Consumers group gives cold shoulder to proposed Manitoba Hydro rate freeze
Consumers Coalition says putting off hike could result in rate shock later
Premier Wab Kinew's promise to freeze electricity rates for a year is getting a cold shoulder from a group that represents consumers and low-income Manitobans.
Kinew promised Tuesday to follow through on a 2023 election campaign pledge by freezing Manitoba Hydro rates in 2025.
The move would cost the Crown corporation about $18 million for every percentage point rate hike it forgoes if it declines to seek permission for a rate increase from the Public Utilities Board, Hydro spokesperson Peter Chura said.
This is significant, as Manitoba Hydro ended its most recent fiscal year with a $157-million deficit and $24.8 billion in accumulated debt.
The Crown corporation must also spend billions of dollars to replace aging infrastructure and billions more to increase generating capacity in order to meet a growing demand for electricity.
The Cosumers Coalition, which represents a trio of non-profit organizations, expressed concern the Kinew government is issuing a political directive for a Hydro rate freeze instead of allowing the Public Utilities Board to determine Hydro rates next year.
Katrine Dilay, a lawyer who represents the coalition, says while she appreciates the NDP government is concerned about affordability measures now, putting off rate hikes now creates a risk of more impactful increases down the road.
"Those would be required in the next few years to meet Manitoba's energy and capacity needs over the next decade. So from our clients' perspectives, the commitment from the government creates a significant risk for future consumers of higher than necessary rate increases," Dilay said Wednesday in an interview.
Dilay, whose organization is made up of Manitoba Harvest, the Aboriginal Centre of Winnipeg and the Manitoba branch of the Consumers Association of Canada, said the independent rate-setting process operated by the Public Utilities Board ensures electricity rates are based on evidence, rather than political considerations.
"A rate freeze will also delay Manitoba Hydro's next rate application and Public Utilities Board hearing, which have proven time and time again to be necessary for Manitoba Hydro's accountability to ensure that it is effectively controlling its costs," she said.
Hydro spokesperson Chura confirmed the Crown corporation has no intention of requesting a rate hike in 2025.
Manitoba Finance Minister Adrien Sala said Wednesday if the Public Utilities Board denies a Hydro rate freeze in 2025, his government has no intention of passing legislation to ensure a freeze takes place.
He said he sees no risk in a one-year freeze.
Progressive Conservative energy critic Lauren Stone (Midland) did not agree, stating Tuesday she wants to know how much a rate freeze will impact Hydro's bottom line at a time when the Crown corporation's debt stands at $24.8 billion.
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