Special Manitoba Hydro rate class needed to offset challenges of living on First Nations, appeal court hears

Manitoba Hydro and the Public Utilities Board faced off in court Wednesday in a power struggle over whether the board had the right to order the creation of special electricity rate class for Indigenous customers on reserves.

The two entities were in court for an all-day hearing after Manitoba Hydro appealed the regulatory board's order to create an "on-reserve First Nations" customer class in 2018.

The special rate class exempted those customers from an across-the-board hydro rate increase of 3.6 per cent. 

The Crown corporation objected to the order in 2018, but went ahead with its creation.

Manitoba Hydro's lawyer, Helga Van Iderstine, told Court of Appeal judges that while the utility accepts that many First Nations people living on reserve live in poverty, it doesn't agree that the board has the authority to create different rate classes to address this issue. 

"They don't have rate-making functions … they have a review and approval authority. It may seem like a subtle difference but it's important," she said. 

She also argued that under provincial law, rates for Manitoba Hydro customers should be the same throughout the province. 

A section of the Manitoba Hydro Act states that "The rates charged for power supplied to a class of grid customers within the province shall be the same throughout the province."

Board not a 'rubber stamp' 

But Dayna Steinfeld, lawyer for the Public Utilities Board, argued the board "is not just there to rubber stamp what's put forward by Manitoba Hydro."

She said the board has the authority to consider a variety of options when deciding how the utility's costs should be recovered. 

She also stressed that existing legislation leaves it up to the board to decide which factors are relevant when considering rates, such as social issues. 

In this case, she said the board heard extensive evidence that on-reserve customers face unique challenges, like inadequate housing.

She said that the board heard evidence that in some cases, these customers have to make "unacceptable" sacrifices in order to pay their energy bills. 

The Assembly of Manitoba Chiefs was an intervener in the appeal, and on Wednesday, lawyer Carly Fox backed up the utility board's argument. 

She told appeal court judges that customers living on reserves are disproportionately vulnerable to rate increase, and that the rate class eliminates an unjust burden on those customers. 

The Consumers' Association of Canada's Manitoba branch is also an intervener in the appeal, with lawyer Byron Williams stating that while the association doesn't agree with the creation of the special rate class, it believes the board had the authority to do so. 

Court of Appeal judges Diana Cameron, Janice leMaistre and William Burnett reserved their decision for a later date.