Manitoba Hydro has filed an update to its recent multi-year General Rate Application (GRA) with the Public Utilities Board (PUB), reducing its requested average electricity rate increase to two per cent in each of the fiscal years 2023-24 and 2024-25.

The utility had initially asked for 3.5 per cent in each of the next two fiscal years. Manitoba Hydro is also seeking confirmation of the interim 3.6 per cent rate increase approved by the PUB that took effect in January 2022 to help counter the effects of the 2021 drought.

The significantly lower rate request is due to the Manitoba government’s recent decision to reduce what it collects from Manitoba Hydro annually in provincial debt guarantee and water rental payments. It’s estimated the changes will save Manitoba Hydro approximately $190 million in the 2022–23 fiscal year alone.

“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,” says Jay Grewal, President and CEO of Manitoba Hydro.

“The changes will allow us to start reducing our debt while continuing to make the needed investments in our system to maintain reliable service to our customers. They also ensure we have the financial resources available to address the risks created by factors out of our control like increasing interest rates, export prices and droughts like what we saw in 2021.”

Bill impacts of the two per cent average rate increase, effective September 1, 2023, will be less than $3 a month for the average residential customer without electric heating (based on an average of 1,000 kilowatt hours (kWh) per month) and under $6 a month for those with electric heating (based on an average consumption of 2,000 kWh monthly).

The two per cent average increase effective April 1, 2024, will result in an additional increase of less than $3 and $6 a month for average residential customer without and with electric heating respectively.

It’s anticipated that applying the savings from the payment reductions to debt will save Manitoba Hydro and its customers approximately $4 billion over the next 20 years.

“We know our customers want greater certainty when it comes to future rate increases so they can budget for their energy costs,” Manitoba Hydro’s Chief Financial Officer Aurel Tess said.

“Starting to reduce our debt now will begin lowering our annual interest costs,” Tess said. “That provides savings to our customers and helps Manitoba Hydro keep pace with needed reinvestment in our system as we prepare for a future that will see increased electrification to reduce our carbon footprint.”