manitoba hydro annual business plan

Annual Business Plan 2021-22 - Available in accessible formats upon request - Manitoba Hydro

• Download HTML
• Download PDF

• Uncategorized

• IT & Technique

• World Around

• Style & Fashion

• Home & Garden

• Arts & Entertainment

• Hobbies & Interests

• HYDROVISION
• Career Center

Manitoba Hydro’s first IRP predicts swift, significant increase in electrical demand

Manitoba Hydro released its first Integrated Resource Plan (IRP), which shows electrical demand in the province could more than double in the next 20 years — and new sources of electricity could be needed within the next decade.

“The 2023 IRP makes it clear that the move towards low- or no-carbon energy sources will accelerate the need for clean electricity,” said Jay Grewal, president and chief executive officer of Manitoba Hydro. “Meeting these needs will require significant investments and the pace of those investments could put upward pressure on the cost of supplying electricity to Manitobans.”

Grewal said Manitoba’s legacy of clean, safe, renewable hydropower and reliable natural gas service puts the province at an advantage as it prepares for the future.

Manitoba Hydro’s 2023 IRP is the result of a two-year process to understand the factors driving change in Manitoba’s energy landscape and what it means for the supply and delivery of electricity and natural gas. Multiple rounds of engagement with customers and interested parties were completed, plus extensive modelling and analysis on a range of potential future scenarios informed by those conversations, the utility said.

The IRP also considers how existing and potential government actions are impacting the energy landscape, including the province’s recently released Manitoba Energy Roadmap.

“The energy transition has already started,” Grewal said. “More customers are considering buying electric vehicles, some businesses are taking steps to decarbonize their operations, and governments — at federal, provincial, and municipal levels — are taking or contemplating actions that will further drive the transition.”

While not a development plan, the IRP outlines how Manitoba Hydro will monitor, prepare for, and respond to this transition and the changes in the energy landscape in the years ahead.

The IRP shows Manitoba can leverage its clean energy advantage through additional energy efficiency measures to get the most out of the energy the province already has. Additional wind generation could also be a cost-effective energy choice that can play a role in getting to a low carbon future, the company said. Edward Kennedy, chair of the Manitoba Hydro-Electric Board, said the utility needs to consider diverse options for new electrical energy sources to meet the future energy needs. “We have a tremendous opportunity to protect our low power rates, especially for those who are most vulnerable to rate increases, while adding new resources that will power our path to electrification,” he said. “Energy savings will be a big part of this picture, recognizing that our existing hydro base , although renewable, needs to be considered as a precious, finite source of energy.”

Related Posts

Latest Hydro Review News

Powering the future of Manitoba Hydro

Register for January’s Virtual Membership Luncheon – The Power of Leadership with Jay Grewal, President & CEO of Manitoba Hydro on January 28th  for a conversation on being a leader in 2021. Originally published in March 2020. 

Jay Grewal has certainly had an interesting first year as CEO of Manitoba Hydro. As if taking charge of one of the province’s highest-profile corporations and kicking off a new strategic plan weren’t enough, in October 2019, Manitoba was hit with a massive storm that took down power lines, over 4,000 poles, and a number of transmission towers.

“Manitoba Hydro has never experienced anything like that before, but we are trained to be calm in challenging situations,” said Grewal, adding that more than one thousand employees were directly involved in the restoration effort.

As soon as the storm ended, Grewal knew she had to get out into the affected areas and see the damage first-hand to understand what Manitoba Hydro’s staff and customers were dealing with and what the company could do to help.

In some ways, it was a continuation of the work she started when she first came to Manitoba Hydro, which saw her criss-cross the province as she held 22 town halls with staff. As she started the long-term strategic visioning process, she — along with her staff — also held a series of meetings with customers and critical stakeholders.

Grewal said those consultations were critical to understanding Manitoba Hydro’s current operations and discovering the opportunities the company has to better serve its customers within a rapidly changing energy industry.

“This is an incredible period of change for all utilities,” she explained. “It’s similar to what we’ve seen in the telecom sector over the past two decades, but the pace of change will be much faster.

To respond to that change, Manitoba Hydro is not only developing a 20-year strategic plan but it also recently restructured its business model to support that plan — and put a clear focus on the customer.

“We will not think like a monopoly,” Grewal said. “Everyone will understand how they serve the customer. And through this, we’ll be able to fix processes to make them more seamless. It will also allow us to understand our assets better and how we should optimize the capital we spend.”

Grewal said the changes are already yielding positive results, with employees more willing to look at new ways of doing things, and adopting more customer-centric processes and approaches.

She said fostering a new culture at Manitoba Hydro, combined with the company’s existing infrastructure, will position it well to help the province achieve its long-term economic development goals.

“This is a wholesale change, that is shaking our industry to its core,” Grewal said. “But those who plan and get ahead of it, and have the advantage of the assets we have, will actually end up in a much better place.

“We are so fortunate compared to our neighbours,” she added. “We have green, dependable electricity in an environment where so much is being driven by climate change. Our energy can be leveraged to attract industry and jobs.”

While many people might find the process of modernizing a traditional monopoly utility to be a daunting task, Grewal speaks about it with a smile on her face.

“I’m a change agent, and I don’t do status quo well,” she explained. “I like dealing with problems and complexities because it’s challenging and fun.

“This is the most interesting time to be in this business. It’s also going to be one of the most challenging but I think if we play it right we will leverage the benefits of that green, dependable energy Manitobans have invested in.”

Grewal will share a few more details on Manitoba Hydro’s new strategic plan, new business model and their COVID-19 response as the featured speaker on January 28th at “The Power of Leadership” virtual luncheon presented by The Winnipeg Chamber of Commerce.

• Tagged with:

Chamber Blog

Introducing our 15th Annual Spirit of Winnipeg Finalists

On June 14th, we will be hosting our 15th annual Spirit of Winnipeg Awards to celebrate 25 businesses that demonstrated exceptional commitment and dedication to their work in Winnipeg. And…

Sustainability Spotlight – BizforClimate

3-minute read Written by Casey Clair, Energy and Climate Advocate Community-based sustainability is a key strategy in developing flourishing eco-conscious businesses. At The Chamber, it is important for us to…

What Makes Responsible AI?

Today, your business is built on data, technology and cybersecurity that is being rapidly transformed by the creation and use of artificial intelligence (AI). Now, the question facing virtually…

And Your 2024 Code Conference Keynote is…

CODE newsletters are meant to inspire you to reflect on your commitment to diversity, equity, and inclusion, find valuable resources to further action and develop skills needed to facilitate bold…

Get Social With Us

May 16, 2024

Winnipeg 11° C , Cloudy with wind

Full Forecast

• Advertising Contact
• Send a Letter to the Editor
• Staff biographies
• Submit a News Tip
• Subscribe to Newsletters
• Notifications
• Create Account
• Compact View
• About the E-Edition
• Winnipeg Free Press
• Community Review East
• Community Review West
• All Arts & Life
• Celebrities
• Environment
• Food & Drink
• Life & Style
• Science & Technology
• All Business
• Agriculture
• Personal Finance
• Manitoba’s Top Employers
• All Opinion
• Editorial Cartoon
• Letters to the Editor
• Auto Racing
• Blue Bombers
• High School
• Horse Racing
• Winnipeg Jets
• Manitoba Moose
• Reader Bridge
• Free Press 101: How we practise journalism
• Advertising
• Carrier Positions & Retailer Requests
• FP Newspapers Inc.
• Internships
• Job Opportunities
• Local Journalism Initiative
• Retail Locations
• Staff Biographies
• Terms and Conditions
• All Free Press Community Review News
• East Edition
• West Edition
• Classifieds
• All FP Features
• Business Hub
• Drink & Dine
• Health & Wellness
• Whiskers & Wings
• Sponsored Articles
• Credit Cards
• Credit Score
• Personal Loans
• Real Estate
• Side Hustles
• Property Listings
• Featured News
• Renovation and design
• Resale homes
• Newsletters
• Niigaan and the Lone Ranger
• Photo and Book store
• Become a Patron
• Privacy Policy

© 2024 Winnipeg Free Press

Quick Links

• Publications
• Sponsored Content
• Employee Code of Conduct Policy
• Supplier Code of Conduct Policy
• Report on Forced Labour and Child Labour in Supply Chains

Ways to support us

• Pay it Forward program
• Support Faith coverage
• Support Arts coverage

Replica E-Edition

Arts & Life

• Photo Galleries

Canstar Community news

Notification Settings

This browser doesn't support push notifications at the moment. Check browsers features, update your browser or try to use one from the list of recommended to manage your notifications settings:

• Firefox (27+)
• Google Chrome (30+)
• Safari ( MacOS 13+ with browser 16.1+ and iOS 16.4+ ) / Note make sure Push API support enabled under Settings > Safari > Advanced > Experimental Features
• Microsoft Edge

If you wish to manage your notification settings from this browser you will need to update your browser's settings for this site. Just click button below and allow notifications for this site

Note Safari 16.4+ working on iOS devices also need this site app to be installed at device's Home Screen for Push Notifications to work

Notifications are blocked for this site. If you wish to manage your notification settings from this browser you will need to update your browser's settings. Usually you'd need to click on site options icon to the left of address bar and change notifications preferences/permissions from there

Breaking News

Urgent and important stories

Recommended Reads

Noteworthy news and features

Advertisement

Learn more about Free Press Advertising solutions

‘Expensive advice’: Tories slam new Hydro adviser

Criticized crown corporation in past.

Advertise with us

The Tories have accused the government of “hiding something” after it appointed a special adviser for Manitoba Hydro, who has criticized the Crown corporation and provincial energy policies.

Read this article for free:

Already have an account? Log in here »

To continue reading, please subscribe:

Monthly Digital Subscription

$19 $0 for the first 4 weeks *

• Enjoy unlimited reading on winnipegfreepress.com
• Read the E-Edition, our digital replica newspaper
• Access News Break, our award-winning app
• Play interactive puzzles

*No charge for 4 weeks then billed as $19 every four weeks (new subscribers and qualified returning subscribers only). Cancel anytime.

Read unlimited articles for free today:

For the second time this week, the April 17 appointment of Kenneth Klassen as “special adviser for hydro and energy to the department of finance” was raised in question period by Progressive Conservative finance critic Obby Khan.

Khan said Klassen is “on the record” supporting a hike in carbon taxes, raising the Manitoba gas tax, eliminating the provincial sales tax exemption on home heating and wanting to “rapidly phase out natural gas in this province.”

MIKAELA MACKENZIE / FREE PRESS

Finance minister Adrian Sala says special hydro adviser Kenneth Klassen represents ‘bringing in the talent’ needed to meet Manitoba’s energy needs.

MIKAELA MACKENZIE / FREE PRESS Finance minister Adrian Sala presents the budget in the chamber at the Manitoba Legislative Building on Tuesday, April 2, 2024. For budget story.

The Tories pointed to a presentation Klassen made in to a legislative committee in 2018 regarding the Climate and Green Plan Implementation Act. In it, Klassen extolled the benefits of ramping up energy efficiency: “It is one of the only climate change measures that we can take that has a negative cost,” as per the official record in Hansard. “It saves more than it costs. It’s not a free lunch; it’s a lunch you’re paid to eat.”

Klassen questioned why Manitoba has a low fuel tax, saying it made no sense if the province wanted to accelerate the adoption of electric vehicles. He told the all-party committee at the time that Manitoba needed to reform how it charged for gasoline.

Klassen, who has decades of work experience with provincial and federal governments and has consulted on energy efficiency strategies, legislation and regulations, told the committee the seven per cent PST exemption on home heating fuel “has bugged me for 30 years.” Natural gas — a fossil fuel — imported from Alberta to heat a home is exempt from the seven per cent tax, while the hydro electricity required to run the fan motor in a natural gas furnace is not.

“Why are we exempting from tax non-renewable fossil fuels, but efficiency measures — if I hire somebody to put a made-in Manitoba window with Manitoba labour — get taxed? We should do the reverse =… If we do institute the PST or eliminate the PST exemption on home heating fuel, we need to have appropriate protections for lower-income households.”

Klassen urged the government of the day to get Efficiency Manitoba up and running. Then-opposition leader Wab Kinew asked him if he agreed with “putting the affordability of hydro and the broader future of hydro at a very prominent place in our fight against global warming?”

Klassen said he did.

“If we’re going to eliminate natural gas eventually as a heating fuel for homes and buildings, at least in new construction, and if we’re going to convert vehicles, Manitoba Hydro has a huge role to play,” Klassen said at the time.

After dealing with that Crown corporation for 30-plus years, Klassen told the committee he didn’t think Manitoba Hydro “has the culture to embrace that kind of change.”

“They’re very supply-side oriented; they’re not demand-side oriented. I think that’s the role for Efficiency Manitoba… they can address some of these shortcomings and they’re more neutral in this, so that Manitoba Hydro should focus on its knitting… creating an abundant, affordable supply of clean hydro. Efficiency Manitoba should deal more with the things on the demand side.”

Efficiency Manitoba, which offers programs and rebates to promote energy savings, launched as a Crown corporation in 2018 under the Pallister government.

Khan called out Klassen’s lack of confidence in Manitoba Hydro’s ability to change.

“These are things he’s willing to say on the record. What is he willing to say off the record to the minister behind closed doors?” Khan said to reporters Wednesday. “Manitobans can’t afford this NDP special adviser’s expensive advice.”

Khan questioned why Klassen’s salary wasn’t included in the order in council announcing his appointment, as is the norm. The press secretary for Adrien Sala, minister responsible for Manitoba Hydro, told the Free Press the omission was an oversight, and Klassen’s annual salary is $130,000.

In the house, Sala said his department is “bringing in the talent” it needs to meet Manitoba’s energy needs “and that’s not something we need to hide from.”

Business Weekly

Monday mornings

The latest local business news and a lookahead to the coming week.

In an interview Wednesday, Sala said Klassen was hired for his “broad range of expertise in energy and decarbonization.”

“We are doing the work of developing energy policy and charting a course forward to ensure we can continue to offer Manitobans access to reliable, affordable energy,” Sala said. “Mr. Klassen is well-positioned to do that.”

He dismissed the notion Klassen’s advice would be “expensive” for Manitobans.

“We have a credible path to net zero without a carbon tax,” Sala said. “Tackling climate change should not come at the expense of the working class.”

[email protected]

Carol Sanders Legislature reporter

After 20 years of reporting on the growing diversity of people calling Manitoba home, Carol moved to the legislature bureau in early 2020.

   Read full biography

Advertisement Advertise With Us

• Most Popular
• Explore all categories

manitoba hydro annual business plan 2021-22

• Manitoba Hydro Annual Business Plan 2021-22

Upload: others

Post on 26-Jan-2022

Embed Size (px): 344 x 292 429 x 357 514 x 422 599 x 487

Annual Business Plan 2021-22

Available in accessible formats upon request.

Manitoba Hydro Annual Business Plan 2021-22 Page 2

Crown Corporations Governance and Accountability Act Manitoba Hydro hereby submits its Annual Business Plan as required by the Crown Corporations Governance and Accountability Act, consistent with the provided guidelines for a standard format among Crown corporations’ plans.

Table of Contents Crown Corporations Governance and Accountability Act ..................................................................... 2

1.0 Mandate ........................................................................................................................................... 4

1.1 Manitoba Hydro’s Mandate as set out in The Manitoba Hydro Act ....................................... 4 1.2 Key Directives from Province ................................................................................................... 4

Manitoba Hydro Annual Business Plan 2021-22 Page 3

1.3 Priorities of Government .......................................................................................................... 5

2.0 Operating Environment ................................................................................................................. 6

2.1 Internal Environment ................................................................................................................. 6 2.2 External Environment ................................................................................................................ 6 2.3 Risks ............................................................................................................................................. 6

3.0 Strategic Direction ....................................................................................................................... 10

3.1 Strategy 2040: Manitoba Hydro of the Future .................................................................... 10 3.3 Business Plan Outcomes ......................................................................................................... 10

4.0 Financial Budgets & Forecasts .................................................................................................... 11

4.1 Statement of Net Income ........................................................................................................ 11 4.2 Key Planning Assumptions ...................................................................................................... 12 4.3 Sensitivity Analysis ................................................................................................................... 13

5.0 Human Resources ........................................................................................................................ 14

5.1 Equivalent Full-Time Employees ............................................................................................ 14 5.2 Organizational Chart ................................................................................................................ 14 5.3 Compensation and Staffing ..................................................................................................... 15

6.0 Capital Plans .................................................................................................................................. 17

6.1 Total Capital & Deferred Expenditures Summary ................................................................. 17 6.2 Major New Generation & Transmission ................................................................................. 17 6.3 Major Project Delivery ............................................................................................................. 18 6.4 Other Capital Projects ............................................................................................................. 20

Appendix A: Status of April 2019 Framework Letter Expectations ................................................... 21

Manitoba Hydro Annual Business Plan 2021-22 Page 4

1.0 Mandate

1.1 Manitoba Hydro’s Mandate as set out in The Manitoba Hydro Act

The purposes and objects of The Manitoba Hydro Act are to provide for the continuance of a supply of power adequate for the needs of the province, and to engage in and to promote economy and efficiency in the development, generation, transmission, distribution, supply and end-use of power and, in addition, are:

• to provide and market products, services and expertise related to the development, generation, transmission, distribution, supply and end-use of power, within and outside the province; and

• to market and supply power to persons outside the province on terms and conditions acceptable to the board.

1.2 Key Directives from Province

In accordance with The Crown Corporations Governance and Accountability Act, the Minister of Crown Services may issue directives to Manitoba Hydro to support provincial policy and Manitoba Hydro must comply with any directive given.

The following directives have been issued to Manitoba Hydro:

• On January 30, 2020 the Minister of Crown Services issued a Directive to Crown Corporations concerning executive management compensation, overall staffing levels and review of management spans and layers.

Manitoba Hydro will remain in compliance with the Directive issued by the Minister of Crown Services. Since 2017, Manitoba Hydro has decreased the overall workforce by 15% and management positions by 22%. In November 2018, Meyers Norris Penny (MNP) issued an audit report on Manitoba Hydro’s management reductions and confirmed that the 15% reduction requirement was exceeded. An extensive business model review is currently underway, and targets outlined in the Directive will be incorporated into the new business model.

• In support of the Made-in-Manitoba Climate and Green Plan, Crown Services requests that Manitoba Hydro cancel print-based subscriptions, and the purchase or production of business cards, unless an appropriate exception has been granted.

Manitoba Hydro has conducted a review of all print-based subscriptions. There are a small number of print-based subscriptions that remain which are necessary for business purposes. Manitoba Hydro has eliminated the purchase of business cards.

• Manitoba Order-in-Council 00082/2018: A Directive to Manitoba Hydro-Electric Board Respecting Agreements with Indigenous Groups and Communities.

Manitoba Hydro continues to operate in alignment with this directive.

Manitoba Hydro Annual Business Plan 2021-22 Page 5

1.3 Priorities of Government

The Minister of Crown Services issued a framework letter to Manitoba Hydro on April 24, 2019. Manitoba Hydro continues to work collaboratively with the Province to support the priorities of government and expectations included in the framework letter (see Appendix A status report).

Manitoba Hydro Annual Business Plan 2021-22 Page 6

2.0 Operating Environment

2.1 Internal Environment

Manitoba Hydro has an experienced and dedicated work force, solid operating infrastructure and a track record of excellent reliability.

The COVID-19 pandemic significantly changed Manitoba Hydro’s internal operating environment. Manitoba Hydro implemented a virtual operating model in March 2020 as the first cases of COVID 19 appeared in Manitoba. Although over 1/3 of our workforce continues to report to a Manitoba Hydro office or facility, or works directly with the public across our operations, many employees are taking part in the remote model and working some or all of their hours from home. Keeyask construction and commissioning has also been impacted by COVID-19 and health and safety measures have been put in place to protect site employees, contractors and the surrounding communities. Due to public health orders, the provincial vaccination plan and other factors, impacts of COVID-19 are expected to carry through the 2021-22 fiscal year.

Manitoba Hydro is currently transforming our business model to enable a higher degree of customer centricity, integration and effectiveness throughout the organization to meet the challenges of the changing energy landscape to support Strategy 2040.

The new business model, as presented in section 5.2, will elevate critical capabilities, including Customer Solutions & Experience, Asset Management, Work Management, Project Delivery, Transformation, Digital, Enterprise Risk Management and Strategy Enterprise Planning are required to ensure we keep costs as low as possible.

2.2 External Environment

The future won’t look like the past. Decarbonization, digitalization and decentralization (the three D’s) are key trends reshaping the energy sector. Government policy interventions, technological advancements, economics, customer preferences, climate change and regulatory oversight are driving these trends that will shape and/or disrupt Manitoba Hydro’s business environment in the future. Technology-enabled alternatives to grid energy are also emerging and competing for customer attention “behind the meter”. Competition is expected to be fierce in this new market as existing energy companies, technology giants and innovators vie to sell energy management, self-generation, storage, charging and other services to consumers. Manitoba Hydro’s export customers are also seeing similar trends, with adoption rates and market responses well ahead of Manitoba. The pace and breadth of these changes are unpredictable, and the wide range of potential impacts could put the sustainability of Manitoba’s energy future at risk. Proactively managed, these risks can be mitigated in the best interest of all Manitobans and create opportunities to maximize Manitoba’s renewable hydropower advantage. 2.3 Risks

As of mid-March 2020, Manitoba Hydro has initiated the development of an Enterprise Risk Management (ERM) program to enhance and expand its risk management efforts. Development and

Manitoba Hydro Annual Business Plan 2021-22 Page 7

maturation of the ERM program is a multi-year process and initial development is well underway. ERM is focused on strategically managing Manitoba Hydro’s enterprise risks through an integrated, comprehensive, forward looking and standardized approach. ERM will drive consistency and organizational alignment around risk management by implementation of defined risk management policies and procedures. This will ensure aggregate enterprise risk levels are understood, appropriate action is taken to mitigate, manage and monitor the risks and risk levels are maintained within established tolerances

Manitoba Hydro faces a number of risks to the fulfillment of its mission and mandate. Manitoba Hydro has identified the following significant risks requiring attention and focus over the next fiscal year and/or longer.

Strategic Risks

Risk Likelihood Consequence Mitigation Plan

The risk of grid parity and/or grid defection, resulting in declining revenues and potentially stranded assets. Grid parity and/or grid defection may occur as a result of: o Changing customer

expectations and behavior

o Accelerating technological change

Possible Very High If left unmitigated, grid parity and/or grid defection could have a significant impact on Manitoba Hydro. Manitoba Hydro has developed Strategy 2040, which includes a number of key strategic initiatives to address this risk and position Manitoba Hydro accordingly to respond to the evolving energy landscape.

The risk of being unable to simultaneously address ageing infrastructure while modernizing infrastructure to be ready for the new energy landscape

Unlikely Very High As part of the initiatives of Strategy 2040, consideration will be given to both existing assets and potential modernization requirements. The needs of existing infrastructure and modernization will be balanced accordingly.

Operational Risks

Low water conditions Unlikely

Very High Forecast revenue based on average of 40 years of water flow. Actual water levels can’t be controlled.

Manitoba Hydro Annual Business Plan 2021-22 Page 8

Warmer weather than expected (warmest winter in 60 years)

Unlikely Very High Forecast revenue based on average of past 25 years heating and cooling degree days. Actual weather can’t be controlled.

Emergencies and disasters, including storms and pandemics

Possible High While such events are uncontrollable, Manitoba Hydro has a Business Continuity Plan/Program to mitigate the impacts of these types of events. The Plan/Program is comprised of emergency response plans, trained staff, hazard analysis and multiple supporting systems.

The potential for changes to Federal or Provincial environmental and/or regulatory requirements that impact how Manitoba Hydro operates

Unlikely High Work with appropriate stakeholders to manage any potential changes. Continued implementation of a broad range of activities to protect the environment and limit any impact caused by Manitoba Hydro

Financial Risks

Significantly lower export prices for extra-provincial sales (spot market prices) due to unexpected events

Unlikely Very High

Wherever possible, enter into bilateral agreements to reduce the amount of energy exposed to spot market prices, optimize hydraulic generation scheduling to be available in highest price periods, and optimize the sale of energy on a daily basis into the highest priced markets that Manitoba Hydro transacts in.

Potential market uncertainty/instability that impacts Manitoba Hydro’s ability to re-finance its debt or obtain new debt

Remote Very High

Maintain an appropriate level of pre-funding on debt requirements to mitigate any impact of potential, temporary market instability

Manitoba Hydro Annual Business Plan 2021-22 Page 9

Technological Risk

Potential for a cyber security breach to Manitoba Hydro’s information technology (IT) or operational technology (OT) systems that impacts operations or causes a privacy breach

Remote High Continuous review of key systems and processes and security assessments to protect against potential cyber security event(s) that could result in theft of information, impact to business processes and/or the disruption or misuse of critical operations/assets.

Manitoba Hydro Annual Business Plan 2021-22 Page 10

3.0 Strategic Direction

Manitoba Hydro’s mission statement:

Help all Manitobans efficiently navigate the evolving energy landscape, leveraging their clean energy advantage, while ensuring safe, clean, reliable energy at the lowest possible cost.

3.1 Strategy 2040: Manitoba Hydro of the Future

We are transforming to become ‘Manitoba Hydro of the Future’. Strategy 2040 provides strategic direction anchored in the best interest of Manitobans, as exemplified in the 5 pillars:

Strategy 2040 is enabled by the Business Model ‘hard wiring’ and the Culture ‘soft wiring’. Within each of these integrated workstreams, new capacity and capabilities will be added with respect to people, processes and technology.

The development of the first Enterprise Plan in Fall 2021 will allow Manitoba Hydro to better align strategic and financial planning processes, and support Manitoba’s summary budgeting processes. Manitoba Hydro is collaborating with government in shaping its strategy to align with future Provincial Energy Policy, and support government in coordinating policy, governance and regulation to mitigate risks and leverage opportunities. 3.2 Business Plan Outcomes

Manitoba Hydro’s success at achieving its mandate, mission and strategic priorities is measured by the following outcomes:

Measure 2021-22 Target

Manitoba Hydro Annual Business Plan 2021-22 Page 11

FINANCE Debt to Capitalization 86%

Consolidated Net Income (Loss) $190M

Consolidated Operating & Admin (O&A) Costs $627M

CUSTOMER SATISFACTION

CSTS - Customer Satisfaction Tracking Study 8.2

RELIABILITY SAIDI - System Average Interruption Duration Index 148 SAIFI – System Average Interruption Frequency Index 1.59

SAFETY Lost Time Injury Frequency Rate 0.6 – 0.8 Lost Time Injury Severity Rate 12 - 16 Serious Injury/Fatality 0 Serious Injury/Fatality Potential 0

DIVERSITY Indigenous - province-wide workforce 18% Indigenous - northern workforce 47% Indigenous – in management 8% Persons with disabilities 6% Visible minorities 9% Women - in workforce 30% Women - in management 30%

1. Measure from the quarterly Customer Satisfaction Tracking Study (CSTS) question “On a scale of 1 to 10, where 1 is extremely dissatisfied and 10 is extremely satisfied, how satisfied are you with the overall service you have received from Manitoba Hydro?”

Manitoba Hydro will report results on the above planned outcomes to the Minister of Crown Services with the audited financial results in the Manitoba Hydro-Electric Board Annual Report.

4.0 Financial Budgets & Forecasts

4.1 Statement of Net Income

Manitoba Hydro Annual Business Plan 2021-22 Page 12

4.2 Key Planning Assumptions

Both near term and long-term planning horizons include the following assumptions:

• Proposed electric and non-gas rate increases effective October 1, 2021 of 3.5%; • The Fall 2020 interest rate forecast; • Electricity load forecast based on the 2019 Fall Update updated to reflect the

projected impacts of COVID-19; • Short-term electricity export price forecast based on a November 2020 update;

Manitoba Hydro Annual Business Plan 2021-22 Page 13

• 20 year weighted average term to maturity on new debt; • Cessation of the Major Capital Reserve deferral (originally established in PUB Order

69/19) effective September 30, 2021 with subsequent amortization over a 24-month period; and

• Keeyask Generating Station 1st Power March 2021.

4.3 Sensitivity Analysis

Sensitivities are adjusted with each budget cycle. The 2021-22 proposed budget net income of $190 million could be impacted by variances in planning assumptions. Critical risks and associated impacts to the 2021-22 proposed budget are as follows: Water Conditions

• The 2021/22 proposed budget of net export revenue ($510 million) is based on the average or mean of the most recent 40 years of hydraulic flow history (1979 – 2018).

• The uncertainty and variability of water flows has the largest potential impact on the 2021/22 financials and is prevalent through most of the year. Under extreme conditions, using the lowest and highest flow conditions observed over the past 40 years, the model indicates potential impacts to net income of -$295 million and +$115 million respectively.

• Typical annual fluctuations in flows may impact net income by +$69 million/-$58 million.

• A colder or warmer than normal winter could have a +/- $42 million annual impact to net income respectively.

• A record cold or warm winter will increase or decrease Manitoba’s annual energy consumption by approximately 4%. An increase or decrease to domestic revenue due to a colder or warmer than normal winter will be partially offset by an associated increase or decrease to net export revenues.

Export Prices

• Fluctuations in the spot market prices could have a -$72 million impact to net income if lower prices are experienced.

• The 2021/22 proposed budget is based on the opportunity export price forecasts available from the Intercontinental Exchange (NYSE: ICE) and from one of Manitoba Hydro’s long-term price forecasters as at November 6, 2020 for the Midcontinent Independent System Operator (MISO) region. The low export price scenario assumes the average percentage decline in actual export prices experienced between April 2020 – October 2020 and previously budgeted export prices remains throughout the 2021/22 fiscal year.

Manitoba Hydro Annual Business Plan 2021-22 Page 14

5.0 Human Resources

5.1 Equivalent Full-Time Employees

The table below reflects the calculated Equivalent Full Time Employees and measures all hours worked in a period divided by 1,916 hours per year. EFT calculations include seasonal, part-time and temporary staff. The total EFT count also includes Subsidiary employees at Manitoba Hydro International (MHI) and Manitoba Hydro Utility Services (MHUS).

Equivalent Full-Time (EFT) Employees 2018/19 2019/20 2020/21 2021/22 at March 31 2019 at March 31 2020 at Dec 31 2020 Projected1

Senior Management

Subsidiary Employees*

Total EFT count 5 475 5 393 5 004 5 420

* Manitoba Hydro International and Manitoba Hydro Utility Services

1 Manitoba Hydro is undergoing a significant Business Model Review; as such the projected breakdown of EFTs for 2021-22 is not yet available. At year end 2020-2021, EFTs are expected to be below budget by approximately 9% due to higher than projected retirements which have not yet been replaced and unpaid time off, both related to the government savings initiative.

5.2 Organizational Chart

While Strategy 2040 outlines where the Corporation is going, the business model is the vehicle in which Manitoba Hydro will get there. The business model supports Manitoba Hydro in building out capabilities: the people, knowledge, systems, tools and processes that deliver value to Manitobans.

Flowing out of the business model review is a new life-cycle business model and organizational structure, as shown in the chart below. Three Operating Units represent a holistic, end-to-end view of the customer, and four Functional Units act as strategic partners to the operating units and perform services for internal and external customers. Note, the subsidiaries Manitoba Hydro International (reporting to CFO) and Manitoba Hydro Utility Services (reporting to VP Customer) are not depicted on organization chart below.

Manitoba Hydro Annual Business Plan 2021-22 Page 15

5.3 Compensation and Staffing

Compensation

Base payroll costs for 2021-22 is forecasted to be approximately $480 million, which includes a projection for subsidiaries Manitoba Hydro International and Manitoba Hydro Utility Services, but does not include overtime or benefits. Paid overtime costs typically average 15% of base payroll but increased to 16% over a three-year period (2017/18 through 2019/20) primarily as a result of the requirement to restore power for the unprecedented October 2019 storm.

Under normal conditions, overtime is driven by contractual obligations (northern employees), maintenance requirements, emergencies, and deadlines for capital projects. Higher than normal overtime costs are not occurring in 2020-21 and are not anticipated for 2021/22.Manitoba Hydro was requested by the Province of Manitoba to achieve substantial labour cost savings during the fiscal year 2020-21. To achieve those savings, hundreds of vacancies were not filled during the year. The annual turnover rate for 2020 was 7.2% (or 370 employees), slightly higher than the average rate of 6% in the last 6 years. Using this average and the current workforce numbers, it is estimated that the attrition for the 2021 calendar year will be approximately 291 employees. In addition, Manitoba Hydro sustained a significant reduction in staff in 2017 due to a voluntary departure program, and has high number of forecasted retirements (described below). For these reasons, it is expected that Manitoba Hydro will be filling the majority of vacancies and hiring externally to meet its mandated obligations.

President and CEO

VP Customer Solutions & Experience

Customer Strategy & Experience

Sales, Marketing & Product Development

Customer Care

VP Asset Planning & Delivery

Integrated Resource Planning

Asset Management

Engineering

Construction

Project Management

VP Operations

Generation Operations & Maintenance

System Operations

Transmission Operations & Maintenance

Distribution Operations

Distribution Operations (Winnipeg)

Operations Business Solutions & Services

VP Digital & Transformation

Transformation

IT Services

VP HR & Supply Chain

Supply Chain

Human Resources

Safety, Health & Environment

Manitoba Hydro International

Chief Financial Officer

Corporate Controller

Rates & Regulatory Affairs

Internal Audit

Strategy & Enterprise Planning

Enterprise Risk Management

VP External Relations, Indigenous & Comms.

General Counsel & Corporate Secretary

Indigenous & Community Relations

Government Relations

Corporate Communications

Manitoba Hydro Annual Business Plan 2021-22 Page 16

Labour Relations

Approximately 79% of Manitoba Hydro’s employees are represented by labour unions. The Corporation has been in negotiations with its largest union (IBEW Local 2034) for over two years since the collective agreement expired on December 31, 2018. As of early March 2021, negotiations are continuing with the assistance of a conciliator.

The other three collective agreements expired at the end of 2020. Negotiations with CUPE and AMHSSE began in February 2021. As of early March 2021, negotiations with UNIFOR had not been scheduled. A financial mandate from the Manitoba Government for IBEW negotiations was received in October 2020 covering the years 2019 and 2020. No wage increases for 2021 have been approved or applied.

Retirement Forecast

There are 671 employees (approx. 14% of workforce) eligible to retire in 2021 with a full pension. Manitoba Hydro expects 20% of eligible employees to retire or approximately 134 employees for the 2021 calendar year.

Manitoba Hydro Annual Business Plan 2021-22 Page 17

6.0 Capital Plans

6.1 Total Capital & Deferred Expenditures Summary

($ Millions) 2020/21

Approved 2020/21 Forecast

2021/22 Budget

Major New Generation & Transmission 963 827 719

Business Operations Capital (BOC) 527 504 569

Capital Expenditures 1 490 1 331 1 288

Other Capitalized Expenditures 181 137 143

Total 1 671 1 468 1 431

The above totals include capitalized interest and, in case of certain mitigation estimates carried in other capitalized expenditures, the recognition of a present value asset/liability associated with assumed new settlements.

Examples of Other Capitalized Expenditures include: Great Northern Transmission Line, Efficiency Manitoba expenditures, Regulatory Services, Site Remediation, and Mitigation Settlements.

6.2 Major New Generation & Transmission

($ Millions) Total

Project Cost

Actual Expenditures*

2020/21 Forecast 2021/22 2022/23 2023/24 2024/25

Keeyask - Generation 8 726 7 406 698 648 292 7 1

Bipole III Reliability 4 624 4 584 15 28 - - -

MMTP 490 463 85 22 - - -

Birtle Transmission 69 34 29 21 - - -

Total 12 487 827 719 292 7 1

*Actuals to December 31, 2020

Manitoba Hydro Annual Business Plan 2021-22 Page 18

6.3 Major Project Delivery

The completion of the major capital projects is a critical focus and priority for Manitoba Hydro. Significant resources are dedicated to managing these projects to ensure they are completed on time, on budget and on scope.

Keeyask – Generation

The Keeyask project is a 695-megawatt (MW) hydroelectric generating station that is being developed in a partnership between Manitoba Hydro and four Manitoba First Nations: Tataskweyak Cree Nation, War Lake First Nation, York Factory First Nation and Fox Lake Cree Nation. Working together, the Partners are known collectively as the Keeyask Hydropower Limited Partnership.

Located approximately 725 km north of Winnipeg on the lower Nelson River, construction of the Keeyask project includes:

• 7-unit powerhouse/service bay complex on the north side of Gull Rapids; • 7-bay spillway on the south side of Gull Rapids; • More than 2 km of dams across Gull Rapids; and • 23 km of dykes built on the north and south side of the reservoir.

In 2020-21, despite the significant challenges faced from the COVID-19 pandemic, the Keeyask Project was able to achieve a number of important milestones including completion of the remaining concrete placements in the Powerhouse, water-up and impoundment of the reservoir, and installation and commissioning of the first generator unit. On February 16, 2021 the first of seven generating units at Keeyask was brought into service and is now connected to the Manitoba Hydro power grid, in advance of the end of the current fiscal 2020-21.

The following goals/milestones have been identified for the 2021-22 fiscal year:

• Stay on track to meet and beat the project control budget of $8.7B; • General Civil Works Contractor decommissioning mostly complete; • Complete installation of the remaining turbine and generator units and complete installation

of the remaining balance of plant systems; and • All remaining units in service.

Birtle Transmission

The Birtle Transmission project is a new 230 kV transmission line to be built from Birtle Station to the Manitoba-Saskatchewan border, which is required to supply energy sales to SaskPower. The following milestones have been achieved:

• Environmental Act license was received in January 2020; • Federal funding under the Investing in Canada Infrastructure Program – Green

Infrastructure Stream – Climate Change Mitigation (ICIP-GIS-CCM) of up to $18.8 million was approved;

• Construction of the B71T transmission line commenced in July 2020 with completion anticipated by March 2021; and

• Birtle South Station construction was completed in August 2020 with final station commissioning to occur upon completion of the transmission line.

Manitoba Hydro Annual Business Plan 2021-22 Page 19

Manitoba Hydro Annual Business Plan 2021-22 Page 20

6.4 Other Capital Projects

Significant Capital Projects The following schedule lists all significant projects (total project value > $50 million) included in the 2021 Capital Expenditure Forecast.

Generation System

Pine Falls Units 1-4 Major Overhauls 85 85 3 - - - -

Transmission System

HVDC Transformer Sustainment 162 162 1 1 1 - -

St. Vital-DeSalaberry T/L & Station 94 75 57 - - - -

DeSalaberry-Letellier 230kV T/L 71 13 7 17 35 2 2

Dorsey Synchronous Condenser 65 59 1 4 1 - -

Projects >$50 million 394 69 22 37 2 2

Other Capital Projects 939 193 239 200 183 182

Capital Programs - 242 308 353 440 457

Total 1 333 504 569 590 625 641

Manitoba Hydro Annual Business Plan 2021-22 Page 21

Appendix A: Status of April 2019 Framework Letter Expectations

Framework Letter Directive Status In Progress Completed Support the implementation of Efficiency Manitoba to ensure a smooth transition of Demand Side Management programs for Manitoba Hydro customers.

Cooperate with the inquiry into the development of the Keeyask Generating Station and the Bipole III transmission line and converter stations.

We ask that you limit advertising to responsible mandate focused advertising considered essential for you to successfully perform your core business and continue to work with Government on the alignment of all sponsorship activities with central government.

Government is committed to advancing reconciliation with Indigenous Manitobans through the renewal of its consultation framework to ensure respectful and productive consultations. All government organizations are expected to contribute to reconciliation in their interactions with Indigenous communities and individuals.

Work closely with the Province (through Crown Services Secretariat and Treasury Board Secretariat) in respect of any new long-term contractual commitments, including any potential long-term electricity sale arrangements, to ensure return on investment.

Pursue opportunities with the federal government and other provinces to advance climate change initiatives, including the potential development of an East-West Grid and work with our Intergovernmental Affairs department on opportunities to leverage financial partnerships with the federal government.

Work with the province on implementing the provincial economic development strategy focused on maximizing economic spinoffs for Manitoba, creating new revenues for Manitoba Hydro and mitigating the need for future rate increases for customers or less profitable sales outside of Manitoba on the spot market.

Work with the Public Utilities Board to streamline processes, in an effort to reduce overall costs to ratepayers of regulatory hearings.

In the coming year, we will be taking more steps to fully integrate Crown corporations into our summary budget process. This may affect the timing of budget processes and

Manitoba Hydro Annual Business Plan 2021-22 Page 22

Framework Letter Directive Status In Progress Completed other financial matters. I am seeking your support in ensuring accurate, timely financial reporting to government, in particular your vigilance in providing clear and early notice of significant variances to budgets, or changes to your medium and long term forecasts. Please continue to work with Crown Services Secretariat and Treasury Board Secretariat to strengthen alignment with government overall.

We expect you to scrupulously manage all operating costs, defer all non-critical capital projects without a clear return on investment, and carefully examine business plans for opportunities to achieve improved financial results. We also expect the Board to carefully examine overall staffing efficiencies. Centrally, we have reduced overall management by over 15%, conducted a “spans and layers” review of management structures, and reduced overall headcount by 8%. We expect you to work towards the same, or more.

We ask you to review all compensation agreements, including executive compensation practices and interchange agreements to ensure alignment with government policies and practices. The expectation is that compensation practices will reflect the principles of responsible fiscal management and protect the sustainability of services to customers and ratepayers.

We have a strong interest in reducing red tape for all Manitobans. As a Crown, we ask that you integrate the red-tape reduction process and reporting into your Board processes – whether by way of a new Committee or regular reporting mechanisms.

Achieve more open government through increased transparency in tendering and procurement practices. All Crown corporations should ensure their procurement practices reflect this priority and are aligned with the requirements of trade agreements to which Manitoba is a signatory. In Government, we are centralizing our procurement practices and we urge you to pro-actively join us in this process so that we can shop smarter for all Manitobans.

Government is committed to ensuring all employees are treated with dignity and respect. Respectful workplace policies need to be reviewed and updated to ensure employees have safe and effective pathways to report disrespectful or harassing behaviour without fear of repercussion.

Corporate Strategic Plan 2012-2013 - Manitoba Hydro

Manitoba Hydro Place, Winnipeg, Manitobaiisbecanada.ca/umedia/cms_files/iiSBE_-_MBHP-_FINAL__TO... · 2014-10-24 · For more information see . iisbecanada.ca/sb-14. Manitoba Hydro

Power Quality Specification - Manitoba Hydro Electric Energy and

St Vital Transmission Line Construction - Manitoba Hydro€¦ · Manitoba Hydro permission – partnership with Qualico, MH, City of Winnipeg. St. Vital Transmission Project • 3-

2011/12 Power Resource Plan - Manitoba Hydro · 2012. 7. 20. · Manitoba Hydro - 2011/12 Power Resource Plan 4 In July 2011 Manitoba Hydro entered into a power purchase agreement

FINANCIAL TARGET REVIEW (2015) - Manitoba Hydro · Attachment 6 - 2015 Financial Target Review Report Prepared by Manitoba Hydro Author: Manitoba Hydro Subject: Supplemental Filing

NSERC/Manitoba Hydro Alternative Energy Chairhome.cc.umanitoba.ca/~bibeauel/research/papers/2006_bibeau_hvdc.pdfNSERC/Manitoba Hydro Alternative Energy Chair CENTRE FEST June 9,

Manitoba Hydro Manitoba-Minnesota Transmission Project ... · Manitoba Hydro Manitoba-Minnesota Transmission Project (MMTP) File OF-Fac-IPL-M180-2015-01 02 . Hearing Order EH-001-2017

Manitoba Hydro – Generation Operations - IEEEsites.ieee.org/winnipeg-pes/files/2015/01/Arc-Flash-Hazard...Manitoba Hydro – Generation Operations . Presented By: Allison Fritz,

Transmission line routing process - Manitoba Hydro

Disturbance in 1960 - Manitoba Hydro...Created By: Chris - B Size Portrait BTB - MAR 2015 Scale: 1:355,000 Manitoba Hydro, ECOSTEM, Province of Manitoba, Tolko. The 2013 Provincial

3854 MANITOBA PUBLIC UTILITIES BOARD Re: MANITOBA HYDRO

Final presentation to Manitoba Hydro

Alternative Routes Determined - Manitoba Hydro...Appendix D Background Presentation Part 4 Author Manitoba Hydro Subject St. Vital Transmission Complex Project Environmental Assessment

APPENDIX ‘F’ MANITOBA HYDRO (GAS) · PDF fileAPPENDIX ‘F’ MANITOBA HYDRO (GAS) REQUIREMENTS 18­2015. ... underground cables or natural gas pipelines in your area. ... DIRECTIONAL

Interview Tips From Manitoba Hydro

FINANCIAL TARGET REVIEW (2015) - Manitoba Hydro · FINANCIAL . TARGET . REVIEW (2015) FINANCIAL PLANNING DEPARTMENT . FINANCE & REGULATORY . December, 2015 Manitoba Hydro 2017/18

Nunavut-Manitoba Hydro Line Study

4113 MANITOBA PUBLIC UTILITIES BOARD Re: MANITOBA HYDRO

Appendix 69 - Attachment 2 - Manitoba Hydro

Manitoba Hydro Wind Synergy Study Final Report Hydro Wind Synergy...The Manitoba Hydro Wind Synergy Study found significant benefits can be realized from the addition of either an

The Manitoba Hydro-Electric Board Quarterly Report...The Manitoba Hydro-Electric Board Quarterly Report for the nine months ended December 31, 2016 Manitoba Hydro 2017/18 & 2018/19

Sharp-tailed grouse lek survey report - Manitoba Hydro

Power Smart Guide: wall insulation - Manitoba Hydro

Manitoba Hydro International Professional (MRI) Services Proposal

Manitoba Hydro: Keeyask Process Costs and Adverse Effects

The Tree Care Guide - Manitoba Hydro

view the Book (PDF) - Manitoba Hydro Electric Energy and ... · PDF fileWinnipeg, Manitoba R3C 2P4 Telephone: (204) ... the City of Winnipeg Hydro Electric System (known as City Hydro);

7795 MANITOBA PUBLIC UTILITIES BOARD Re: MANITOBA HYDRO · 2018-05-10 · 7795 MANITOBA PUBLIC UTILITIES BOARD Re: MANITOBA HYDRO 2017/18 and 2018/19 GENERAL RATE APPLICATION PUBLIC

Moose Lake Settlement Agreement 1990 - Manitoba Hydro

XW Proposed Riel MANITOBA XW - Manitoba Hydro Electric

Cost of Service Department June 2013 - Manitoba Hydro

Manitoba Hydro Corporate Update · Manitoba Hydro 2012/13 & 2013/14 Electric General Rate Application Appendix 34 - Attachment 1 – Manitoba Hydro Corporate Update – Presentation

QC of Imagery with FME at Manitoba Hydro

Interview Tips From Manitoba Hydro - University of Manitoba