Manitoba Hydro has signed a tentative deal with Xcel Energy of Minnesota to export $2.2 billion in hydroelectric and wind power, extending Xcel's current 10-year deal with Hydro.

The deal was announced Friday between Hydro and Northern States Power Co.–Minnesota, an Xcel Energy company.

The deal still requires approval by public utilities boards in Manitoba and Minnesota, as well as the National Energy Board of Canada.

Manitoba Hydro president Bob Brennan said Friday about 95 per cent of the 375 megawatts of power Hydro will sell to Xcel will be hydroelectric. The remainder will come from wind sources.

The current contract, which covers the period from 2005 to 2015, is worth $1.7 billion. The deal announced Friday, which will extend Hydro's relationship with Xcel until 2025, should be finalized by mid-2007, Brennan said.

"This is an excellent opportunity for Manitoba Hydro, Xcel Energy and an overall benefit to the environment," Brennan said in a release Friday.

"As a preferred supplier, Manitoba Hydro continues to power an important export market, while Xcel gains reliable, cost-competitive energy. And we are able to do this while reducing greenhouse gases."

Officials with Xcel say the deal is major, providing 375,000 customers in Minnesota, North and South Dakota and parts of Wisconsin with power for an entire year.

Xcel Energy is a Minneapolis-based electricity and natural gas company that has about 3.3 million electricity customers through its regulated operations in eight western and midwestern states.

Premier Gary Doer said Friday that Hydro's latest deal vindicates the province's decision to build hydroelectric plants in the first place.

"The sales produce benefits for lower rates and therefore more economic activity right throughout our province," he said.

But provincial Conservative Leader Hugh McFadyen said the province is celebrating a bit prematurely, since the sale still has to be approved at so many levels.

"What we have today is a term sheet, and a term sheet is essentially a cocktail napkin with terms written on it," McFadyen said.

Doer said he is confident the deal will go ahead, pointing to previously approved deals with Xcel.