PUB orders Hydro to produce financial data Tribunal gives Crown utility 30 days to act on order; transparency vital to protect ratepayers, 'achieve public trust' By: Carol Sanders Posted: 7:00 PM CDT Tuesday, May. 11, 2021 Last Modified: 9:18 PM CDT Tuesday, May. 11, 2021 Updates

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This article was published 10/05/2021 (1326 days ago), so information in it may no longer be current.

The Public Utilities Board may soon be able to get a look at Manitoba Hydro’s finances and predictions for future health, both of which have been kept under wraps in recent years.

A PUB decision directs the Crown corporation to provide information about its finances and operations, saying “a transparent process allows the public to have access to information regarding the basis for the rates charged for electricity, and to trust that the monopoly utility is being regulated in the public interest.”

The independent tribunal with broad oversight and supervisory powers over public utilities told Hydro in a decision posted Monday to provide “financial, operational, capital expenditure, hydrology, and cost of service information currently in existence and in use in the operations and management of Manitoba Hydro within 30 days.”

The order follows a complaint earlier this year by the Consumers Coalition — which includes the Consumers’ Association of Canada (Manitoba), Harvest Manitoba and the Aboriginal Council of Winnipeg — that the company hasn’t held a rate hearing since 2018 or divulged its financial forecast since 2016.

“In order to achieve public trust, there must be transparency in the board’s processes.” – PUB decision

“In order to achieve public trust, there must be transparency in the board’s processes,” the PUB’s decision said.

Manitoba Hydro spokesman Bruce Owen said Tuesday that it is reviewing the order.

The order carries a fine of $100 a day if Hydro does not comply.

A spokesperson for Crown Services Minister Jeff Wharton said “this government values the important work of the PUB and Manitoba Hydro and supports the PUB request for additional information from Manitoba Hydro in order to make an informed decision to remain transparent and protect Manitoba ratepayers.”

The Progressive Conservative government has taken steps to limit board oversight of electricity rates. Finance Minister Scott Fielding, who has said that the cost of the current PUB regulatory process, borne by the Crown corporation, is too expensive, in October introduced Bill 35 — The Public Utilities Ratepayer Protection and Regulatory Reform Act (Various Acts Amended).

If passed, the bill would require Hydro to submit full general rate applications to the PUB only once every five years, allowing cabinet to set rates in the interim. It’s one of the five bills that the Opposition NDP has held over until the house resumes sitting in the fall

“If Bill 35 passes in the fall, this may be Manitobans last chance for a transparent review of Manitoba Hydro’s financial position until 2024,” said Gloria Desorcy, Manitoba executive director with the Consumers Association of Canada.

“I think this lack of transparency is a small taste of what we might experience in Manitoba if Bill 35 passes in the fall: rates set for necessary products, produced by Crown monopolies, without the oversight of an independent regulator, or the benefit of a transparent public process,” she told the Free Press.

“I think this lack of transparency is a small taste of what we might experience in Manitoba if Bill 35 passes in the fall: rates set for necessary products, produced by Crown monopolies, without the oversight of an independent regulator, or the benefit of a transparent public process.” – Gloria Desorcy

The province has bypassed the regulatory process and board oversight already, imposing a 2.9 per cent rate increase Dec. 1 for electricity customers. The rate hike was included in a 167-page budget implementation bill.

Earlier this year, the Consumers Coalition took the extraordinary step of appealing directly to the PUB to hold a special hearing on electricity rates in response to an unprecedented effort on the part of the provincial government to suppress all financial information about Hydro’s current and future operations.

“The PUB doesn’t currently have enough info about Manitoba Hydro’s finances to know if there is substantial change in their situation or not, let alone to determine an appropriate rate for electricity,” said Desorcy. “Without this information, and the oversight of our independent regulator, how will we know if we are paying a reasonable rate, or paying too much, or paying too little for what is an essential product for life in Manitoba?” she asked

In its findings, the Public Utilities Board said that meeting its mandate — setting for a monopoly just and reasonable rates that are in the public interest — requires ratepayer trust and confidence.

“The PUB doesn’t currently have enough info about Manitoba Hydro’s finances to know if there is substantial change in their situation or not, let alone to determine an appropriate rate for electricity.” – Gloria Desorcy

The board also noted concerns expressed by the Manitoba Industrial Power Users Group — big customers including Maple Leaf Foods Inc. and Winpak Ltd. — who are part of the “general service large” rate classes that purchased nearly 35 per cent of Hydro’s annual domestic energy sales.

The PUB report cited the industrial users’ group as saying the utility’s failure since 2016 to produce an integrated financial forecast, combined with presentations of limited short-term forecasts and a lack of transparency regarding the most recent rate and regulatory changes imposed by the legislature, “means that industry in Manitoba is presently operating with an unprecedented lack of confidence.”

“Conditions related to rate competitiveness in Manitoba are opaque and important decisions regarding capital investment by industry and post-pandemic production scheduling are already beginning to direct critical resources elsewhere. If allowed to continue, opportunities for Manitoba-based operations will inevitably be lost,” it said, adding businesses need to know what to expect in order to “rebound from the difficult economic conditions of a pandemic.”

carol.sanders@freepress.mb.ca

MANITOBA HYDRO STATUS UPDATE HEARING

Carol Sanders
Legislature reporter

After 20 years of reporting on the growing diversity of people calling Manitoba home, Carol moved to the legislature bureau in early 2020.

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