Manitoba rate hike hearings continue

Manitoba Hydro Rate Increase faces PUB hearings as consumer groups challenge a 2.9% hike, citing whistleblower allegations, KPMG audit findings, blackout risk, capital projects like Bipole III, Keeyask, Conawapa, and cross-border power sales.

Hearings into a requested rate hike from Manitoba Hydro continued but consumer advocacy groups are suggesting they may last much longer due to issues the groups have with the Crown corporation's overall business plan.

"More questions have been raised than answered in the rate-hike hearings so far," Byron Williams, a lawyer for the Public Interest Law Centre said.

Williams is representing two groups: the Manitoba Society of Seniors and the Manitoba branch of the Consumers Association of Canada. Both are questioning the need for a rate hike.

The Public Utilities Board PUB is overseeing hearings into a proposed electricity rate increase by Hydro of 2.9 per cent. The company is also projecting the need for further rate hikes of up to 3.5 per cent over the next decade, including proposals to raise rates 2.5% each year in the near term.

The PUB is the agency responsible for approving the increase, but the hearings so far have been wide-ranging and have touched on many issues Hydro is facing, such as the proposed sale of power to the U.S. and a report from a whistleblower that alleges the company is being mismanaged.

She came forward in 2008 to allege that the Crown corporation is miscalculating how much power it can generate and sell and that the province could face significant blackouts in the future.

A complaint filed with the Manitoba Ombudsman's Office under provincial whistleblower legislation in December 2008 accuses the utility of taking too many risks with the province's power supply and alleges mismanagement, similar to off-book millions questioned in another utility case nationwide, has cost Hydro more than $1 billion.

Hydro contracted KPMG to conduct an independent audit, which has been tabled at the PUB hearings.

However the consumers' groups still have questions, Williams said, including calls for lower power bills for the poor in some cases.

"A report by KPMG has not done enough to allay concerns about the whistleblower and risk," he said.

Glenn Schneider of Hydro, however, said the rate increase is needed, with a rate increase next year expected under budgeting plans: partly to cover what he called domestic spending, such as renewal of infrastructure and partly to forge ahead with new projects such as the Bipole III transmission line and the Keeyask and Conawapa dams.

The combined cost of the projects would be between $14-16 billion, Schneider said.

The next major Hydro project — the Wuskwatim dam — is expected to come online at the end of 2011 or early 2012.

The rate increase is needed and the company is trying to be transparent and responsible to ratepayers, Schneider suggested.

"What we are trying to do is strike a balance so that we don't come to the PUB in an urgent situation where we need money — that would be irresponsible," he said.

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