NDP presses pause on Hydro rate control bill, keeps it from passing this spring

The Manitoba government is running into opposition as it tries to control electricity rates.

New legislation that would cap rate hikes but also give the government a greater say in the setting of prices was prevented from passing this spring by the NDP.  As Official Opposition, the party has the authority to delay five pieces of legislation into the fall. 

NDP Hydro critic Adrien Sala said the government is treating the proposed rate cap, which could be as high as five per cent, as a protection for Manitobans, but he disagreed with that assessment. 

"The reality is that is a huge rate increase for Manitobans and we haven't seen that in this province, at least not in recent history," Sala said, referring to previous yearly rate increases. 

"In fact, it just all but guarantees that we're going to see those five per cent rate increases year after year."

If the bill passes, the annual rate hike could not be higher than five per cent or the rate of inflation, whichever is lower.

Bill considers financial targets

Sala is also worried by a new requirement that the Public Utilities Board take into account the financial targets set by the province when setting rates, which, he argued, undermines the board's independence. 

In 2020, the Tories first introduced a version of this bill that would have temporarily shifted the duties of rate-setting to the government itself as it prepared the PUB for multi-year rate hearings rather than holding it annually.

The new version of the bill keeps the decision in the hands of the board, but requires them to weigh the government's financial targets.

The board will also be asked to set rates three years at a time, rather than annually. 

The PC government has been arguing the status quo, which costs an estimated $10 million annually, is too expensive. 

Since its election in 2016, the Progressive Conservatives have made a point to improve the financial picture of the Crown corporation. The Bipole III and Keeyask megaprojects, which were built over the past 15 years, helped to triple Hydro's debt to more than $23 billion. 

Hydro has been seeking rate hikes, in part, to bring down their debt load. 

Cameron Friesen, the government minister in charge of Hydro, said he's disappointed by the NDP's decision to delay a bill that he said will keep annual rate increases affordable. 

"Manitobans won't forget the NDP mismanagement of the Keeyask and Bipole III construction projects, how they hid the escalating costs from the public and circumvented approval processes. Our government understands that Manitoba Hydro's low energy rates to Manitobans is our advantage," he said in an email.

The bill would also allow a "person" other than Manitoba Hydro to get involved in the retail sale of hydroelectricity, but Friesen previously said the provision is limited to certain specific circumstances, such as customers selling solar or wind power back to the grid.

Hydro seeks clarity on 2022 rate hike

Meanwhile, the Crown corporation is asking the board to defend its decision for ignoring its request for a five per cent rate hike in 2022. 

In February, Hydro asked the board — which instead granted a 3.6 per cent increase in prices — to provide a more detailed justification for its refusal. Hydro spokesperson Bruce Owen said the corporation believes the PUB failed to establish a rationale for its decision. 

The public utility had argued it needed the higher amount to offset losses due to last year's drought, which reduced water flows and its ability to generate surplus energy to sell in markets outside Manitoba, but the board said it considered both the financial consequences of the drought and the customers who may have been shocked by a five per cent increase.

The NDP raised the issue in question period on Monday as a signal of five per cent rate hikes becoming the norm.

When asked for an explanation as to why it was requiring additional information from the board, Owen said Hydro needs a fuller explanation in preparation for filing its next general rate application in the months ahead.

The NDP has also delayed four other bills from passing in the spring legislative session, including one piece of legislation that would reverse much of the pesticide ban that it introduced in 2014 while in government. 

Other delayed bills include legislation that would permit electronic driver's licences and one that gives the Social Services Appeal Board the ability to dismiss an appeal in certain circumstances.