alone cannot reliably carry Manitoba through prolonged extreme cold. Fair enough. However, critics are not proposing wind and batteries alone.

The real alternative is a more diversified energy mix. That could mean one turbine rather than three, combined with more wind, battery storage, demand response, energy efficiency, curtailable industrial loads, expanded imports and interconnections, upgrades to existing hydroelectric stations and smarter use of our reservoirs. A strong case can be made that more use of these alternatives would completely meet Hydro’s 2030 needs.

Reducing annual electricity use and winter peak demand deserves far more attention, particularly given Manitoba’s heavy reliance on electric resistance heating. The new national heat pump rebate, part of a $2-billion federal home-retrofit initiative, offers an opportunity to accelerate conversions to cold-climate air-source heat pumps. Efficiency Manitoba, with support from Hydro, should also accelerate its efforts to support ground-source and district geothermal systems, which reduce both annual electricity consumption and winter peak demand. Manitoba has more than 140,000 electrically heated homes. A managed program of conversion to geothermal systems would also save significant amounts of energy, and would create employment and savings for the home owners.

Hydro’s approach to future-proofing raises another concern. The Brandon project includes provisions for a fourth turbine, including space for another unit and a gas pipeline that could serve it with added compression. Hydro has also left open the possibility of converting the turbines to operate regularly with combined-cycle generation. Neither is part of the current proposal, but both open the door to much greater long-term reliance on gas than Hydro’s assurances about infrequent operation suggest.

Environmental and health questions matter, too. A Brandon physician, appearing for the Canadian Association of Physicians for the Environment, warned the PUB about the health effects of air pollution and climate change from fossil-fuel generation. Hydro replies that the turbines would run infrequently. That’s what Hydro is selling now, but its plans noted above suggest otherwise. More and longer running turbines are in their cards.

If future-proofing is sound planning, it should not stop at gas. New homes and buildings, for example, could be made solar-ready and heat-pump-ready at little additional cost during construction, preserving lower-carbon options as technologies improve and costs fall.

There is a stunning political contradiction of spending billions on American-made turbines while Premier Kinew urges Manitobans to buy Canadian. GE Vernova, the only company to submit a final bid, would manufacture the turbines in South Carolina. The company also donated US$500,000 to Donald Trump’s 2025 inauguration. None of this should override reliability and cost, but it warrants additional scrutiny.

The PUB will soon provide its findings and recommendations to the provincial government, separately addressing the proposed turbines and Hydro’s broader integrated resource plan. Those recommendations should address the central question raised throughout the hearings — has Hydro made a convincing case for three gas turbines when a more diversified combination of generation, storage, demand-side measures, imports and existing hydroelectric resources may offer lower costs, lower financial and environmental risks, and greater flexibility?

Premier Kinew and his cabinet must take the PUB’s recommendations seriously before approving one of the largest infrastructure investments in the province’s history. Hydro’s decision to proceed with environmental approvals must not prejudge the outcome. The burden of proof rests with Hydro.

Unless the PUB concludes that Hydro has made a convincing case for three gas turbines, Premier Kinew should send the plan back for further work using some external consultants rather than commit ratepayers to an investment likely to well exceed $3 billion, a decision they may have to live with and regret for decades.

Tim Sale is a former Manitoba minister of energy.