Manitoba Hydro blames $157M loss on drought across Lake Winnipeg basin

Manitoba Hydro lost $157 million during its most recent fiscal year, thanks to drought conditions that plagued the Lake Winnipeg basin during much of 2023.

The Crown corporation's loss for the 2023-24 fiscal year, disclosed Tuesday in an annual report, represents a $795-million reversal of fortune from the previous fiscal year, which saw Hydro post a net income of $638 million.

Hydro blames the negative financial results on dry conditions across western Canada that led to low water levels on Lake Winnipeg, which the corporation uses as a reservoir to power its hydroelectric stations on the Nelson River.

"Manitoba Hydro experienced drought conditions for the second time in three years," Hydro president and CEO Allan Danroth said in a statement, referring to the drought of 2021 as well as the one last year.

"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."

As recently as this February, Hydro expected to lose even more money. After three quarters, the Crown corporation projected a $190-million loss for this fiscal year.

Heavy rains early this year helped claw back some of the red ink. Nonetheless, the loss in 2023-24 added to Hydro's net debt, which rose from $24.6 billion at the end of the last fiscal year to $24.8 billion.

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

"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."

Hydro spends slightly more than $1 billion a year servicing its debt.