Hydro seeks 3.5% electricity rate increase next year instead of nearly 8%

Manitoba Hydro is scaling back its rate hike request for next year, instead of the annual 7.9 per cent hikes the Crown corporation previouslysaid itwould need until 2023-24 to address debt.

Hydrois askingthePublic Utilities Board for a 3.5 per cent rate increase next year, which would take effect onApril1.

In last week's application, Hydro said its new board is reviewing the corporation's financial picture. Once that is complete, the utility expects to submit a new multi-year rate application in late 2019 that addresses the organization's long-term future.

"It'stoo speculative at this point to discuss any possible future rate increases," spokesperson Bruce Owen said in an email.

The proposedincrease next yearis nearlyin line with the Public Utilities Board's decision to allow an average3.6 per cent jump in electricity rates in 2018-19, which began thissummer.

TheNDPleft us with an insurmountable problem we're trying to fix that.-Crown Services Minister Colleen Mayer

"The requested 3.5 per centrate increase generates a modest level of net income under average water flow conditions that will assist in gradually building the revenue base and reduce the risk of the corporation incurring a loss" in 2019-20,the rate application said.

If approved, consumers would face their second rate increase from Hydro in under a year.

Crown Services Minister Colleen Mayer said she'ssympathetic to customers bracing foranother rate increase that far exceedsthe rate ofinflation.

"I hear that, very clearly," she said. "The NDPleft us with an insurmountable problem we're trying to fix that."

Next year's rate increase is projected to bring in $59 million ofrevenue, boosting the Crown corporation'sfinancial reserves by $31 million.

Without it, the utility would deal with a net loss, it said.

Cancel public hearing: Hydro

This time, Hydro officials areasking PUB to forgoa public hearing, suggesting neither itself nor the board has the resourcesfor alengthy six- to nine-month process to review an application where not much has changed financially and would generate a "minimum level of net income," Hydro said in a letter to the board.

The short-term rate relief, the letter recommends, should be "awarded in a timely and cost-effective manner, recognizing that the corporation's long-term financial forecasts will be finalized and available for review" in late 2019.

Hydro's net income next yearwill belower than projected, the rate application said, due to a reduction in export sales and increases in depreciation and financing costs from Bipole III.

NDPLeader Wab Kinewsaid the province is forgetting the purpose of Manitoba Hydro, which is to provide affordable, clean energy.

"Even though they had a total implosion of their previous board, on this very issue, they haven't learned lessons and they continue to be cheerleaders for these rapid rate increases," Kinew said, referring to the exodus of every board member but one earlier this year.

On natural gas, Manitoba Hydro is askingPUBforno rate increase for the next two years.

There will, however,be some changes in rates in different customer classes, Owen said, resultingin modest rate reductions for mainly residential customers and increases for customers who use a lot ofnatural gas.

The corporation also wants to stop collecting fees to support the furnace replacement program. The initiative will continue with existing fees.

Hydro seeks 3.5% electricity rate increase next year instead of nearly 8%

6 years ago

Duration 2:02

For now, Manitoba Hydro is scaling back the nearly eight per cent rate hike the utility previously said it would need year after year.