Hydro’s financial picture improves

Manitoba Hydro has not only boosted its profit projection for the current year, but its financial performance for the recently completed 2018-19 fiscal year was rosier than earlier forecast.

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Hey there, time traveller!
This article was published 10/04/2019 (1442 days ago), so information in it may no longer be current.

Manitoba Hydro has not only boosted its profit projection for the current year, but its financial performance for the recently completed 2018-19 fiscal year was rosier than earlier forecast.

While its annual report isn’t due for several months, the Crown corporation recently revealed to the Public Utilities Board that profits on the electrical side of its business last year are estimated to be $95 million — up from the $51 million predicted in November.

The Free Press reported this week that according to Hydro’s most recent projections, the corporation is on track to earn a profit of more than $60 million in the current fiscal year (which began April 1) even if the PUB refuses to grant any of the 3.5 per cent increases in consumer electrical rates that it is seeking.

The proposed rate increase, which could take effect as early as June 1, would result in a $3.30 increase on the monthly bill of a residential customer who uses 1,000 kilowatt-hours per month.

The PUB will hold public hearings on Hydro’s rate application starting April 24.

If Hydro gets the entire rate increase it’s seeking, the corporation projects a profit of $115 million for 2019-20. When it filed its rate application with the PUB on Nov. 30, it estimated the increase would take it from a loss position to a profit of $31 million.

The main reasons for the increased profit forecast this year are improved water flows for hydro generation and more attractive export prices for electricity.

However, Hydro spokesman Bruce Owen warned that if the weather doesn’t co-operate in the months ahead, the improved financial predictions for the current fiscal year may not materialize.

“Although at this point in the year it appears that we will have adequate water levels, we cannot predict precipitation, especially through the heavy rain months of May and June, when most runoff to our reservoirs occurs,” he said Wednesday.

Owen also noted that Lake Winnipeg is “two feet (0.6 metres) lower” than it was at this time last year.” Manitoba Hydro has five generating stations on the Nelson River, which drains the lake. And while the Red River is poised to flood this year, sending lots of water into Lake Winnipeg, it only accounts for about 10 per cent of inflows into the lake, Owen said.

Manitoba Hydro has said it will continue to seek a 3.5 per cent increase in electricity rates this year even though its profit projections have improved since it filed its rate application with the PUB last fall. Last year, Hydro received approval to boost rates 3.6 per cent. That increase took effect June 1.

Over the long run, Owen said, the proposed increase will help pay for maintenance and upgrades, which are needed on aging equipment, and buffer customers from future high rate increases as Hydro bears the cost of the Keeyask Generating Station and new power transmission lines.

For a second consecutive day on Wednesday, the NDP Opposition hammered the government in question period about Hydro’s plan to continue to seek a substantial rate hike this year.

“Right now, even after already increasing Manitoba’s hydro bills (last June), the Hydro board that he’s named is asking for a 3.5 per cent rate increase,” NDP Leader Wab Kinew said, referring to Brian Pallister. “Will the premier work with Hydro to ensure that Manitobans’ bills don’t go up this year?”

Pallister responded by saying that the former NDP government needlessly placed the Crown corporation in financial jeopardy by proceeding with new capital projects, such as Keeyask “against all market signals” that new generating capacity was needed.


Larry Kusch

Larry Kusch
Legislature reporter

Larry Kusch didn’t know what he wanted to do with his life until he attended a high school newspaper editor’s workshop in Regina in the summer of 1969 and listened to a university student speak glowingly about the journalism program at Carleton University in Ottawa.

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