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Brandon Sun - PRINT EDITION

Hydro rate hike request not shocking

Manitoba ratepayers and business leaders shuddered last week upon hearing news that Manitoba Hydro is seeking a 7.9 per cent annual rate increase every year for the next five years.

While the size and scope of the requested increases are off-putting, they should hardly come as a surprise.

For 17 years the previous government used the Crown corporation, once a crown jewel with an abundance of capital, as its personal charge card.

Mismanagement, project costs spiralling out of control and politicization handicapped the company to the state it finds itself in today. To be clear, we believe the requested increases will come down to a number that is more palatable, but the ask underscores the current reality at Hydro.

For all of the public pandering the NDP did about the importance of Hydro in the province, and they did a lot, it now appears like lip service.

Rewind to the beginning and Hydro’s current status in the province could be forecasted in the tea leaves.

In one of its first acts of government, the NDP raised fees on the public utility in the form of higher water power rentals. The government charges Hydro for the use of the water that powers its generating stations. For a sense of the costs of those fees, in the first quarter of 2016 alone, Hydro paid the province $31 million in “water rentals and assessments.” That’s a Crown corporation paying a provincial government, which owns the company, more than $100 million per year —or close to $2 billion during the course of 17 years — to use water to power its stations. Those fees, which doubled under the NDP, are nothing more than a way to siphon money from Hydro into provincial coffers.

And, it doesn’t end there.

For close to two decades the NDP collected a debt guarantee fee from Hydro. Essentially, the NDP guaranteed Hydro’s debt — something that cost them nothing — for a fee. In the 2014-15 fiscal year that amounted to $109 million, according to The Brandon Sun.

The most brazen disrespect for Hydro, however, came in 2002, just years after forming their first of four majority governments, when the NDP took $203 million out of Hydro in the form of a “dividend.”

Add that to a number of projects that came in massively higher than originally estimated — Keeyask dam project went from $6.5 billion to $8.7 billion — and you start to understand why Hydro is asking for a nearly eight per cent annual increase for five straight years.

If the requested rate increase is approved, homeowners can expect to pay nearly 50 per cent more for Hydro in five years. But that’s just the tip of the iceberg as the increases are going to make it more expensive for every company currently doing business in Manitoba. Those costs will be passed on to the consumer in the form of higher prices at the grocery store, gas station and curling rink.

Those costs are exacerbated by a growing concern from a series of reports that show more than half of Canadians are within $200 of being unable to handle their month costs and it becomes clear that any substantial increase will make it difficult for many families.

Couple those concerns with a massive provincial deficit and a Progressive Conservative government that has promised to lower taxes and something doesn’t add up.

What does add up — Manitobans own Hydro, and they’re going to pay for it.

Republished from the Brandon Sun print edition May 9, 2017

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Manitoba ratepayers and business leaders shuddered last week upon hearing news that Manitoba Hydro is seeking a 7.9 per cent annual rate increase every year for the next five years.

While the size and scope of the requested increases are off-putting, they should hardly come as a surprise.

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Manitoba ratepayers and business leaders shuddered last week upon hearing news that Manitoba Hydro is seeking a 7.9 per cent annual rate increase every year for the next five years.

While the size and scope of the requested increases are off-putting, they should hardly come as a surprise.

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