Winnipeg Free Press - PRINT EDITION
Posted: 12/11/2012 1:00 AM | Comments: 0
Last Modified: 12/11/2012 11:26 AM | Updates
MANITOBA Hydro wants its customers to pay more for keeping the lights on.
The province's power utility and the arm's-length Public Utilities Board began the first day of hearings Monday on Hydro's request for a 3.5 per cent rate increase as of April 1.
Hydro also signalled it wants increases of 3.95 per cent in each of the remaining 18 years of its 20-year financial forecast -- a forecast that includes the building of the Bipole III transmission line down the west side of the province, two massive generating stations in northern Manitoba and an overhaul of its other dams, transmission lines and substations built decades ago.
Hydro president and chief executive officer Scott Thomson said Hydro needs the extra money from rates to offset an estimated $2.9-billion loss in forecast revenue over the 20-year period.
"The revenue stream that we had been expecting to help underwrite some of the capital development, and some of our overall requirements, has declined," Thomson said Monday.
When Hydro first put the idea out four years ago it needs a steady series of rate hikes over the next decade, it was pegged at about three per cent every year.
But that was before the global recession hit and sidelined export power sales to the United States. It also came just as the shale gas boom exploded in North America and flooded the market with cheap natural gas to compete against Hydro's electricity.
The result hasn't been pretty for Hydro's bottom line. In its most recent financial report, Hydro saw a net loss on consolidated electricity and natural gas operations of $43 million for the first six months of this fiscal year, compared to net income of $13 million for the same period last year.
Hydro has also revised the construction costs for the Keeyask and Conawapa generating stations.
Conawapa's estimated in-service cost of $7.8 billion in 2025-26 has gone up $2.4 billion and Keeyask's estimated in-service cost of $5.6 billion in 2019-20 has gone up $600 million.
"What we have experienced over the last five, six, seven years is that construction and labour rates have been substantially higher than inflation," Thomson said, adding Conawapa's costs have gone up partly because it's been pushed back one year.
The PUB has already granted Hydro a two per cent hike last April and another 2.5 per cent increase in September.
Byron Williams, who represents the Manitoba branch of the Consumers' Association of Canada, told the three-member PUB panel if Hydro gets its wish of a 3.5 per cent hike, Manitobans will be paying eight per cent more on their Hydro bills in just one year.
Hydro says the rate increases are modest and only add a few dollars a year to the average residential user's bill -- and still keep its rates among the lowest in North America.
Manitoba Keewatinowi Okimakanak, which represents most First Nations in the province's north, and the Manitoba Industrial Power Users Group also oppose Hydro's rate request.
The GAC said it's concerned energy conservation will suffer with the building of two new dams.
It says Hydro should put more focus on other forms of renewable energy such as wind, solar, geothermal and electric vehicles.
Republished from the Winnipeg Free Press print edition December 11, 2012 A5
Updated on Tuesday, December 11, 2012 at 11:26 AM CST: Removes GAC from list of groups opposed to the rate hike.
Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.
Having problems with the form?Contact Us Directly
Bookings altered for Redford flights: report
Shelling adds to mounting civilian toll in Ukraine
Collision kills driver on Highway 10
Manitoba's phone-based health advice service celebrates 20th anniversary
New affordable housing agreement signed
Runway at Winnipeg airport reopening after repair work
Canada's Damian Warner, Jim Steacy win gold
Cochrane wins 2nd gold at Commonwealth Games
Hughes renews call for children's advocate independent of government
Man found by firefighters identified
Steeves proposes halving malathion buffer zones
Canada plans new sanctions against Russia
Israel hits symbols of Hamas rule; 128 killed
Sixth and last suspect being sought in Polo Park robbery, confinement case
Moore out, Kelly in against Ti-Cats
Salaries of First Nation leaders online
5 food writers subpoenaed in 'pink slime' lawsuit
Canadian wrestlers win 2 gold in Glasgow
Suzuki recalls nearly 26,000 cars for fire risk
China investigating Microsoft in monopoly case
One Bad Son plays some feel-good rock at News Café
Sam factor prepares Rams for sensitivity session
Filmmaker finds beauty in decay in doc-style music video about Winnipeg
Vegas illegal betting suspects freed from custody
Appeals court upholds labels on meat packages
Trump says his Buffalo Bills bid unlikely to win
Jets sign Frolik to one-year deal
Elegant Louvre Garden in Paris infested with rats
Jury awards Ventura $1.8M in defamation case
Hungry cat wakes owner before home burns
Cyclist made tourniquet from pants after shooting
Beautiful day, and week, ahead
Teacher who survived Sandy Hook has book deal
Legendary pitcher Jenkins sees familiar dreams at Shaw Park
Study: 35 per cent in US facing debt collectors
Suicide bomber kills Afghan president's cousin
Hajrullahu named special teams player of the week
Ripe for the pickin': berry growers and eaters enjoy a plentiful season
Whale-watching Ontario family stranded at sea