Manitoba Hydro hopes to increase rates 7.9 per cent annually for the next five years, a total 46.3 per cent jump over current rates
Local governments aren’t happy with word Manitoba Hydro is hoping to increase rates by nearly eight per cent a year for the next half-decade.
Delegates from the Municipality of Pipestone raised the issue at the recent Association of Manitoba Municipalities (AMM) western membership meeting and found plenty of support for their position.
After the western membership unanimously backed the call June 15, the resolution will go before the full membership at the annual convention this fall in Brandon.
In May, Manitoba Hydro announced that it was requesting a 7.9 per cent rate increase in both 2017 and 2018, and had plans for similar hikes in the following three years.
Assuming identical 7.9 per cent jumps from 2019 to 2021, the back-to-back increases would raise rates by over 46 per cent over five years, after which Manitoba Hydro has said it hopes for annual increases of two per cent.
“That’s a horrible increase for anybody to have to endure and the problem is the people are having to pay it twice,” RM of Pipestone Deputy Reeve Randy Henuset said.
He said residents have to foot the bill in their personal and business lives for homes and other properties, then they had to also cover the slated increases at the municipal level.
“Our municipality has a $150,000 Hydro bill. It goes up 40 per cent, that’s $60,000, which the ratepayers also have to cover,” Henuset said.
The Municipality of Pipestone sponsored the uncontested resolution at the AMM western district meeting in Carberry.
Manitoba Hydro’s financial misfortunes have been the focus of headlines throughout 2017. In February, the company announced that it would be cutting 900 jobs, or 15 per cent of its staff. According to a May release, the Crown corporation’s debt sits at $11 billion, a number expected to jump to $23 billion by the completion of the Keeyask generating station and Bipole III transmission line.
“They’re so far in the hole; they have to get their money from somewhere, so they’re making the ratepayers, or the taxpayers, pay for their mismanagement,” Henuset said.
Manitoba Hydro pointed to capital investments in the two megaprojects for the rate hike. The generating station and transmission line, “seriously overextended Hydro’s financial position,” according to a May 5 release.
“We know that this will not be an easy time for ratepayers but we also know that when this process is complete, Manitoba Hydro will be restored to financial health and we will continue to enjoy electricity rates that are among the lowest in North America,” Manitoba Hydro chair Sandford Riley said.
“We also note that these proposed rate increases are significantly lower than the possible double-digit rate increases which we contemplated in the wake of our comprehensive review of Hydro’s operations last fall.”
If approved, the first hike will come into effect Aug. 1, 2017.
The initial hike would increase the monthly bill of a 2,000-kilowatt-per-month user by $13.14, the Crown corporation has said. Another $14.19 monthly hike would be in the works for that same customer in 2018.
“Approval of the rate increases proposed in this application is required to improve the financial position of the corporation,” Manitoba Hydro told the PUB in May. “In making this application, Manitoba Hydro has considered customer sensitivity to rate increases as well as the financial position of the corporation, and believes that the proposed rate increases provide an appropriate balance between addressing the financial risks of the corporation and managing the impact of rate increases on customers.”
The application is currently before the PUB board. A pre-hearing of the issue took place June 12. A decision has yet to be made.
“We’ll see where our new government stands, I guess,” Henuset said.
“Of course, it’s the PUB board that decides and if the whole AMM puts pressure on them, maybe they’ll say no,” he added.