Natural Resources Committee on Sept. 20th, 2017

[Geng Tan, Liberal, Don Valley North, ON]

Thank you, Chair.

Let's say there is a small, remote community or there's some business entity, for example, a mining operation, and they need access to the energy sources but there's no way to build a transmission line to the community, so they have to go to different options: mega, solar, wind, biomass or SMR. Sorry, I don't think SMR is a reality right now.

I know this is a decision made by the government and the community, but has the community or government ever approached you as the power generation company for advice? If they did, what kind of a recommendation did you provide for them? How do you make this kind of a recommendation to them? Could I have a quick answer from both of you?

[Mark Sidebottom]

From Nova Scotia we're lucky enough to be able to connect virtually every community just because of our geography, so we don't run into that quite as much. Maybe the question is more appropriate for David.

[Geng Tan, Liberal, Don Valley North, ON]

You mentioned the Manitoba effect.

[David Cormie]

Right. We do have four isolated northern communities that are still on diesel fuel. Do you build very long transmission lines to connect those communities? Those investments are in the order of hundreds of millions of dollars. Or do you invest in windmills and in solar farms to help reduce the amount of diesel fuel that's consumed? That ends up being an economic decision. Can you achieve your emission reduction goals and do it reliably with renewable technologies or is the best solution, but the least cost in the long-run solution, to build transmission lines and get all those isolated communities on the central grid and have them benefit from that central supply?

[Geng Tan, Liberal, Don Valley North, ON]

Was that decision made by the government, or did they ever approach you for these kinds of comments before making decisions?

[David Cormie]

I can't really speak to what conversations have happened between government and Manitoba Hydro on that issue. It's outside of my expertise.

[Geng Tan, Liberal, Don Valley North, ON]

Okay. Thanks.

We've already had a lot of talk on interties and how to use them as a strategy to seal the gaps for the energy needed between provinces.

I still want to look into another scenario. Let's talk about Ontario. Ontario has no problem with energy needs—they have enough energy supply—but they rely on nuclear to provide more than 50% of their energy. Some public opinion suggests that we should stop nuclear and buy cheap power—hydro power from Quebec, for example. It's a different scenario.

I know that the generation and transmission of electricity is under provincial jurisdiction. There might be a few options for Ontario. Either they can remain self-sufficient, even though they have to pay presumably a slightly higher electricity price, or they can rely on electricity supplied by other provinces—for example, Quebec—but then they take the risk of losing their capacity. Suddenly they become dependent on other provinces. Or maybe Canada should provide a national strategy that addresses this kind of contingency, or should even provide some kind of guarantee to Ontario, so that they're willing to shut down their nuclear or other power plants to buy electricity from other provinces.

What are your comments on this kind of scenario?

[Mark Sidebottom]

My experience would be that having a portfolio of energy is a more robust solution. Having a number of sources of energy is an appropriate strategy. I think it's very much a decision of a particular jurisdiction how much they want to put in the hands of another jurisdiction.

From a reliability standpoint, the bulk power grid has mandated requirements for how big the lines are, where the generation is located, and how the capacity is counted. There are bulk system reliability requirements that always need to be adhered to. There are some guiding principles around these.

What I think your question goes to is more the commercial risk between various jurisdictions, and I don't think I can answer that one clearly. I can talk about the bulk power system. I know that you can build a bulk power system that takes generation from afar and brings it near. You can do it reliably; there are ways to do it.

The question, then, is your comfort with the counterparty.

[Geng Tan, Liberal, Don Valley North, ON]

Mr. Cormie.

[David Cormie]

We were involved in discussions between Ontario and Manitoba 15 years ago on building large interconnections between northern Manitoba and Sudbury and Winnipeg and Sudbury. The ultimate goal was to deliver renewable energy from Manitoba into Ontario.

The reason those discussions didn't go anywhere is that Ontario had lots of its own undeveloped hydro much closer. To import renewable energy from Manitoba that was 1,000 miles farther away was just more expensive. Ultimately it came down to an issue of long-term economics.

We've never had any concern about supply reliability in energy trade within Canada; it's not an issue. We're fortunate enough that Manitoba is an exporter of electricity, and so we've never had any concern; we've never been dependent on the United States for imported power.

I can tell you that we've had thousands of emergencies in Manitoba over the last many years, and each time those emergencies have been met because of the reserve-sharing arrangements with U.S. utilities, which have always been able to keep the lights on in Manitoba. Our customers don't even know that disaster has happened. The power instantly flows from export to import, and the benefits of interties are invisible to our customers. It's only the wisdom of those who preceded us, who ultimately made the decisions to interconnect with the United States, that we can thank for that.

Our thoughts of bringing those same kinds of benefits to Canadians because of interconnections have been proven by history to be a path to success. All those who have built transmission at interconnection regions have shown the benefits. Now it's time for us to provide those provinces, like Manitoba, with the same things.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Falk, I can give you about a minute and a half.

[Ted Falk, Conservative, Provencher, MB]

Mr. Cormie, I just want to ask you a bit more about the Keeyask generating station that you're building in northern Manitoba right now. It's projected to come online about four years from now, and it's a 700-kilowatt project I believe. I just want to commend you on working with four first nations up there. You're working with the Tataskweyak Cree Nation, the York Factory First Nation, the War Lake First Nation, and the Fox Lake Cree Nation, and you're doing that project in a partnership. You're creating a tremendous opportunity for these first nations communities to find employment for their folks. I think that's just tremendous and I want to commend you on that.

Can you talk about your experience with that partnership and any ongoing partnerships you may have with the first nations?

[David Cormie]

On the Keeyask partnership with the four indigenous communities in whose resource area we're building the Keeyask generating station, we couldn't have built the project without their involvement and their support. The project has provided them with economic development opportunities and job training, will provide lasting employment opportunities through the life of the project, and will also result in a revenue stream as they share in its long-term profitability.

It takes a long time from the time you begin consultations with the aboriginal and indigenous communities until the benefit stream flows, and in the meantime they have significant needs to just get through the day-to-day requirements of living. Patience has to be a virtue in these partnerships, and in the meantime we have to work with them to ensure they hang in there for the long run.

[The Chair, Liberal, James Maloney]

Thank you, that's all the time we have. Gentlemen, thank you both very much for joining us today. Your contribution is very much appreciated.

We'll see everybody on Monday.

The meeting is adjourned.