Province proposes yearly 2.5% Manitoba Hydro rate increases for next 3 years
Pallister government to introduce legislation this fall to move to multi-year rate applications for utilities
The provincial government wants to cap Manitoba Hydro rate increases at 2.5 per cent each year for the next three years.
The Progressive Conservative government is set to pass legislation this fall to move to multi-year general rate applications before the Public Utilities Board.
The new rates will be introduced as amendments to that legislation this fall, and if approved, the rates will take effect in December, Crown Services Minister Jeff Wharton and Finance Minister Scott Fielding announced at a news conference Thursday.
The proposed rate increase is lower than the 3.5 per cent increase Manitoba Hydro had asked for to help manage its debt load.
Fielding said the proposed rate increase strikes a balance between addressing what he called a "huge debt problem at Manitoba Hydro" and keeping rates affordable for Manitobans.
Bruce Owen, a spokesperson for Manitoba Hydro, said the utility is pleased with the proposed rate increases, which he said will provide the Crown corporation with some certainty in its financial planning over the next three years.
The 3.5 per cent rate increase that was mentioned at a standing committee meeting last week was simply an assumption made for budgeting purposes, Owen said in an email.
Increase worries ratepayer
The province says that on average, this would add an extra $35 per year to ratepayers' bills.
However, for those who heat their homes with electricity, the 2.5 per cent increase in 2021 would add approximately $57 to an annual electricity bill, Owen said.
One of those people is Sharon Holme, who says she and her husband already feel pinched by the huge hydro bills they get each month for their home in Winnipeg Beach.
Holme says the electricity bill for their 1,900-square-foot home, which is heated with electricity, can range in the winter months between $900 and $1,200, which is more than their mortgage.
"It just baffles me that we have to have that much money paid out just to keep ourselves warm, and it's not even the warmest," she said.
She said she's worried about what a 2.5 per cent increase will mean for their budget. Right now, she is unable to work due to illness and her husband, who is a contractor, is taking on odd jobs to make ends meet.
Lyndie Bright, who lives in an apartment in Winnipeg, said the same rate increase for everybody doesn't account for the struggles faced by people like her who live on a fixed income.
"If you're thinking of raising it every year at two per cent plus, my income is not going to be raised to match that. For people on welfare, you're already on a low budget — and welfare will help, but it will not provide everything."
Lack of transparency troubling: NDP
Under the Progressive Conservative government's proposed Bill 35 — titled the Public Utilities Ratepayer Protection and Regulatory Reform Act — the Public Utilities Board would approve electricity rates in five-year intervals rather than annually. Any rate adjustments would be approved through government regulation.
For years, utility rates were approved through a public hearing process held by the board, but the government has taken over that role in advance of the legislation passing.
The legislation was set to pass this spring but was blocked by the Opposition NDP, who argued the bill will weaken the Public Utilities Board and give the provincial government "carte blanche" to set utility rates without public input.
The second reading of the bill has been postponed until fall.
Adrien Sala, the NDP's Manitoba Hydro critic, said it's disappointing the government is going forward with a rate increase without an independent review from the utilities board.
"Manitobans will never know whether or not we're being asked to overpay in this situation because the PCs are setting those rates at the cabinet table."
The NDP added the rate hike is especially hurtful to Hydro customers in First Nations communities. They were subject to a 6.5 per cent rate hike last September, after the Manitoba Court of Appeal ruled on-reserve customers should not have been exempt from a 2018 rate hike. All residential customers in Manitoba now pay the same amount for electricity.
Manitoba Liberal Leader Dougald Lamont said it's outrageous to see the finance minister announce hydro rate changes as if it was a political announcement.
"The Public Utilities Board is [there] to protect Manitobans. This is basically ripping up all of that and it's really a shocking thing to do," he said.
With files from Ian Froese