By The Canadian Press
(FILE)
Manitoba residents could see their electricity rates rise by 3.5 per cent in each of the next three years if an application by Manitoba Hydro is approved.
The Crown corporation says billions of dollars are needed to address aging infrastructure and expand capacity.
It also says drought conditions over the last two years resulted in lower water levels for hydroelectricity and prompted $960 million in lower net income.
The utility is applying to the Public Utilities Board — the province’s energy regulator — for three rate hikes of 3.5 per cent each year, which is a cumulative total of close to 10.9 per cent.
The request follows a rate freeze this year, which was part of a promise by the NDP government to keep rates affordable.
A coalition of consumer groups had warned that the rate freeze might only delay high rate hikes in future years.
“The performance of Manitoba Hydro’s current system is continuing to decline and increased levels of capital spending on sustainment of existing assets is needed to address this decline and ensure a reliable electrical system,” the utility wrote in its application, filed Friday.
“Maintaining the debt-to-capitalization ratio over the period of major investments over the next 10 years is critical as Manitoba Hydro is already highly leveraged. There is no room left to continue to allow material increases to the debt ratio while maintaining the financial health of the utility.”
The application repeated previous warnings that new sources of electrical energy are needed by 2030 to handle peak demand times, and equipment on two of Hydro’s main transmission lines are more than 50 years old.
The request for an increase would have been higher, the utility said, if not for cuts by the provincial government to a capital tax and Hydro’s debt-guarantee fee in the recent budget.
Affordability has been a key issue for the NDP government since it was elected in 2023. The government suspended the provincial fuel tax for a year and then reintroduced it at a lower rate. But other costs have risen, including groceries, education taxes and a 5.7 per cent jump in automobile insurance rates.
