WINNIPEG — Manitoba Hydro made millions less in income last year and the Crown corporation expects its long-term debt to grow by $25 billion in the next five years.
The utility's annual report shows it made $37 million in net income for the fiscal year ended March 31, down from $71 million the year before.
It projects the income loss to continue next year.
The utility says the drop comes primarily from $50 million in restructuring costs, including a reduction in employees and management.
Hydro incurred huge debt to build new generating stations and transmission lines — its total debt is more than $19 billion.
In the report, Hydro president and CEO Kelvin Shepherd says reducing costs is only part of a plan to restore financial stability, adding the utility will look at increasing exports.
The report says higher domestic electricity revenues because of colder weather and an increase in customers helped the financial results, but improvements were offset by a drop in revenues from export sales due to reduced hydraulic generation.
The Crown utility has undergone inner turmoil recently with nine out of 10 board members resigning in March. They cited an inability to work with Premier Brian Pallister and the Progressive Conservative government.
Pallister said the resignations were linked to the board's plan to pay $70 million to the Manitoba Metis Federation so the organization wouldn't pursue concerns over a new transmission line to Minnesota. The government overturned the decision and Pallister called the deal "persuasion money."
Shepherd announced in July that he will step down in November.
Hydro has said it will seek rate increases of nearly eight per cent for the next several years.
In May, Manitoba Hydro lost its bid to raise the rate an additional 7.9 per cent in June. A 3.6 per cent increase was approved instead.
The Public Utilities Board also directed the utility to create a special rate class for Indigenous customers who live on reserves. Last week, Hydro asked the courts to overturn that directive.
Shepherd said Manitoba Hydro is working on a long-term financial plan.
"This level of debt increases the potential financial exposure from risks facing the corporation and is a concern for both the corporation and our customers, who may be exposed to higher rate increases in the event of rising interest rates, a prolonged drought or a major system failure," Shepherd said.
The Canadian Press