Winnipeg Free Press - PRINT EDITION

Rate shock

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Manitoba Hydro ratepayers have been slapped with increases totalling 4.5 per cent for electricity this year. The increases are "interim" -- to be confirmed, or not, when a prolonged dispute between the Crown utility and its rate regulator is settled. This is a clumsy and expensive way to charge Hydro's customers.

The Public Utilities Board this week allowed the 2.5 per cent increase, to kick in Saturday, because it wanted to prevent rate shock next year, when another requested increase is decided. The increases this year follow an earlier hike, the revenues from which were ordered stashed in a holding account -- perhaps returned to customers -- until the utility's general rate application before the PUB is finally settled. That process is awaiting a hearing on a dispute over whether the PUB is entitled to the details of Hydro's export contracts with customers south of the border.

The PUB is concerned about the massive cost and debt Manitoba Hydro is facing as export prices fall and rising costs for its capital program. The new Wuskwatim dam is operating at a loss right now, it notes. Further, Hydro wants to build the Conawapa and Keeyask dams, for export purposes, despite some projections showing the market for that is risky.

Some of the $20 million in additional income the interim increases will produce are to cover the "pre-build" costs of those projects, projects that many believe are too risky, too costly. The PUB has said Hydro's entire capital program should be put to a vigorous independent review. Premier Greg Selinger should waste no time in doing exactly that.

Editorials are the consensus view of the Winnipeg Free Press’ editorial board, comprising Gerald Flood, Catherine Mitchell, David O’Brien and Paul Samyn.

Republished from the Winnipeg Free Press print edition August 31, 2012 A12

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