Manitoba Hydro’s electric board is hopeful a promise from the provincial government will help reduce the utility’s debt load, cut down on Manitobans’ monthly costs.
The province announced Wednesday that it’s cutting a pair of annual fees it charges Hydro in half — one for water rental and one for guaranteeing the utility’s debt. The changes, retroactive to April 1, are intended to save the Crown corporation almost $190 million a year and help stabilize its finances, finance minister Cameron Friesen said.
Electric board chair Edward Kennedy told 680 CJOB’s The Start that the fee change could have an impact on future proposed rate hikes of 3.5 per cent, but won’t eliminate hikes completely.
“At 3.5, they were below the rate of inflation, but that’s still a lot hitting people’s pocketbooks,” Kennedy said.
“To say we’re going to have zeroes across the board, that doesn’t reflect the reality of all the things that are going on in energy today — the volatility of water levels and interest rates and new technologies and energy.
“Hydro needs financial flexibility. I think in the two per cent range, for example, that we saw in our long-term forecast, I would hope it’s received favourably.”
Hydro’s debt load, he said, has tripled in the past 15 years, and the fees — which many Manitobans may not even realize exist — aren’t helping.
“It’s not politically glamorous to take these fees down, because they do give payments to the province, but there’s no magic behind them,” Kennedy said.
“They’ve been there… they’re not talked about a lot, but they’re a big factor in trying to turn the corner on our debt situation.”
Hydro rates continue to be a key issue in Manitoba, with a provincial election looming next year. While the Progressive Conservative government has taken this route to tackling the issue, the opposition New Democrats have promised to freeze rates if elected.