Manitoba Hydro released their annual report for the fiscal year of 2016-17, and it shows a consolidated net income of $71-million dollars — up from $49-million the previous year.
$53-million came from the electricity sector, including a one-time sale of property of $20-million dollars, $4-million from natural gas, $11-million from subsidiaries, and $3-million in adjustments to electric and natural gas operations related to the gas meter exchange program.
President and CEO of Manitoba Hydro, Kelvin Shepherd says variety of factors played into the numbers being where they currently are.
“We had a lot of high water levels that year…which allowed us to generate more electricity,” Shepherd said. “That mostly went into our export business and generated additional revenue.”
However with the good comes the bad, as the corporation has an overall debt of $16.4-billion dollars. Some of the revenue is offset through lower than expected growth in Manitoba energy consumption as a result of a mild winter.
Lower short-term export prices, possible increased borrowing costs, the risk of drought, and ongoing construction of two major capital projects — the Bipole 3 Transmission Project and Keeyask Generating Station — are other financial and business challenges the provincial company is facing.
Adjustments Need To Be Made
Manitoba Hydro has applied to the Public Utilities Board for an increase in electricity rates.
Shepherd says the reason is that much of their revenue comes from a dependency on an adequate water supply running through their hydroelectric generating stations.
Basically the more water that runs through, the more they can sell energy to the export market, increasing their sales volume.
He says they’re asking for a 7.9 per cent increase over the next five years.
“And that’s still going through the regulatory hearing process, and it won’t really be fully settled until early next year.” the CEO said.
Other measures include an ongoing voluntary staff reduction program, which affects 990 people, reducing the number of executives, and increasing operational and capital efficiency.
Shepherd says the reason is to ensure the long-term financial health of the corporation.