Manitoba Hydro customers will see a series of rate increases over the next three years following a final decision from the Manitoba Public Utilities Board.
In a decision released March 19, the Board confirmed a 4.0 per cent general rate increase that took effect January 1, 2026, along with additional increases of 3.5 per cent in 2027 and 3.0 per cent in 2028.
The Board says the increases are needed as Manitoba Hydro faces significant financial pressure, largely due to ongoing drought conditions. Water flows in 2025 were among the lowest recorded in more than a century, contributing to a sharp decline in the utility’s financial outlook.
Between March and November of 2025, Manitoba Hydro’s projected net income dropped by more than $600 million, shifting from an expected $218 million profit to a projected $409 million loss, according to the Board.
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Drought driving financial strain
The Board says the approved rate path is designed to address immediate financial challenges while maintaining longer-term stability.
It described the approach as “front-loading” some of the revenue increases to help offset the impacts of drought conditions, which have reduced Hydro’s ability to generate electricity.
What it means for customers
The 4.0 per cent increase implemented in January applies broadly to most customers, with the exception of four northern communities in the Diesel Zone.
Future increases in 2027 and 2028 will not be applied evenly across all customers. Instead, they will be structured as general revenue increases, meaning some customer classes could see higher or lower changes depending on their share of system costs.
The exact breakdown will be determined in a future compliance filing by Manitoba Hydro.
Concerns over costs and major projects
The Board also raised concerns about rising capital costs, noting Manitoba Hydro’s long-term spending plan has grown significantly.
Projected capital expenditures have increased to nearly $31.2 billion over 20 years, up from $18.2 billion in the previous plan. Much of that increase is tied to the proposed High Voltage Direct Current reliability project, now estimated at $6.8 billion.
The Board pointed to ongoing cost escalation and evolving estimates as areas of concern.
It also highlighted challenges with the province’s approval process, saying the mismatch between multi-year rate setting and single-year capital approvals can create uncertainty.
Affordability concerns raised
The decision also points to growing concerns about affordability and energy poverty in Manitoba.
The Board is recommending the province conduct an energy poverty review and develop a strategy to support low-income households. It also suggested a refundable tax credit targeted at those most affected by rising energy costs.
The Board emphasized that energy is an essential service and said broad-based programs may not adequately support those in greatest need.
The Manitoba Public Utilities Board is an independent tribunal that regulates utilities in the public interest.