Manitoba Hydro asked the province’s appeals court Aug. 10 to overturn part of the Public Utilities Board (PUB) order approving 2018-19 electricity rates, saying that creating a special rate class for on-reserve First Nations customers contravenes legislation governing the Crown corporation.
Manitoba Hydro is also appealing part of the order that directed it to hire a consultant to assess how various management initiatives are being implemented.
“We believe that the PUB exceeded its jurisdictional authority by ordering the creation of a special rate class which contravenes Manitoba Hydro’s legislative requirement to maintain uniform rates for all residential customers, regardless of where they reside in Manitoba,” said Hydro CEO Kelvin Shepherd in a news release. “This appeal isn’t about the social policy merits of these special rates, rather it’s primarily a question of whether the current legislation enables the PUB to create them. The court is in the best position to provide clarity on whether the PUB has authority to establish these special rates. We believe the PUB has overstepped its bounds in issuing this particular directive. We also believe that the PUB lacks legislative authority to order Manitoba Hydro to spend customer funds to hire a consultant to review asset management decisions made by the utility under the oversight and authority of the Manitoba Hydro-Electric Board (MHEB). This aspect of the PUB order is not consistent with the governance structure and authority established by legislation.”
Manitoba Hydro already asked the PUB to vary these and other aspects of its order 59/18. The board did vary parts of that order and issue a new one but did not change these two directives, which Manitoba Hydro says raise important jurisdictional questions.
Hydro’s application to the Manitoba Court of Appeal does not immediately affect the special rate class, which it already created to comply with the PUB order.
The PUB approved a 3.6 per cent hike in rates for 2018-19 on May 1 and also ordered the creation of a First Nation on-reserve residential customer class, who will not see their rates rise in 2018.
The PUB said it remained concerned about the affordability of electricity for Manitobans and recommended that the provincial government assume responsibility for developing programs to assist lower-income customers and that a portion of revenues collected from the Keeyask generating station be used to pay for those programs. The board also said that the province should transfer some carbon tax revenues to Manitoba Hydro to lower potential future electricity rate increases once that tax takes effect Sept. 1.
The PUB also recommended that the provincial government suspend the collection of about $900 million in government revenues from Bipole III over the next 13 years, an amount that represents the cost of locating the transmission line to the west side of Lake Manitoba instead of on the east side of Lake Winnipeg. The board further recommended that Manitoba Hydro reduce spending on energy-efficiency programs because some of the current programs are not economic and should not be pursued apart from those that assist lower-income customers.
