Hydro reports $446-M loss in 2025-26, points to fourth drought year in past five

Manitoba Hydro posted a $446-million loss in 2025-26, as drought conditions slashed hydroelectric generation, forcing the Crown corporation to buy more power while leaving it with less electricity to sell outside the province.

The loss was $666 million worse than the $220-million profit Hydro had budgeted. The utility posted a $63-million loss the previous year, according to the utility’s annual report released Tuesday.

Hydro said the 2025-26 fiscal year, which ended on March 31, marked its fourth low-water year in the past five years, among the worst stretches of water-flow conditions in its recorded history.

Hydroelectric generation fell 23 per cent to 24 billion kilowatt-hours from 31 billion the previous year, leaving Hydro a net importer of electricity.

Fuel and purchased-power costs climbed to $529 million — $347 million over budget — while revenue from electricity sales outside Manitoba fell 34 per cent, to $569 million from $860 million.

The utility also incurred $52.2 million in costs related to Manitoba’s severe wildfire season, including repairs and replacement of damaged infrastructure, additional contractors, overtime and employee travel.

Hydro’s total debt increased by about $1.2 billion during the year, reaching $26.55 billion as of March 31.

The Crown corporation said it recorded a cash deficiency from operations for the third consecutive year and increased its borrowing to maintain liquidity, fund operations and pay for capital investments.

Hydro spent $742 million on additions, improvements and replacement of existing electrical infrastructure during the year, up from $645 million in 2024-25. It expects to invest nearly $17 billion in Manitoba’s energy system over the next decade.

Electricity rates for most customers increased four per cent on Jan. 1.

Meanwhile, the Crown corporation said there was some good news heading into 2026-27, as spring inflows had improved and reservoir levels were slightly above average. Assuming normal precipitation, it expected hydraulic generation to come in close to budget.

But the company warned summer and fall precipitation can materially change both generation and its bottom line, so the financial outlook remains uncertain.

The report comes just a month after Hydro president and CEO Allan Danroth stepped down, citing personal reasons just two years after he was hired.

His departure surprised some onlookers, and came while the Public Utilities Board was nearing the end of six weeks of hearings that scrutinized Hydro’s energy plans over the next decade, including three proposed natural gas-powered turbines in Brandon at an estimated cost of $3 billion.

Chief operating officer Hal Turner was appointed interim president and CEO ahead of a national and international search for a replacement.

scott.billeck@freepress.mb.ca