Manitoba Hydro Posts $157M Net Loss due to Drought: 2023-24 Annual Report
October 8, 2024
Manitoba Hydro released its 2023-24 annual report which shows a consolidated net loss of $157 million attributable to Manitoba Hydro for the fiscal year ended March 31, 2024. This compares to a consolidated net income of $638 million the previous year.
“Manitoba Hydro experienced drought conditions for the second time in three years,” said President & CEO Allan Danroth. “Low water conditions resulted in less excess energy being available to sell in wholesale markets, and the need to import power to meet customers’ requirements in Manitoba.”
The consolidated net loss for 2023-24 was $607 million lower than the forecast net income of $450 million. The loss was driven by lower net exports related to drought, an increase in the purchase price of power imports, and higher operating and administrative expenses due to increased wages and salaries as a result of collective bargaining settlements.
Overall, the net loss attributable to Manitoba Hydro of $157 million for the 2023-24 fiscal year was comprised of a net loss of $135 million in the electric segment, a net loss of $34 million in the natural gas segment and net income of $12 million from other segments, including Manitoba Hydro International.
“Factors like water levels and export market prices are difficult to predict and not fully in our control,” said Danroth. “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.”
While significant spring rainfall helped replenish waterways, first quarter results for the 2024-25 fiscal year showed a loss of $77 million, compared to a net income of $40 million for the same period last year.
The net loss for the first quarter is slightly higher than the budgeted net loss of $66 million for the same period, which reflected lower storage levels to start the fiscal year.
Lower storage in reservoirs means the main driver of the decrease in net income from this same period last year is lower net exports. The decrease was also impacted by an increase in operating and administrative costs, the completion of the Bipole III deferral amortization in July 2023, as well as a slight decrease in domestic electric revenue.
Danroth cautioned that late summer, autumn and winter precipitation levels could still have a significant impact on the utility’s finances going forward.
“While we are always striving to improve the efficiency of our operations, rains 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,” he said.
