July 8, 2020

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Opinion

COVID-19 diverts attention from Bill 44

On April 15, with the province in pandemic-related lockdown, the Progressive Conservatives tried to pass Bill 44, The Public Utilities Ratepayer Protection and Regulatory Reform Actin an emergency sitting of the legislature. The bill introduces significant changes to the Public Utilities Board Act, the Manitoba Hydro Act, the Manitoba Public Insurance Corporation Act and the City of Winnipeg Charter.

The emergency sitting was ostensibly required to pass legislation to deal with the pandemic. But the Pallister government also tried to pass eight other bills, including Bill 44, none of which had anything to do with the pandemic. The Opposition NDP was able to convince the PCs to deal only with the legislation relative to COVID19. This was not the first time the sitting government tried to rush legislation through without debate. 

Bill 44 clearly undermines the Public Utility Board’s ability to protect the public interest.  

The board currently regulates retail electricity rates and oversees approval of capital projects. In 2014 it reviewed Manitoba Hydro’s preferred plan, which included the Keeyask and Conawapa generating stations. Five organizations were granted intervenor status and eight independent expert consultants provided testimony before the panel approved the Keeyask and the 750-megawatt U.S. transmission interconnection projects.

Hydro’s estimates for the amount of debt it would take on for Keeyask were approved by the board. Financing was raised in the normal matter, despite the government's current angst over the state of the utility’s debt-to-equity ratio. Since taking power and re-populating the Hydro board, the PCs' 2017 attempt to significantly increase hydro rates to pay down Hydro’s debt was thwarted by the PUB, partly based on the testimony of intervenors such as Winnipeg Harvest.

Bill 44 will restrict the PUB’s ability to control rate increases. It brings in a transitional period ending March 31, 2024, during which time cabinet – after consulting with the minister and the PUB — can increase Hydro rates to any level.  It can do so without independent expert or consumer testimony from stakeholders such as Manitoba Keewatinowi Okimakanak or Winnipeg Harvest.

Hydro rates could increase as much as 7.9 per cent peryear, as per Manitoba Hydro’s 2017 proposal that was rejected by the PUB.  Once the transitional period is over, rate increases will be capped at four per cent.

Bill 44 foregoes the PUB’s ability to protect ratepayers, in favour of allowing the corporation to achieve targeted debt-to-capitalization ratios. It can raise rates to whatever amount is required to meet the targets, despite the PUB’s recent rejection of Hydro’s claim that it was in financial trouble.

Bill 44 also stipulates that "Rates for different customers or classes of customers must not differ based on affordability or other socio-economic factors." This amendment is clearly in response to the PUB’s 2017 recommendation that Hydro establish a lower First Nations On-Reserve Residential class rate. The Board was moved by testimony presented by First Nation intervenors. Hydro subsequently instigated legal proceedings against the ruling.

On June 9, the Manitoba Court of Appeal ruled in favour of Manitoba Hydro and, by extension, against First Nations communities that have suffered so much damage from Hydro development and pay extraordinarily high heating costs. 

Finally, amendments to the Manitoba Hydro Act break up the utility’s monopoly over the sale of electricity. The bill allows for the sale of power to recharge electric vehicles at public charging stations. Manitoba needs to invest in such infrastructure, but in order to provide the affordable, reliable power, that power needs to be provided publically by Manitoba Hydro.

The bill also authorizes landlords, condominium corporations and housing co-operatives to produce and sell power to tenants. These provisions are controlled by a regulation made under a subsection of the bill – a regulation that can be more easily changed than legislation.

Will these customers pay the same rates as Manitoba Hydro's residential customers, and enjoy the same level of service? They may face more costly and less reliable service, while Hydro could lose revenue. Taxpayers, Manitoba Hydro’s de facto shareholders, should not accept such a loss.

Roughly 32 per cent of Manitobans live in multi-family housing units, so these changes open up the door to substantial privatization of the residential market and greatly erode an invaluable public asset.

In an age of reconciliation, climate change, growing inequality and continental demand for renewable energy, Manitobans need to demand that Manitoba Hydro and the PUB be strengthened, not dismantled. 

Pandemic or not, Bill 44 needs to be vigorously and publicly debated.

Lynne Fernandez holds the Errol Black Chair in labour issues at the Canadian Centre for Policy Alternatives — Manitoba. 

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