09/17/2012 12:31 EDT | Updated 11/17/2012 05:12 EST

Manitoba Hydro mega-projects need more scrutiny: Opposition Tories

WINNIPEG - Manitoba's NDP government rejected opposition accusations Monday that $18 billion in planned hydroelectric mega-projects is a risk to taxpayers that needs more scrutiny.

"We've got contracts in the United States, we're talking to Saskatchewan and Ontario and ... most provinces would love to be in the position that Manitoba is in order to expand their clean, green energy," Dave Chomiak, the minister responsible for Manitoba Hydro, told reporters.

The Progressive Conservatives are raising red flags over lower energy prices on the world market. Natural gas prices have dropped, due in part to shale gas development, making it harder for Manitoba to sell electricity at a profit.

PC Leader Brian Pallister said a thorough examination of what future prices may look like needs to be done before Crown-owned Manitoba Hydro proceeds with plans to build two generating stations — Keyask and Conawapa — and a lengthy transmission line that will bring power from the northern dams to consumers in the south.

"Manitobans deserve honest information. This is a mega-project of the greatest magnitude and we're talking about future generations as well as ourselves that will be impacted," Pallister said.

The province's Public Utilities Board warned last year that low export prices could see Manitoba consumers facing soaring electricity rates over the next two decades and subsidizing Hydro's export sales.

The board suggested in a 111-page report that instead of power rates going up by 70 per cent over the next 20 years, as the utility has planned, the increase might have to be twice that to cover construction costs and low sales prices.

The government, however, appears confident that export prices will rebound.

"Energy demand is going up," Chomiak said.

"We know that the hydro that we're building for 10 and 20 years out, both for our children and our grandchildren, will be an asset to them in a world that will require energy."

The planned projects will undergo separate environmental and economic reviews by provincial regulators. But Pallister said the scope of the economic review will be limited — its mandate does not include an examination of world energy prices that Hydro must compete with for sales.

Manitoba Hydro already exports hydro to Wisconsin, Minnesota, northwestern Ontario and other jurisdictions. In its most recent quarterly financial report, the utility reported a $14-million loss in its electricity division.

Export revenues for the quarter ending June 30 totalled $87 million — down $14 million or 14 per cent from the same period last year.