Manitoba Hydro released its annual report showing a total consolidated net income of $99 million for the fiscal year ended March 31, 2020, $22 million below the budgeted net income of $121 million, and also down $22 million from the previous year’s net income.
The consolidated net income of $99 million was comprised of net income of $105 million in the electric segment, net income of $2 million in the natural gas segment, and $8 million from subsidiaries, partially offset by a $16 million adjustment reflecting the PUB’s decision to refund previously expensed meter exchange costs to natural gas customers.
The decrease in net income by $22 million over the prior year was primarily the result of lower customer usage and weather impacts related to a shorter heating season as well as higher financing and depreciation costs associated with the Bipole III project being in-service for the full fiscal year.
These decreases to net income were partially offset by an increase in export revenues compared to last year due to favourable water conditions, customer growth and the full-year impact of the June 1, 2018 electric rate increase.
When compared to the budgeted net income for 2019-20 – which was also $121 million – the results reflect a lower-than-expected rate increase. The Public Utility Board’s decision on June 1, 2019 granted Manitoba Hydro a 2.5% electric rate increase rather than the requested 3.5 per cent increase, and assigned all of the rate increase to a major capital deferral account to mitigate future rate increases when the Keeyask Generating Station comes into service. The first of seven units is anticipated to begin producing power in October 2020 and remains on track to meet its control budget of $8.7 billion.
The Keeyask Project is being developed by the Keeyask Hydropower Limited Partnership, a venture between Manitoba Hydro and four Manitoba First Nations – Tataskweyak Cree Nation, War Lake First Nation, York Factory First Nation, and Fox Lake Cree Nation.
When complete in 2021-22, Keeyask will add another 695 megawatts of clean, dependable hydroelectric generating capacity to Manitoba Hydro’s system, which will be used to power future economic growth in the province and provide additional export sales opportunities to help keep rates lower for Manitobans. In 2019-20, export sales contributed $468 million in revenue to the corporation, or approximately 21% of all electricity-derived revenues.
Costs related to the October 2019 snowstorm totaled $79 million at March 31, 2020. The total cost for the 2019 storm, unprecedented in the history of the corporation and which caused extensive damage and outages across the province, are expected to reach approximately $100 million in total once all repairs to the transmission system are completed 2020-21.
The COVID-19 pandemic did not have an impact on 2019-20 revenues, as the various “lockdown” orders from federal and provincial public health authorities only came into effect in mid-March, two weeks before Manitoba Hydro’s fiscal year-end.
In response to the pandemic, Manitoba Hydro quickly adopted a virtual model of operation for office staff and made numerous changes to work procedures for field staff in order to maintain reliable service and protect the health and safety of customers and employees, with measures informed by Manitoba Health, Seniors & Active Living.
