Manitoba Hydro customers will see their electricity rates going up come June 1 this year.
The Public Utilities Board approved a 3.6 per cent increase effective next month.
But that’s a far cry from what Manitoba Hydro requested — which was a 7.9 per cent increase.
READ MORE: Potential Manitoba Hydro hikes aren’t popular among customers
The PUB said it’s concerned about affordability and thinks the province should step in to help low-income customers.
Manitoba Hydro President and CEO Kelvin Shepherd said this lower rate increase will negatively impact Hydro’s debt.
“With lower rate increases, debt is going to increase more, and probably top out $2.5 to $3 billion higher over the next number of years,” he said. “There’s risk associated with that — and there’s judgement.”
“Obviously, we want to ensure that our infrastructure is reliable and that we maintain reliable service for customers,” Shepherd continued. “I would suggest from a financial point of view, it’s not that we’re risk averse, what we’re trying to do is find the right balance.”
Byron Williams from the Consumers Coalition called the decision a victory for Hydro ratepayers.
“The good news for Manitoba consumers is that instead of rate shock-level rate increases of 7.9 per cent, the overall average rate increase is 3.6 per cent,” he said.
“It’s rare that we call a rate increase that’s roughly double the rate of inflation good news, but it’s a lot better news than what could have been.”
The board ordered Hydro to create a new First Nation On-Reserve Residential Customer Class, which will not receive any rate hikes in 2018.
READ MORE: Hydro hikes face opposition as hearings begin
It is recommending the province suspend collection of $900 million in government revenues from Bipole III over 13 years to help keep rates low.
“In a way, I guess you could say it’s going from one pocket to another, but I think what it really is is recognition that Manitoba ratepayers were bearing all the risk of these large capital projects while the sole beneficiary in the pocketbook was the province of Manitoba,” Williams said.
“There is a lot of similarity between taxpayers and ratepayers, but an impact on taxpayers is not felt to the same degree due to our income tax system as an impact upon ratepayers,” he continued. “So protecting ratepayers tends to be a little more protective of vulnerable consumers.”
Crown Services Minister Cliff Cullen said the creation of projects like Bipole III by the former NDP government was a costly mistake.
“The decision made by the previous government had not a benefit to anyone, quite frankly — it was an extra $900 million to Manitobans,” he said.
The PUB also wants the province to transfer some of its carbon tax revenue to Hydro in the future.
The province nixed the idea, with Minister Cullen telling media this recommendation wasn’t an option the provincial government would even consider.
“The intent of the carbon tax is to put it back in the hands of Manitobans.”
The carbon tax is supposed to take effect Sept. 1.
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