In our household, we're wondering how to afford the Manitoba Hydro bill increases.
Premier Brian Pallister's Progressive Conservative government has frozen one of our salaries. Our other bills are also rising: property taxes, water and insurance.
We save money by being energy efficient. We shut off the lights when leaving a room. We wear sweaters and turn down the heat.
Hydro bills will go up anyway because Manitoba Hydro decided to go ahead with the Bipole III transmission line and the Keeyask Generating Station to increase electricity supply. These efforts (like many public works projects) are over budget and behind schedule.
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Manitoba gambled that it could export this energy and earn back the costs. It doesn't look like we'll win this roll of the dice. The predicted electricity demands beyond our province's borders didn't materialize.
The Manitoba Hydro board plans to resolve the problem by raising rates for all of our households by 7.9 per cent a year for five years, far beyond the rate of inflation.
As a province, our average salaries aren't going up 7.9 per cent a year. We certainly won't be able to sustain the suggested increases over the long term.
Stuck with it
As individuals, we didn't choose this large-scale energy production project. Now we're stuck with it.
The average working-class or middle-class household will figure out ways to reduce energy use and utility bills. However, reducing our electric bills won't help resolve the larger provincial financial crisis.
We all have to pitch in to pay for this bet that Manitoba Hydro lost.
When Hydro finishes building the dam, the costs of running it remain about the same whether it's generating electricity or not. If there's insufficient demand, we shoulder the costs across fewer kilowatt-hours. Then the price of producing each unit of electric power goes up.
So the solution to the crisis is counterintuitive: to keep hydro rates low, we have to use more electricity, not less.
We need to use this increased supply without wrecking our household budgets.
We could shift our energy budgets so that more of that energy is electric. Then less comes from other sources, like fossil fuels.
We can afford more electricity if we don't pay for natural gas, gasoline, or the $25 per tonne carbon tax. Using hydroelectric power also helps meet Manitoba's carbon reduction targets.
How can we rethink provincial energy use policies to turn this into a net positive for Manitoba?
Electric Cars: If the government encourages purchasing and using electric cars, we spend less money on fossil fuels (gas) and more on renewable energy like electricity.
We're lucky. Most of Manitoba's cars have a spot to plug in at home anyway.
If the government incentivizes purchasing electric cars, we also reduce our carbon taxes and increase electricity demand.
The province and municipal governments could require that new car and truck purchases, including its own fleet of vehicles, be electric or plug-in hybrids. Next, we create a network of rapid recharging stations. Finally, the province prioritizes this environmental effort through incentives. Families purchasing new vehicles would see clear financial benefits for choosing electric cars.
Electric power for public transport: The current provincial government plans to use part of the carbon tax proceeds to buy electric buses. This is a logical short-term choice. It uses some of our oversupply of electricity.
That plan could go further. Many cities' transit systems run on electricity, with light rail, for example. Winnipeg's downtown infrastructure was designed with tramway use in mind. When my family walks down Stafford Street, we admire a mural that shows the neighbourhood trolley in use long ago. This mode of transportation would use our electricity supply and reduce the need to drive cars downtown.
Incentivize geothermal heating systems: Geothermal heating systems are expensive, but once installed, they use substantially less energy than other options.
What are the benefits? Geothermal heating uses energy from the earth. It doesn't rely on fossil fuels, so we would pay less carbon taxes. It also depends on electric pumps to function, so it uses clean energy from hydro.
The government could provide subsidies or tax breaks to those who install geothermal systems. What about requiring new homes to use this heating system? Where geothermal is impractical, we could consider electric furnaces for fossil-free central heating systems.
Freeze or eliminate incentives for solar power: Solar and wind power are wonderful clean energy sources. On the Prairies, we have plenty of sunshine and wind. At present, Manitoba Hydro offers incentives to those who install solar panels.
This reduces carbon fuel dependence while diversifying the province's energy-generating capacity (important, particularly during prolonged drought).
Unfortunately, subsidizing wind and solar power boosts supply, which we don't need.
If we cancel the solar power incentives, the money saved could purchase electric cars or install geothermal heating systems. This would address some of Manitoba Hydro's problems, while also reducing the carbon footprint.
Use the carbon tax to offset rate hikes: Manitoba Hydro board chair Sandy Riley has it right. We should use carbon tax proceeds to protect vulnerable Manitobans from big rate hikes.
Pallister's government plans for this money to buy electric buses (good idea), upgrade diesel vehicles (why not buy electric vehicles instead?) and shut a coal-fired electricity plant (fair enough).
We might have a better chance of paying off our lost bet if the province invests in our oversupply. Boost support of electric cars, buses and light rail and encourage geothermal heat production so we share the burden and stop burning fossil fuels.
I'm worried about rate increases. I'd like the province to think ahead and create long-term strategies that are better for the environment and our health.
Let's improve and grow city transit, not cut it. This forces us to drive our cars, use fossil fuels, create pollution and pay more carbon tax.
Let's redistribute our demand needs to enjoy the electricity oversupply we will receive — whether we like it or not.