Manitoba NDP would freeze hydro rates for a year if it wins provincial election

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This article was published 22/08/2023 (1084 days ago), so information in it may no longer be current.

WINNIPEG – Manitoba’s Opposition New Democrats promised to freeze hydroelectricity rates for one year if they win the election slated for Oct. 3, although any final decision on rates rests with the province’s independent energy regulator.

An NDP government would reduce the annual fees that Crown-owned Manitoba Hydro pays the government by $37.5 million, NDP Leader Wab Kinew said Tuesday.

He estimated that would be enough to allow Hydro to apply for a rate freeze next year and give people some relief from inflation.

“People my age don’t remember inflation ever being this high before,” Kinew said.

“And for Manitobans, as we’ve heard from different walks of life, it’s actually threatening both the quality of life and even the ability to live independently. That’s the truth for many seniors in the province.”

The announcement is the latest in a series of pocketbook promises made by the NDP. Kinew promised Monday to temporarily suspend the province’s 14-cent-per-litre gasoline tax, which would cost the treasury about $320 million if the suspension lasted a full year.

Last week, Kinew promised rebates for people who buy electric vehicles, which he said would cost the province about $7 million annually.

The NDP could afford the promises because this year’s provincial budget includes hundreds of millions of dollars in contingency funds for unexpected spending, Kinew said.

The Progressive Conservative budget, passed in the spring, includes $520 million for contingencies and “unexpected events,” budget documents show.

Manitoba Hydro has faced financial challenges and a high debt load due in part to cost overruns under the former NDP government from the construction of a generating station and a major transmission line.

Moody’s, an international credit rating agency, warned more than a year ago that recent electricity rate hikes had not been high enough to keep up with rising costs and debt servicing.

The Tories said Tuesday that Manitobans are still paying interest on the overruns.

“The NDP tripled Manitoba Hydro’s debt and nearly bankrupted the corporation,” Finance Minister Cliff Cullen said in a written statement.

Last year, the utility said it would seek annual rate increases of 3.5 per cent over two years. The Tory government then cut two annual fees paid by Manitoba Hydro to the government — one for debt guarantees, the other for water usage — by a combined $190 million and the utility dropped its rate-hike request to two per cent annually.

That two per cent would work out to a little less than $3 a month for the average customer who has non-electrical heat sources such as natural gas, or $6 a month for someone who uses electricity for heat, the utility said.

The Public Utilities Board, the provincial energy regulator, has yet to rule on that request.

This report by The Canadian Press was first published Aug. 22, 2023.