Public Utilities Board will be allowed to dig deep on Hydro finances

The Public Utilities Board has been granted extra power to look closer at Manitoba Hydro's books.

The Progressive Conservative government passed an order in council on Tuesday allowing the PUB special access to the Crown corporation's finances.

The decision was made to give the PUB the authority to look at both the financial health of the company and how it is financed through debt, Finance Minister Cameron Friesen said in a news release.

"Serious concerns have been raised in recent months about the debt of Manitoba Hydro and its impact on both the corporation and the province's finances," Friesen said in the release.

The new powers will also allow the PUB to access information on spending for the Bipole III transmission line and other capital expenses.

The order in council does allow Hydro to retain some information it considers commercially sensitive.

Hydro seeks changes to process

Friesen said in the past, the PUB "has not been privy to all of the capital information related to potential cost overruns or the state of assets currently in use and the costs associated with anticipated repairs to those assets."

In a letter late last month, Manitoba Hydro told the PUB it will file its application for electricity rate changes at the end of April or early in May.

Hydro board chair Sandy Riley has signalled the need for electricity rate changes in the double digits and a possible injection of cash to protect the Crown corporation's fiscal stability.

The company is laying off staff to reduce expenses, but has decided to complete the Bipole III transmission line and the Keeyask dam project, despite cost overruns and delays.

• Manitoba Hydro is a 'ticking time bomb' that needs financial help from province: board chair
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Hydro officials expect numerous topics — including interest rates, capital expenses, export prices for electricity and the financial vulnerability of the company — to be explored during the rate application process.

The letter from Manitoba Hydro to the Public Utilities Board is also a response to a PUB request for suggestions on how to streamline the rate application process. The utility is asking the PUB to make several changes, including reducing the number of information requests made leading up to the hearings. 

"Minimum filing requirements and information requests should be limited to those that are significant and relevant, and can be provided with reasonable effort," Hydro division manager Greg Barnlund wrote to the PUB.

In rate application hearings from 2008 to 2012, Hydro received an average of 2,000 information requests for each proceeding. 

• Hydro letter to PUB, March 24, 2017

The rate application seeks to set electricity charges from 2017 to 2019 and would be the first such hearings after the PC government made wholesale changes to both the board of Manitoba Hydro and the PUB.

The Public Utitlities Board of Manitoba is an independent tribunal that regulates the rates of public utilities. It takes the impact on customers and financial needs of the utilities into account when approving rates.