The Manitoba government has passed an Order in Council (OIC) providing the Public Utilities Board (PUB) with special authority to access information on Manitoba Hydro’s financial health, capital expenditure plans, cost overruns, and asset values during the process of the 2017–18 General Rate Application (GRA).
The announcement was made by Finance Minister Cameron Friesen, minister responsible for the PUB, who said, “Serious concerns have been raised in recent months about the debt of Manitoba Hydro and its impact on both the corporation and the province’s finances,” said Friesen. “We are providing the PUB with the authority to review not only the financial health of the utility but also to delve deeply into its capital finances while assessing the potential impact of both factors on Manitoba hydro rates.”
The PUB is an independent quasi-judicial tribunal with oversight and supervisory powers over public utilities as set out in legislation. The regulator is charged with ensuring the financial health of a Crown corporation seeking a general rate application is balanced with the best interests of consumers.
In Manitoba, the PUB has struggled in its duty in the absence of capital information for the short, medium and long term, said Friesen. The PUB has not been privy to all of the capital information related to potential cost overruns or the state of assets currently in use and the costs associated with anticipated repairs to those assets, he added.
Across Canada, it is common for public utility regulators to review and, in some jurisdictions, approve capital expenditures. Access to capital information allows for rates to be set with full understanding of the state of capital investments and assets including possible issues that could impact the financial health of a corporation, Friesen noted.
While the PUB has authority over capital expenditures of other public utilities in Manitoba, this OIC grants the PUB, for the first time, the authority to gain access to evidence regarding Manitoba Hydro’s financial and capital situation. This is the first time the PUB has been granted the authority to access information on capital spending on the Bipole III transmission line project, the minister noted.
“Manitobans have expressed concern with the financial situation of Manitoba Hydro since reports revealed the corporation’s long-term debt is expected to nearly double to $25 billion within the next three or four years,” said Friesen.
More information is available from the Government of Manitoba.