Winnipeg Free Press - PRINT EDITION

Arguments heard for, against Hydro rate hike

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Manitoba's Public Utilities Board was told Monday it should reject Manitoba Hydro's request for a 3.5 per cent rate hike because the Crown utility hasn't made a convincing case it needs the extra money.

The three-member PUB panel also heard Hydro should put more resources into its energy-conservation programs so more Manitobans will cut back their power consumption, allowing more excess electricity to be sold to the United States.

Gloria Desorcy, executive director of the Manitoba branch of the Consumers' Association of Canada, said Hydro has already secured two interim increases from the PUB this year totalling 5.5 per cent, and an additional 3.5 per cent increase effective April 1 is too much for Manitobans to pay.

"Are they looking internally, which is what I believe other companies do to see if they can cut their costs, before they turn to their customers to look for a rate increase?" Desorcy said. The consumers' association, the Green Action Centre and the Manitoba Industrial Power Users Group (MIPUG) each made their final arguments to the PUB on Monday. Final arguments continue Wednesday.

Manitoba Hydro wants the PUB to approve the 3.5 per cent general rate increase to put more money into its bank account ($197 million) as it prepares to build the $3.820-billion Bipole III transmission line -- an environmental hearing for the project resumes March 4 -- and the Keeyask and Conapawa generating stations, estimated to cost $6.220 billion and $10.192 billion, respectively.

Manitoba Hydro is also seeking final approval of the earlier interim increases approved by the PUB, including a two per cent increase effective April 1, 2012 and a 2.5 per cent increase effective Sept. 1, 2012.

Hydro says even with those increases combined, Manitobans pay the lowest for power in North America.

Included in Hydro's request is for the PUB to release a $23-million pot of money that was created when the PUB ordered a one per cent rate clawback two years ago.

The consumers' association said that money rightfully belongs to ratepayers and should be rebated. It also said Manitoba Hydro could apply to have a portion of that money, but only if it uses it toward improving its energy-efficiency programs. The association also said Hydro has not made a strong enough case for the 3.5 per cent increase, especially at a time when its retained earnings sit at a record $2.510 billion.

The Green Action Centre, on the other hand, supports the 3.5 per cent increase because of the recent hit the utility has taken on the export market and lower forecasted surplus power sales.

Last Friday, Hydro released its third-quarter results, which showed it posted a net loss of $38 million for the first nine months of the fiscal year. Last year, it earned profits of $29 million during the same period.

The Green Action Centre also said it supports a $41-million annual expenditure by Hydro over the next three years to support its energy-efficiency programs, such as more aggressive home insulation and light bulb-replacement programs.

Republished from the Winnipeg Free Press print edition February 26, 2013 A7

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