Manitoba Hydro is raising electricity rates May 1 by 3.5 per cent, taking another $48 million out of ratepayers' pockets. This is an early instalment in dramatic rate hikes to pay for the utility's aggressive plans to build new dams and a transmission line that are blowing past all cost projections.
And here's the rub: A big chunk of the cash will be hived off, on order of the Public Utilities Board, to a savings account to buffer the rate shock that will hit once the Bipole III transmission line comes into service. This year alone, $20.4 million will go into a kitty that will accumulate -- hundreds of millions of dollars -- until 2025.
The PUB ordered the account set up out of pointed concern for Hydro's declining financial health. Debt is rising, revenues falling and costs are up steeply -- in five years, Hydro has hired 771 full-time-equivalent positions, adding $197 million to its payroll. Meanwhile, power sales to the United States have dropped precipitously: Net export revenues are now expected to add up to $5.8 billion by 2029, down from $12.2 billion forecasted four years ago.
Critics have raised alarms about the utility's development plans and the financing implications. A responsible business would cut costs. Instead, Hydro is banking on annual rate increases of 3.95 per cent for the next 20 years.
An obvious cut is to the cost of Bipole III -- $1 billion could be saved by building it on the original route east of Lake Winnipeg. The route was moved west of Lake Manitoba on the edict of an NDP government that caved to environmentalists who lobbied for a wilderness gem that is nevertheless seeing a road carved through it.
The waste is symptomatic of a fiscal culture bred by a government that has proved impervious to the financial burden it loads on ordinary Manitobans. The PUB has given a small taste of the enormous expense of the foolish Bipole III decision. Manitobans should consider the Opposition Tories' promise they would reverse that decision to save them the compounded misery.