Manitoba Hydro looking for 3.5 per cent rate hike in October

WINNIPEG -

Manitoba Hydro is looking for a potential rate hike come the fall.

During a legislative committee meeting Tuesday morning, Manitoba Hydro President and CEO Jay Grewal revealed the Crown Corporation is looking for a 3.5 per cent rate increase to take effect Oct. 1, 2021.

"The rate increase that we presented will allow Manitoba Hydro over the longer term to move towards being able to start to generate net income to be able to pay down its debt and to get closer to achieving that 75-25 debt-equity target," she told the Standing Committee on Crown Corporations.

Grewal said Hydro believes the assumed rate hike – which has not been approved – is required.

"Increases that are not resulting in rate shock, but will still allow us to move forward to achieve our debt-equity target, is key."

Grewal told the committee the assumed rate increase has been factored into Hydro's projected $190 million net income for the upcoming fiscal year. She said the rate increase has been presented to the treasury board, but has not been approved.

In the meeting, Crown Services Minister Jeff Wharton confirmed Hydro provided information to support the rate increase request.

"To be clear, no rate increase has been approved," Wharton told CTV News in a statement. He said Bill 35 contains an interim period where cabinet sets the hydro rate.

Manitoba's opposition questioned the need and reasoning for the proposed rate hike.

"It is obviously really important that Manitobans can have confidence that rate setting is done in a way that preserves their interest and protects their interests," Adrien Sala, the NDP critic for Manitoba Hydro, told the committee.

"I guess the concern here is that we're learning yet again of an assumed rate increase that is to come which will be imposed on Manitobans, but Manitobans have no opportunity at this point to confirm through independent analysis conducted by the Public Utilities Board, that (the) rate increase is actually required."

A spokesperson for Manitoba Hydro told CTV News the 3.5 per cent hike is not confirmed, and is only an assumption made for budgeting purposes.

"A transitional rate increase of 2.9 per cent was set by government in Oct. 2020," the Hydro spokesperson told CTV News in a statement.

"Government may set another rate increase this October or later, but we don’t know what that rate increase will be."

Any rate increase confirmed by the province would be included in its outlook before the submission to the Public Utilities Board.

It is a part of Manitoba Hydro's first five-year general rate application, which will go to the Public Utilities Board during the winter of 2022-23.