Manitoba Hydro hikes rates, while pushing back against on-reserve freeze

Manitoba Hydro is implementing rate increases Friday, despite appealing the Public Utilities Board's order for a rate freeze for First Nations customers on reserve.

The Crown corporation implemented the general rate increase of 3.6 per cent, as well as the newly created "on-reserve residential customer class" that is exempt from the price hike, said spokesperson Scott Powell.

The increase is happening while Hydro challenges the order to freeze electricity rates on First Nations in 2018-19.

The Public Utilities Board said it had jurisdiction to order the freeze under the Hydro Act because the First Nation customer class "is not defined solely on the basis of the region of the province in which customers are located."

Hydro disagrees, and in a legal application for a review, the Crown corporation argues the PUB has no grounds to create the on-reserve affordability program.

"The PUB has exceeded its jurisdiction and made error in law," the application for review says.

Manitoba Hydro spokesperson Scott Powell believes the Public Utilities Board's decree violates the Manitoba Hydro Act, which mandates that all residential customers pay the same rate regardless of where they live.

Legal action threatened

The Assembly of Manitoba Chiefs is threatening Manitoba Hydro with legal action if it doesn't withdraw its objection, which the assembly describes as an "important step towards alleviating energy poverty."

"At a time when Manitoba Hydro and governments are constantly talking about reconciliation, it's unfortunate that they would try to overturn this important decision," the assembly said in a statement.

Powell said Hydro acknowledges there are issues with energy affordability on First Nations, but said the PUB's order is not the way to fix that.

"It really isn't about reconciliation, it's about ensuring that we're operating within the confines of the legislation that governs the operation of the utility," he said. 

In the PUB's original ruling, board member and former provincial judge Larry Ring was the lone dissenter.

He likes the board's suggestion that the province help low-income ratepayers cover their electricity bills, but said developing a separate customer class should be a decision made by elected officials.

"Manitoba Hydro is an energy utility, not a social service agency of the provincial government," Ring wrote.

'We respect the PUB process': Cullen

The provincial government said it would take time to review Hydro's application.

"What we can say today is something that has been clear since we formed government: we respect the PUB process and will not stand between Hydro and the Public Utilities Board as they work collaboratively in the days ahead on what's best for Hydro ratepayers," Crown Services Minister Cliff Cullen said in a statement.

If Hydro's appeal is approved, Powell said the scheduled increases would be tweaked slightly.

Until then, rates for non-exempt residential customers will go up 4.04 per cent, while other increases range between 2.76 and 4.15 per cent depending on customer class. The overall increase is an average of 3.6 per cent.

The Public Utilities Board is meeting Friday to discuss Hydro's appeal.

In addition to concerns over the rate freeze, Manitoba Hydro wants the PUB to review a number of other considerations, including the timing of a future rate increase and the solar energy purchase rate.

Hydro applied in 2017 to hike rates by 7.9 per cent this year but was turned down by the utilities board.