Hydro rate hikes should come with plan to help low-income customers, Green Action Centre says
An environmental group says if Manitoba Hydro wants to increase its rates, the utility needs to have a plan to help low-income people deal with the higher price tag.
In a submission to the Public Utility Board dated May 26, the Green Action Centre says Manitoba Hydro might have to increase rates to cover its significant expenditures, but calls on the utility to come up with an affordability strategy to accompany the hikes.
The Crown corporation has asked the Public Utility Board if it can raise rates by 7.9 per cent this year and next, with the new prices coming into effect Aug. 1, 2017 and then April 1, 2018.
Manitoba Hydro CEO Kelvin Shepherd has said the increase is necessary to help the utility pay off the "significant amount of debt" it incurred to pay for the Keeyask Generating Station and Bipole III transmission line.
"Everyone recognizes that the debt load of Manitoba Hydro is increasing drastically, doubling or more," said Peter Miller, a volunteer with the Green Action Centre and former chair of the group's policy committee.
But Miller said his group is concerned about the impact that will have on customers who are already spending a big chunk of their income on energy.
"Rates are going up very steeply, or at least that's what they're asking for — double the old projection of 3.95, they want 7.9 per cent now, every year, beginning in two months," he said.
"We're very concerned about affordability levels for the most stressed customers, those who spend six per cent or 10 per cent of their income or more on their energy bill, and that will rapidly escalate."
Miller said low-income customers or people who use electric heating — especially in the north — will be hit the hardest by the hikes.
The group is pushing Hydro to bring in "conservation rates" — that is, a price that increases after a customer uses a certain amount of energy — alongside the strategy to ensure affordability in the face of rising rates.
That could include reaching out to customers with high bills to offer them tools to make their homes more energy efficient, or a version of conservation rates that gives low-income customers a lower starting point than others.
"Affordability doesn't mean just low rates across the board," Miller said.
"Affordability has to do with what people can pay and the resources they have. It is the question of finding some solution for the lowest-income folks who heat with electric heat and thus use a lot of electricity — what can be done on their behalf?"
'Excessive risk taking'
In its own submissions to the Public Utilities Board, Manitoba's Consumers Coalition criticized the utility for creating the problem of rising debt in the first place.
"The pressures facing Manitoba ratepayers are a product of unreasonable actions by MB Hydro, not the regulatory system," the Consumers Coalition wrote in a submission dated March 28.
The coalition critiqued the utility for "excessive risk taking" in its expenditures and the "imprudent magnitude" of spending on the Keeyask and Bipole III projects.
"Put bluntly, it has been the actions of [Manitoba] Hydro that have imposed excessive risks and rates upon Manitoba consumers and the regulatory process that has been a primary means for defending consumer interests," the letter states.
