Manitoba Hydro, a Canadian utility, released its second report for 2021 to 2022, forecasting a roughly $400 million net reduction in hydropower export revenues because of continuous drought. For that reason, the organization expects a loss that may reach $190 million minimum.
Manitoba Hydro initially expected a net income equivalent to $190 million for the same fiscal year in its 2020 to 20201 fiscal year annual report.
Precipitation during the late fall and cold season can contribute to the loss for 2021 to 2022. Lesser water flow and the lack or absence of rainfall on the company’s watershed in the past year have weakened Manitoba Hydro’s ability to produce and sell extra energy in Canada and the US.
As expressed by Jay Grewal, the president and CEO of the organization, “Drought is a major issue for hydroelectric utilities. For our utility, anytime we get at least average water flows, Manitoba Hydro uses that by running water through turbines. Then, selling surplus energy to spot markets instead of wasting and spilling water downriver. The additional revenue we get helps us keep our rates low for customers in Manitoba.”
The utility serves over 586,000 customers that need electricity in Manitoba, including 285,000 customers that require natural gas in the province’s southern parts.
Approximately 96% of the electrical power that the company generates comes from 15 hydropower stations in Laurie, Burntwood, Saskatchewan, Winnipeg, and Nelson rivers.
The report stated that the company’s net loss (natural gas and electrical operations) reached $90 million from January to June 2021, more than the previous year’s $41 million net loss.
The net loss increase was due to higher depreciation and finance expenses linked to the beginnings of the Keeyask Generating Station. Keeyask is a 695 MW hydroelectric station developed by Manitoba Hydro in partnership with the 4 First Nations.