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Old Posted May 2, 2012, 8:19 PM
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Bdog Bdog is offline
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Quote:
Originally Posted by h0twired View Post
Hydro is HARDLY the cash cow that many make it out to be.

The entire generating capacity of Manitoba Hydro is around 4500 MWh. That is all hydro and steam generation throughout the province.

Lets assume a GENEROUS price of $80/MWh. This is higher than the average $50-75 range but it will prove my point without people arguing over market prices.

4500MWh * 24 hours * 365 days * $80 = $3.15 billion

So the raw power alone at an inflated market price can generate just over $3 billion in GROSS revenue. Now subtract the overhead costs like transmission, local delivery, staffing, dam construction/financing, interest/repayment on capital debts and other operating expenses and the remaining profit is actually pretty meager.

Compare that with the nearly $2 billion in oil royalties and $1.4 billion in potash royalties that Saskachewan brought in (2008-2009) from the companies exploiting the resources in the province. Considering the Saskatchewan provincial budget is about $10 billion it must be pretty nice to get over 1/3 of it from resource royalties.
Well said Hotwired. Resource rents and royalties dwarf what Manitoba could possibly generate from Hydro (and dwarf our equalization revenues as well).

The Wall government is the first to admit that the resource boom (record high prices for potash, oil and uranium) is largely to thank for the recent prosperity. Few Saskatchewanians can point to solid policy changes the Sask Party has made to promote this growth (although some forumers have pointed out certain small policy steps, which may play small roles in the growth).

Case in point - Saskatchewan's budget balooned from just over $8 Billion in 2007 to $11 Billion today (+ 40% in 5 years). Not sure how one can look at those numbers then throw stones at Manitoba's overspending (although I'm not justifying Manitoba's spending either - just noting that things aren't that different between the 2 provinces, besides the unprecedented royalties)
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