Industrial electricity consumers slam provincial Hydro bill

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This article was published 11/10/2022 (806 days ago), so information in it may no longer be current.

A group representing major industrial electricity users in Manitoba warned proposed legislation to accelerate debt repayment at Manitoba Hydro could spark an exodus of business over the next two decades.

“Manitoba’s much-touted energy advantage is rapidly eroding after a decade of rate increases that have exceeded the historic rate of inflation,” said Dale Friesen, a senior consultant for the Manitoba Industrial Power Users Group.

It represents 14 large industrial electricity consumers — including chemical, food and steel processing plants — which collectively account for 20 per cent of all electric and natural gas consumption in Manitoba’s employment base.

Friesen delivered a presentation on its behalf to the standing committee on social and economic development Tuesday night. The committee is hearing public representations on Bill 36 (Manitoba Hydro Amendment and Public Utilities Board Amendment Act).

The bill would cap annual electricity rate increases at inflation or five per cent, whichever is lower; establish multi-year rate setting; and put aggressive debt-to-capital ratios in statute.

Critics of the Progressive Conservative government’s bill argue it threatens the transparency and fairness of the Public Utilities Board and will lead to rate increases in excess of what is necessary for the financial stability of Hydro.

Friesen said industrial power users share many of those concerns and believe the legislation is “fundamentally flawed” and must be withdrawn.

The only element in Bill 36 that mandates non-discretionary, comprehensive, independent and transparent reviews is a clause that requires PUB to review major projects and export contracts, Friesen said.

Financial targets — which set debt-to-capitalization ratios at 80 per cent by 2035 and 70 per cent by 2040 — are overly aggressive and arbitrary, Friesen said.

Analysis by the group suggests a cumulative increase of 120 per cent by 2040 is required to meet the target.

“That will drive industry from Manitoba,” Friesen said. “It will destroy energy-intensive industry in this province.”

Finance Minister Cameron Friesen was pressed to respond to the industry group’s concerns in question period Wednesday.

“Why is the minister not listening to important voices, such as the largest industries in Manitoba?” NDP Hydro critic Adrien Sala said in the house.

Friesen said the previous NDP government (1999-2016) overspent on Bipole III and the Keeyask generating station, leading to record debt levels for Manitoba Hydro.

“It means higher rates,” the finance minister said. “That’s why we have brought a bill that protects Manitobans, keeps rates low, and puts Manitoba Hydro back on a path to stability.”

danielle.dasilva@freepress.mb.ca