Utility Rates
Utility rates
The Board strives to ensure that Manitobans have safe and reliable access to necessary public services at just and reasonable rates. When applying for an increase in rates, all utilities under the PUB's jurisdiction must justify the revenue requirements that support a requested rate increase. Those costs are considered and analyzed in detail by the Board, and include but are not limited to:
• The cost to build, operate and maintain the utility’s facilities• The cost to finance debt incurred from building the utility’s facilities• Depreciation and amortization expenses• The costs of financing general debt incurred by the utility• The cost of providing affordable and reliable service to utility customers
In addition to these financial considerations, the PUB assesses the performance of utilities, seeking to optimize value for the ratepayer. This type of regulation involves an active assessment of whether goals and outcomes are being met in a cost-effective and timely manner, necessitating a comprehensive examination of the operations of the utility.
Given that several large utilities under PUB oversight are Crown Corporations (publicly owned and operated by the government), the PUB is a crucial entity for ensuring neutral, objective analysis of proposed rates. The PUB operates independently from government—we fairly and transparently weigh the financial needs of the utility with the needs of ratepayers in our rate setting decisions.
Utility facility projects
The PUB has limited oversight over the capital expenditures of Manitoba’s public utilities.
Though the Board does have regulatory control over the capital expenditures of natural gas distributors and water and wastewater facilities, we do not have regulatory control over Manitoba Hydro’s capital expenditures, such as transmission lines, dams and generating stations.
However, the Board may order the exclusion of certain capital costs in our calculation of appropriate rates to be charged to Manitoba consumers. Moreover, the Board may be instructed by the provincial government to provide recommendations about proper capital development plans. For example, in 2014 the Board conducted a comprehensive examination of Manitoba Hydro’s preferred capital development plan with its Need For and Alternatives To (NFAT) review, conducted in 2014 at the government’s request.
Capital development plans figure prominently in the Board’s decision-making regarding rate adjustments for all Manitoba public utilities. New capital expenditures often require a utility to incur more debt, seeking an increase in consumer rates in order to pay it down. As such, other than for Manitoba Hydro, the Board must examine whether there is an acceptable business case for such expenditure. In the case of water and wastewater utilities, municipalities must apply to the Board for approval of a recovery method for loans used to pay for capital development.
Regulatory policy
The PUB carries out our mandate based on several pieces of enabling legislation. The legislation grants us significant authority to analyze the accounting techniques and financial practices of public utilities in Manitoba.
The PUB’s regulatory policies emerge through our Orders, instructing utilities on acceptable practices and procedures in their operations. In addition to the enabling legislation, these regulatory policies are aided by the PUB’s staff and expert advisers.
The PUB is further aided by our continued connections with other utility regulators and administrative tribunals. These connections are facilitated by the Board’s membership in the Canadian Association of Members of Public Utility Tribunals (CAMPUT), the Canadian Auto Insurance Rate Regulators (CARR) and the Manitoba Council of Administrative Tribunals (MCAT) as well as professional relationships with organizations like the Association of Manitoba Municipalities. The PUB strives to offer innovative regulatory policies and solutions that are consistent with national trends in utility regulation.