Manitobans would temporarily lose public hearings on Hydro rates under new law
Province says moving to multi-year rate hearings, instead of yearly, would save Manitobans' money
Manitobans won't get a say on potential hikes to electricity rates for the next few years, if a new bill becomes law.
The independent Public Utilities Board currently allows Manitobans to have their say through public hearings every year Manitoba Hydro applies for a rate change. It's the PUB that then rules on whether to allow the rate change.
But the province introduced legislation Thursday that would suspend that practice until March 2024. Any rate adjustments until then would be approved through government regulation.
Beginning that spring, the PUB would return to approving electricity rates under the proposed legislation, but for five-year intervals rather than annually.
The province says the new rules, if they pass, would save taxpayers money. It pegs the cost of annual hearings by the utility board, which also oversees Manitoba Public Insurance and Centra Gas, at roughly $10 million a year.
But Bryon Williams, director of the Public Interest Law Centre, says the third-party watchdog has saved Manitobans far more money than it costs.
"It is shocking to me that Manitoba Hydro, which has authored the fiasco of Bipole III and Keeyask — cumulatively $14 billion of mismanaged projects — would be having the hubris to suggest that annual costs of this magnitude are a barrier," he said.
'That voice will be sadly missed'
He said the PUB saved Manitobans $60 million one year, when in 2018, it rejected Hydro's call for a 7.9 per cent rate increase, allowing a 3.6 per cent hike instead.
The utilities board also pushed the Manitoba government years earlier to scrap the $10.5-billion Conawapa dam project.
"From our client's perspective, the Public Utilities Board has been a critical place where consumers can bring the best evidence and independent oversight from people from across North America, where low-income individuals and others can have their say," Williams said.
"In a province where Manitoba Hydro has a legislated monopoly, it has been the one consistent voice sticking up for consumers, and that voice will be sadly missed."
Under the proposed legislation, by 2024, the PUB would approve electricity rates in five-year intervals based on anticipated revenues.
The bill calls for future rate hikes to be under four per cent, or double the rate of inflation, whichever is greater.
The new multi-year rate approvals would "improve the timing and cost efficiency of all review processes, benefitting ratepayers who indirectly pay the costs of the rate reviews," Crown Services Minister Jeff Wharton said in a statement.
Under a gradual transition to the new model, the rates will be set by government initially, while Manitoba Hydro's new long-term strategic plan is rolled out and implemented.
The new process is a win for customers, who will have better predictability in the rates they're paying, says Manitoba Hydro spokesperson Bruce Owen. He adds the changes will strengthen the Crown corporation's balance sheet and debt-reduction targets.
Gloria Desorcy, executive director of the Manitoba branch of the Consumers' Association of Canada, questioned the value in predicting electricity prices years in advance.
"When you ask for public input … how reliable or how meaningful is the input if there's many factors we're not sure about?"
The province said rates during the five-year period will escalate annually based on inflation.
NDP accuses government of overreach
Adrien Sala, the NDP's critic for Manitoba Hydro, accused the government of gutting public oversight of the utility.
"It's important to remember that in taking away this authority from the PUB, we're essentially putting Manitoba ratepayers at greater risk of seeing big rate increases."
The proposed legislation would also amend the rate approval process for Manitoba Public Insurance.
That Crown corporation would continue to apply for rate increases annually, but "more extensive reviews" of MPI's operations, capital management or investment strategies would occur every five years under the new legislation.
The bill would also make Winnipeg water and sewer rates subject to PUB hearings, which would bring the city in line with other jurisdictions.