Energy Matters – November 2017
Included with this month’s Energy Matters:
Power Smart tip
Up to 25% of a home’s heat loss can occur through an uninsulated basement. Insulate to reduce your heating costs.
Returning Manitoba Hydro to financial health benefits customers in long term
Electricity rates in Manitoba do not cover the costs of providing you with clean, safe and reliable energy. If action is not taken, our debt will grow to levels that expose you to the very real risks of reduced service reliability and increased costs resulting from drought or rising interest rates.
That’s why we’ve developed a 10-year plan to keep our debt at manageable levels and your electricity rates lower over the long term.
What is the 10-year plan?
Our balanced plan to restore Manitoba Hydro’s financial health and protect customers includes:
- a management restructuring and a 15% workforce reduction to lower our operating costs as well as an ongoing effort to find new ways to run our business more efficiently;
- pursuit of additional sales of surplus electricity outside of Manitoba;
- annual 7.9% rate increases each year from 2018 to 2023, then 4.54% in 2024 followed by a return to inflationary (or lower) increases.
We’re already acting on this plan. We’ve reduced the number of senior managers and, by the end of January 2018, we will have reduced our workforce by over 800 employees. We filed an application to increase rates with the Manitoba Public Utilities Board (PUB) who granted an interim increase of 3.36% effective August 1, 2017. We’ve also asked for an additional 7.9% increase in 2018. A full public hearing on our General Rate Application begins in December.
Why are we asking you to pay more?
Without rate increases, we’re forecast to be considerably short of the cash needed to fund our core operations over the next five years.
With growth in electricity demand here in Manitoba slowing, projected revenue from sales in the province is down hundreds of millions of dollars in the next decade compared to previous forecasts. Income from sales outside of the province is also projected to be hundreds of millions less than previously forecast because of the continued availability of cheap natural gas-fired generation, resulting in lower electricity prices on the short-term opportunity market.
At the same time, even with the proposed rate increases, we’re expecting to increase our debt by $8 billion over the next five years to fund investments in our electricity system. Those investments include major projects such as the Keeyask Generating Station and Bipole III Transmission Line to expand our energy supply and strengthen reliability. It also includes work to rebuild aging parts of the system that are failing—for example, one-quarter (250,000) of our province’s wood hydro poles were installed between 1945 and 1960 and many will need replacing.
How is the current situation putting you at risk?
Manitoba Hydro’s current financial situation leaves our customers vulnerable to the direct impacts of a drought, equipment failure or higher interest rates. That vulnerability stems from the fact our debt is expected to reach almost $25 billion in the next five years. Unless we have adequate income and cash flow coming from higher rates, this much debt leaves us without the capacity to absorb any additional costs. Costs from rapidly rising interest rates or drought would instead need to be passed directly on to you, resulting in unplanned rate increases much higher than those we are asking for now. It could also affect our ability to invest in our aging system, hurting the reliability of your energy service.
We recognize no one wants to pay more. We appreciate the challenges Manitoba families face each day. However, we also recognize the serious consequences that significant unplanned rate increases or more frequent and longer power outages would have on you and our province’s economy.
Our focus is on powering the province with clean, safe, reliable electricity at reasonable rates. Taking steps today, while hard, will help keep rates lower in the long run.
Manitoba Hydro increases accessibility
About 200,000 Manitobans live with a disability. Manitoba Hydro has developed a multi-year accessibility plan to remove barriers across the utility that may pose a challenge to people with a disability.
The plan includes providing information, communications and services in an accessible manner to people when it’s requested. For instance, when Manitoba Hydro hosts a public event – is it wheelchair accessible? Is there a translator or services for hearing impaired?
“Manitoba Hydro is taking steps to ensure we increase accessibility for all our customers,” said Carol Thiessen, the Crown corporation’s accessibility coordinator. “Accessibility is about taking measures to ensure that customers are not unintentionally excluded from a service or communication.”
If customers experience difficulty accessing Manitoba Hydro’s goods or services, they can complete an accessibility request and/or feedback form.
Under the province’s Accessibility for Manitobans Act all businesses and non-profit organizations must develop an accessibility plan by November 2018 to address accessibility barriers in policies, practices and procedures. Accessibility Plans must be made public and updated every two years. To learn more about the Accessibility for Manitobans Act, contact the province’s Disability Issues Office at 204-945-7613 or visit www.acccessibilitymb.ca.