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A lower hydro rate class created by the Public Utilities Board specifically to assist First Nations residential customers has been struck down by the province’s highest court.
The rate class — which was created in 2018, freezing electricity rates for customers living on the province’s reserves at 2017 rates — was unanimously tossed out by the Manitoba Court of Appeal in a 35-page written decision released Wednesday.
"I am of the opinion that the PUB exceeded its jurisdiction," Madam Justice Diana Cameron wrote.
Cameron said while the PUB — an independent quasi-judicial administrative tribunal — has the power to consider social policy and bill affordability in its decisions, it doesn’t have the authority "to direct the creation of customer classifications implementing broader social policy aimed at poverty reduction and which have the effect of redistributing Manitoba Hydro’s funds and reserves to alleviate such conditions."
"The directive constitutes a realm that is reserved for the federal and provincial governments," she wrote.
Cameron also noted the on-reserve class rate freeze meant all other Hydro ratepayers would have to pay more for their electricity to cover the reduction, while adding the federal government already pays the hydro costs of people living on reserve who receive employment income assistance.
"Thus, the directive may actually, in some cases, amount to a subsidy to the federal government and not provide relief to ratepayers in the on-reserve class."
In a statement, Grand Chief Arlen Dumas of the Assembly of Manitoba Chiefs expressed disappointment.
"This decision by the court not only goes against the letter and principle of substantive equality, it also goes against the spirit and intent of this legal and social concept as it relates to First Nations," Dumas said.
"This decision of the court represents an impoverished view of substantive equality and does not take into consideration historic disadvantage and discrimination experienced to different degrees by all First Nations," he said.
"The AMC maintains the view that the PUB was within its mandate to attempt to achieve equality and fairness for First Nations on-reserve residential Hydro customers, given the exceptional histories and circumstances of First Nations within this province and in keeping with the principles set out in the Path to Reconciliation Act."
Dumas said he will be speaking to the AMC executive council for direction on pursuing the action further.
When the PUB created the new rate class in 2018, while First Nations customers had their rates frozen at 2017 levels, most residential customers saw a 4.04 per cent increase — instead of a 3.92 per cent increase without the freeze.
It was estimated at the time the new rate class would save First Nations residents about $2 million a year.
Then-Hydro president and chief executive officer Kelvin Shepherd said the PUB had not only exceeded its jurisdictional authority but also contravened the utility’s legislative requirement to have uniform rates for all residential customers no matter where they lived in the province.
Hydro spokesman Bruce Owen said Wednesday the utility now considers the matter closed.
"The financial implications and impact on customers will be determined in the next few days," Owen said.
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