Hydro calls proposed 11 per cent rate hike ‘a balanced approach’

An electricity rate hike of nearly 11 per cent over three years is needed to cope with drought-related financial losses, replace infrastructure and satisfy future energy demands, Manitoba Hydro argued Tuesday.

The Crown corporation said average residential bills will rise by up to $12 to $22 per month over the period, if the Public Utilities Board approves the proposal.

“We’ve taken a balanced approach to this rate ask in order to be what we feel is the minimum rate necessary to maintain the financial health of the corporation, and to balance the other priorities of repairing and replacing aging infrastructure, and developing new resources to meet the growing needs of Manitobans,” Hydro spokesman Peter Chura said after the utility presented its case at a PUB hearing Tuesday.

“We’ve taken a balanced approach to this rate ask in order to be what we feel is the minimum rate necessary to maintain the financial health of the corporation.”

Manitoba’s energy regulator will hear from the Consumers Coalition on Thursday. The coalition of four non-profit groups opposes hikes of 3.5 per cent in each of the next three years (a cumulative total of 10.9 per cent).

The NDP government froze Hydro rates in 2025. The last increase was one per cent in April 2024. Any new rate changes approved by the PUB would take effect Jan. 1, 2026.

Manitoba will still have the second-lowest residential electricity rates and the lowest commercial and industrial rates in Canada if the proposed increase is approved, Hydro told the PUB.

The utility is projecting a net income loss of $409 million in the current fiscal year due, in part, to drought and export prices.

It is preparing for continued drought next year after low water levels in four of the last five years.

Annual rate increases below 3.5 per cent would result in cash flow shortfalls and increased debt, Chura said.

Hydro’s application to the PUB said it must spend $31 billion over 20 years to maintain and upgrade its infrastructure and expand electricity-generating capacity.

Chura said the utility will face a capacity shortfall during peak times in four to six years unless it develops new resources. Other challenges include inflation-related cost increases, the utility said.

The Manitoba government has proposed a $3-billion combustion turbine facility in Brandon to generate 750 megawatts of power. It is partnering with Indigenous groups to add 600 megawatts of wind energy.

In a statement, the Consumers Coalition said Hydro, a “Crown-owned monopoly,” failed a duty to demonstrate to Manitobans that it has taken all reasonable measures to constrain costs before seeking a rate increase of this magnitude.

The coalition, which is an intervener in the PUB hearing, accused Hydro of having unreasonable operating and administrative cost increases and failing to reduce spending in response to drought. It also said Hydro has immature asset management and capital planning processes.

“Recognizing that ratepayers ultimately pay the price, rates should be set on what we know, including necessary financial risk management in the face of drought, rather than what Manitoba Hydro would like us to believe.”

“Recognizing that ratepayers ultimately pay the price, rates should be set on what we know, including necessary financial risk management in the face of drought, rather than what Manitoba Hydro would like us to believe, which is grounded in significant uncertainty and may still change materially,” said the coalition, which is made up of Harvest Manitoba, the Aboriginal Council of Winnipeg, Manitoba Seniors Equity Action Coalition and the Manitoba branch of the Consumers’ Association of Canada.

Hydro lawyer Gwen Muirhead told the hearing the Crown corporation has taken appropriate and reasonable action to manage costs.

Keystone Agricultural Producers general manager Colin Hornby asked the PUB to hold rates steady when he made a presentation last week.

“Farmers are already dealing with significant other cost pressures,” he said Tuesday, citing fuel, labour, taxes and tariffs as examples.

“The relative low cost to Hydro is one of the few advantages Manitoba has in terms of attracting investment — for example, food processors or others in the ag value chain. We want to make sure that’s something we continue to maintain.”

At an earlier hearing, the Manitoba Non-Profit Housing Association advocated for targeted measures to address energy poverty amid rent increases.

“The relative low cost to Hydro is one of the few advantages Manitoba has in terms of attracting investment.”

Executive director Christina Maes Nino told the Free Press the organization is seeking more affordable housing units that are energy efficient.

“When these costs go up, we know they get passed down to tenants,” she said. “That’s a challenge for tenants who are needing to choose between paying for rent, paying their utility bills, buying food, buying medicine.”

Hydro offers a number of bill relief programs, including a one-time support grant for residential customers who have overdue bills, Chura said.

Manitoba Eco-Network executive director James Beddome said Hydro wants to increase rates, in part, to spend billions on “dirty and expensive” gas plants the province doesn’t need.

“The province’s integrated plan for meeting our electricity needs should be finalized and reviewed by the PUB before deciding what alternatives are best,” he said.

chris.kitching@freepress.mb.ca