Manitoba Hydro reports a net loss of over $150 million due to drought

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Manitoba Hydro is reporting net losses of more than $150 million from their last fiscal year, blaming much of it on drought and low water levels experienced on Lake Winnipeg last year.

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Hydro released its 2023-24 annual report on Tuesday, which shows a consolidated net loss of $157 million for the fiscal year that ended in March of 2024.

According to Hydro, the losses for 2023-24 came in at $607 million lower than what was a forecasted net income of $450 million. These loses were caused in large part by lower net exports related to drought and low water levels on Lake Winnipeg, which the utility uses to power hydroelectric stations on the Nelson River.

“Low water conditions resulted in less excess energy being available to sell in wholesale markets, and the need to import power to meet customer’s requirements in Manitoba,” Manitoba Hydro President and CEO Allan Danroth said in a Wednesday media release.

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Hydro is also blaming the losses on an increase in the purchase price of power imports, and higher operating and administrative expenses due to increased wages and salaries resulting from collective bargaining settlements.

“Factors like water levels and export market prices are difficult to predict and not fully in our control,” Danroth said.

“We continually try to operate our business as efficiently as possible to minimize the impact of drought on our customers. However, as a hydroelectric utility, there is a limit to what we can do when we are at the mercy of Mother Nature when it comes to precipitation.”

According to Hydro the overall losses for the year totalled $135 million in the electric segment, and $34 million in the natural gas segment. Those losses are calibrated with a net income of $12 million from other segments, including Manitoba Hydro International.

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Hydro mentioned that significant rainfall in the spring of 2023 helped to “replenish” waterways, but despite that, results of the first quarter of the 2024-25 fiscal year show a net loss of $77 million, compared to a net income of $40 million over the same period last year. Precipitation levels still have the potential to turn Hydro’s fortunes around this year, if the province gets a high amount of precipitation in the coming months.

“While we are always striving to improve the efficiency of our operations, rain and winter snowpack, not just in Manitoba but across the entire watershed, play a critical role in ensuring we have good water conditions each year,” Danroth said.

This is the second time in three years that Hydro has reported a net loss totaling over a hundred million dollars. The corporation recorded a net loss of $248 million in 2021-22, which they also blamed mainly on drought conditions.

— Dave Baxter is a Local Journalism Initiative reporter who works out of the Winnipeg Sun. The Local Journalism Initiative is funded by the Government of Canada.

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