Manitobans will soon see their hydro bills rise for the second time this year. And, if Manitoba Hydro projections prove correct, provincial electricity rates will continue to climb substantially over the next decade.
The latest hike -- a 2.5 per cent interim increase approved by the Public Utilities Board (PUB) on Wednesday -- comes just months after the Selinger government passed a law guaranteeing Manitobans continue to pay the lowest combined price in Canada for hydro, natural gas and auto insurance. The "interim" designation means the hike is expected to be confirmed by the PUB in the new year after hearings that begin in December.
Dave Chomiak, minister responsible for Manitoba Hydro, argues that even with the latest increase, which takes effect Saturday, the province's consumers are getting a break on electricity prices. "We have the lowest rates in the country," he said.
Colin Craig, Prairie director of the Canadian Taxpayers Federation, said Manitoba is at risk of losing its No. 1 rate status if the latest electricity hike leads to larger ones in the future.
"We do pay low rates for power, but we are at risk of some major increases if Hydro isn't careful," he said. "This is one of the first steps that could lead to major increases if due diligence doesn't occur."
The latest rate increase follows a two per cent hike this past April. And the pain for consumers might not end there. In December, the PUB is holding hearings to decide whether to approve a further 3.5 per cent rate increase to hydro effective next April.
Byron Williams, lawyer for the Manitoba branch of the Consumers Association of Canada, said such increases are tough on consumers.
"Whether you're on a fixed income or not, most consumers aren't seeing their incomes rise by anywhere near that level," he said Wednesday.
Progressive Conservative Leader Brian Pallister has called on the PUB to freeze hydro rates until there is a full independent and transparent review of Hydro's ambitious expansion plans.
"It's a sad day for Manitoba ratepayers and for Manitoba taxpayers in general," Pallister said of Wednesday's interim rate increase. "It's another step down the NDP path towards very significant hydro rate increases."
Hydro intends to build two large northern dams and a new transmission line from the north in the next dozen years. These plans come at a time when export demand and prices for electricity are soft. That's created uncertainty and concern about what kind of rates Manitobans will be forced to pay in the future.
Manitoba Hydro projected earlier this year it will require annual rate increases of 3.5 per cent through 2022. Hydro customers, including businesses and industrial users, now pay $1.5 billion a year to the Crown corporation. By 2022, it's estimated Hydro will require revenues of $2.4 billion a year.
While Manitobans can expect their electricity bills to continue to go up, there's better news in the areas of auto insurance and gas prices.
Manitoba Public Insurance hasn't boosted its overall auto insurance rates since 2004. In recent years, its rates have either fallen or been flat. In addition, it has paid out hundreds of millions of dollars in rebates to policyholders. In June, MPI proposed to the PUB keeping rates flat next year.
Meanwhile, Manitobans' natural gas bills tend to fluctuate greatly, but, overall, heating rates have not risen considerably in recent years. A 2.9 per cent hike approved for Centra residential customers this month followed an 8.6 per cent drop in rates in May.
MPI % rate changes:
2012 -6.8 per cent (proposed)
2011 -4.0 per cent
2010 0.0 per cent
2009 -1.0 per cent
2008 0.0 per cent
2007 -2.6 per cent
2006 0.0 per cent
2005 -1.0 per cent
2004 3.7 per cent
2003 -1.0 per cent
2002 0.0 per cent
2001 0.0 per cent
2011 $336 million*
2008 $63 million
2007 $60 million
2006 $58 million
2001 $80 million
*$16 million additional rebates pending PUB approval
Centra Gas residential rate changes*:
Aug. 1, 2012 2.9 per cent
May 1, 2012 -8.6 per cent
Nov. 1, 2011 -2.2 per cent
Aug. 1, 2011 1.8 per cent
May 1, 2011 -3.0 per cent
Feb. 1, 2011 2.0 per cent
Aug. 1, 2010 -1.0 per cent
Feb. 1, 2010 2.9 per cent
Nov. 1, 2009 -6.3 per cent
Aug. 1, 2009 2.4 per cent
May 1, 2009 -7.5 per cent
*Expressed as an annual percentage
Manitoba Hydro rate changes:
Sept. 1, 2012 2.5 per cent
April 1, 2012 2.0 per cent
April 1, 2011 2.0 per cent
April 1, 2010 1.9 per cent
April 1, 2009 2.9 per cent
July 1, 2008 5.0 per cent
-- source: Public Utilities Board of Manitoba, Manitoba Public Insurance