Manitobans Need to Know Reason for Hydro Increase

Manitobans Need to Know Reason for Hydro Increase

Area residents concerned about hydro rate hikes deserve to know the reason for the increase: massive Hydro spending under the former NDP government. Borrowing more costs more, and bills for huge Hydro projects have come due. Since the year 2000, Manitoba’s NDP government sent Hydro’s debt skyrocketing from $6 billion to $21.6 billion. That’s roughly $44,000 of Hydro debt for every home in the province, plus roughly $1,600 of interest charged annually per household for these same Hydro projects. And because Hydro operates outside of government accounts, Hydro debt is often excluded from government debt discussions, even though it accounts for 40% of Manitoba’s overall debt-load. But there is only one taxpayer, and all taxes and bills come from the same paycheck.

In response, Manitoba’s PC government has introduced legislation modernizing the operations of the Public Utilities Board and strengthening their oversight on utility rates. Bill 35 lowers rate application costs by millions and makes rates more predictable by changing an annual review to a multi-year rate application process such as is done in other provinces. It also sets stricter parameters on capital project oversight to avoid a repeat of the past where the NDP pushed huge projects forward such as Keeyask or BiPole III, costing billions with minimal scrutiny. 

Part of these changes include a transition period where the government can set rates. The PC government recognizes the need to keep household Hydro rates low while ensuring Manitoba Hydro had enough revenue to service its large debts. The proposed rate of 2.9% is consistent with historic rate increases and will add about $2.50 to monthly bills for most homes.

Some claim Hydro debt is actually an investment. After all, can’t newly generated electricity be sold elsewhere to pay off debt and in time, make all Manitobans richer? It’s a great idea on paper, except that numerous provinces pursued this idea during the same decade, causing export rates to drop below profitability. Canada Energy Regulator data shows that in 2014, electricity sold for $87.23 per megawatt hour, but in 2019, that amount had dropped more than half to just $40.70 per megawatt hour. So while the cost of producing electricity went down, Manitoba’s Hydro rates went up. And all because, despite low interest rates, the cost of borrowing multiple billions of dollars remains owing.

Manitoba’s current PC government is making life more affordable for ordinary people. We’ve changed provincial income tax laws so folks make more each year before paying provincial income tax, and now thousands of very low income earners pay no provincial income tax at all. We’ve reduced the PST. And we’ve implemented common sense policies like no longer insisting all government offices have fax machines. These big and small measures add up. And we’ll need it. With Manitoba Hydro debt at $21.65 billion, Manitobans will be left with an ongoing reminder of the NDP legacy for decades into the future.

Andrew Micklefield is the MLA for Rossmere and can be reached at 204-289-4545 or by emailing

The cost of borrowing to construct mega-projects such as the Keeyask Generating Station (above) and Bipole III has saddled Manitoba Hydro with $21.6 billion of debt.

Supplied photo

Link to external post. -published November 4 in The Herald as ‘The plan for your Hydro rates’

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