Manitoba Hydro is asking the Public Utilities Board for rate increases of 3.5 per cent in each of the next two years.
If the Crown corporation’s general rate application is approved, electricity costs would go up 3.5 per cent in September 2023 and another 3.5 per cent in April of the following year.
Hydro says the higher rate would result in a home with electric heat using an average of 2,000 kilowatt hours per month, which currently costs about $200, seeing its average monthly bill go up by about $7 next September and another $7 in April 2024.
The bill for a home without electric heat using about 1,000 kilowatt-hours per month would increase by about $4 next September and again the following April if the rate increase is approved.
The Crown corporation is also asking the PUB to confirm its interim rate increase of 3.6 per cent that took effect in January 2022.
“While we know rising costs are tough for many of our customers right now, and that no one wants to pay more for their energy, the rates we’re asking for are necessary to ensure we’re able to provide our customers with the safe and dependable service they need today and in the future,” said Hydro CEO Jay Grewal in a Nov. 16 press release. “These proposed increases will help ensure Manitoba Hydro has the financial resources available to handle the risks created by our $24 billion debt load, and factors that are out of our control like fluctuating interest rates, export market prices and water levels.”
Grewal says regular predictable rate increases help Hydro weather the market and weather volatility that resulted in it posting a $248 million loss last year and expecting a net income of $559 million this year — a more than $800 million swing.
Higher rates will also help the utility to continue servicing its debt at a time of rising interest rates and to replace and refurbish aging equipment without further borrowing, which will allow it to gradually retire existing debts over a reasonable period of time. The Crown corporation says it is anticipating a decline in export revenues in coming years. Much of this year’s higher expected income is a result of higher water flows and higher prices for power exports.