Hydro seeks 2.9 per cent rate increase

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This article was published 10/03/2011 (5597 days ago), so information in it may no longer be current.

MANITOBA Hydro wants a 2.9 per cent rate increase effective April 1, before the public regulator has fully digested whether such a hike is warranted.

The Crown utility recently made the demand of the Public Utilities Board for an interim increase when it became clear hearings into the ongoing rate application will now drag into the summer and perhaps longer. The PUB already approved an interim 2010 rate hike of 2.8 per cent. The additional 2.9 per cent increase would mean, for example, someone living in a three-bedroom bungalow would pay about $2 a month more.

“We’re asking for an interim increase as of April 1 of this year rather than waiting for the end of the hearing, which could stretch into July or perhaps August,” Hydro spokesman Glenn Schneider said Wednesday.

The reason for the delay is because the PUB is taking an unprecedented look into the inner workings of Hydro as it heads into the next 10 years to build two new dams and the Bipole III transmission line under an ambitious plan to export more power to the United States. The PUB wants to satisfy itself Hydro has properly examined the risk of its plan, especially if there’s a drought.

Those concerns were raised several months ago when a fired consultant claimed Hydro risked power outages and the loss of millions of dollars. The consultant’s claims have been dispelled by two independent reviews.

Schneider said the rate increase is needed so Hydro can properly finance its multibillion-dollar dam development plan.

“We don’t want to be in a situation where we’re coming to the PUB in an urgent situation,” Schneider said. “We don’t want to be under the gun in terms of our financial needs. We want to have a stable, reasonable increase in our rates over a long period of time so that we don’t have a rate shock for our customers.”

By comparison, Schneider said, B.C. Hydro is asking for a rate increase of nine per cent in each of the next three years.

Gloria Desorcy, executive director of the Manitoba branch of the Consumers’ Association of Canada, said the PUB should hold off raising power rates. Lawyer Byron Williams of the Public Interest Law Centre presented the association’s case to the PUB Wednesday.

Over the past six years, Desorcy said, rate increases have been about 45 per cent above inflation in Manitoba.

Looking ahead, she said Hydro’s forecasted rate increases for the next nine years will amount to 67 per cent above inflation.

“We’re just feeling that on behalf of consumers, and we’re hearing from consumers, that this is just not sustainable for them,” she said. “This is really becoming more than they can handle.”

Manitoba Hydro contends its rates, even with the increases, are still one of the lowest, if not the lowest, in North America.

Desorcy also said consumers are paying for dam-building projects, Keeyask and Conawapa, that are years away from being built and are contingent on whether Manitoba Hydro can ink long-term export deals with Minnesota and Wisconsin.

“If they don’t sign those contracts, Hydro is not forecasting the need to build Keeyask in the next 20 years, but these things are already affecting rates,” she said.

Schneider said talks with Minnesota and Wisconsin continue.

“I think we’re very close to finalizing an agreement with Minnesota Power,” he said, adding the $3.5-billion Keeyask generating station would be triggered by that agreement.

bruce.owen@freepress.mb.ca