WINNIPEG — The Manitoba government is planning to raise electricity rates by 2.5 per cent a year for the next three years, starting in December.

The increases, to be presented in amendments to a bill before the legislature, are the lowest in a decade and will help keep rates among the lowest in Canada, the Progressive Conservative government said Thursday.

"This means that Manitoba households and businesses will have stability and certainty as our economy recovers from the COVID-19 pandemic," Jeff Wharton, the minister for Crown services, said.

Electricity rates are normally set by the Public Utilities Board, a regulatory body that holds public hearings and examines Crown-owned Manitoba Hydro's finances. But the government has temporarily suspended the public process while it reforms the board, and has set rates itself starting last year with a 2.9 per cent hike.

Manitoba Hydro had asked for a 3.5 per cent increase this year to help pay off billions of dollars in debt. The corporation's debt tripled over a 15-year period as a new dam and a transmission line were built and ran over budget.

Finance Minister Scott Fielding said the government is opting instead for a 2.5 per cent rise.

"In spite of the huge debt problem at Manitoba Hydro, our government is working to strike an appropriate balance to protect Manitoba ratepayers as we recover post-pandemic," Fielding said.

The Opposition New Democrats said the government is keeping the public in the dark by avoiding an open regulatory review of the corporation's finances.

"Without that clarity on Hydro's financial position, it's impossible for Manitobans to know whether or not a rate increase is fair, whether or not it's actually required," NDP hydro critic Adrien Sala said.

The New Democrats are not promising lower rate increases than the Tories, but pledge a return to the public regulatory hearings if elected.

"I think it's fair to say that an NDP government would honour the independent process that's managed by the Public Utilities Board," Sala said.

The board has traditionally approved rate increases every year. Under the former NDP government, increases ranged from two per cent to five per cent.

One credit rating agency, Moody's, warned in 2019 that the utility had a weak financial profile but benefited from the financial backing of the government. Hydro applied for annual rate hikes of 7.9 per cent as recently as 2017, but the board approved increases of less than half that amount.

This report by The Canadian Press was first published July 8, 2021.

Steve Lambert, The Canadian Press