Manitoba Hydro chair suggests proposed carbon tax could offset rising rates

As Manitoba Hydro applies to raise rates by nearly 8 per cent the chairman of the board is suggesting part of the province’s proposed carbon tax revenue should be used to help offset the cost for some Manitobans.

READ MORE: Manitoba Hydro seeking 7.9% rate hike

Hydro is seeking rate increases of 7.9 per cent a year for the next few years, as it deals with spiraling costs of a new generating station and transmission line.

In a speech to the Manitoba Chambers of Commerce, Sanford Riley said the province should look at subsidizing people and businesses in the province who would need the most help.

“Knowing that Hydro is facing challenging times and it’s going to put a stress on ratepayers… one of the places the government should consider putting its money is into support programs for the people who need it the most,” Riley said.

Tweet This Click to share quote on Twitter: "Knowing that Hydro is facing challenging times and it's going to put a stress on ratepayers… one of the places the government should consider putting its money is into support programs for the people who need it the most," Riley said.

The province is planning to bring in a carbon tax of $25 per tonne next year that would not apply to clean energy, such as hydroelectricity, and would raise about $250 million a year.

“What the carbon tax does is it makes it easier for those Manitobans who are most affected to manage the transition,” Riley said. “We are not suggesting the carbon tax is going to solve Hydro’s problems.”

READ MORE: Hydro rate hikes could cost northern Manitoba big in the winter: Public Interest Law Centre

Riley suggest part of that money could go towards help for low-income earners and people who live in remote areas to deal with the rising cost of heat and power.

“Those we are on fixed incomes at the lower end of the economic scale…those who live in communities in the north that have challenges because of the way in which their communities are organized,” Riley said.  “Those who live in rural areas who have not been able to use natural gas to heat their homes and have to use electricity and certain businesses.”

The Public Utilities Board starts hearings next week on the proposed rate hikes, which Riley said are necessary to avoid serious financial trouble for both Crown-owned Hydro and the provincial
government.

The government has said there could be a variety of uses for the money – everything from reduced electricity rates to green technology development to new flood-fighting infrastructure.

–With files from the Canadian Press