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Executive Director's message

May 4, 2018

Spring has sprung, the Winnipeg Jets are winning and we're happy to report success in one of our priority areas.

Last year, Manitoba Hydro submitted a request to the Public Utilities Board (PUB) for a 7.9% rate increase. As advocates for conditions that will attract investment in mine development and exploration in the province, MAMI has been working hard to advocate for affordable power rates for our operating members and potential new entrants.

Throughout 2017 and into 2018, we met with Manitoba Hydro (MH) senior management and leadership as well as provincial government ministers and staff to help them understand the significant risk posed to our industry by a 7.9% rate increase. On February 1, 2018, we made a formal presentation to the PUB hearing to explain how the proposed increase would negatively affect Manitoba mining and the entire Northern Manitoba economy as a result.

For those who aren't already aware, on May 1, the PUB denied Manitoba Hydro's application and instead implemented a 3.6% increase, less than half of what the utility had requested. Excerpts from the Board's final order show that our presentation had an impact:

"Manitoba Hydro did not provide evidence as to the economic impacts on customers in various sectors - such as residential, commercial, and industrial - or macroeconomic impacts of its proposed rate plan. However, expert witnesses retained by Interveners and the Board provided evidence that Manitoba Hydro's projected rate path may lead to short-term job losses and negative impacts for some industries that are more economically vulnerable, based on the electricity intensity of their production and the competitive nature of the markets into which they sell their products. Industry representatives similarly gave evidence that the projected rate path will make Manitoba businesses less competitive, will lead to corporate decisions to not make investments in Manitoba locations, and may lead to plant closures."
Order No. 59/18 May 1, 2018
Page 20 of 316

"A representative from the Mining Association of Manitoba echoed the concern that higher electricity rate increases will erode Manitoba's competitiveness, will jeopardize ongoing investment decisions by mining operators, and will cost the province billions of dollars in total economic activity over the forecast period."
Order No. 59/18 May 1, 2018
Page 160 of 316

In addition, we expect that our members will in fact face lower increases than 3.6%:

"The PUB gave Manitoba Hydro until May 15 to establish rate increases for various customer classes for its approval. Because it costs the corporation less money to provide energy to large industrial users, they will face an increase that is lower than the 3.6 per cent average rate hike the PUB ordered on Tuesday."
Martin, Nick and Kusch, Larry (2018, May 1). PUB shoots down Hydro's 7.9 per cent rate-increase request; agrees to 3.6 per cent. Winnipeg Free Press

The media announcement about the PUB order can be found here: hydro electricity rates - may 1%2c 2018.pdf


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