Manitoba Hydro is reducing its request for rate increases for the next two years and is crediting a recent provincial government fee reduction.
Earlier this month, the Crown-owned utility said it would ask the provincial regulator, the Public Utilities Board, for rate hikes of 3.5 per cent in each of the next two years. The utility said Tuesday it is revising that request to two per cent in each year.
It's also revising its long-term projections, from annual rate hikes above the rate of inflation to rate hikes of two per cent annually for the next 19 years.
The move follows a decision by the Manitoba government last week to cut in half fees that the province charges the utility for debt guarantees and water usage. Manitoba Hydro says the changes would save it about $190 million this year and more in future years.
"The reduction announced by the government will help keep rates low for customers, and that’s great news when we know many customers are struggling with the cost of living," Jay Grewal, the Crown corporation's president and chief executive officer, said in a press release Tuesday.
"It also gives Manitoba Hydro the ability to start to reduce our debt while making investments in our system so our customers get the service they demand."
If the request for two per cent increases is approved, the average customer who uses electric heat would see their monthly bill increase by $4 in each of the next two years, the utility said. People who heat with natural gas or other sources would see their electric bill increase by $2.
Hydro rates have become a key issue in the lead-up to the provincial election slated for Oct. 3.
The Opposition New Democrats, who are leading in opinion polls, have promised to freeze rates if they are elected but have refused to explain how that might be done.
Manitoba Hydro's debt tripled over 15 years due in part to cost overruns on a generating station and a major transmission line under the former NDP government. The utility says it currently pays out about 40 cents of every dollar to service its $24-billion debt.
Moody's, an international credit rating agency, warned in the spring that recent electricity rate hikes had not been high enough to keep up with rising costs and debt servicing. The agency said the utility's ability to be self-sustaining was at risk.
This report by The Canadian Press was first published Nov. 29, 2022.