Manitoba Hydro: Finally figuring it out.

For years Manitoba Hydro has been promoting energy efficiency through its Power Smart program. They paid for numerous TV ads, they had a trade-in program for LED Christmas lights, they sent me not one but TWO packages of CFL light bulbs, and if I stop procrastinating and finally get around to insulating my attic, they will pay for most of that too.

McKim Hydro Ad

source: McKim Group

I am not going to tell you that these things are not worthwhile. They are — some more than others perhaps — but efficient use of energy is an important cause. It is becoming all the more critical as evidence grows about climate change, and also as Manitoba Hydro contemplates financing over $20 billion in new megaprojects to feed projected increases in demand (and money-losing exports, but that’s another post for another day). All of these efforts, however, are not enough to keep Manitobans from being one of the largest per-capita energy consumers in Canada, and by extension, the world. This should be no surprise because the single biggest driver of this energy consumption has never been directly addressed: cheap electricity.

Nothing changes behaviour like good old fashioned money, and when power is cheap, people will consume more if it. This is simple supply and demand. In fact it’s about as simple as it gets, but acting on this is anything but simple when people come to expect cheap power and when the government has even declared that it constitutes the “Manitoba Advantage”. How on earth can we tamper with that???

Well, I proposed a way on a different blog before the last Provincial election: inverted electricity rates. Set a cheap base rate for the first X kWh of power in a given billing cycle, with ‘X’ being enough to power a modest-sized energy efficient home, and then sell everything above that at a rate equivalent to the cost of production or a little higher. (I want to say “market rates” but when electricity is sold for 1/3 the cost of production in some cases, it is clear this is no ordinary market.)

The low initial rate will allow the politicians to say, truthfully, that many people will pay less for power with this new pricing system. For all others, they will finally have some real incentive to upgrade their homes and change their lifestyle to conserve power. It makes so much sense because it’s based on fundamental economic principles and the realities of human behaviour. This isn’t me being a genius — it is an idea that has already been implemented by other governments including British Columbia, one of the few places to see an actual decrease in per capita energy consumption in recent years. It was also part of the Green Party of Manitoba’s demand management strategy in the last election, incidentally.

I was happy to read in the Free Press last weekend that this system might finally come to Manitoba. It is part of a demand-side management plan (DSM level 2, to the kidz on the street) that also includes an allowance for users to generate their own power and even sell it back to the grid, which is something that Hydro has been very reluctant to support in the past. In the plan, the inverted rate system is referred to as “conservation rates”. There is no mention of what the rates may be, and the whole plan still needs to be approved by the premier, but it is at least encouraging to see these ideas finally get tabled.

My fear is that the rates will not be differentiated enough to make a real difference, or that Greg Selinger may scrap it outright to avoid the negative optics of increasing hydro rates (for some people) after promising that they will always be low as long as they are left in charge. One more (real or perceived) broken promise could be the nail in the NDP coffin.

However I hope that common economic and environmental sense prevails, and that Manitoba Hydro finally gets the leeway it needs to encourage real action on energy conservation. Maybe if they implement these conservation rates the $20 billion mega project expansion plan could be scaled back … and maybe I’ll get off my ass and insulate my attic.

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5 thoughts on “Manitoba Hydro: Finally figuring it out.

  1. Since my house is actually zoned R2, I think what i will do is install a second electric meter in my wifes name so I can get twice as much power at the low rate

  2. That is not a bad idea, except for one thing – those of us living in older building that have to pay to heat our units would be unfairly penalized. Consider my situation. I live on Sargent near Maryland. Not the best neighbourhood, but the people are nice. My building is probably a hundred years old, give or take a decade. The owner has spent the last five years totally redoing each and every apartment. New drywall, new floors, new cabinets, new washrooms, new appliances, The boiler has been taken out, and every unit is now heated by baseboard heater and paid for by the tenant. We also each have our very own hot water tank.. Everything is brand new, except for the actual building itself, and everything under the surface remodelling. My suite looks great, but it leaks heat like crazy. All winter I struggled to get my heat above 15 degrees C on the coldest of nights (sometimes needing to use the stove), and on average, 19 degrees was about as warm as it got for most of the winter.My floor was so cold by my fire escape door that water would freeze on it. Literally, it would become ice. Obviously this is not supposed to happen.

    My hydro bill worked out to 250 dollars a month. My apartment is 320 square feet (that is a real measurement, not a guess). Obviously this is an extreme situation. And it is not because of anything I have done that is atypical. Other units have had bills that are very much the same. I am on a fixed income, after rent I have 400 dollars a month. I am going to school, and don’t have time for another job. That hydro bill eats up half of my non-rent money, leaving me with 200 for food, bus fare, phone and internet, medication, whatever else. I think my budget deficit is second only to the American budget, and I have not even invaded anybody in the last few months, but maybe I should.

    Obviously I can’t “upgrade” my insulation or get Mb Hydro to subsidize renovations. Your plan sounds great, but there are many other reasons why people have high electricity consumption.

    • I mentioned on the “other” blog that some allowance would need to be made for places that use electric heat. Also part of Hydro’s demand-side management plan is to subsidize the replacement of electric heat with gas.

      Still, there is no way an apartment your size should never have a heating bill that high. Perhaps the owner should have put some insulation in the walls when he replaced the drywall. The way you describe it, the building is obviously substandard and inappropriate for this climate, and I think it was a mistake for the owner to invest in cosmetic improvements instead of functional improvements to make it liveable in cold weather.

  3. You mention in this blog post that it “is becoming all the more critical as evidence grows about climate change”. The evidence has been clear for decades: We (in all the world, including each person in Manitoba) must drastically cut back on placing greenhouse gases into our atmosphere. It’s the mandate of our provincial government, and therefore is/should be by Manitoba Hydro.

    Yet the Free Press article states:
    “Hydro is looking at two other ways to further reduce domestic power consumption. Fuel switching would see more consumers switch to natural gas to heat their homes and load displacement would encourage larger users to generate their own power to displace their own electrical load.”

    I wonder how Hydro justifies switching to burning natural gas VS consuming hydroelectric power. I guess short-term savings of reduced electrical consumption trumps longer-term effects of climate change, which are already here. How much has the flooding in Manitoba cost us in the last handful of years? A few hundred million dollars? It’s not going to get any cheaper from here on in…

    Thanks for letting me post this on your blog.. :)

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