Manitoba Hydro's 2.5% rate hike approved

Get ready to pay more for hydroelectricity starting this weekend: the Public Utilities Board has approved an interim rate hike of 2per cent for all Manitoba Hydro customers starting Sept. 1.

The rate increase, which is on top of atwo per cent hike that was approvedthis spring, is intended to help Manitoba Hydro's bottom line as the Crown corporation deals with financial stresses such as low export prices and cost overruns related to the Wuskwatim hydroelectric dam.

The latest rate increase works out to an extra $50 a year for the average household.

Byron Williams of the Public Interest Law Centre says it could really hurt Manitobans living on fixed incomes.

"It is a lot of pressure to put on persons who are already facing significant cost stresses," Williams told CBC News.

Manitoba Hydro officials say there was no way they could have predictedthe downturn in the export market.

At the same time, they note that Manitobans still pay the lowest hydro rates in Canada.

But Williams warned that rate hikes expected over the next decade could enter the double digits.

"These are concerning times for Manitoba Hydro ratepayersnot just in the short term, but looking out into the future," he said.

"There's likely to be significant rate pressure on consumers for the next decade."

There are no plans to postpone any new multimillion-dollarhydroelectric projects,Hydro officials add.

The PUB is currently holding public hearings into Hydro's rates, with a final ruling expected in 2013.