About our rate application
We filed our 2021-22 Interim Rate Application with the Public Utilities Board (PUB) requesting an average 5 per cent electricity rate increase for January 1, 2022. The Province of Manitoba directed us to file this application after Bill 35 and the associated electricity rate increase were withdrawn.
The higher proposed increase is a result of the impact of the ongoing drought on Manitoba Hydro’s finances, and is needed to help ensure we have the revenue needed to run the electric system, perform ongoing maintenance, and rebuild and expand the system so that we can continue to provide reliable, safe and efficient service.
Even after the proposed increase, we will continue to have some of the lowest electricity rates in North America, according to a comparison of rates prepared annually by Hydro-Québec. A Statistics Canada report on household spending, released earlier this year, shows the average Manitoba family spends more for cellular, internet and TV services annually than they do on their energy bill.
How much more will you pay?
If you are a residential customer who does not heat with electricity and uses about 1,000 kilowatts per month, it would mean about a $5 increase on your monthly bill. If you heat with electricity and use about 2,000 kilowatts a month, it would mean about a $10 increase on your monthly bill.
Can Manitoba Hydro just absorb the financial hit from the drought and then recover using future profits?
That would be the equivalent of borrowing money on your credit card to pay the mortgage, which over the long run would be more expensive. We will be absorbing part of the financial hit from the drought, but this rate increase is needed to prevent further deterioration in our financial health. In the long run this helps mitigate the effect of events like droughts on our customers, and helps keep rates lower than they would be.
Manitoba Hydro’s balance sheet is heavily leveraged. Forty-two cents of every dollar you pay us for energy is used to pay interest on our debt and not to deliver the reliable energy you expect. This, along with other costs that are fixed in nature, leaves very little financial flexibility to deal with risks such as future droughts, rising interest rates, and the changing energy landscape.
What else are we doing?
We always operate our business as efficiently as possible to keep costs, and therefore rates, as low as possible.
We are continuing to look at various options to minimize our costs while ensuring we continue to provide efficient, reliable and safe service to you. Layoffs are not being considered.
What can you do?
We encourage you to use energy wisely to help minimize your bill and use the resource efficiently.
Efficiency Manitoba offers many programs designed to help you use energy wisely and lower your energy bill.
Is there a risk of blackouts?
You can rest assured that your energy needs will be met. There is no danger of blackouts due to an energy shortage. The impacts of the drought are financial in nature only.
What happens next
The Public Utilities Board (PUB), is an independent and impartial regulator. The PUB will ultimately determine what level of rate increase we are awarded through their review process, which has yet to be scheduled (as of November 16).