The Manitoba Public Utilities Board (Board) has issued its final order on Manitoba Hydro’s Fiscal 2026-2028 General Rate Application (GRA), finalizing the 4.0% interim general rate increase that took effect January 1, 2026, and approving additional general revenue increases of 3.5% effective January 1, 2027 and 3.0% effective January 1, 2028.

The Board found Manitoba Hydro is experiencing significant short-term financial pressure due to severe drought conditions, with 2025 water flows approaching the second-lowest levels in 112 years. Between the application filing in March 2025 and the oral hearing in November 2025, Manitoba Hydro’s 2025/26 outlook worsened by more than $600 million – from a projected net income of $218 million to a projected loss of $409 million. The Board’s rate path “front-loads” a portion of revenue to respond to drought impacts while aiming to support rate stability over time.

A general revenue increase is not the same as a general rate increase. A general rate increase means that all customer classes pay the same increase. The general rate increase of 4% applied to all customers except the four northern communities in the Diesel Zone, served by diesel generation. The general revenue increases will be differentiated where some customers will be paying a higher increase than the 3.5% and 3.0% and others will be paying lower. This differentiation ensures that each customer class pays its fair share of Manitoba Hydro’s costs that are properly attributed to each class. The exact percentages for each customer class will be determined through a subsequent compliance filing by Manitoba Hydro.

What the decision means for customers

  • January 1, 2026: 4.0% general rate increase applies broadly to all customer classes (except the four northern communities in the Diesel Zone served by diesel generation).
  • January 1, 2027 and January 1, 2028: general revenue increases of 3.5% and 3.0%, which will be applied using inter-class rate differentiation. This means some customer classes will see increases above these percentages and others below, to better align rates with the costs attributed to each class. Actual increase will be confirmed in a subsequent compliance filing Order.

Other key findings in the order

  • Capital plans and major projects: Manitoba Hydro’s projected capital expenditures increased from $18.2 billion (over 20 years in the previous GRA) to nearly $31.2 billion, largely driven by the proposed High Voltage Direct Current (“HVDC”) Reliability Project. The placeholder estimate for that project in this proceeding is $6.8 billion, up from $1.8 billion previously. The Board expressed concern with cost escalation and the evolution of estimates.
  • Treasury Board timing: The Board highlighted a disconnect between the Board’s three year rate-setting process and Treasury Board’s one-year-at-a-time capital approvals, which can limit certainty for multi-year rate decisions.
  • Operating and administrative costs: Manitoba Hydro’s projected operating and administrative expenses increased by $528 million (about 25%) since the last GRA. The Board disallowed 1% of planned operating and administrative expenditures (excluding SAP S/4HANA costs) and approved a capped deferral account of up to $167 million for Manitoba Hydro electric operations related to the SAP S/4HANA enterprise software replacement project, pending additional business justification for later phases.
  • Affordability and energy poverty: The Board raised concerns about energy poverty and recommended the Province undertake an Energy Poverty Reduction Review and develop an energy poverty strategy. The Board also recommended a refundable tax credit targeted to low-income ratepayers to help reduce annual energy burden. Targeted programs are needed as energy is an essential service and programs of general application do not help those most in need.

The Board is an independent, quasi-judicial administrative tribunal that acts in the public interest.