Manitoba Hydro submitted its two-year General Rate Application (GRA) with the Public Utilities of Manitoba (PUB) yesterday, seeking an electricity rate increase of 3.5 per cent in each of the fiscal years 2023-24 and 2024-25.
Manitoba Hydro is also seeking confirmation from the PUB of the 3.6 per cent interim rate increase it awarded in January of 2022. Please see Manitoba Hydro’s 2023-25 General Rate Application.
“While we know rising costs are tough for many of our customers right now, and that no one wants to pay more for their energy, the rates we’re asking for are necessary to ensure we’re able to provide our customers with the safe and dependable service they need today and in the future,” said Jay Grewal, Manitoba Hydro’s President and CEO.
“These proposed increases will help ensure Manitoba Hydro has the financial resources available to handle the risks created by our $24 billion debt load, and factors that are out of our control like fluctuating interest rates, export market prices and water levels,” she said.
Grewal said the swings in Manitoba Hydro’s financial situation are potentially volatile and require more steps to provide a safety cushion and a path to long-term stability within a fast-changing energy landscape. Last year, for example, the utility experienced a $248 million loss while this year it’s projecting net income of $559 million - a swing of $807 million. The improvement for the current fiscal year is due to higher precipitation last spring resulting in higher water flows, and higher prices on the export opportunity market.
Regular, predictable rate increases will help minimize that volatility, reducing the risk of rate shock to customers in future years, Grewal said.
“Our customers have told us that having those predictable rate increases is important to them, so they can more effectively budget for their energy costs,” Grewal said. “This GRA is an important step in providing customers that predictability.”
The proposed rate increases are also an important measure toward enabling Manitoba Hydro to manage the risks and pursue opportunities in the changing energy landscape, for the benefit of its customers and all Manitobans. Examples include the introduction of more electric vehicles on our roads and the decarbonization of other energy sources, such as the federal government’s Net-Zero Emissions by 2050 goal. Manitoba Hydro continues to engage with customers and other stakeholders to better understand their future needs as it develops its first Integrated Resource Plan, to be completed in mid-2023.
“We’re committed to continuing to serve our customers with safe, reliable, clean energy today and tomorrow. That means investing in system improvements, expansions as required, and replacing our older assets as they come to the end of their life,” Grewal said.
As part of its GRA filing, Manitoba Hydro has provided the PUB with a long-term financial forecast scenario based on current projections that provides directional information for the next 20 years.
“Although this is only a rate application until the 2024-25 fiscal year, we want to ensure the PUB has all the information it requires as it reviews our submission and that we provide the fullest possible picture of the scenarios we’re most likely to face,” Grewal said.
“Our commitment to our customers remains as true today as it has in the past: to provide safe, reliable energy at a cost that remains among the lowest in North America and be as efficient as possible as we do that.”
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