Manitoba hydro rate increases could be capped, hearings reduced under new bill

(File Photo)

WINNIPEG — Manitoba's Progressive Conservative government is making another attempt to control hydroelectric rates but it may yet again run into resistance from the Opposition New Democrats.

A bill introduced in the legislature Tuesday would allow the provincial regulator -- Public Utilities Board -- to continue to set rates for Crown-owned Manitoba Hydro. But annual rate increases would be capped at five per cent or the rate of inflation, whichever is lower.

The bill would also have the board set rates for three years at a time instead of holding public hearings every year.

"It's not in our interest, on an annual basis, (to have) a hearing that costs $10 million," Finance Minister Cameron Friesen said.

"That's a significant cost that could go to keeping rates lower."

The bill, if passed into law, would also give the government more input on rates. It would require the regulatory board to be guided in part by financial targets set by the province.

The Tories have tried to wrestle with Manitoba Hydro's debt since taking office in 2016.

The utility saw its debt triple in 15 years as it built two megaprojects -- the Bipole III transmission line and the Keeyask generating station -- under the former NDP government. The projects ran a combined $3.7 billion over budget.

Manitoba Hydro's debt now accounts for about 40 per cent of the province's total, and dry weather last summer has prompted the utility to limit export sales and forecast a deficit this year.

The utility has at times asked for rate hikes of up to seven per cent but has been rebuffed by the regulatory board.

Under former premier Brian Pallister, the government planned to suspend public hearings for five years and directly set rate increases of 2.5 per cent.

The NDP opposed and delayed the bill and demanded that public reviews remain. The Tories agreed after Pallister retired last fall and killed that bill, and the regulatory board recently approved an interim rate hike of 3.6 per cent.

The New Democrats said Tuesday the government could cause rates to go higher than necessary by trying to influence the board.

"I think what we're likely to see with this is five per cent increases year after year," NDP hydro critic Adrien Sala said.

The bill would also allow a "person" other than Manitoba Hydro to get involved in the retail sale of hydroelectricity.

The NDP said that could pave the way to partially privatize the Crown corporation, but Friesen said the provision is limited to certain specific circumstances, such as customers selling solar or wind power back to the grid.

"We can already foresee, in a few years, that residential users will be using power when they need it and perhaps even generating power to draw back into the grid when they don't."

This report by The Canadian Press was first published March 22, 2022.