The Progressive Conservative government of Manitoba is about to receive a billion dollars worth of good financial news from a most unusual source: Manitoba Hydro’s Keeyask generating station.

Thanks to geo-political events and higher-than-average water levels, Hydro is on the verge of one of its most successful years. Ever.

Historic snowfall and relentless spring rains have pushed river and lake levels to the brim, providing more than enough water to drive the turbines at all of Hydro’s generating stations, including the seven new units at Keeyask. That will generate enough electricity to boost exports to levels not seen in more than a decade.

However, that’s not all. The spot market Hydro is selling into is red hot.

A worldwide energy crisis, sparked largely by the war in Ukraine, has driven up the price of natural gas and — as a consequence — electricity rates. Not only will Hydro export more this year, it will be exported at much higher rates than in recent years where an oversupply of shale gas drove down the price of hydroelectricity.

Although the final numbers are not in yet, Hydro is forecasting a $230 million loss for 2021-22. Using estimates based on 107 water-level scenarios Hydro filed in its last rate application to the Public Utilities Board, that loss could turn into a net profit of more than $430 million in 2022-23, a rebound of more than $600 million.

But that’s not the only good fiscal news for Premier Heather Stefanson’s Tory government.

According to Hydro, the Stefanson government will collect at least $500 million in fees, surcharges and taxes on all that additional generating and export activity, the most money any government in Manitoba has ever taken off the top of Hydro revenues.

And let’s remember, both of those estimates were based on 2021 export prices. With the spot export rates much higher, those windfall figures will likely grow significantly.

However, while the windfall is excellent fiscal news for the Tories, it could be a disaster politically because a windfall of this magnitude is only possible because the former NDP government built the Keeyask generating station.

Ever since 2016, the Tories have been bludgeoning the NDP for cost overruns at Keeyask and the accompanying Bipole III transmission line. Former premier Brian Pallister went as far as to claim the NDP’s mismanagement of the projects was the "scandal of the century" in Manitoba politics.

Given that the two projects were $3.7 billion over budget, the NDP’s record of Keeyask and Bipole III cannot be defended. The cost overruns drove Hydro debt to historic new levels and triggered increases in electricity rates.

However, as Keeyask was brought fully into service, the benefits have started to come into focus.

Keeyask allowed Hydro to sign new, long-term export contracts with Wisconsin, Minnesota and Saskatchewan, the latter a $5-billion deal that is the richest in the utility’s history. And once new contracts were in place, Hydro was then able to strike a side deal to build a new high-capacity transmission line into Minnesota.

The line allows Hydro to serve its firm contract customers and export much more electricity into the lucrative spot market than it would with the old transmission line. As well, the line has turned out to be a saviour for the province when droughts require Manitoba to import electricity. Last year, the new line to Minnesota allowed the utility to buy enormous quantities of electricity cheap during non-peak hours to supplement domestic generating capacity.

The truth the Tories would prefer you don’t know is that without Keeyask, Manitoba could not have reached a deal to build the high-capacity transmission line. And without that line, Manitoba wouldn’t have the excess electricity, or the transmission capacity, to sell into the current, overheated spot market.

How committed are the Tories to keeping this story under wraps?

Even though the final two turbines at Keeyask were commissioned in late March, neither the government nor Hydro issued a news release to mark the historic occasion. A Hydro spokesman said the utility wanted to wait until all seven Keeyask turbines were in use, which did not happen until June 7.

The spokesman said a more formal announcement would be made in the coming weeks. But if past practice around milestones like the Saskatchewan export contract are any indication — government made no attempt to celebrate the accomplishment — it will be profoundly subdued.

This is a good news story that runs headlong into a political narrative the Tories expected to lean heavily on in the 2023 election. Now that Keeyask is paying off, Stefanson and the Tories are at risk of losing that narrative.

The hardest of the hardcore Tories will never forgive the debt that accrued from Keeyask and Bipole. But the numbers don’t lie; Keeyask is paying off in very lucrative ways.

Politicians rarely worry about which government or party started a project when it’s a good news story. If the Tories viewed Keeyask as a good thing, there is no doubt Stefanson would be making an appearance sometime this summer in northern Manitoba to flip the switch on Keeyask’s seven turbines.

But that’s not going to happen because Keeyask is more valuable to the Tories as a political weapon, and less as a financial windfall.