Manitoba households and businesses will see higher electricity bills in the new year after the province’s utility regulator approved an interim rate increase for Manitoba Hydro.
The Public Utilities Board has authorized a 4.0 per cent general rate increase for Manitoba Hydro, effective Jan. 1, 2026. The increase applies to all customer classes except those in Manitoba Hydro’s Diesel Zone.
The approved increase is higher than the 3.5 per cent increase sought by Manitoba Hydro in its general rate application and reflects the financial impact of a severe drought affecting the utility’s hydroelectric system.
According to the board, water flows into Manitoba Hydro’s watershed are currently at the second-lowest level in 112 years. As a result, the utility’s financial metrics have deteriorated by more than $625 million.
In its decision, the board said an increase at the maximum legislated rate cap of four per cent is necessary to protect the long-term financial health of the Crown utility.
While the increase adds pressure for customers, some local business owners say they understand the circumstances behind the decision.
Trevor Buchanan, a farmer from Argyle and owner of Meridian Acres, said the increase represents another cost his operation will need to absorb.
“For our business, it’s another cost that we will need to incur,” Buchanan said. “I do see Hydro’s point of view, though. I’ve personally seen how low the water levels actually are in our province after a recent trip to Gillam, where most of our hydro is produced.”
Buchanan said multi-year lows in snowfall and rainfall have limited water replenishment across Manitoba’s watersheds.
“With the multi-year low snowfall and rains, our watersheds are not being replenished to normal levels,” he said.
He said his operation has already experienced power reliability issues related to supply constraints.
“We’ve seen first-hand what they call brownouts, where not enough voltage is supplied,” Buchanan said. “That’s when electronic burnout happens — motors burn out and computer-controlled devices are fried.”
To reduce risk, Buchanan said Meridian Acres has invested in alternative systems.
“We’ve implemented geothermal heating and installed generators in areas that require higher power requirements because Manitoba Hydro cannot provide enough electricity to maintain their function,” he said.
Buchanan said solar power has been considered but was not financially feasible at the time.
“We looked at solar as a source, but the costs were too astronomical for the return,” he said. “In the future, that may come in line with the investment return to make the move toward it.”
Despite acknowledging Hydro’s challenges, Buchanan said higher utility costs further strain household affordability.
“With expensive housing costs, rising grocery bills and other pressures, our younger generation and people on fixed incomes take another blow to their ability to sustain themselves and raise a family in this province,” he said.
The Public Utilities Board is an independent, quasi-judicial administrative tribunal with oversight and supervisory authority over public utilities and designated monopolies in Manitoba. In approving rates, the board said it must balance the financial requirements of the utility with the impact on customers.
The interim increase will remain in place until the board issues a final order on Manitoba Hydro’s 2026–2028 general rate application, expected later in 2026. That final decision will set a final rate for the 2025-26 fiscal year and determine rates for the remaining two years of the application period, while also addressing other issues raised during the review.
Additional details on the decision are contained in Board Order 161/25, which is available through the Public Utilities Board.
