After a year-long delay, construction is slated to begin immediately on 60 wind turbines owned and operated by Pattern Energy, a San Francisco-based renewable energy company.
But instead of the 300 megawatts the NDP government originally promised, the wind farm will add less than half that power to Hydro’s grid.
And, Manitoba Hydro is loaning Pattern the bulk of the construction money because the recession and the credit crunch made it impossible for Pattern to afford to build the wind farm and keep power prices low enough for Hydro’s liking.
Manitoba Hydro president Bob Brennan said the loan won’t affect rates and the bailout isn’t risky. He said Hydro will make a small profit on the loan, and if Pattern were to default, Hydro would take over a wind farm that Pattern partly paid for.
Tory Hydro critic Rick Borotsik, the MLA for Brandon West, said more wind power is a noble goal but the St. Joseph deal involves too many fuzzy details. He said he’d like to know what interest rate Hydro is charging and why; whether Pattern’s business plan is sound, and why the company couldn’t get private financing.
Borotsik said the loan is unfair to the other 83 bidders that submitted proposals for wind farms but lost out to the St. Joseph project, without knowing government loans might be a financing option.
“There are too many red flags in this one, too many unanswered questions,” Borotsik said.
The NDP promised to build 1,000 megawatts of wind power by 2015 but is falling short of that goal. So far, 237 megawatts are on tap, including St. Joseph.
Both Brennan and Premier Greg Selinger shied away from the 1,000-megawatt commitment Monday. Asked when Hydro might issue a request for proposals for the next wind farm, Brennan joked the St. Joseph project was so difficult to negotiate that his staff need a break.
He said Hydro is unlikely to start working on some of the 83 other wind farm projects under development because the price of power is too steep.
Complicating matters is the fact the federal government has not replenished a subsidy that bolstered the economic viability of wind farms. Pattern Energy was among the last projects to get cash from the subsidy.
Given the credit crunch and the end of the subsidy, Selinger said he’s going to ask Hydro to come up with other ways to build wind farms.
St. Joseph wind farm facts:
Size: 138 megawatts, about the same as the Jenpeg dam in northern Manitoba and enough to power 50,000 homes.
Cost: $345 million, with $95 million coming from Pattern Energy and the rest loaned from Manitoba Hydro.
Spinoff: $38 million in land-rental payments to farmers over the life of the project, plus tax revenue to governments.
Jobs: 225 during construction
Location: Near St. Joseph, a few minutes west of Highway 75 on provincial road 201 (the road to Altona).
Deadline: Turbines should start turning late this year and be fully online by spring.