Please confirm MH s position on rate increases relative to IFF07-1: a) Takes March 2007 rate increase of 2.25% as a given.

Transcription

1 PUB/MH II-1 Reference: IFF07-1 Section 4.0 to 10.0 Please confirm MH s position on rate increases relative to IFF07-1: a) Takes March 2007 rate increase of 2.25% as a given. IFF07-1 incorporates the 2.25% March 1, 2007 rate increase in General Consumers Revenue at approved rates as per Board Order 20/07. Manitoba Hydro acknowledges that this rate increase is still subject to final approval by the PUB Page 1 of 1

2 PUB/MH II-1 Reference: IFF07-1 Section 4.0 to 10.0 Please confirm MH s position on rate increases relative to IFF07-1: b) Proposes annual increase of 2.9% from 2009 through 2018 to maintain a constant debt-equity ratio of 78:22 IFF07-1 assumes annual rate increases of 2.9% in 2009 through 2018 in order to provide context for the rates that are the subject of this Application. The magnitude of future rate applications will depend upon financial and other circumstances at that time Page 1 of 1

3 PUB/MH II-1 Reference: IFF07-1 Section 4.0 to 10.0 Please confirm MH s position on rate increases relative to IFF07-1: c) Offers a high probability risk scenario which: Would require additional 1.2% over three years to cover capital expenditure escalation (of $100 M/year). Would require additional 0.9% over to cover severe one-year drought. Please see Manitoba Hydro s response to PUB/MH II Page 1 of 1

4 PUB/MH II-1 Reference: IFF07-1 Section 4.0 to 10.0 Please confirm MH s position on rate increases relative to IFF07-1: d) Offers two alternatives on debt/equity of 75:25 would require either: Additional 0.6% increase (3.59% year total) Or Additional 3.7% increase (6.6% year total) and 0% increases to achieve by 2011/12. Annual electricity rate increases of 3.5% from 2009/10 to 2107/18 are projected to enable the achievement of the 75:25 debt/equity target by 2017/18. To achieve 75:25 by the 2011/12 target date, rate increases of 6.6% per year would be required from 2009/10 to 2011/ Page 1 of 1

5 PUB/MH II-2 Reference: PUB/MH I-4 WLP Agreement a) Please provide the valuation utilized in determining WLP financial interest in the Wuskwatim GS and explain how the cost escalations related to the project impact the ownership interest of the WLP partners? A complete economic and financial evaluation of the Wuskwatim project was filed with the Clean Environment Commission, April, The two Limited Partners would invest equity in the project by subscribing for units worth, in total, 25% of the total capital. The analysis to date assumes that the Nisichawayasihk Cree Nation will subscribe for a 33% share of these units. The Nisichawayasihk Cree Nation is required to make an initial cash downpayment of not less than $1 million at the project commitment date and would finance the balance of its investment during construction through loans from Manitoba Hydro. Upon the in-service of Wuskwatim G.S., the Nisichawayasihk Cree Nation would be required to provide an additional cash equity payment (referred to, in conjunction with the $1 million downpayment, as the cash component of its investment). The balance (the financed component) would be provided by Manitoba Hydro. The minimum cash component and maximum financed component are governed by an agreed upon formula. Based on the Wuskwatim G.S. cost assumptions included in IFF07-1, the PDA requires that the Nisichawayasihk Cree Nation make a total cash equity payment of $34 million for a 33% share of the units and Manitoba Hydro would lend Nisichawayasihk Cree Nation $68 million for the financed component of its units in the Partnership. Manitoba Hydro would be required to invest $207 million for its 67% share of the units. The balance of the capital requirements will be financed by debt Page 1 of 1

6 PUB/MH II-2 Reference: PUB/MH I-4 WLP Agreement b) Based on the current cost to construct of $1.6 billion, please confirm the required equity investment of the WLP partners. Please see Manitoba Hydro s response to PUB/MH II-2(a) Page 1 of 1

7 PUB/MH II-2 Reference: PUB/MH I-4 WLP Agreement c) Given the current ownership structure of WLP, please explain how much NCN will require to invest to acquire 33% beneficial ownership of WLP? Please see Manitoba Hydro s response to PUB/MH II-2(a) Page 1 of 1

8 PUB/MH II-2 Reference: PUB/MH I-4 WLP Agreement d) Please explain who is responsible for servicing the debt related to the project and indicate on which balance sheet the debt will reside. Manitoba Hydro s actual borrowings made during the construction of the Wuskwatim G.S. will reside on Manitoba Hydro s balance sheet. An intercompany receivable will be recorded on Manitoba Hydro s balance sheet and a corresponding intercompany payable will be recorded on the Wuskwatim Power Limited Partnership s balance sheet Page 1 of 1

9 PUB/MH II-2 Reference: PUB/MH I-4 WLP Agreement e) Please provide the formula and demonstrate the determination of the $41.5 million amount to be financed by MH. The maximum financed component provided to the Nisichawayasihk Cree Nation by Manitoba Hydro is calculated as follows: Total equity in the Partnership: Project cost x 25% = $189 million Maximum financed component: Total equity x 22% = $41.58 million The $41.58 million amount filed with the CEC in 2003 was based on projected total equity for the WPLP of $189 million Page 1 of 1

10 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations a) Please provide a detailed description of the agreed methodology and an illustrative example of how the revenue from the Wuskwatim Generating Station will be determined in a given year and allocated to WLP. Manitoba Hydro will purchase all of the energy generated by the Wuskwatim generating station from the limited partnership at rates that are based on the value of the power in the export market. On peak generation will be priced based upon the rolling average price throughout the year of long term export and/or import transactions. Similarly, off peak generation will be priced based upon opportunity transactions. Any market-related fees or expenses paid by Manitoba Hydro are netted out from the average transaction price calculations. Actual Wuskwatim generation will be adjusted for transmission line losses and the resulting revenue is subject to a 3% fee for specified risks retained by Manitoba Hydro Page 1 of 1

11 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations b) Please illustrate how the revenue to be assigned to the Wuskwatim project (GWh and export sale rates) over the next 20 years will cover project-specific annual finance, depreciation, and OM&A costs. Please see the attached projections based upon IFF07-1 assumptions Page 1 of 2

12 PROJECTED OPERATING STATEMENT FROM IFF07-1 WUSKWATIM POWER LIMITED PARTNERSHIP (In millions of dollars) For year ending March 31: REVENUES Net Revenue EXPENSES Finance Expense Operating Expense Net Income (Loss) (20) (25) (19) (13) (7) (2) 5 Average Generation (GWh) ,515 1,515 1,515 1,515 1,515 1,515 For year ending March 31: REVENUES Net Revenue EXPENSES Finance Expense Operating Expense Net Income (Loss) Average Generation (GWh) 1,515 1,515 1,515 1,515 1,515 1,515 1,515 1,515 1,515 1,515 1, Page 2 of 2

13 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations c) Please define the incremental costs of Wuskwatim after in-service to MH on an annual basis; include the forecast incremental energy generated (GWh) and $ revenues gained by MH on an annual basis for the next 20 years. Assuming that the Nisichawayasihk Cree Nation subscribes for a 33% share of the units in the Partnership, the incremental cost or benefit of Wuskwatim to Manitoba Hydro would essentially be 67% of the net income or loss shown in PUB/MH II-3(b) Page 1 of 1

14 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations d) Please explain how the transmission charge to recover depreciation, interest and operating costs related to incremental facilities to serve Wuskwatim will be determined. There will be no transmission charge to recover depreciation and interest for the incremental facilities. Wuskwatim Power Limited Partnership will be charged the actual cost incurred for operating and maintaining the incremental facilities Page 1 of 1

15 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations e) Please identify the incremental facilities which will support Wuskwatim. The main incremental facilities that support Wuskwatim generation include: 1. Two km 230 kv single-circuit steel tower transmission lines from Herblet Lake to Wuskwatim Switching Station 2. One km 230 kv single-circuit steel tower transmission line from Birchtree to Wuskwatim Switching Station. 3. New 230 kv air-insulated station at Birchtree with kv circuit breakers. The existing line between Thompson and Kelsey will be sectionalized into the new station and the new Birchtree-Wuskwatim line and new Birchtree SVC will be terminated here Mvar static var compensator (SVC) to be installed in Birchtree station. 5. New 230 kv gas-insulated station at Wuskwatim with kv circuit breakers. The three lines to the Wuskwatim generating station, two lines to Herblet and one line to Birchtree will terminate here. 6. Protection upgrades at Kelsey and Thompson associated with the line sectionalizing work. 7. Three 1.18 km 230 kv lines between the Wuskwatim GS and the Wuskwatim switching station. 8. Three 20 Mvar shunt reactors to be installed in the Herblet Lake station. 9. One 165 km 230 kv single-circuit steel tower transmission lines from Herblet Lake to the Pas Ralls Island station Page 1 of 2

16 10. Breaker and protection additions at The Pas Ralls Island and Herblet Lake stations associated with the new line terminations Page 2 of 2

17 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations f) Please indicate the facilities being advanced to accommodate Wuskwatim, the period of advancement and describe how the charge related to those facilities will be determined. The facilities required for the Herblet Lake Rall s Island line include: One 165 km 230 kv single-circuit steel tower transmission lines from Herblet Lake to the Pas Ralls Island station. one 20 Mvar reactor at Herblet associated breakers and protection at Herblet and the Pas Ralls Island stations. Originally, the Wuskwatim Facilities preceded the reliability need date for the Herblet Lake- Ralls Island line. Consequently, the Interconnection and Operating Agreement required the WLP to pay for the cost to construct the line. The WLP would be refunded the actual cost on the date the line would be placed in-service for reliability needs. Due to delays in the Wuskwatim schedule, the reliability need data and the date the line is needed for Wuskwatim coincide. Therefore, there will be no advancement charges Page 1 of 1

18 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations g) Please indicate the amount identified as periodic major capital expenditures which fall outside the forecast period Please see the attached projection based on IFF07-1 assumptions Page 1 of 2

19 PROJECTED ONGOING CAPITAL EXPENDITURES FROM IFF07-1 WUSKWATIM POWER LIMITED PARTNERSHIP (In millions of dollars) For year ending March 31: Other Capital Expenditures * For year ending March 31: Other Capital Expenditures * * In-service cost of other periodic capital expenditures related to the Wuskwatim GS Page 2 of 2

20 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations h) Please indicate the amount of reserves annually during the forecast period that will be required to fund the periodic major capital expenditures, based on the forecasts assumptions utilized and major capital expenditures currently identified. Annual reserves to fund periodic major capital expenditures have not been forecasted. The General Partner Board of Directors of the Wuskwatim Power Limited Partnership will determine any reserves to be set aside once the project is in-service Page 1 of 1

21 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations i) Please elaborate on all parameters beyond the debt to equity ratio to be utilized to determine the portion of profits that may be distributed as dividends. All cash in excess of that needed to maintain the 75:25 debt/equity ratio after the allocation of any amounts to be held in reserve or for anticipated expenses is available as potential distributions. No distributions can be made if the debt ratio exceeds 75%, rounded to the nearest full percentage point Page 1 of 1

22 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations j) Please explain what limits in place for the cash call and dividend advances which can be loaned by MH. The cash call credit facility has no pre-set limit. The PDA limits the dividend credit facility to four times the amount of Taskinigahp Power Corporation s (TPC) own cash invested as at the first anniversary date of Wuskwatim s in-service date net of any amounts already used to repay cash call loans. TPC is the investment vehicle used by Nisichawayasihk Cree Nation Page 1 of 1

23 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations k) Please provide an illustrative example of dividend advances and cash call advances assuming full equity participation of the parties under scenarios where in a year the generating station has a net loss, has a net profit of $1million, $5 million and $10 million. The availability of dividend and/or cash call advances is not directly linked to net income or loss, but to the debt/equity ratio. If the amount of cash in excess of that needed to maintain the debt/equity ratio would result in an available distribution to NCN of less than what could be made available under the dividend credit facility, advances would be available up to the level necessary to top up the distributions to the maximum level of the loan advances. If cash investments from the partners are necessary to maintain the debt/equity ratio, advances would be available to TPC in order to allow it to meet its proportionate share of the cash call Page 1 of 1

24 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations l) Please explain how the examples under (j) would vary if the debt to equity ratio was at or below 75:25 The process in (j) would be the same if the debt ratio were lower than 75%, except that the cash call facility would not be required or available Page 1 of 1

25 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations m) Please provide the calculation of the current and forecast financing rate to be charged to NCN on amounts advanced or forecast to be advanced, including the amount of the risk premium. The financing rate applied to NCN on amounts advanced or forecast to be advanced up until project completion are as follows in the PDA: Manitoba Hydro s short term Canadian borrowing cost for the month + one percent risk premium + provincial guarantee fee Page 1 of 1

26 PUB/MH II-3 Reference: PUB/MH I-4 WLP Operations n) Please explain how the risk premium was determined. The risk premium was a negotiated amount Page 1 of 1

27 PUB/MH II-4 Reference: PUB/MH I-18 (a) Please file the most current financial statements for: i. Wuskwatim Power Limited Partnership; and ii Manitoba Ltd. i. Wuskwatim Power Limited Partnership financial statements cannot be released without the approval of the Board of the Wuskatim Power Limited Partnership. This matter will be tabled at the next meeting of the Limited Partnership Board. ii. The financial statements of Manitoba Ltd. has been included in Appendix Page 1 of 1

28 PUB/MH II-5 Reference: PUB/MH I-20 Equivalent Full Time Employees a) Please provide a schedule of equivalent full time employees for the years 2004/05 through 2008/09. Please see the following schedule (from Schedules and of the updated filing) Page 1 of 3

29 PUB/MH II-5, part (a) EQUIVALENT FULL TIME EMPLOYEES - BY BUSINESS UNIT 2004/ / / / /09 Actual Actual Actual Forecast Forecast President & CEO Public Affairs General Counsel Administration Corporate Relations Corporate Planning Aboriginal Relations Purchasing Administration Finance & Administration Information Technology Services Treasury Financial Planning & Corporate Risk Management Human Resources Gas Supply Rates & Regulatory Affairs Corporate Controller Corporate Facilities Corporate Safety & Health Administration Power Supply Power Planning Power Projects Development HVDC Generation North Generations South Engineering Services Power Sales & Operations New Generation Construction Administration ,344 1,366 1,405 1,537 1,578 Transmission & Distribution Research & Development Transmission System Operations Transmission Planning & Design Transmission Construction & Line Maintenance Distribution Planning & Design Distribution Construction Apparatus Maintenance Administration ,954 1,981 2,005 2,097 2, Page 2 of 3

30 PUB/MH II-5, part (a) EQUIVALENT FULL TIME EMPLOYEES - BY BUSINESS UNIT 2004/ / / / /09 Actual Actual Actual Forecast Forecast Customer Service & Marketing Industrial & Commercial Solutions Customer Service Operations 1,050 1,073 1,041 1,039 1,059 Consumer Marketing & Sales Business Support Services Administration ,511 1,551 1,531 1,536 1,573 Total 5,866 5,980 5,991 6,248 6, Page 3 of 3

31 PUB/MH II-5 Reference: PUB/MH I-20 Equivalent Full Time Employees b) For each of the years 2004/05 through 2006/07 please separate employees into fulltime vs. construction as set out in the annual report. Please see the following schedules. Note that these schedules do not agree to the amounts shown in the annual report because the annual report amounts represent staff levels as at March 31 of the fiscal year, whereas these schedules represent total staff levels throughout the year including staff changes, and seasonal and overtime requirements Page 1 of 7

32 EQUIVALENT FULL TIME EMPLOYEES - ANNUAL RESULTS BY DIVISION FOR THE YEAR ENDING MARCH 31, 2005 Operating & Direct Total Administrative Construction PRESIDENT & CEO Public Affairs General Counsel & Corporate Secretary Administration CORPORATE RELATIONS Corporate Planning Division Aboriginal Relations Purchasing Department Administration FINANCE & ADMINISTRATION Information Technology Services Treasury Financial Planning & Corp Risk Mgmt Human Resources Gas Supply Rates & Regulatory Affairs Corporate Controller Corporate Facilities Corporate Safety & Health Administration POWER SUPPLY Power Sales & Operations Power Planning Power Projects Development HVDC Generation North Generations South Engineering Services New Generation Administration , , Page 2 of 7

33 EQUIVALENT FULL TIME EMPLOYEES - ANNUAL RESULTS BY DIVISION FOR THE YEAR ENDING MARCH 31, 2005 Operating & Direct Total Administrative Construction TRANSMISSION & DISTRIBUTION Research & Development 5-5 Transmission System Operations Transmission Planning & Design Transmission Construction & Line Mtce Distribution Planning & Design Distribution Construction Apparatus Maintenance Administration , ,954 CUSTOMER SERVICE & MARKETING Industrial & Commercial Solutions Customer Service Operations ,050 Consumer Marketing & Sales Business Support Services Administration , ,511 TOTAL 4,759 1,107 5, Page 3 of 7

38 PUB/MH II-5 Reference: PUB/MH I-20 Equivalent Full Time Employees c) Please explain the major changes since 2004/05 in EFT employees for: i. Corporate Relations - Aboriginal Relations Please include a general description of the positions added by type of job classification. Changes have been made since 2004/05 to strengthen the capacity of the Aboriginal Relations Division to act as the focal point for the management of all internal and external Aboriginal issues including policy development. From 2005 to 2006, positions increased by nine and from 2006 to 2007, positions increased by five. General position descriptions are explained below: Manager - to oversee the assessment of strategic corporate interests related to current and evolving Aboriginal issues and to develop and refine relevant corporate policies. Staff Officer - to assist with the administration of the Hydro Northern Training and Employment Initiative. Environmental Specialist - i) to provide policy, planning and technical advice and support to other corporate units in managing Aboriginal issues requiring an integrated corporate response ii) to support the planning, implementation and monitoring of the Waterways Management Program, and iii) to support negotiated solutions to adverse effects of existing and future projects. Administrative Officer - i) to support the development and refinement of policies relevant to Aboriginal interests in Manitoba Hydro s purchasing, employment, training and future development activities, ii) to assist with implementation of the Aboriginal cultural awareness strategy and community relations, and iii) to provide support for the delivery of various community relations activities. Utility Worker - to perform general labourer duties associated with the alleviation of adverse effects and to assist in the management of material and equipment involved in the delivery of northern field programs Page 1 of 1

39 PUB/MH II-5 Reference: PUB/MH I-20 Equivalent Full Time Employees c) Please explain the major changes since 2004/05 in EFT employees for: ii. Power Supply - Administration Please include a general description of the positions added by type of job classification. As per Manitoba Hydro s response to PUB/MH I-20(b), the changes in Power Supply - Administration EFT employees have been detailed. For new positions, the following job classifications have been added: 2005 vs new positions 9 Trades Trainees - trainees in the electrical, mechanical and operating trades, which rotate within generation, HVDC and thermal stations vs new positions 6 Trades Trainees - see above description vs new positions 17 Trades Trainees - see above description vs no new positions Page 1 of 1

40 PUB/MH II-5 Reference: PUB/MH I-20 Equivalent Full Time Employees c) Please explain the major changes since 2004/05 in EFT employees for: iii. Customer Service &Marketing - Consumer Marketing & Sales Please include a general description of the positions added by type of job classification. As per Manitoba Hydro s response to PUB/MH I-20(b), the changes in Customer Service & Marketing - Consumer Marketing & Sales EFT employees have been detailed. During this period, the following job classifications have been added: Manager, Marketing & Sector Sales provides oversight and direction for staff and other resources and is responsible for a number of marketing initiatives, customer education, and dedicated Power Smart sales. Supervisory, Power Smart Sales responsible for leading a team of dedicated Power Smart sales staff. Staff Officers responsible for identifying opportunities for energy efficiency including designing and delivering Power Smart Programs. Marketing Programs Research Analysts responsible for providing support for staff officers responsible for specific Power Smart programs. Power Smart Sales Research Analysts responsible for pursuing Power Smart sales opportunities with customers in the Commercial sector. Planning & Evaluation Research Analysts responsible for providing support activities in the development of Manitoba Hydro s Power Smart Plan and evaluating the Power Smart Programs Page 1 of 2

41 Administrative Representatives responsible for providing various administrative tasks, including the day to day administration of various Power Smart Programs vs new positions Eight Staff Officers Eight Research Analysts 2006 vs new positions One Manager Marketing & Sector Sales One Supervisor Energy Services & Sales Five Administrative Officers 2007 vs no new positions 2008 vs no new positions Page 2 of 2

42 PUB/MH II-6 Reference: PUB/MH I-21(d) NERC Reliability Standards a) Please indicate which NERC reliability standards MH currently does not comply with and discuss what steps are being undertaken to comply and the anticipated time frame for full compliance. Manitoba Hydro believes it is compliant with all applicable NERC reliability standards Page 1 of 1

43 PUB/MH II-6 Reference: PUB/MH I-21(d) NERC Reliability Standards b) Please elaborate on what will be required as it relates to have a dedicated project team including the size of team, describe the investment in additional physical infrastructure and cyber security technology. Manitoba Hydro is working to meet the future requirements of the NERC Cyber Security Standards, according to the NERC compliance schedule. Manitoba Hydro does not have to comply with these standards at this time. Manitoba Hydro has established a project team with a temporary dedicated staff of seven (7). The ongoing staffing requirement is two new permanent staff positions to manage the compliance of the Cyber Security Program. Manitoba Hydro has committed a capital investment of approximately $10M over five years Page 1 of 1

44 PUB/MH II-7 Reference: PUB/MH I-23 (a),(d), Coalition/MH I-35 a) Please provide the CEF 02 which related to the IFF02-1. Please see the attached schedule for a copy of the CEF 02 summary table Page 1 of 7

45 ELECTRICITY CAPITAL EXPENDITURE FORECAST (CEF02-1) (IN MILLIONS OF DOLLARS ) FOR THE YEARS 2002/03 TO 2012/13 Project Total NEW GENERATION and MAJOR TRANSMISSION PROJECTS NEW GENERATION BRANDON COMBUSTION TURBINE WUSKWATIM GS LICENCING COSTS GULL GS LICENCING COSTS MAJOR TRANSMISSION BIPOLE 3 PLANNING STUDIES AND LICENSING COSTS 0.7 RADISSON - RIEL -DORSEY + 500kV HVDC LINE RIEL 230/500 kv STATION NORTHERN AC TRANSMISSION SYSTEM REQUIREMENTS PROPOSED NEW GENERATION/MAJOR TRANSMISSION CEF Page 2 of 7

46 ELECTRICITY CAPITAL EXPENDITURE FORECAST (CEF02-1) (IN MILLIONS OF DOLLARS ) FOR THE YEARS 2002/03 TO 2012/13 Project Total POWER SUPPLY HVDC FACILITIES HVDC BIPOLE RELIABILITY ENHANCEMENTS BIPOLE 1 MERCURY ARC VALVES STAGE HVDC BIPOLE 2 THYRISTOR POLY PIPE REPLACEMENTS CONVERTER TRANSFORMER BUSHING REPLACEMENT DORSEY BIPOLE 1 SYNCH CONDENSER BREAKER REPLACEMENT BIPOLE 1&2 DC FILTER CAPACITOR REPLACEMENT BIPOLE 1 VALVE HALL WALL BUSHING REPLACEMENT BIPOLE I & 2 ELECTRODE LINE MONITORING HVDC SYSTEM SWITCHGEAR UPGRADE HVDC AUXILLIARY POWER SUPPLY DORSEY SYNCHRONOUS CONDENSER REFURBISHMENT BIPOLE 2 TRANSFORMER COOLING UPGRADE DORSEY SYNC CONDENSER COOLER UPGRADE HVDC SYST TRANSFORMER & REACTOR FP&P HVDC BIPOLE 1 CHILLER REPLACEMENT HVDC BIPOLE 1 ROOF REPLACEMENT HYDRAULIC REHABILITATION GREAT FALLS G.S. REHABILITATION PINE FALLS G.S. REHABILITATION LAURIE RIVER PLANT 1 AND 2 REHABILITATION GRAND RAPIDS GS REHABILITATION JENPEG GS UNIT 1-6 OVERHAULS POWER SUPPLY DAM SAFETY UPGRADES WINNIPEG RIVER CONTROL SYSTEM LIMESTONE OUTSTANDING WORK WINNIPEG RIVER RIVERBANK PROTECTION PROGRAM KETTLE GS - IMPROVEMENTS & UPGRADES KELSEY GS IMPROVEMENTS & UPGRADES KETTLE ANNUNCIATION SYSTEM RENEWAL NELSON RIVER CONTROL JENPEG STAFFHOUSE SEWAGE TREATMENT JENPEG G.S. KISKITTO CONTROL STRUCTURE DYKE REPAIR POINTE DU BOIS GS IMPRVMTS & UPGRADES Page 3 of 7

47 ELECTRICITY CAPITAL EXPENDITURE FORECAST (CEF02-1) (IN MILLIONS OF DOLLARS ) FOR THE YEARS 2002/03 TO 2012/13 Project Total THERMAL REHABILITATION BRANDON GS UNIT 5 LICENCE RENEWAL SELKIRK GS FUEL SWITCHING PROJECT SELKIRK GS LICENCE RENEWAL OTHER 200MW ONTARIO HYDRO SALE - SYNC COND CONVERSION SITE REMEDIATION OF CONTAMINATED CORPORATE FACILITIES OIL CONTAINMENT FIRE PROTECTION PROJECTS GENERATION TOWNSITE INFRASTRUCTURE 3.4 PLANNING STUDY COSTS DOMESTIC ITEMS - POWER SUPPLY WH DOMESTIC ITEMS - POWER SUPPLY PROPOSED POWER SUPPLY CEF TRANSMISSION AND DISTRIBUTION INTERCONNECTIONS GLENBORO - RUGBY ND 230 kv TIE LINE Page 4 of 7

48 ELECTRICITY CAPITAL EXPENDITURE FORECAST (CEF02-1) (IN MILLIONS OF DOLLARS ) FOR THE YEARS 2002/03 TO 2012/13 Project Total TRANSMISSION NORTH CENTRAL MANITOBA PROJECT HERBLET LAKE > THE PAS 230kV TRANSMISSION WINNIPEG > BRANDON TRANSMISSION IMPROVEMENTS FT. GARRY PERIMETER STN 66-12KV BANK REPL RIDGEWAY KV TRANSFORMER ADDITION ST. VITAL TRANSFORMER ADDITION DORSEY - ROSSER 230kV T/L IMPROVEMENTS DORSEY > ST. VITAL 230kV AC TRANSMISSION DORSEY > LAVERENDRYE > ST. VITAL 230kV TRANSMISSION ROSSER > SILVER 230kV TRANSMISSION NEEPAWA kV STN ROSSER > MCPHILLIPS 115kV TRANSMISSION IMPROVEMENTS RICHER S KV TRANSFORMER ADDITION PINE FALLS > BLOODVEIN 115kV TRANSMISSION LINE ST. VITAL > STEINBACH 230kV TRANSMISSION RIDGEWAY - SELKIRK 230kV TRANSMISSION SOURIS > PEMBINA VALLEY 230kV TRANSMISSION WINNIPEG AREA TRANSMISSION REFURBISHMENT DORSEY > US BORDER D602F 500KV AC T/L INSULATOR REPLACEME BIPOLE 1 & 2 LINE SPACER DAMPERS REPLACEMENT DORSEY BUS ENHANCEMENT FLIN FLON AREA TRANSMISSION IMPROVEMENTS PHASE 1& PINE FALLS - GREAT FALLS kV SUPPLY SUBTRANSMISSION JENPEG-NORWAY HOUSE 66kV LINE RUTTAN > SOUTH INDIAN LAKE 66 kv LINE CENTRAL SUPPLY > PIKWITONEI & THICKET PORTAGE BIRTLE - ROSSBURN 66KV LINE ST.BONIFACE PLESSIS Rd kV STATION ROSSER - OAK POINT KV STATION ROSSER - OAK POINT BANK 2 ADDITION ST.BONIFACE PLESSIS Rd BANK 2 ADDITION NEEPAWA - PLUMAS 66KV LINE RESTON/GLENBORO CAPACITY INCREASE ST. LEON KV TRANSFORMER ADD'N AND IPL EXPANSION BRANDON CROCUS PLAINS kV BANK ADDITION BRERETON LAKE STATION AREA FT. GARRY PERIMETER STN 66-12KV BANK REPL Page 5 of 7

49 ELECTRICITY CAPITAL EXPENDITURE FORECAST (CEF02-1) (IN MILLIONS OF DOLLARS ) FOR THE YEARS 2002/03 TO 2012/13 Project Total DISTRIBUTION VIRDEN AREA DISTRIBUTION CHANGES DEFECTIVE RINJ CABLE REPLACEMENT SHAMATTAWA NEW DIESEL GS & TANK FARM COMMUNICATIONS MICROWAVE RADIO REPLACEMENTS OTHER MAPINFO PROJECT SITE REMEDIATION OIL CONTAINMENT DOMESTIC ITEMS - TRANSMISSION AND DISTRIBUTION WH DOMESTIC ITEMS - TRANSMISSION AND DISTRIBUTION PROPOSED TRANSMISSION AND DISTRIBUTION CEF CUSTOMER SERVICE & MARKETING DEMAND SIDE MANAGEMENT CAPITAL COSTS AUTOMATIC METER READING IMPLEMENTATION DISTRIBUTION PCB TESTING & TRANSFORMER REPLCMT WINNIPEG DISTRIBUTION INFRASTRUCTURE REQRMNTS DOMESTIC ITEM CS&M WH DOMESTIC ITEM CS&M PROPOSED CUSTOMER SERVICE & MARKETING CEF Page 6 of 7

50 ELECTRICITY CAPITAL EXPENDITURE FORECAST (CEF02-1) (IN MILLIONS OF DOLLARS ) FOR THE YEARS 2002/03 TO 2012/13 Project Total FINANCE & ADMINISTRATION CORPORATE BUILDING PROGRAM NEW HEAD OFFICE CUSTOMER INFORMATION SYSTEM HUMAN RESOURCE MANAGEMENT SYSTEM ENTERPRISE GIS PROJECT DOMESTIC ITEMS - FINANCE & ADMINISTRATION WH DOMESTIC ITEMS - FINANCE & ADMINISTRATION PROPOSED FINANCE & ADMINISTRATION YEAR-END FORECAST VARIANCE TOTAL ELECTRICITY CEF Page 7 of 7

51 PUB/MH II-7 Reference: PUB/MH I-23 (a),(d), Coalition/MH I-35 b) Please provide a table which compares the actual/forecast (CEF07-1) capital expenditures by major capital project for the fiscal years 2003 through 2013 with that forecast in CEF02, and explain the differences. Please see the attached schedule Page 1 of 9

52 Table PUB/MH II-7 (b) (in millions of dollars) CEF Forecast CEF Actuals Forecast Difference Comments New Generation & Transmission Brandon Combustion Turbine Wuskwatim Generation , ,211.1 Wuskwatim Transmission New project. Herblet Lake - The Pas 230 kv Transmission Keeyask Generating Station Licensing (formerly Gull GS Licensing Costs Project) CEF02 was only for the licensing of the Wuskwatim plant. The actuals and the CEF07 estimate include both the unamortized planning studies and licensing costs in addition to the costs associated with the construction of the plant. Estimate updated for current market prices, in-service date deferred from October 2010 to August 2011, and an Optical Ground Wire (OPGW) fibre communications substitutes the Power Line Communications (PLC) system previously planned. More extensive consultations with First Nation partners and more complex environmental and engineering studies in preparation for the regulatory review process. Conawapa Generating Station New project, previously in planning studies. Wind Generation Kelsey Generating Station Improvements & Upgrades The increase reflects increase in scope to rehab all 7 units and to combine the rerunnering and unit 5 rehab items, as well as current construction market conditions. Kettle Generating Station Improvements & Upgrades Expenditures for the period advanced one year. Pointe du Bois Rebuild The increase reflects current work schedule and construction market conditions. Pointe du Bois & Slave Falls Transmission New project. Transmission upgrades required as a result of Pointe du Bois Rebuild project. Contributing to this variance is the transfer of Conawapa studies Planning Study Costs in 2006 for $10.4 M as well as less actual spending in than planned in CEF02. Bipole 3 Licencing Costs Bipole 3 Western Route (formerly Radisson-Riel 500 kv HVDC Line) In-service date was deferred from October 2010 in CEF02 to October Riel 230/ 500 kv Station In-service date was deferred from August 2008 in CEF02 to March Costs for the last year of the project are therefore not included in the CEF period Page 2 of 9

53 Table PUB/MH II-7 (b) (in millions of dollars) CEF Forecast CEF Actuals Forecast Difference Northern AC Transmission System Requirements Comments Expand project scope to include such items as rebuild of generator cross tip scheme, a spare Ponton Station transformer and additional costs for the technical difficulties incurred interfacing new equipment with existing scheme. MB-ON Clean Energy Transfer Init-Phase Demand Side Management - Electric Refine existing programs, add new programs and eliminate a number of programs to target savings of 2,759 GWh by New Head Office New Head Office Reflects current approved scope, cost estimate, and work schedule. Corporate Relations Waterways Management Program New project. Power Supply HVDC Bipole Reliability Enhancements Bipole 1 Pole 2 Thyristor Valve Project HVDC Bipole 2 Thyristor Poly Pipe Replacement Converter Transformer Bushing Replacement Dorsey Bipole 1 Synch Condenser Breaker Replacement BP1 DC Filter Capacitor Replacement Bipole 1 Valve Hall wall Bushing Replacement Bipole 1 & 2 Electrode Line Monitoring HVDC System Switchgear Upgrade HVDC Auxiliary Power Supply Upgrades Dorsey Synchronous Condenser Refurbishment BP1 Chiller Dorsey ASEA Synchronous Condenser Cooler Upgrade HVDC Bipole 1 Roof Replacement Revised estimate reflects the repair of corrosion fretting on SC7Y, SC8Y and SC9Y, the removal of SC22Y, re-wedging, GEM80 PLC replacements, additional modification to the 600V transfer scheme for SC7Y, SC8Y and SC9Y, increased actual cost experience with the SC8Y refurbishment, addition of SC11Y refurbishment, vibration monitoring & controls upgrades; as well as modifications required to resolve excessive brush wearing problems Page 3 of 9

54 Table PUB/MH II-7 (b) (in millions of dollars) CEF Forecast CEF Actuals Forecast Difference Bipole 2 Transformer Cooling Upgrade HVDC System Transformer & Reactor Fire Protection & Prevention HVDC AC Filter PCB Capacitor Replacement New project. HVDC Transformer Replacement Program New project. Dorsey 230 kv Relay Building Upgrade New project. Dorsey EE Synchronous Condenser Glycol Cooler Upgrade New project. HVDC Stations Ground Grid Refurbishment New project. HVDC Bipole kv HLR Circuit Breaker Replacement New project. HVDC Bipole 1 Pole Differential Protection New project. HVDC Bipole 1 By-Pass Vacuum Switch Removal New project. HVDC Bipole 2 Refrigerant Condenser Replacement New project. HVDC Bipole 1 Smoothing Reactor Replacement New project. HVDC - BP1 Converter Station, P1&P2 Battery Bank Seperation New project. HVDC Bipole 1 DCCT Transductor Replacement New project. HVDC BP1 & BP2 DC Converter Transformer Bushing Replace New project. HVDC Bipole 2 Valve Wall Bushing Replacement New project. HVDC Bipole 1 CQ Disconnect Replacement New project. HVDC - BP2 Refurbish Thyristor Module Cooling Components New project. HVDC BP2 Smoothing Reactor Replacement New project. Great Falls Generating Station Rehabilitation Pine Falls Generating Station Rehabilitation Comments Estimate revised to include amounts required for the electrical rehabilitation of the station which includes the replacement of potential transformers, synchronizers, annunciators, generator breakers, excitation and governor systems, step-up transformers and electrical back-up systems. In addition, the scope on Units 1 & 2 major overhaul project increased to include the electrical work and a deferral of the in-service date by one year due to delays in equipment purchases. Laurie River Plants 1 and 2 Rehabilitation Grand Rapids G.S. Rehabilitation Estimate revised to reflect coordination of breakers and sync with 11.6 unit 4 overhaul, unit 4 repairs, and unit 1 legal costs. Jenpeg Generating Station Unit Overhauls In-service date was deferred from March 2012 in CEF02 to March in CEF07; thus, CEF07 reflects reduced spending compared to CEF02 for the period to Kettle G.S. Unit Re-Wedging Power Supply Dam Safety Upgrades Project scope revised to include: weather warning systems at all plants; public early warning systems and dike rip rap 20.4 rehabilitation at Grand Rapids and Seven Sisters; spillway hoist replacement and 2,200v supply at Pointe de Bois; and extension of the basic program from 2008 to Page 4 of 9

55 Table PUB/MH II-7 (b) (in millions of dollars) CEF Forecast CEF Actuals Forecast Difference Winnipeg River Control System Limestone G.S. Outstanding Work Winnipeg River Riverbank Protection Program Kettle Annunciation System Renewal Jenpeg Staffhouse Sewage Treatment Jenpeg GS Kiskitto Cntrl Str Dyke Repair Nelson River Control Power Supply Hydraulic Controls New project. Slave Falls GS Creek Spillway Rehab New project. Slave Falls Generating Station Rehabilitation New project. Generating Station Roof Replacements New project. Great Falls Generating Station Unit 4 Major Overhaul New project. Great Falls 115 kv Indoor Station Safety Improvements New project. Jenpeg Transformers Refurbish/Add Spare New project. Water Licenses and Renewals New project. Grand Rapids Generator Step-Up Transformer Refurbishment New project. Gen South PCB Regulation Compliance New project. Comments Brandon Generating Station Unit 5 License Review Estimate revised for timing, current market conditions, and to include the installation of the low nitrous oxide burners and continuous emissions monitoring equipment. The ash mitigation program was expanded to include ash cells. Selkirk GS Ancillary Systems (formerly Selkirk GS Fuel Switching Project) Project transferred from "Selkirk GS Fuel Switching Project". Selkirk Generating Station License Review Scope reduced to cancel the installation of the cooling tower, and add tube replacements, intake fish screen and lube oil modifications. Brandon Unit 5 Rehabilitation New project. Selkirk G.S. Rehabilitation New project. Fire Protection Projects - HVDC Halon Replacement Project New project. Power Supply Fall Protection Program New project. Oil Containment - Power Supply Increase reflects deferred in-service date and increased scope to include encapsulation of oil filled transformers/smoothing reactors at HVDC stations and fast oil drain scheme. Estimate increased to include actual contract costs for the Dorsey containment building, and construction of collection area. Generation Townsite Infrastructure Scope increased to include Gillam housing: replacement of 40 doublewide trailers with RTM homes, retrofit of 66 corporate accommodations, addition of 32 new conventional housing units, and replacement of the Gillam shopping centre Page 5 of 9

56 Table PUB/MH II-7 (b) (in millions of dollars) CEF-07 CEF Actuals Difference Forecast Forecast 200MW Ontario Hydro Sale - Sync Condnsr Comments Site Remediation of Contaminated Corporate Facilities High Voltage Test Facility New project. Power Supply Security Installations Upgrades New project. Power Supply Sewer & Domestic Water System New project. Domestic Item - Power Supply Scope increased to reflect the addition of assessment and remediation of historical sites, acquisition and disposal of corporate properties, and remediation of the 2 Mile and 8 Mile water channels previously in non-construction capital. Transmission & Distribution Glenboro - Rugby 230kV T/L North Central Manitoba Project Winnipeg - Brandon Transmission Improvements Transcona New kv Station (formerly Ridgeway kV Transformer Addition) St. Vital Transformer Addition New project. Dorsey-Rosser 230kV Transmission Imprvmt Dorsey-St Vital 230kV AC Transmission Dorsey-LaVerendrye-St Vital 230kV Trnsms Rosser-Silver 230kV Transmission Neepawa kv Station Rosser-McPhillips 115kV Trnsmsn Improve Richer S kV Transformer Addition Estimate updated for current market prices as well as a reduction in duration for the construction of the Dorsey-Portage 230 kv line, in-service date deferred from October 2008 to October 2014, pushing much of the total budget past the 2013 fiscal year (CEF07 estimate is $40.0 M). Project transferred from "Ridgeway kv Transformer Addition". Increase reflects additional costs for site improvements due to increase in site size, market price increases on equipment, and deferral of Stage 1 in-service from March to July Pine Falls - Bloodvein 115 kv Transmission Line In-service date deferred from October 2011 to October 2014, pushing much of the spending beyond the 2013 fiscal year (CEF07 estimate is $34.1 M). Ridgeway - Selkirk 230 kv Transmission Souris - Pembina Valley 230 kv Transmission In-service date deferred ten years to October Page 6 of 9