Manitoba Hydro has submitted its request for a rate increase the next two years.
The two-year general rate application (GRA) was filed Tuesday with the Public Utilities Board (PUB) of Manitoba. If approved, rates will go up 3.5 per cent in each of the fiscal years of 2023-24 and 2024-25. Manitoba Hydro is also seeking confirmation from the PUB for a 3.6 per cent interim rate increase it awarded in January of 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," says Jay Grewal, Manitoba Hydro's President and CEO. "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," she says.
Grewal says the swings in Manitoba Hydro's financial situation are potentially volatile and require more steps to provide a safety cushion and a path to long-term stability within a fast-changing energy landscape. Last year, for example, the utility experienced a $248 million loss while this year it is projecting a net income of $559 million - a swing of $807 million. The improvement for the current fiscal year is due to higher precipitation last spring resulting in higher water flows and higher prices on the export opportunity market.
Grewal adds regular, predictable rate increases will help minimize that volatility, reducing the risk of rate shock to customers in future years.
"Our customers have told us that having those predictable rate increases is important to them, so they can more effectively budget for their energy costs," says Grewal. "This GRA is an important step in providing customers that predictability."
If approved, an overall rate increase of 3.5 per cent would take effect on September 1st, 2023 and then again on April 1st, 2024.
Manitoba Hydro explains that for a residential customer without electric heat (using an average of 1,000 kilowatt-hours (kWh) per month), the average impact of the proposed increase is approximately $4 per month after September 1st, 2023, and a further increase of approximately $4 per month after April 1st, 2024. For a residential customer with electric heat (using an average of 2,000 kilowatt-hours (kWh) per month), the average impact of the proposed increase is approximately $7 per month after September 1st, 2023, and further bill increase of approximately $7 per month after April 1st, 2024.