A government-owned Canadian electricity exporter is making a C$350 million ($262 million) bet that the "clean" power movement in the United States will outlast the imminent pro-fossil fuels regime change in Washington, DC.
Manitoba Hydro, a provincial Crown corporation, applied this week to the National Energy Board (NEB) for a construction permit for a 213-kilometer (128-mile) transmission line from Winnipeg to the U.S. border.
The Canadian wire would hook up to a 358-kilometer import route, the Great Northern Transmission Line, sponsored by Minnesota Power. The U.S. project, forecast to cost US$560-710 million, received a presidential permit Nov. 16.
Scheduled to switch on in 2020, the connection would tap zero-emissions power surpluses from the new Keeyask Generating Station, a C$7.2 billion dam under construction 725 kilometers (435 miles) north of Winnipeg on the Nelson River by a partnership between Manitoba Hydro and four aboriginal groups.
The Manitoba and Minnesota projects figure in a US$2.7 billion package of upgrades planned by the Midcontinent Independent System Operator (MISO), which manages power for all or parts of 15 states: Arkansas, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, North Dakota, South Dakota, Wisconsin and Texas.
"Renewable energy from Manitoba Hydro that would be delivered over the new international power line to load-serving entities in MISO has significant potential to help meet federal and state level objectives by reducing U.S. carbon dioxide (CO2) emissions through the displacement of nonrenewable generation," the NEB filing by Manitoba Power said.
The Canadian provincial government-owned electricity developer acknowledged that protest lawsuits and Donald Trump's election as U.S. president threaten to short-circuit the U.S. clean-power drive led by President Obama’s administration.
But Manitoba Hydro maintained that the movement to replace coal-fired power with renewable energy has too much momentum for any one political figure or level of government to stop.
"The ability of the U.S. Environmental Protection Agency (EPA) to implement the Clean Power Plan is uncertain at the current time given legal challenges from numerous states and the upcoming federal administration change in early 2017," said the filing.
However, Manitoba Hydro suggested that the environmental substance of the plan would survive even if the U.S. Supreme Court ruling agrees with the protesting states that the Obama program wrongly invaded their jurisdictions.
The NEB application pointed to a 2007 U.S. Supreme Court ruling that greenhouse gases (GHG) are air pollution that "must be regulated if these gases could be reasonably anticipated to endanger public health or welfare." The EPA promptly enacted a final rule defining six GHGs as threats to public health and future generations.
Manitoba Hydro, in its filing, said "if the U.S. EPA is not able to implement the Clean Power Plan, the agency still has a legal obligation" under the Clean Air Act, as well as EPA's assessment of the "scientific evidence concerning the risks of climate change, to regulate the emissions of CO2 from the U.S. electricity generation sector.”
The Canadian renewable energy exporter also noted that some states within the MISO region already are developing GHG reduction and coal replacement policies. Apart from any initiatives related to the Clean Power Plan, "significant" state-level renewable portfolio standards and state emission requirements will have to be met, and "individual states within the MISO footprint will continue to pursue renewable and non-carbon emitting resources," said the application.
The stakes are high for the provincial company in the cross-border power delivery proposal. Manitoba Hydro predicted export revenues of C$7 billion ($5.2 billion) from the proposed transmission line's original anchor 15-year supply contract with Minnesota Power. Multiple additional service requests have been received, according to the application.