NDP commits to freezing electricity rates for 1 year

Manitoba's Opposition New Democrats are confident they'll be able to freeze hydroelectricity rates for one year if they win the Oct. 3 provincial election.

NDP Leader Wab Kinew said he would reduce the annual fees that Crown-owned Manitoba Hydro pays the government by $37.5 million and dip into the contingency funds in the provincial budget.

He said the two measures should convince the independent energy regulator, the Public Utilities Board, that rates should stay the same.

"We're going to work with Manitoba Hydro to make sure that their financial situation is strong and then we're going to make for these accounting changes on the government side so we can go back to the Public Utilities Board in a fair and open process and say,'Here's how we get to a rate freeze for Manitobans.' We think this is well-deserved.

If elected, Kinew said the NDP would guard against significant rate hikes in the future by continuing to reduce those annual fees by $37.5 million. The money would likely come out of the debt guarantee fee, which is a levy the province charges on Hydro's total debt.

WATCH | NDP says rate freeze won't hurtHydro's financial books:

Hydro's finances won't be affected by rate freeze, NDP leader says

1 year ago

Duration 0:29

NDP leader Wab Kinew says his government's measures to support a one-year electricity rate wouldn't negatively impact the Crown corporation's bottom line.

The Progressive Conservative government recently cut two of thoseannual fees in half, keeping $190 million in Manitoba Hydro's coffersand prompting the utilityto revise its desired rate increases downward but still ask for an increase.

The Crown corporation has said it needs annual increases of about two per cent for the next several years.

Existing budget can support rate freeze: NDP

Kinewsaid the government has the means within its existingbudget to support an electricity rate freeze, as well as thetemporary suspension of the provincial gasoline tax the NDPpromised on Monday.

The province has $521 million set aside for "contingencies and unanticipated events" and more than $200 million of contingencies around capital investments, according to the 2023 budget.

"I can think of no greater contingency that we should be preparing for than to help the average Manitoban during this period of high inflation," Kinew said.

Manitoba Hydro has faced financial challenges and a high debt load due in part to cost overruns under the former NDP government from the construction of a generating station and a major transmission line.

Moody's, an international credit rating agency, warned more than a year ago that recent electricity rate hikes had not been high enough to keep up with rising costs and debt servicing.

The Progressive Conservatives warned that a short-term rate freeze would cause long-term problems.

"Wab Kinew's temporary fake freeze today will cost you more tomorrow, and distracts from his party's failures the NDP tripled Manitoba Hydro's debt," Spruce Woods MLA Cliff Cullen said.

Manitoba Liberal Leader Dougald Lamont said the NDP shouldn't be celebrated for taking less money out of Hydro.

He alleged the utility, which is $24 billion in debt, has more pronouncedfinancial struggles because successive NDP and PC governments have been "skimming cash off Hydro for years without anybody noticing."

The various fees have cost Hydro a few hundred million dollars annually.

Any rate freeze wouldn't take effect until 2025-26 at the earliest.

The Public Utilities Board still needs to rule on Hydro's request to increase electricity rates by twoper cent annuallyfor the next two years. Kinew said a NDP government would respectthe regulator's decision.

The NDP also committed on Tuesday to rescind Bill 36,legislation from the PC government that moves electricity rate-setting from an annual to a multi-year process.

The provincial election is on Oct. 3.