Manitoba Hydro is challenging an order which would freeze electricity rates for First Nations communities.

A month ago the Public Utilities Board ruled Hydro must create an “On Reserve First Nations” customer class with a zero per cent rate increase for 2018/19 to deal with what it calls energy poverty.

Now the Crown corporation has filed a "review and vary directive" with the PUB pertaining to the order. Hydro argues the utilities board does not have jurisdiction or the legal authority to make this kind of ruling.

“We understand that there's concerns with bill affordability, we've acknowledged that all along, but we have to make sure we operate within the legislation,” said Manitoba Hydro’s Scott Powell.

The PUB argues it has broad jurisdictional powers under the law.

"The Public Utilities Board can create a new class of ratepayers and that is the context for that particular part of the order,” said PUB executive director Darren Christle.

A panel will now be put in place to deal with the review.

If Hydro is unsuccessful it can go to court.

The PUB ruling from May 1 increased rates by 3.6 per cent on average, less than the 7.9 per cent requested by Hydro.

At the time, Hydro said it's projecting debt levels of up to $27 billion.