PUB orders 3 years of Centra Gas rate hikes

The Public Utilities Board has approved three years of rate hikes for Centra Gas — even after the corporation requested only one bump.

The PUB has imposed a 4.5 per cent rate increase for Centra Gas Manitoba Inc., a subsidiary of Manitoba Hydro, for Nov. 1, 2025 and a four per cent increase starting Nov. 1, 2026. That follows an increase of 4.5 per cent Centra imposed on Nov. 1, 2024.

The PUB mandated the increase because Centra loses millions of dollars each year.

“It is clear to the Board that the one-time 4.5 per cent general revenue increase applied for by Centra is insufficient to protect the financial health of the utility. Decisive regulatory action is required,” the PUB said in the Tuesday decision.

The increases only affect “the cost of operating Centra’s distribution system, not the cost of natural gas consumed by Manitobans. This means they affect only a portion of each customer’s bill.”

A 2018 projection showed Centra was expected to have a net income of about $7 million each year in the early 2020s, the decision said. Centra started losing money in 2020-21 and has lost money every year since, spiking at a projected $34 million in losses in 2023-24.

Political science Prof. Malcolm Bird said the PUB decision makes sense as a way to keep the Crown corporation afloat. He said it also makes sense the PUB had to step in and enforce it, so the government can “pin” the blame on the PUB instead of taking the blame itself.

“Hydro did not ask for this increase because it would rather have the utilities board impose it on the rate payer,” the University of Winnipeg professor said. “What this does is it alleviates political pressure on the government regarding this rate increase. You can kind of pin stuff on the utilities board.

“It’s offloading political culpability, or responsibility for this rate increase, onto the public utility force.”

Bird said the government is in a bind as it tries to lower the cost of living, but that “it’s not like Hydro forgot about applying for the rate increase.”

The PUB decision notes that Centra’s one-time 4.5 per cent proposal only came after the PUB directed it to make a new rate application.

“Shortly after receiving the application, the Board approved an interim general revenue increase of 4.5 per cent on an urgent basis, which took effect on Nov. 1, 2024. Even with that increase, the utility projected a $20-million loss in 2024-25,” the decision said.

The minister responsible for Manitoba Hydro, Adrien Sala, blamed the losses on the former Progressive Conservative government.

“I think that comes down to the former government’s incompetence and mismanagement. For years, they were told to file, and they refused,” said Sala, who is also finance minister and minister responsible for the PUB.

“Their failure to act created greater rate pressure and ultimately created significant risks,” the St. James MLA said. “And that’s a very important utility that, of course, provides Manitobans with heating services that we all depend on.”

The NDP came to power in October 2023, and the first application after the PUB requested one came just over a year later in October 2024. Sala said the government responded “in short order.”

“We responded to the fiscal challenges that the former government created. We did that in short order after entering government, because we’re focused on good management.”

Hydro critic Lauren Stone, the Progressive Conservative MLA for Midland, said the rate increases are determined by market prices and Sala “is trying to distract” from the bigger picture.

“Minister Sala needs to stop distracting Manitobans from his failures on their budget and their deficit and exploding Manitoba Hydro’s budget,” Stone said.

When asked why Centra went from making $2 million in 2019-20 to losing $34 million in 2023-24, and losing money every year in between, Stone said, “I can’t speak to that. I’d have to dig into that a little bit further.”

The current rates project the 2024-25 loss to be $20 million, 2025-26 losses to be $7 million and for Centra to start making money again after that.

Manitoba Hydro media relations officer Peter Chura said Hydro will adjust its plans to meet the new directives.

“We had proposed a rate path intended to put the company on a sounder financial footing, and the Board’s decision reinforces and builds on this plan,” Chura wrote in an email. “As the Board notes in its order, ‘the utility continues to deliver safe and reliable natural gas service,’ and that remains our priority while keeping rates affordable.”

The PUB also directed Centra to file 2027-28 to 2029-30 rate applications by April 2027, so that the board can review rates for the future on a “timely basis,” and reduce its forecast operating and administrative expenses by $2 million in both 2025-26 and 2026-27.

Sala said he couldn’t speak to what that application might look like.

» alambert@brandonsun.com