Manitoba Hydro wants a 3.95 per cent general rate increase effective April 1 to generate additional revenue of $56 million in 2014-15 — money that will help it build two new dams and two transmission lines, one to the United States.
Hydro filed the request to the Public Utilities Board (PUB) late Friday.
The Crown utility signaled almost two years ago it could need consecutive rates increases from now to 2033 as it plans to build the Keeyask and Conawapa generating stations, the Bipole II transmission line from northern Manitoba to Winnipeg and a second transmission line from Winnipeg to Duluth, MN. That line will give Hydro a pipeline to export power to Wisconsin and import power when needed. Hydro also needs capital to upgrade its older infrastructure, such as distribution, transmission and substation assets installed up to 60 years ago.
Future proposed rate increases may change based on the energy supply and the demand for it on the export market.
The PUB is currently involved in a special Needs For and Alternatives To (NFAT) hearing, scheduled to go into late May, on Hydro’s dam-building plan. For that reason Hydro has asked that the public review process for the rate increase be conducted by way of a written process, without an oral hearing, in order to avoid resource and scheduling constraints during NFAT hearing, and to ensure the proposed rate increase is implemented in a timely manner.
Manitoba Hydro says even with the increase, Manitobans pay some of the lowest rates in Canada depending on consumption. See Hydro's rate comparisons.
In its third quarter report, ending Dec. 31, Hydro says revenues from electricity sales within Manitoba totaled $990 million for the nine-month period, which was $84 million or nine per cent higher than the same period last year.
The report says the increase in domestic revenue was due to electricity rate increases and colder winter weather resulting in higher heating loads.
Export revenue of $338 million were $58 million or 21 per cent higher than the same period last year primarily due to higher sales volumes reflecting favourable water conditions and higher export prices.