Hydro is requesting a five per cent jump in electricity rates starting on January 1, claiming drought conditions warrant the increase but the coalition disagrees, saying a two per cent increase would be sufficient.
The coalition, which includes Harvest Manitoba, the Consumers’ Association of Canada-Manitoba, and the Aboriginal Council of Winnipeg, said a 5 per cent rate increase would put an unnecessary strain on consumer budgets, especially for those on fixed incomes or living up north.
"We feel that, in many ways, Manitobans have already paid for this drought," said Gloria Desorcy, executive director of the Consumers’ Association of Canada - Manitoba.
The coalition argues that hydroelectric companies already plan for droughts and that hydro should be using past earnings to mitigate any losses.
The group claims drought conditions would have added about 0.8 per cent to Hydro’s bottom line. They said remaining revenues from a two per cent increase could then be used to offset the increased costs of major projects like the Keeyask generating station.
The group also said Hydro is financially secure and is projecting a positive net income of $112 million next year without rate increases, assuming the drought doesn’t continue.
They argue Hydro can use retained earnings as a tool to mitigate losses and find further efficiencies within the corporation.
"So we said two per cent, which is much more palatable for consumers especially at the time when so many consumers are struggling with so many higher bills,” said Desorcy.
According to the coalition’s calculations, that works out to a $2-4 increase per month, depending on whether electricity is used for heating, but it could be higher.
The coalition said their proposed two per cent rate increase should be applied to all Manitoba Hydro customers and have a set expiration date of January 1, 2023.
Another issue, according to the coalition, is the process of an interim rate application does not provide any meaningful transparency and accountability.
Desorcy said the next step is up to the PUB.
The board is expected to decide on the proposed increase in the next couple of weeks.