Expected revenue insufficient to cover costs from assets in service and allow the company to build

200 Pages·2017·14.76 MB·English

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r .pptx artbeat a ement heckin _ 20 1608 Source: Manitoba Hydro benchmarking 1. Residential based on 1,000 kWh monthly usage, gas h 1 2 Ranking: 0 10 20 30 0 5 10 Hydro Manitoba Quebec Hydro (En max) 20 Alberta NB Power Power wfoundland BC Hydro 20 askPower Ottawa Hydro ova Scotia Charge ¢per kWMonthly Residential Provincial peers, l Nearly all customeDomestic rev. PRIVILEGED AND CO
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o .pptx eartbeat Interim Mana em t checK1n_ 1608 ource: Manitoba Hydro, SaskPower, BC Hydro, BC '14-'18 to 3%6% "Workout plan" • Rates deBC Hydro • 5.1% CA and 7.3%'09-'13 • Rates deBC Hydro • 6.5% CA '13-'17 from 4.9-Power Sask • Steady a• 5.1% CA IFF Baseline ra• 3.95% Scenario 5 ye significant increases A number of provincia chieve ---30-40o/o ased on benchomestic rev. PRIVILEGED A D
!HE tlOST G Analysis cline from initial 9% and GR to 1.4% cline from initial 9.3% GR 5.5% nnual increases ranting GR te increases included in ar rate trajectory in recent past l peers received cumulative marking wit CONFIDENTIAL -PREPAR
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Draft-for discussion 2 1 Scenario still to be run otal Operating Cash Flow '18-'22 ges from $3.2 B to ative 5 year cash flo ver 5 years eers, 6i8111b.AifOR 1t11111GM'IOl!IGenera
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· 1HE tlOSTON .pp nagemen chec n_20 I _, Source: Manitoba Hydro, Statistics Canada, BCG Analysis additional customer revenue amount raised in on equity based on Canadian benchmar1cs 3. Estimated annual net export revenues assigned to cus1. Assumed Rates increased over 5 years such that the proportion of income spent in Manitoba on E : I CAGR 10 return by end of years: 2 average rate base rate of : 9.5% l of return amount needed to achieve cumulative 57% Rate base/rate Rates increases equal to : I CAGR I rate classes 3 I I 8.7% export revenue subsidies for I cumulative impact of removing net export subsidy 51% Rate increases to equal the Removal of behind Quebec after 5 yrs CAGR Canada a $100 margin Act by 9.3% rates remain lowest in Accountability cumulative combined residential utility Utility Rate 56% Affordable Raise rates such that MH's -------------------------------------------------- 5 after yrs.1 CAGR to the Canadian avg. equal 7.4% income parity income spent on electricity of disposable disposable bring MB share of cumulative 43% o/o Electricity as Residential rate increase to ____ _ I , : Rates Rate Option Description I I :----: ----------- potential internal MH benchmarks Possible 5 year rate increases drawn from higher rate increases than Prov Benchmarking using metrics spDomestic rev. PRIVILEGED AND CONFIDE TIAL -PREPARED I CO
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.pp _201so Source: Manitoba Hydro, Fraser Institute, Statistics Canad(7of households living in energy poverty institute estimate 1. FY '16 2. Revenue from Proof of Revenue Schedule En Industrial 9 Large (<100 kV) 41 Large GS (<30 kV) 309 Large GS 2,061 edium GS 66,000 Small GS 460,000 Residential 425,000- Low income 70,000 • 35,000-Residential FY '16Class Cust. ReveRate No. of more sensitivity th While all segmentsDomestic rev. PRIVILEGED AND CON
lHE tlOSTON a, BCG Analysis %, lower end estimate) and Statistics Canada estim2016 ergy figures are based on actual consumption 1 4.11 1 4.15 5.22 1 6.42 1 8.47 7.67 577 High estimate 1 Low estimate3 7.67 $ E, MProvincial Rank 1 kWh nue Rate per an others to rate enjoy low ratesFIDENTIAL -PREPARED IN CONTE
LrROUP ates of popu by custome 24% 8% 9% 17% 20% 21% nergy2 Of Ofo inc , soPLATIO
Draft-for discussion only s1 (15% 2014 lation living in poverty high end estimate) according to LICO 3. r class Percentage of low income consumers estimated using Fraser • Large chemical, pipeline and mining customers • Larger manufacturing and processing facilities facilities • Includes hospitals and larger manufacturing • Includes gov't institutions (e.g. universities) • Larger retail businesses and multifamily apts . • Portion of rate class pays demand charges restaurants, small farms) • Consists of small businesses (small offices, Includes seasonal homes • • Remainder of residential rate class • Remote First Nations population also in segme• May spend larger share of income on energy • Households below poverty line Description reases me li&Uh.AJ:BR OF 1t/mlGMK> General Rate Application
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iHE tiOS1UNeart:b€at tntenm an gem'nt checkin_ pbc 016oaoc. Ability to relocate operations • Intervener pressures Industry-specific trends • PUB precedent Macroeconomic environment • • Economic development objectives costs Electricity share of company op. • Political considerations income rates) Electric bill as % of disposable • Utility legislation (e.g. uniform Factors impacting ability Factors impacting feasibility ilit Low High Low Residential -Low Income 9 Largest Industrials Med/higher income Residential - Small GS • Large GS(<100 kV) • Medium GS L __________________ J Large GS ( <30 kV) : FY 16 Revenue : High rates Assessment of relative ability to raise f implementing differentiated H to consider customer finaomestic rev. PRIVILEGED AND CONFIDENTIAL -PREPARED
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Draft-for discussion only vROUP swings Industrial • Hit by commodity shutdown/job loss Large • Elec. high % of costs • Higher risk of (<100 kV) • Diverse industry mix presence Large GS Captive consumers • Stronger intervener • Large GS • Diverse industry mix coverage ratio among • Captive consumers • Pay lowest cost GS • Medium Captive consumers -Elec low % of costs • Weak interveners increase for SMEs • Poor optics of • Captive consumers Small GS % Elec low of costs • Weak interveners --------------------------------------------------------- income low non-low income pop. Med.lhigh • Total utility bills very • Weaker intervener for Residential of total spending affordability law • Electric bills low as % • Headroom under _____________________________________ • Uniform rates law Low lncom household spending population Residential • Bills a high% of on vulnerable • Limited incomes • Difficult to raise rates Se ment Abilit Feasibili businesses can sustain increases Residential, small and medium sized tes across segments l constraints andpfG39ilmi 5lliGllllLA\1CflRV1tllllllG:All'IClllGeneral Rate ApplicationEM PLATION OF
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