Manitoba Committee Hansard — Public Utilities Committee, Sitting 5 (30th Legislature, 4th Session)

30-4-pu5

Manitoba — Debates (Hansard)

Legislative Assembly of Manitoba HEARING OF THE STANDING COMMITTEE ON PUBLIC UTILITIES AND NATURAL RESOURCES Chairman Mr. Harry Shafransky Constituency of Radisson TUESDAY, March 29, 1977, 10:00 a.m. Printed by P.N. Crosbie -Queen's Printer for the Province of Manitoba

I TIME: 10:00 a.m. Public Utilities Tuesday, March 29, 1977 CHAIRMAN, Mr. Harry Shafransky. MR. CHAI RMAN: The Committee will come to order. I will call upon the Chairman, Mr. Bateman. I believe he has a few comments to make before we proceed with the questions and I had last day, Mr. Joha nnson and Mr. Dillen on the list of people to as k questions. Mr. Lyon. MR. LYON: Mr. Chairman, before we begin, it is a matter of procedure. lt is now two weeks since this Committee last met and it was only yesterday that we received a copy of the Hans ard proceed ings of the committee meeting of two weeks ago.

In other words it took thirteen days to produce it. Now I know that our Han sard staff are extremely hard-working and extremely accur ate and I don't lay any blame on them whatsoever, but I do suggest that an order should go forward from the Committee to those responsible to ensure that transcripts of these hearings are made available as rap idly as possible and that in no case should a hearing be called of this Committee, particula rly with respect to Manitoba Hydro, until such time as the transcript has been in the hands of the Committee, preferably, for some da ys. MR. CHAIRM AN: Mr.

Lyon, first of all it is the report of the Chairman of the Man itoba Hyd ro, the Annual Report; these are not hearings. The transcript is something that just came about in the last c-ouple of years that the Committee established the idea of having transcripts made available of the Committee. This had not been done until very recent years. So, when you are tal king about hearings, these are not hearings. First of all I should like to point it out that this is the Annual Report from the Chairman of Man itoba Hydro. The transcripts are made available of Hansard every day.

We can have that directive made to see if they can speed up to have the Committee tra nscripts available as soon as possible, at least prior to the next sitting of the Committee. MR. LYON: Well, Mr. Chairman, that is the importa nt point. lf that instruction can go forward from you on behalf of the Committee then I won't argue with you about your ... MR. CHAI RMAN: Well I shall speak to the Speaker and see if that is something that can be exped ited to make sure that the transcripts of the meetings of the Public Utilities or any other committee, before it could be called ...

I don't see how it is possible because it has added to the overall load of producing these transcripts and certai nly Ha nsard must be commende d on the way that they are proceeding with giving the transcripts for the daily meeting of the Legislature. Premier Schreyer on the same point of order. MR. SCHREYER: Yes, Mr. Chairman, in order not to quibble about the matter I would suggest that on the 7th of April, other than Thursday of this week, which we could

schedule other business then, that if Hydro is cal led, if necessary, for the 7th of April, then we should have the tra nscripts avai lable surely by then. So that should accommo date the point. MR. CHAI RMAN: Yes, and it is interesting to note too that Mr. Lyon did indicate that he received the transcript yesterd ay. A MEMB ER: We ll we all did. MR. CHAIRM AN: Then the transcripts are available before this meeting. This coming Thursday the Man itoba Public Insurance Corporation is slated to meet at 10 o'clock. Mr. Bateman. MR. BATEMAN: Mr.

Chairman, I did have a few comments I would like to make before we get 11nder way with the questions and I did want to assure the members of t he Committee again, Sir, that we are here to answer questions. We want to make sure that your Committee members have all the information they need in which to properly assess the performance of Man itoba Hydro and the approval of our Annual Report.

The last meeting of this Committee we were discuss ing, among other things, at the end of the session, the matter of rates, demand billing, and the effect on community clubs and so on. 1 would like to ask our Mana ger of the Rates and Economics Department of Man itoba Hydro, Mr. Cy Cartwright, to say a few words about this before we get under way with the questions agai n. Mr. Cartwright, would you ... MR. CHAIRMAN: Mr. Cartwright, would you come forward please. MR. CARTWRIGH T: Mr.

Chairman, I would like to take a few minutes of your time today to explain Manit oba Hyd ro's power rate structure and the mutual benefits of demand billing to both the customer and the utility. There seems to be a misconception that demand billing is a penalty rate which the customer must go on when he has done something wrong. This is entirely untrue. 1 will review very briefly Manit oba Hydro's rate policy and in particular demand billing. In particular, 1 will show on the screen data on a small group of customers with recreat ional facilities.

First, a sample ca lculation; second, sample bills of a customer by months for a twelve month period; third, a

summary of electric bill increases, consumption increases, and unit price increases over the past three years for four customers; fourth, a

summary of electric bills as a percentage of total operating expense over the past five years; fifth, sam ples of monthly bills of four customers billed on the power rate compared to what these bills might have been had they been billed on the general service rate; sixth, curling clubs on demand billing, comparison with general service rate. 59

Public Utilities Tuesday, March 29, 1977 Man itoba Hydro, as with most utilities on this continent, whether they are dealing in water, natural gas or electricity, realizes that social responsibility can not be factored into rate maki ng and at the same time be fai r to all its customers. For example, if one customer is given a preferential rate whereby he pays less for his service than another customer in the same category then in order for the utility to obtain the same revenue the other customer must pay more.

In other words the utility is placed in a position of collecting non-voluntary or compulsory contri butions. This is disc rimination. Manitoba Hydro's position on this matter is that social responsibility is better handled by other agencies. Our policy is to establish rate cla ssifications that reflect an equitable distri bution of cost and return of revenue and to make sure that all customers in the same rate classification receive the same t�eatment to the extent possible. lt is true that historically some non-profit organizations outside of Winnip eg did at one time receive preferential treatment.

However, in recent revisions we have been eliminati ng all special and discri minatory rate applic ations. Manit oba Hydro's rates are divid ed into two general categories, residential and non-residential . The non-residential includes general service and power. The general service rate applies to non residential customers with capacity requirements of less than 55 KVA of de mand as registered on a de mand meter. This size load represents a three or four sheet curling rink with an artificial ice making plant. Man itoba Hydro's power rate has two parts to it: the first

part is the demand or capacity charge and the other part the energy or consumption charge. Man itoba Hydro has one de mand charge and one energy charge intended to make it easier to understand. lt is the same for all parts of Man itoba except the diesel areas. We charge our fixed costs such as depreciation, interest, etc., on an annual basis, then average the fixed charges on a monthly basis.

A customer who takes service during the winter months is required on the power rate to pay a guarante ed minimum part of the fixed charges du ring the remaind er of the billing year ending in October. lt is obvious to us, because of the concern here today and from reports in the news media, that we have not done a good job in communicating our demand form of billing to our new customers and other interested parties. For this we apologize. We assure you we are ta king positive steps to improve these communications.

If one rents a car, it seems reasonable to pay so much per day or month or year plus so much per mile. The first

part is the "demand charge," which covers the charges the lessee must pay for simply renting the car. The other part, like our energy charge in de mand type rates, must cover other costs that vary with use such as gasol ine and maintenance. As I go through some of the graphs a little later on, just imagine each of the customers as leasing an electrical genera tor and parking it in the driv eway outside his buildi ngs. This may help you visualize the meaning of the demand char ge and energy charge as it relates to electricity rates.

As a matter of interest, the Public Utilities Board , in 19 70, made reference to demand metering as being an appropriate method of billing customers and suggested it should be introduced at levels below the 10 0 KVA that we were using in 19 70. Further to this Ebasco Services Incorporated of New York, who were the rate consultants for the Public Utilities Board in 19 69 and 19 70, reviewed our rate structu res after our rate changes in April of 19 74 and recommended aga in that the level of demand billing be lowered as it was then at 80 KVA.

Demand billing is the fairest method to the customer, for billing customers for the capacity and energy demand ed by them from the utility. All customers having similar load char acte ristics are charged the same amount regardless where in Man itoba they reside and regardless of what use is made of the electric ity suppl:ed. This form of billing is a universally accepted form of billing in North America and Europe. Dr. Joh n .-lopkinson proposed such a rate in 1890 and Mr. Arthur Wrigh t introduced a de mand rate in a different form six years later and these rate types have been in use since that time.

The increase in the customer's demand or capacit y requirements sets the date of the next power plant on the system. lt is, therefore, in the interests of both the customer and the utility to obtain optimum use out of our existing plants by extending the use of the facilities over as long a period as possible. The demand component of the bill allows the customer to have some control over the amount of the bill and at the same time assures the utility a return on its cost in capacity. Transf erring of an account to the power rate may or may not increase or decrease a bill, depending on use

whereas a rate increase or increased consumption will certainly increase the bill regardless of classifica tion. On the power rate, the bill for any given de mand is usually lower in high use months

whereas in low use months the bill is usually higher as compared to the general service rate. Over a twelve month period one can offset the other. Effective load mana gement, or lack of it, can influence the bill one way or another. Staff of Man itoba Hydr o, along with other government depar tments, have been attending recreation management group meetings over the past several months to explain load mana gement techniques and methods of reducing the customer's demand costs. Ho pefully over the long term this will be of benefit to both the customer and the utility. 60

Public Utilities Tuesday, March 29, 1977 Now I have some slides here to show you. I will just go through a sample bill calcula tion to demonstrate how a bill is calcu lated on the power standard rate. You will notice the demand char ge is $3.00 per ... incident ally, these sample bills are ca lculated using rates effective Apri1 1, 19 76. The demand char ge $3.00 per KVA, energy or consumption char ge is . 75 cents per kilowatt hour.

Now the billing demand is the greater of the meter demand, or second ly, 80 percent of the highest demand measured in the winter months of Noveer, December, January and February, or 55 KVA, or 25 percent the contract demand. Now, our billing year runs from November 1s t of one year to October 31 st of the following year and from No. 2 ... No. 2 then is, you started all over again, you are back to whether it is one, three or four in Noveer. Now let's look at first of all the bill ca lculation for Deceer 19 75. The billing information is taken from actual bills.

The meter demand for Deceer was 19 2 KVA, 80 percent of the meter demand in November, which registered 180 KVA, is then 14 4 KVA; the energy for December was 69,000 kilowatt hours, so the bill calcula tion is the demand charge, the higher of the four I just enunciated there, which is 19 2 which is the actual metered demand for December, times $3.00, is $576.00. The energy charge is 69,000 kilowatt hours at .75 cents, is $517 .50, for a total of $1 ,093.50. Now then, let's look at a bill calcu lation for August of the following year, it is the same billing year.

The meter demand for August was 30 KVA, 80 percent of the highest winter demand is 204 KVA, �st ablished in Februray, times .8 is 16 3.2 KVA. The energy for August, 4,200 kilowatt hours, the bill cal culation then becomes the highest demand under 1 ,2,3, or 4 which is 16 3 KVA times $3.00 is $489.00. The energy charged 4,200 kilowatt hours at .75 cents - $31.50; the total bill $520.50.

I think it's very important that I point out here, you'll notice that the bill is not 80 percent of the December bill and that's very important because I think people have is, misinterpreted what that 80 percent and you can see from that that 80 percent of the December bill would be somewhere around $800.00. So that's how a bill is cal culated. Now here again, we have actual figures from an actual account. Month ly bill compari son, in this case general service, all electric. This year we do not have the all ele ctric rate; it's an in use rate. MR. HE NDERSON: Mr.

Chai rman, couldn't you refer to that chart once more before you moved on? I had a question on it. You were showing us what the bill is under the demand way of do ing it. Can you show us on the very same sheet what it would be if it was cal culated on the use, energy consumed? MR. CARTWRI GHT: You'd take the consumption like 69,000 kilowatt hours and put it through the blocks .... MR. HE NDERSON: Wel l, I'm not interested in the mechanics of it but I'm interested in the dollar signs which show up at the bottom. MR. CARTWRIGH T: We have some examples if you'll just bear with me.

I think you're answer will come up on No.2. MR. CHAIRM AN: Mr. Henderson, the examples will be shown by putting it through the blocks in the vari ous rates at the first 75 kilowatt hours and so on, eventually arrivin g at the final figure. Mr. Craik. MR. CRAIK: On the same sheet as the previous one, could we refer back to it again? On sample A, without demand metering, the bill for August, would it be the energy charge al one? MR. CARTWRIGH T: Likely , because that would likely be higher than the minimum bill under the general service. MR. CRAIK: So without the demand metering, the bill would be $31 .50 right.

MR. CARTWRI GHT: No, no. You see that energy char ge is .75 and even if you refer to this year's rate applic ation, I think they were handed out last week, you'll notice that, if you could just . MR. CRAIK: Around double that then? MR. CARTWR IG HT: We ll, we have some figures if you'll just let us come to them. MR. CRAIK: Oh, okay. MR . CARTWRIGH T: Maybe you cou ld come back to it. Now here we have a monthly bi ll comparison, the general service all electric rate versus the power standard rate.

I don't have the actual cal culations or the steps going through it but we used rates that were effective in April 19 76 and the billing records, the billing demand and the billing consumptions are actuals but because there was a rate change in there, we've used the same rate that was in effect April 19 76 so we could make a di rect comparison on a common base.

So here we have you can see, a billing year from November to October with the ki lo-hour consumption in the first column, the de mand reading actu ally read on the de mand meter in the second column, the billing demand itself in the third col umn and then the monthly bill cal culations, the all electric general service rate and then the power demand rate. Now this particular customer was billed on the power demand rate. We haven't picked this for any particular purpose, but we have shown one that in this particular case, the power demand billing was more than al l8electric general service billing as a comparison.

But you will notice - and this is a point that hasn't come out- notice 61

Public Utilities Tuesday, March 29, 1977 that the winter month billings are all less on the power rate than they are on the general service rate because of the greater utilization factor dur ing those months, and the bill is higher in the summer months on the power rate than it is on the general service because of the low utilization. In total in this partic ular illustration, the bill is lower on the all electric general service rate. We don't know if there are any load management techniques being performed here or not.

The average rate on the general service all electric works out at 1. 8 cents per kilowatt hour and 2. 1 cents per kilowatt hour on the power rate. You'll notice there some pretty hefty loads. There's a motor load of 12 6 h.p., a heating load of 54 kilowatts, a lighting load of 32 kilowatts, water heating of 39 kilowatts and cooking at 30 ki lowatts. That's the type of installation that we would like to have a look at if there's any problems in load managing it to see if we can do something for that partic ular facility.

By reducing the winter peak, if you took the 204 up there in the demand billing, if that could be reduced somewhat, it will affect all the billing demands on the other side of the page. Therefore, the demand portion of the bill will be reduced. If you can see from that, it would not affect the all electric general service rate because that's an energy block rate. Now I would like you to look at the chart here of electric utility bill increases over a three year period and these are from actual accounts. From 19 73-74 to 19 75-76, customer B1: his kilowatt hour increase was 26.2 percent.

His bill went up 56.2 percent; cents per kilowatt hour 23.6 percent; the average over the thr ee year period was 11. 8 percent increase. In B2, the kilowatt hour increase was 32.3 percent; bill increase 76.5 percent; cents per kilowatt hour 33.7 and the average 16 .8 percent. Sample B3, his kilowatt hours went up 13 7.2 percent; the bill went up 31 8.5 percent; cents per ki lowatt hour 77. 1 and the average over two years 38.6 percent. B4, kilowatt hours went up 94.8 percent; the bill went up 204.5 percent; cents per kilowatt hour 55.8 and the average 27.9 percent.

You'll notice that in all cases, the kilowatt hour consumption went up and that's a point that we like to stress here. We hear of course that the bills have gone up and that's certainly appreciated but we also don't hear that the consumption also has gone up.

Now on B1 , this accoun t has two services and one of the two services went on demand billing in 19 75 and sample B2, it's general service standard, it's not on power demand billing; sample B3 the change from general service all8electric to demand billing took place in December 19 74, and sample B4 was a general service all electric billing, it was not on demand billing. The next chart I wo uld like to show you is the relationship between electric utility bills and total operating costs. In all cases, total operating costs of course have increased over this period .

Sample C1 in 19 72, 11. 2 percent - that's the per cent of the electrical energy bill as a percent bf the total operating costs. lt was pretty steady right through to 19 76 which was 9.6 percent. Sample C2, went from 15 .9 down to 12 .6. Sample C3 went from 24.2 to 30.9. ltju st so happens that Sample C3 is on general service billing, it's not on power demand billing. Sample C4, 14 .3 up to 15 .6; C5: 12 .7 to 12 .8; Sample C6: 22.3 to 15 .6, indicating that all operating costs have risen and electricity -(Inter jection)- they weren't operating at that time.

The reason we haven't got the figures in for C5 and C6 for 19 72 and 19 73, they weren't operating at that time. This is a graph illustrating the bills by month for a twelve-month period from November to October. They are actual bills that were recorded on the power rate and we billed them on the general service standard rate as a comparison. The point to notice here again is that during the winter months, the bills received by these recreation facilities are much lower during the winter months than on the general service standard rate,

whereas during the summer m:mt hs, the bills on the power rate are higher than on the general service rate. The lower line is the metered demand recorded in that particular establishment which is fairly steady throughout the winter and of course drops off in June to virtually nothing. Now the total bill for the year on the power rate amounts to $3,457 and on the general service rate was $3,791 .00. So this particular customer is better off on the power rate. -(I nterjection)- it's a recreation fac ility on power demand billing. MR. CHAIRMAN: Mr . Blake, do you have a question on this particular point? MR.

CARTWRIGHT: Now here's another examp le of an actual accoun t and you'll notice here that the bills went up appreciably in February, down in March and back up in April which again reflects usage patterns and the same thing with the demand. You'll notice it was relatively low in November, then went up in December, it flattened out and went back down in March, through and then picked up again in September of that particular billing year. In this particular illustration, the annual bill on the general service rate $5,71 5- that's cal culated - the annual power bill $5,1 08 -that was an actual billing.

Here's a third examp le, the same thing. You'll notice the spikes in the same billing again, up and down, with varying usage. The scale on the demand doesn't show the spikes as much there but there are ups and downs in the metered demand and quite a bit of difference between the demand in the winter months and of course the demand in the summer. lt went up again in October. But in this 62

Public Utilities Tuesday, March 29, 1977

part icular case, the power bill $5,220 and if you had been billed on general service it would have been $3,800.00. Again there's another examp le probably that load management is required there to see if something can't be done for that particular customer. I have one more. This particular examp le, you'll notice that the winter bill is fairly close on both rates. You'll also notice that the meas ured or metered demand goes up and down quite abru ptly and here again, one wonders if some load management couldn't be introduc ed there to level out that demand so that you can get that annual bill down.

The annual bill here, of course, on the general service rate $8,893; the actual bill on the power rate $9,843, so it's higher on the power rate in this particular case. But with load managem ent the general service configuration of the bill wouldn't change, it would change on the power rate if you could get that demand component down, it would bring that line down all across the board both winter and summer and would result in a total annual bill of less than $9,843.00. I have one more here to show you. We did an analysis of all the curling and skating clubs that we serve in Manitoba and there's a total of 671 .

The total number on demand billing is 73 and of those 73, we have 65 with more than 12 months consumption and billing demand so we were able to do some billing comparisons. Bill over 20 percent lower on demand billing, ten of the customers. Bill where it was 10 to 20 percent lower on demand billing, another ten. Bill where it was 0-10 percent lower on demand billing, was 12 ; for a total of 32. The bill where it was 0-10 percent higher on demand billing was 12 ; the bill where it was 10 -20 percent higher on demand billing was 6; the bill over 20 percent higher on demand billing was 15 for a total of 33.

Now, we'r e unable to determine how many of these clubs are under municipal control and how many are shareh older controlled. We don't have that information. In add ition to this, Winnipeg Hyd ro clso has 46 community clubs and 13 curling clubs which we don't have any information on. 63

Public Uti1ities Tuesday, March 29, 1977 APP ENDIX SHEET 1 SA MP LE BILL CALC ULATIONS Using Rates Effective April 1, 1976 POWER STANDARD RATE Demand Charge - $3.00 per kVa Energy (Consumption) Charge - 0.75<1: per kWh Billing Demand- The Greatest Of: 1.

Metered Demand OR 2. 80% of the Highest Demand Measured in the winter months of November, December, January, February OR 3. 55 kVa OR 4. 25% of Contract Demand SA MPLE "A"- BILL CALCULAT ION FOR DECE MBER 1975 Metered Demand for December 80% Metered Demand in November - 180 kVa X .8 Dnergy (Consumption) for December Bill Calculation- Demand Charge 192 kVa X $3.00 Energy Charge 69,000 kWh X 0.75<1: Net Bill SA MPLE "A" - BILL CALCULAT ION FOR AUGUST 1976 Metered Demand for August 80% of Highest Winter Demand (204 kVa in February) 204 X .8 Energy (Consumption) for August Bill Calculation - DemandnCharge 163 kVa X $3.00 Energy Charge 4,200 kWh X 0.75<1: Net Bill RATES AND ECONOMICS 77 03 22 64 192 kVa 144 kVa 69,000 kWh $ 576.00 517.50 $1,093.50 30 kVa 163.2 kVa 4,200 kWh $ 489.00 .... 31.50 $ 520.50

Public Utilities Tuesday, March 29, 1977 APP ENDIX SHEET 2 SA MPLE "A" - RECREATION CENTRE Monthly Bill Comparison MONTHLY BILL Month Nov. 75 Dec. Jan. 76 Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct.

TOTAL LOADS (Approx) Motor Heating General Service - All Electric VS Power Standard Rate Rates Effective April 1, 1976 kWh 74,400 69,000 70,800 70,800 69,000 70.800 5,400 3,000 1,800 4,200 1,800 29,400 470,000 126 H.P. 54 kW Demand Billing Reading Demand (kVa) 180 192 198 204 168 180 30 168 (kVa) 180 192 198 204 168 180 163 163 163 163 163 168 AVERAGE RATE Lighting Water Heating Cooking RATES AND ECONOMICS 77 03 22 65 A-E Gen Power Service Demand $ 1,326 $ 1,098 1,234 1,094 1,265 1,125 1,265 1,143 1,234 1,022 1,265 1,071 135 530 84 512 59 503 109 521 59 503 561 725 $ 8,596 $ 9,847 1.8$/kWh 2.1 <1:/kWh 32 kW 39 kW 30 kW

Public Utilities Tuesday, March 29, 19 77 APP ENDIX SHEET 3 RECREATION CENTRES ELECTRIC UTILITY BILL INCREASES OVER A THREE YEAR PERIOD FROM 19 73/74 TO 1975/76 INCREASE kWh BILL <!:/kWh Aver/Yr Sample B1 26.2% 56.2% 23.6% 11.8% Sample B2 32.3% 76.5% 33.7% 16.8% Sample B3 137.2% 318.5% 77.1% 38.6% Sample B4 94.8% 204.5% 55.8% 27.9% Sample 81 - This accoun t has two services. One went on demand Billing in December 19 74. Sample 82 - General Service Stand ard. Sample 83 - Change from General Service All Electric to demand billing in December 19 74. Sample 84 - General Service All Electric. RATES AND ECONOMICS 77 03 22 66

APPENDIX SHEET 4 RECREATION CENTRES RELATIONSHIP BETWEEN ELECTRIC UTILITY BILLS AND TOTAL OP ERATING COSTS ELECTRIC UTILITY BILLS AS % OF TOTAL OP ERATING COSTS 19 72 19 73 1973 1975 19 76 Sample C1 11 .2 10 .4 10.9 11.0 9.6 Sample C2 15 9 13 .6 11.0 13.5 12.6 Sample C3 24.2 22.3 33.0 29.0 30.9 Sample C4 14.3 10 .5 7.6 11.3 15 .6 Sample CS 12 .7 8.9 12.6 12 .8 Sample CS 22.3 19.8 15 .6 NOTE: All these accounts except Sample C3 are on demand billing. Sample C3 is on General Service. Total operating costs have increased over this period. RATES AND ECONOMICS 77 03 22 67

Public Utilities Tuesday, March 29, 1977 AP PENDIX SHEET 9 CURLING CLUBS ON DEMAND BILLING CO MPARISON OF DEMAND AND GENERAL SERVICE RATES ANNUAL BILL No. OF CUSTOMERS Bill over 20% lower on Demand Billing Bill 10- 20% lower on Demand Billing Bill 0- 10% lower on Demand Billing Bill 0- 10% higher on Demand Billing Bill 10- 20% higher on Demand Billing Bill over 20% Higher on Demand Billing TOTAL The above data based on actual readings and bills. 10 10 12 12 6 15 32- 33 65 Eight other Curling Clubs are on Demand Billing but have only a few months of records.

Total number of Curling/Skating Clubs Total number on Demand Billing - 671 - 73 We are unable to determine how many of these clubs are under Municipal control and how many are Shareholder controlled. Winnipeg Hydro also has 46 Community Clubs and 13 Curling Clubs. RATES AND ECONOMICS 77 03 22 68

en (Q RECREATION CENTRE �IONTHLY BILL CO�PARISON Sample D1 Rates Effective April 1, 1976 LEGEND GENERAL SERVICE STANDARD ------- 800 POWER STANDARD -= f-400 700 Cl) � <X: 600 ..J ..J g 500 z ..J 400 ..J al > 300 ..J J: 1- 200 z 0 :E 100 " ............ ,' \ ......... ... .. , \ ,,... .. ... ,' \ ,.. ......... , \ � ... ... , \ "' \ ,, ... ... , \ \ \ \ \ \ \ \ � \ ' ' ------- ---- ' --...�, " DEMAND - -- ANNUAL BILL $3457 o I �----------------------, I I I I I I -1 I I 350 <X: > 300 � z 250 0 z <X: 200 :E w 0 150 > ..J J: 1- 100 z 0 :E 50 0 NOV./75 DEC. JAN.nS FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT.

RATES & ECONOMICS DEPT. 77 03 22 )> (/)"a ::X: "a mm rnz -le 01- >< -1 c ID en c., Die '<a 3:5- �c: n: :r: - N-· cgiD � en .... (Q ..... .....

..... >< 2ico ZI WLU ll.l.U a..::r: <f;C/J ..... 1050 -en ,.. ,g:

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Public Utilities Tuesday, March 29, 19 77 MR. CHAIRMAN: Premier Schreyer. MR. SCHREYER: Could it be indicated as to why 73 out of 671 went up more than that? What is the criteria? MR. CARTWRIGH T: 55 kVa. Now there may be some of the 671 1eftthat will still be eligible and we get to them as we identify them so I don't want it misconstrued that 73 may be the only ones that are eligible. There may be some more. MR. SCHRE YER: I don't know if it's appropriate to ask just now, but if it's 55 kVa, does that indicate curling rinks of X sheets of ice or more? MR.

CARTWRIG HT: Where there is no artificial ice but generally speaking, three or four sheets and more. MR. SCHRE YER: Artificial ice in a relatively smal l, say four sheet curling rink, would that bring it up to 55 kVa? MR. CARTWR IG HT: Very likely, yes, particula rly with the hot water required and the heating required or the lighting required. I'd just like to conclude with this statement. I do not believe there is anyone in this room today that would enco urage waste and inefficient use of our energy resources, electricity or otherwise.

Demand billing encourages the customer to use electricity wisely and efficiently and in so doing reduce waste of our natural resource. In all sincerity I ask you to accept and understand demand billing as being of mutual interest to the customers and the utilities. Thank you very much, Mr. Chai rman. MR. CHAIRM AN: Thank you. There are some questions at this particular time? Mr. Bla ke, you indicated you wished to ask a question? MR. BLAKE: Mr .

Cart wright, I don't know how many men Hydro are prepared to send out into rural Manitoba to explain this program but they've got one hell of a selling job to do if they are going to convince people that this is going to save them money in the recreat ion facilities. I'm just wondering, Mr . Chai rman, the illustrations that we were shown, are they a recreation faci lity that is used year round or were some of them curling clubs that are only used for four or five months. MR. CARTWRIGHT: Because of the dip in most of the bills, I would say they use very little.

The one illustration I used there for the December billing had 4,200 kWh . That's six or seven times what the average house would use, so they're using something du ring the summer months but certainly not the 70,000-odd kWh that they used in the wintertime. MR. BLAKE: You know I understand demand billing in the simple form.

If you have a straight line and you've got a peak probably throughout the year where it would certa inly be to your advantage, but many of them only have the peaks for about 20 percent of the year and not 50 percent of the year and therefore I fail to see where it's going to be to their advantage to go on demand billing, where it's going to save them any money. They're still going to have a fai rly large increase in their bill. MR. CARTWRI GHT: They won't all necessa rily save money, but 32 out of those 65 definitely are better off.

So if they are all on general service those 32 would have to pay more on an annual basis than they are paying today. So what they are do ing likely is contributing to the defici ency from the other 33. Someone has to pay it. MR. BLAKE: That's right. I can agree there, but it's going to be very difficult to tell those that are paying that it's their responsibility.

I ag ree wholeheartedly with your program to encourage the manageme nt of their load, because I think there is a considerable amount of waste and that's something that they can do to their own advantag e, but those that are facing increased costs, you're going to have one hell of a time convincing them that it's their responsibility to pay the cost of someone else that is not manag ing their own or not manag ing their own. MR. CARTWR IGHT: The reports we've had back from the manag ement sessions to date have been very constructive and we are very hopeful that we can show people how they can help us. MR.

BLAKE: That's all, Mr. Chair man, I'll have more later on. MR. EIN ARSON: Mr . Chai rman, I would like to ask, throug h you to Mr . Cartw right, going back around 19 70-71, or from '69 to '721 would say, that Manitoba Hyd ro were advocating conversion from say gas heat or oil to electricity. Did the Manitoba Hyd ro antici pate this kind of thing developing today when they were advocating people changing over, telling people to use Hydr o and use it more? lt seems to me that what you're telling us now is the reverse of the kind of policy you were trying advoc ate to pe ople four, five, six years ago. MR.

CARTWRIGHT: I don't know of any utility in North America that anticipated the changes that have taken place in the last five or six years. MR. EIN ARSON: We ll then, Mr. Chair man, I'm trying to establish how the rationale is with Manitoba Hydro when you were advocating something say five, six years ago. We ll, what were your projections then? Where was the thinking as to where you were going in developing a renewable resource which I thought was the best that any province in Canada has ever had such as we have in Manitoba. MR. CHAIRM AN: Mr . Einarson, you are trying to establish a debate.

If the Chair man of the 73

Public Utilities Tuesday, March 29, 19 77 Man itoba Hydr o wishes to engage in this debate you can proceed. Mr. Bateman? Mft BATEMAN: Mr. Chai rman, I don't believe it's a debate, I think it's a misunderstand ing. Five or six yE:lars ago the situation was, as Mr. Cartwright indicates, something that has changed drast ically p.s far as non-renewab le resources prices are concerned and certainly there is a much greater endeav our to conserve those. The fact that our rates for Manitoba Hyd ro's product have also gone up has kept us competitive with the oil prices in the Province of Manitoba.

And I would still recommend if you make an important assessment of the costs of heating your curling rink with propane gas or oil as opposed to going on a total electric insta llation, you could pr obably do better on a total electrical installa tion with demand billing. MR. EI NARSON: Mr . Chai rman, I just want to make one comment further her e. I'm not going to prolong the debate but I do want to say, Mr.

Chairman, to Manitoba Hydro and to this government that five, six years ago when they were advocating people to use more electricity, I'm afraid they are not going to have the job of selling their bill of goods today as they did then because I'm afraid they are going to run into a lot of static and the kind of thing that people have been led down the gar den path which is not what they had hoped it would be. MR. SCHRE YER: Just to keep the record straight, I'd like to tell Mr. Einarson that direct advertising by Manitoba Hydro was discontinued about five, six years ago. I'd like him to take note of that fact. MR.

BATEMAN: Mr . Chai rman, just one other point, without prolonging discussion, I think that Manitoba Hyd ro ado pts the attitude that we are owned by our customers.

We're endea vouring to provide our customers with the best service that they can achieve and we're not out there to try and convince them to change from anything else that they're using if they don't want to change, but if it's to their financial advantage to change we'd be quite happy to make those facts known to them and just as we have indicated our wish to go out and speak to the community centres that are on demand billing and who don't understand it.

As a matter of fact we have had complaints from some people on demand billing saying their bills are higher than they would be on some other form of billing and they have been shown that that is not the case. lt's actually the reverse. Their bills are lower on demand billing and Mr. Cartwri ght gave you some examples of that today. As a matter of fact 50 percent, very close, of the customers on demand billing are paying less than they would pay on the general service bill. Now tha t's a fact, gentlemen. -{In terjection)- The general increase, yes. We have all had rate increases. MR. CHAI RMAN: Thank you. Mr .

Lyon, you have a question on this particular section? MR. LYON: Going back, Mr. Chai rman, to what Mr. Cartwri ght was saying in his opening remarks, could he clar ify this? I understood him to say that at one time the click-in point for the demand billing was 10 0 KVA? MR.

BATEMAN: Prior to 19 69 when the Manitoba Hydro rates were reviewed by the Public Utility Board, I believe our demand billing level was 10 0 KVA and the strong recommend ation from the Public Utility Board and Ebasco Services who were their consultant recommended that that be lowered. lt was lowered and when our first general increase went in in 19 74 we referred that again, as Mr. Cartw right said , to Ebasco Services who were the consultants to the Public Utility Board during the rate review in 19 69-70 and they recommended that we take steps to further reduce the demand billing which we have done. MR.

LYON: Was the next reduction of the click-in point or for want of a better term, the point at which the demand billing was imposed, was that to 80 KVA ? MR. BATEMAN: No that was to 55 KVA. A MEMBER: lt went from a 10 0, to 80 to 60 to 55. MR. LYON: Yes, that's what I understood Mr. Cartwri ght to say, Mr. Chai rman. So in effect we've had a 45 percent increase in that level at which you click-in demand billing since 19 69. A MEMBER: 45 percent of what? MR. LYON: We ll of usage. MR. BATEMAN: lt's a decr ease, 45 percent lower level of consumption is now on demand billing than it used to be. MR. LYON: Right.

And what has happened to the rates in that period; "that is the rates per KVA demand charge? MR. CHAIRM AN: Wo uld you like to take the micr ophone, Mr. Cartwright? MR. CARTWR IGH T: Mr. Chai rman, we had several types of rates in 19 68 and prior to that and after 19 68-69 period. We've been trying to bring some of these rates in and phase some of the rates out. One of the rate fo rms that we phased out was connected load billing. Another one was bulk metering for customers over 1, 000 KVA, so there was quite a job of blending to do here.

So we started off in 19 69 with a different type of rate form. lt was an hour use demand rate form, the right form and we continued on with that in 19 74 so part of the fixed charges if you like were in the blocks, the hours used block and part of the demand was in the demand rate itself. lt was a very cumbersome method to use so we have reverted to the Ho pkinson, which is a far easier method for the customer to 74

Public Utilities Tuesday, March 29, 1977 understand. And that rate now, this year, is $3.75 . Last year it was $3.00. You must remember you have to add the two cha rges together to get the full effect of the bill. MR. LYON: So the rate per KVA has gone from $2.00 in 19 76 to $3.75 at present. MR. CARTWRIG HT: Yes, I believe that's it. MR. LYON: And from '76 to ... MR. CARTW RI GH T: lt was $3.00 in '76 MR. LYON: Right, that is prior to April 1s t, '76 it was $2.00. Then on April 1 st, '76 it went to $3.00 and then with the current rate increase, it's now $3.75. MR.

CARTWR IGH T: That's true but we changed the rate form in 19 75 as well. MR. LYON: Right, you changed the whole. . . MR. CARTWR IGH T: Yes, we changed the whole rate form. MR. LYON: So as between $2.00 and $3.00 you had an increase in the one year of 50 percent on that ... MR. CARTWR IG HT: On that portion of the bill. MR. LYON: ... portion of the bill and then as between last year '76 and this year a further increase of 75 cents which works out to 25 percent. MR. CARTWRIGHT: On that portion of the bill. The energy part went from .75 to .77, the comparative.

So we have been tipping up the demand component a little bit at a time. MR. LYON: We ll on a flat ba sis that would work out to something like a 75 percent increase over a two year period. Wha t would that be on a compounded basis? MR. CARTWRIGHT: The total bill ... Can you pick a particula r ... MR. LYON: We ll I'm just going on the charge for KVA, Mr. Chair man. MR. BATEMAN: If I co uld ju st interject. The line of questioning that Mr.

Lyon is pursuing is relating to the demand charge which is only a portion of the bill, and the important point is not to indicate that we've had a 75 percent increase in rates on that two year period you're indicating because the general increase and the power customers were, I think, increased in the order of 12 to 14 percent last year, if I'm not mistaken. That is the year that is just starting March 17 th. MR. CARTWRIGH T: Yes, I could refer to unit cost increases for specific load factors to come up with an actual increase on the total bill which would be more relevant, really.

I'd be prepared to do that if you want me to. MR . CHAI RMAN: lt might be a good idea to have some of those charts that were presented by Mr. Cartwright provided to the people in Hansard that they could insert it within the actual tran script. Is that possible? MR. BATEMAN: Yes, that could be done, Mr. Shafransky. MR. SCHRE YER: Wh ile we're waiting for Mr. Cartwr ight, I don't know if the Chair intends to proceed to other questions, other than rates. I'd like to ask the Chair man, if he can, or to refer to Mr.

Cartwright, if necessary, whether with respect to something that is in every rural community, or practically in every one, the country elevator, whether it only has of late or whether it has historically been on demand metering. The ordi nary grain elevator, standard size, small size grain elevator. MR. BATEMAN: I believe, Mr. Chairman, the answer to that, and I'm sure Mr. Cartwright would confirm this is that all grain elevators from the day they are first connected are connected as a power demand customer because they've usually been higher than that 10 0 KVA.

So from the time they are first connected I am sure they've been on the demand billing and still are on it. lt is interesting, Mr. Chairman, in answer to Mr. Lyon's question, if we look at the ... I was going to quote the average revenue in cents per kilowatt hour for our power customer cla ss of load going back to 19 65, we had an average use at that time in our power customers of 10 8,000 kilowatt hours per year and it was 1. 12 cents.

Now, because of the use factor and not putting the emphasis on the demand charge where we believe it should be put to encourage people in wide load management, the rates went from 1. 12 cents in '65 down, and I'll read them by years: '66-67, 1. 08; the next year, 1. 05; then .98; by '69-70 they were .87; and the average use had gone up from 10 8,000 to 241 ,000 in that period of time. They continued to drop slowly each year over '70-71 , '71 -72, '72-73, and '73-74 they had dropped to .74 average cents per kilowatt hour and the average annual use per customer had grown to 3, 689,000.

Now, the next year we imposed the rate increase and that tipped the demand, and tipped the average up and the average is now .90 in '74-75. The use per customer dropped slightly. In '75-76, the average had gone up to 1. 16 and the use had dropped still further, and part of that use, of course the power customers including the mining loads which are off. This next rate increase is designed to improve the average revenue per kilowatt hour in the order of somewhat less than 15 percent for the power cla ss customers. Is that right, Mr. Cartwr ight? MR. CARTWRIG HT: Mr.

Chair man, I'm sorry, I don't have the compari sons with me going back to prior years. I have the average costs on the new rate but I don't have those. But they are avai lable and if the Committee so wishes, I would be very pleased to provide them. 75

Public Utilities Tuesday, March 29, 19 77 MR. CHAIRM AN: Fine, thank you, Mr. Cartwright. MR. BATE MAN: Mr. Chai rman, we will undertake to have Mr. Cartw right provide these charts that he spoke to, if you wish, for the record, and perhaps he can make copies ava ilable that would be suitable for printing. MR. CHAI RMAN: Yes, Mr. Cartwright, those figures could be made available to people in Hansard that may insert them within the appropriate places you are making your presentation. - (In terjection)- Fine, we shall go back to the person who has been on the list for some period of time.

Somehow or other we get away from the normal procedu re. If you wish, I'm going to put people on the list and proceed in order. Mr. Jo hansson, you had some questions? MR. LYON: Mr. Chai rman, I haven't finished my questions. MR. CHAI RMAN: Mr. Lyon, I will put you on the list, you had been on the list. You have never indicated at any particular time, you just interjected that you wished to ask a question of clarific ation at the particular point. -(In terjection)- Mr . Lyon, you are now trying to create an issue. I'm indicating that we started on a different task, I had Mr.

Jo hansson on the list right from the start after the Premier asked questions. You were asking questions of clarification. I have now your name on the list and Mr. Craik's. Mr. Joha nsson has been on the list since the last time we met. Your name is on the list following Mr. Jo hansoon. MR. LYON: Have we finished ... metering? MR. CHAI RMAN: I assumed that there had not been any further questions. MR . LYON: That's precisely the point I was making, if you wou ld listen ... MR. CHAIRM AN: We will carry on with demand metering. -(I nterjection)- Mr. Lyon, I see that you are trying to create, by cal ling me a liar .

MR . LYON: I'm not trying to create ... MR. CHAIRMAN: ... by cal ling me a liar. MR. SCHRE YER: I raise a point of order. MR. CHAIRM AN: Mr. Premier. MR. SCHREYER: I think there is a misunderstand ing. I believe our proced ure is that if we are on a given topic of discussion, to stay with it and if the questions have to do with demand metering, it would seem logical that we complete that and move on to general questioning . ! believe that that's the procedure we have followed. MR.

CHAIRMAN: lt was my impression that we had concluded with the questions on demand metering. lt was my impression that the presentat ion had been made and indication was made that the information was going to be provided, further information in this regard. Mr. Lyon, if you have a question on this matter, then I will entertain your question of cla rification on this matter of demand billing. Mr. Lyon. MR. LYON: Could we have Mr. Cartw right back, Mr. Chairma n, and start from where we were five minutes ago. MR. CHAIRMAN: Mr . Bateman, would you care to take the questions and if Mr . Bateman wishes to call upon Mr.

Cartwright, he will do so. MR. LYON: No, Mr. Chairman, I want Mr . Cartw right back. MR. CHAIRMAN: You wish to ask a question of the Cha irman, Mr. Lyon? We proceed. MR. LYON: I'm questioning Mr. Cartwright, Mr. Chai rman, that's what I was questioning (In terjection)- Wou ld you keep quiet for a minute and listen, Mr. Chai rman, on a point of order. I was questioning Mr. Cartw right about certain questions on demand metering. He left his chair to get further information, then came back. You, for some reason of y0ur own making , chose then to interrupt and to remove Mr. Cartw right from the chair.

I'm asking for Mr . Cartwright to come back to the chair . May I suggest with respect, Sir, if you would stop interfering with the procedu res of this Committee, we could get on with it much more rapidly. Now I would like Mr . Cartwright back in the chai r. MR. CHAIRM AN: Mr . Lyon, I will also respectfully say that we have the Chai rman of Manitoba Hyd ro to answer any questions and if he so chooses to direct a member of his staff, he will call upon him. Mr. Bateman. MR. BATEMAN: We 'll ask Mr. Cartwri ght to come and answer the questions.

If I feel that he is best suited to answer the questions, he'll answer the questions. MR. CHAIRMAN: Mr . Joha nsson on a point of order. MR. JOHANSSON: Mr. Chairma n, Mr. Lyon has demon strated his capacity for rudeness very ably right now, but he hasn't demonstrated his understand ing of the rules of procedure of this Committee. We have tradition ally questioned the Chairman of the utility before us, and he tra ditio nally will call, if he so feels he needs the advice of, his staff. Mr. Lyon has no right to dictate who shall advise the Chai rman of Hydro. MR. CHAIRM AN: Mr . Craik on a point of order . MR.

CRAIK: Mr. Chairma n, on a point of order, Mr. Lyon's hand went up and you recognized itto go on the list not only prior to Mr. Joha nsson but prior to Mr. Einarson as well. I was watching and if 76

Public Utilities Tuesday, March 29, 1977 you didn 't write it down, you at least made the motions to write it down. On a point of order, Mr. Cha irman, I'm raising the question as to whether you, in fact, are recogn izing hands when they are put up and I suggest that if you are not -( lnterjection)- Still on the point of order, Mr. Chair man, and I'm simply asking you to, as Chair man, watch when people indicate their desire to speak because Mr. Lyon didn 't interject in any way, shape or form. His name was on the list prior, twice. Now, if you didn't have it down, you at least appeared to write it down. MR.

CHAI RMAN: I have it down here, Mr. Craik. MR. CRAlK: Let's not make the suggestion that the interjection was out of order. MR. CHAIRM AN: Let's not make the suggestion that I'm not folloWing the procedure as we had established and I understand the proced ure of the Committee. Mr. Premier, on the same point of order. MR. SCHREYER: Mr.

Chai rman, I don't know why it has come about that there is a flurry of points of order, but essentially the point of order I'm raising is that it is appropria te that we continue the line of questioning that we had some several minutes ago as long as there are Meers of the Committee who still have questions to raise on that line and that it is also appropria te that the person who was before the Committee answering questions and detai ls with respect to rates and demand billing continue to be available to respond to those questions. So can we not just then simply proceed. MR.

CHAIRM AN: Yes, I have no objection whatsoever and I did indic ate that to Mr. Lyon but he chooses to be ... Mr. Cartwright, would you come forward. Mr. Lyon. MR. LYON: Now, Mr. Chairman, to continue the line of questioning with Mr. Cartwright where we left off about ten or fifteen minutes ago, we had established, Mr. Cartwright, that the charge for KVA, the demand charge for KVA had gone from $2.00 prior to April 1s t, 19 76, to $3.00 on April 1s t, 19 76, and then to $3.75 at the present time. MR. CARTWRIGHT: Yes, that's

part ly true. lt was the first 500 KVA at $2.00, the next 9,500 KVA at $1 .50, and over 10 ,000 KVA at $1 .40, plus energy charges which has a demand component, the first 10 0 kilowatt hours per KVA of monthly bill ing demand at 1. 2 cents per kilowatt hour; the next 200 kilowatt hours per KVA of monthly billing demand at ,70 cents per kilowatt hour; the next 200 kilowatt hours per KVA of monthly billing demand at .58 cents per kilowatt hour; over 500 kilowatt hours per KVA of monthly bill ing demand at .5 cents per kilowatt hour. That's the complete rate. MR.

LYON: You're saying that under this structure, the power is no longer sold in blocks, that is, since April 1, 19 76? MR. CARTWRIGHT: Yes, there is no block structure in the rates, correct. MR. LYON: Let's just stick from April 1, 19 76 forward , so that the charge per KVA, demand charge per KVA is quoted now in your own rates at $3.00 per kilowatt hour, right? That was up until the .. MR. CARTWR IGH T: Excuse me, $3.00 per KVA. MR. LYON: Three dol lars per KVA. And it's now, you say, $3.75 per KVA? MR. CARTWR IG HT: That's correct. MR.

LYON: When was it that the 80 percent factor was increased from 75 to 80 percent? MR. CARTWRI GHT: April 1 of 19 76. MR. LYON: Prior to April 1, 19 76, it had been at the 75 percent level for how long? MR. CARTWRI GH T: In some rate forms, it hadn't been in that form at all, it some rate forms it had been 10 0 percent. In other rate forms, it had no percentage at all. We had three or four different rate forms. MR. LYON: Because of the . . . MR. CARTWRI GH T: Right, so we combined them all into one and when they were combined, 75 was estab lished. MR.

LYON: What was the cha rge per KVA, and I apprecia te you may not have the answer with you, on a compounded basis, what would the char ge or the rate increase be from $2.00 to $3.75. lt's 75 percent flat, on a compounded basis what would it be? MR. CARTWRIGHT: I don't have that answer for you. MR. LYON: Could you get that for us? MR. CARTWRIGHT: For what years or what period? MR. LYON: Just from the time when it was $2.00 per KVA, the demand charge, up to the present time when it is $3.75. MR. CARTWR IG HT: Factor ing out the kilowatt hour per KVA would be very difficult. MR.

LYON: I'm just talking about percentile. MR . CARTWRIGH T: But I can't get the demand portion out of the hundred kilowatt or per KVA of billing demand. MR. LYON: I see. MR. CARTWRIGH T: I'm not trying to avo id it, I can't get it because of the two different rate structures. I can between this year and last year, because the rate forms are the same. MR. LYON: Between $3.00 and $3.75, right. I see, okay. Now, you were saying that prior to the demand cha rge being implemented in its present form on April 1, 19 76, that you felt or the utility felt 77

Public Utilities Tuesday, March 29, 19 77 that there was a degree of discr imination in the way in which community structures, curling rinks, community clubs and so on were treated? Discrimination, that is, as agai nst other consumers of hydro in Manitoba? MR. CARTWR IG HT: Yes. MR. LYON: Wo uld you care to amp lify on that? MR. CARTWRIGH T: The policy of Manitoba Hydro was to eliminate end use as a criteria for rates and recreational facilities being an end use, if you like, was not recognized any longer in rate making. MR.

LYON: Although it had been the policy of Hydro, I take it, prior to that time, to make sure, or to so structure its rate schedules that community facilities would receive a more favourable rate than otherwise is the case at the present time? MR. CARTWRIGH T: There was a preferential rate given to those establis hments outside the City of Winni peg. The same preferential treatment was not given to community clubs or curl ing rinks inside of the City of Winnipeg that Manitoba Hydro served. lt wasn't a common policy. MR.

LYON: What about, and I know that you can't speak for City Hydro, but do you know what the policy was in City Hydro? MR. CARTWRIGH T: I can't speak for them. I think I would like them to speak for themselves. I can say it was my understanding that they didn 't have a preferential rate, but I would have to verify that. MR. LYON: I see. Now the char ts that you showed us, Mr. Chai rman, to Mr . Cartwright, the third chart purported to give a breakdown of hydro charges to certain unnamed faci lities and to indicate that the hydro charges by and large were in consonance with operating charges. MR.

CARTWRIGH T: That's correct. MR. LYON: The hydro rate increases. MR. CARTWR IGH T: The ones that we reviewed, yes. MR. LYON: Could you tell us how those figures were obtained , that is, did you have access to the full budgets, operating budgets? MR. CARTWR IGH T: Yes, we contacted those that we had communicati ons with and they were kind enough to submit their operating budgets to us. MR. LYON: Not that we question the dedu ctions that you made from those budgets, but could the Committee have these figures made avai lable to them? MR. CARTWRIGH T: That's at the discretion of the Chai rman. MR.

CHAI RMAN: I'm sure that if there are any figures that you would care to have made available to the Committee, we shall distri bute them. MR. CARTWRIGH T: Does that mean identifying these particular associations? MR. CHAIRMAN: Wel l, that is a matter I don't know. What is the procedure, Mr. Premier? MR. SCHRE YER: Wel l, I think, Mr. Chai rman, that a common-sense approach here would be to provide the information and to provide it on the basis of actual samples but without identification of the customer.

So that would be, I think, a logical way of providing both information, specific information, without reveal ing the identity of customers. MR. CHAIRMAN: Is that agr eeable to the members of the committee, that information would be provided as specific examples without di rectly identifying the particular community or recreation centre? MR. LYON: On that point, Mr.

Chai rman, presuming that these are all, as I presume they are, non profit community operations, could we go the step further and request that Manitoba Hydr o endeavo ur to obtain the approval from the groups in question who are used as samples so that these samples cou ld be put before us because this of course is a pressing matter and obviously they must have written to Hyd ro to complain about the rates in order to have generated that kind of statistical

summary that was placed before us this morning? MR. BATEMAN: Wel l, I think, Mr . Chairman, that would be in keeping with Manitoba Hydr o's policy, that we would first of all obtain the approval of the customer as to the public release of the billing information, and to the extent that there is ag reement from those customers, we will be quite prepared to make that budgetary information avai lable to this committee. And I take it, Mr. Lyon, you would like to have the budgetary information from which this char t that we now have on the screen here would show the total costs and the percentage .... MR.

LYON: Yes, if we could have that, that would be helpful. MR. BATEMAN: Right. MR, LYON: This policy, Mr. Chai rman, about which Mr. Car twright was speaking, the al leged discrim ination toward other hydro users, was this the policy that was determined by the Manitoba Hydro board or was this a policy that was determined by the board in conjunction with the government, or how did it come about? MR. BATE MAN: Mr . Chai rman, I think that that is taking us all back to days when the boards were different but it also has to recognize the fact that there were a number of organizati ons that made up 78

Public Utilities Tuesday, March 29, 19 71 our present Man itoba Hydro, and don't forget that the Man itoba Power Commission which was the agency of the Crown distri buting power in rural Man itoba was abs orbi ng a large number of small centres of distribution into the total integrated grid and in doing so absorbed a large number of different rates.

I think in 19 68 when we made our first general rate increase and presented that to the Public Utilities Board for review, we had several thousand rates in effect in the province and as each rate increase has been implemented, we have tended to consol idate and integrate the rates until we now have just these few that are before you. So it's very difficult to say whether it was a Board policy or an inherited policy or a policy that was negotiated between the Power Commission and some of its customers but certainly the rates now are presented to the Board each year in a very formal presentation and Mr .

Cart wright appears on some occa sions for great periods of time just discussing these very things that we're tal king about today. MR. LYON: Wel l, just to clarify the question, Mr. Chairman. I'm tal king about the determination about whic h Mr. Cartw right spoke earl ier to end the special or preferential rates as at April 1, 19 76, I take it it was, with respect to community facilities. Was that a Board deci sion, a Board decision in conjunction with the government or how did it come about? MR. BATEMAN: The approval of the rates was a Board decision. MR. LYON: A Board deci sion.

I suppose it's a fact that would not be argued by too many that we do have preferential rates in many parts of Man itoba today with respect to outlying communities and so on which are subsidized generally out of the total revenues that Man itoba Hydro receives from all of its customers. MR. BATEMAN: That is a fact of life, yes. MR.

LYON: In other words, to put a diesel generator into a remote northern community as was done in the 19 60s and on again into the '70s presents a considerab le preferential treat ment of that community because the costs that the consumers bear, bears really no relation to the cost of providing the power in that par ticular community? MR. BATEMAN: With the exception, Mr. Lyon, that we charge any government agency, federal or provincial, full cost of power in those communities. MR. LYON: But not the private consumer. MR.

BATEMAN: But the standard customer, we limit his use to a 15 amp service on a 230 volt which gives him all he needs for normal electrical use but not electric heating although there are obviously some uses of plug-in heaters in those communities as well. MR. LYON: Wel l, the point being, Mr . Chai rman, that regardless of the ideal as expressed by Mr.

Cartwright, the whole rate setting structure for Man itoba Hydro is based to some considerab le extent upon preferential treatment of certain customers, be they remote customers, be they industrial customers, be they agricultur al customers, in the interests of providing equal ity of access to Man itoba Hydro at more or less equivalent rates throughout the province. MR. BATEMAN: That is correct. MR. LYON: Then why would community buildings be selected out oft his group and put on a user pay bas is? MR. BATEMAN: They are not selected out of this group, they're in the group.

The point is that if you had a community club in the north, you would pay exactly the same rate as you're paying in the south. They're not selected out of the group for special treatment; they're treated the same as the group. MR. LYON: Yes, but except, Mr. Chairman, prior to April 1, 19 76 there was preferential treatment given to them and Mr. Cartw right has said today that that was regarded as being discriminatory and that has been put to an end. MR. BATEMAN: I think Mr.

Cartwright said that our view is that we do not want to discri minate agai nst classes of customer, but if there was a rate previously that provided this discri mination, the Board's pol icy is definitely now to remove the discrimination. MR. LYON: With respect to this one category ... MR. In BATEMAN: categ ories. We respect to all now charge any city of secondary size to Wi nnipeg the same rate regardless of whether it's Bran don or Thompson, they're charged exactly the same rate.

Size of towns like Dau phin and Boisseva in and so on that are in the same general category are charged exactly the same rate, and if you are a power customer on this demand billing, it doesn't matter where you are in the province, you are charged exactly the same. MR . LYON: Mr. Chairman, Mr. Cartw right was saying that he felt that this was a matter of social responsibility that was better hand led by some other jurisdiction or some other level of government. By that, could I ask, Mr. Chai rman, either the Chai rman or Mr.

Cartwright, is he suggesting that a program of direct subsid ies by the Provincial Government of Man itoba would be superior to the rate system that was used prior to April 1, 19 76 with respect to community buildings? MR. BATE MAN: Wel l, Mr. Chairman, we are not in the business of crea ting community clubs. The community clubs were created by a desire on the part of the community to have a fac ility and in a great number of cases these were aided by various branches of government. Now, I think Mr. 79

Public Utilities Tuesday, March 29, 19 77 Cartw right is just sayi ng that we don't think any subsidy to a recreational facility or a church or any other special-use body should have that subsidy built into the electricity rates. Our social function is not to be confused with other branches of government. I think that's exactly what Mr . Cartwright is saying. MR. LYON: Those are all the questions for the moment, Mr. Chairman, from me. MR. CHAI RMAN: Mr. Craik on the same points. MR. CRAIK: Yes, basically, Mr. Chairman, ... MR. CHAI RMAN: One thing I would like to still point out, I have had Mr.

Johanns on on the list on the particular points that the Premier had raised last meeting and he wished to ask questions. I'm going to ask Mr. Johanns on if he would like to go back. We've been deal ing with various people at va rious stages. Mr. Lyon I know you're going to object butthe fact is you have asked questions of clarificati on of a person that was appear ing before us at a particular time on questions that have been referred to by Mr. Bateman and questions that have been posed by the Premier. Now I'm asking Mr . Johannson whether he had questions on this particular point or not. Mr. Premier. MR.

LYON: Mr. Chai rman, I had my hand up for a point of order first and I think you'll find that the Premier and I are going to agree. Maybe if he would li sten, Mr. Chai rman, he would find that ... MR. CHAI RMAN: Mr. Lyon, would you proceed with your point of order. MR. LYON: Thank you, I will. My point of order, Mr. Chai rman is that you of your volition chose to put Mr. Bateman, Mr. Cartwright, first up on the stand this morning to answer certa in questions that were posed at the last meeting of the committee. That was not the choic e of the comm ittee, that was your choice, nobody argued with it.

All the First Minister is sayi ng, all that I am saying and I think it's fundamentally reasonable if we're going to have any order in this debate, is that we try to conclude as much as possible a line of questioning with respect to this particular topic that you selected and put on first thing this morning. MR. CHAI RMAN: That is true, Mr. Lyon. MR. LYON: AI I I'm suggesting is that if Mr. Crai k, if the First Minister, anybody else has questions relating to demand metering, why in the name of common sense don't we hear it rather than reverting back like a ping-pong ... MR. CHAIRMAN: Mr .

Lyo n, thank you for your point of order. MR. LYON: No, I have not finished, Mr. Chairman. Why do we not finish rather than revert ar ound like a ping-pong ball as you apparently ... MR. CHAI RMAN: Wel l, Mr .. . MR. LYON: Wo uld you just wait until I've finished Mr. Chai rman? I'm still on the point of order. MR. CHAI RMAN: Proceed. MR. LYON: I would without the interruption from the Chair . Why can we not finish the one line of questioning. I have no more questions at the present time.

I'm sure the First Minister and others may have. lt would seem to me to be eminently reasonable that we do that and that's all I think the First Minister was suggesting to you; tha t's all I've been suggesting to you. If we could follow that course I think you, Sir, would be in far less trouble. MR. CHAI RMAN: Mr . Lyon, thank you very much for your point of order. The fact is I am trying to maintain the same kind of proced ure. I'm just asking Mr. Johannson if he had questions. He's been on the list ... MR. LYON: We are on demand metering, Mr. Chai rman. MR .

CHAIRMAN: Yes, he has been on the list right after the questions had been first raised, Mr. Lyon. MR. LYON: Is he a mind reader? MR. CHAI RMAN: Mr. Lyon, I would just like to point out to you on your point of order and if you will keep your coo l, I am asking Mr. Johannson, he has been on the list, if he wants to ask questions on this particular point on demand read ing. Now, if it is clear in your mind, I just ask Mr . Johanns on if he wishes to ask questions, if he does not, I am going to proceed to Mr . Crai k. Mr . Crai k. Mr. Johannson, you have no questions on this matter? . Thank you. And I wish, Mr.

Lyon, if you were patient, you would have got to that point. Mr. Crai k. MR. LYON: We got to it before you did, Mr. Chai rman . MR. CHAIRMAN: Oh, I got to it long before you did. MR. LYON: You're not very fast. MR. CHAIRMAN: Mr . Craik. MR . CRAIK: Mr. Chai rman, on the demand metering on the curves you are showing on the demand for these recreat ional centres, I presume most of them are recrea tional centres that involve ice-making, curling rinks and skati ng rinks and so on. They appeared to be quite flat right across from the end of September right through until the end of Februar y somewhere in there.

The ice making period and the heavy demand period then is for the making of the ice in October, this is the reason it goes up, it's not a period normally when Hydro does have problems with peak demand 80

Public Utilities Tuesday, March 29, 19 77 which occurs later in the season, is that right? MR. CARTWR IGHT: That's correct. October is not one of our winter months. Correct. MR. CRAIK: In fact the colder it gets in Jan uary the less demand there is from the point of view of the ice mach ine anyway. What keeps it up in that period? MR.

CARTWR IG HT: We ll, with an ice-making machine with 1;25 horsepower motor, when it's ca lled on to operate it operates and I don't know of any of these motors that have a variable horsepower control on them, it isn't a modulating type so it's either on or off and the problem is that if it's cal led to come on in the winter months, it comes on full. lt may only operate for a very short period of time compared to what it might operate say in July. In July it obviously probably operates all ofthe time. So it's the amount of capacity that it dr aws really that is the deciding factor. MR.

CRAIK: Wel l, are the machines actually used in the real cold period of the winter? MR. CARTWRI GHT: Yes, I understand so. The people coming into the arena will cause the sensing device to bring on the plant and then particula rly with ice rinks when they wash the rinks with 16 0 deg ree water the ice plant will come on immediately and that's the problem with say having the hot water on at the same time as the ice plant comes on. MR. CRAIK: Do you know what portion of the demand is the ice machine and what portion is the lights when you get into that heavy period of winter? MR.

CARTWRIGH T: We haven't done a complete analysis on what the demand portion would be for each of those loads. You may recall the exam ple I showed you there, showed the connected loads, and if you added up the con nected loads they would be more than the 204 KVA so all of the load obviously is not on all of the time but we don't know what portion. But we can certainly assume, for example, if the ice-making plant comes on the 12 6 horsepower capacity would be on at that time. Now what other things would be on at the same time, we haven't done any anal ysis of that.

But we have found in some cases, the hot water ta nks for example, with 4,500 watt elements top and bottom, they someti mes have these connected in series so everything comes on at the same time and we're suggesting that they would put on a flip-flop like you have at home so that if you have the top element on, the bottom element does n't come on at the same time. So there's 4.5 kilowatts right there that could be saved. MR. CRAIK : In the total picture of hydro deman d, how significant is the demand totally of these recrea tional centres?

I presume that it's almost negligible in terms of your total demand that might be put on your system. MR. CARTWRIG HT: In total, any one customer probably except the very very large ones would be a low percentage but the group as a whole are fairly large. They're fairly large. You know we're tal king here anywhere from 10 0 to 300 KVA which is a fai rly large customer. MR. CRAIK: If you took some 600-odd recreational centres, cur ling rinks and others that you mention and in your statistics here added them all together, would they represent one percent of hydro's load in Jan uary? MR.

CARTWRIGHT: I have no figures to estab lish that or not. I might mention here the significanc e of demand metering. In 19 69-70, the Public Utilities Board and Ebasco Services recommended that we go down to 5 kilowatt on farms and the reason for that is that they felt that the customer is more fairly assessed for his capacity and the operating costs on the basis of demand metering. We have not accepted the fact that we should go down to 5 kilowatt. . Many utilities start at zero, have a demand meter for all non-residentia l customers.

Is it not the regular household demand picture on a given day in Jan uary or whenever it is you hit your peak load, that gives you that peak that requires you to build your faci lity to protect your abil ity to supply that demand? Is n't the pattern of demand in the regular household, the average citizen, be it suppertime, Janua ry 15th, or whenever it is, isn't that much more an irregular pattern than the demand that's put on by something like a recrea tional facility which would tend to be flatter? MR. CARTWRIGH T: Wel l, not necessarily.

If I had my personal preference, I would prefer to have a demand meter on my house and be billed on that rate because then I wouldn't be subsidizing in the same way, my next door neighbour because if we both rent a car and he dr ives it on Sunda y and I dr ive it all week, then I don't think I should pay for the car when he is not using it. So that's where it would be fairer. MR.

CRAIK: Wel l, if you did that you are going back to the days when you had meter-misers and other things in the house so you cou ldn't turn on your range at the same time you turned on the heater on your hot water heater which takes you back to the point where you had to have meter misers because there wasn't enough capacity to carry the load in the house. But now you're saying that if you had your own preference, you'd do it again but because of the impact on the system not because your house wiring wouldn't carry it. MR.

CARTWRIGH T: No, not just the system but because I could regulate or govern my own individual bill by doing that. MR. CRAI K: But you did effectively have this forced on many households at one time simply because the house wirings wouldn't carry it. 81

Public Utilities Tuesday, March 29, 19 77 MR. CARTWRIGH T: Yes. That was compulsory. This way, it's not compulsory. it's voluntary on behalf of the customer. MR. CRAIK: You still end up with the same sort of constraints on the operation of your household facil ities. MR. CARTWR IGHT: We would like the customers to assist us in this regard . MR. CRAIK: Back on this other question with regard to these peaks that you are trying to control. You say that the pattern of consumption in a curling rink is not necessarily different than that of the demand of a normal household? MR.

CARTWRIGH T: We are ta lking daily, monthly, annual load factors? Is this what we are tal king about? MR. CRAIK: Wel l, what is the problem? Is it the daily or is it the monthly? What is the problem Hydro is trying to get at in using demand metering? MR. CARTWRIG HT: Annual is one, yes, annual load factor, as well as ... I think the three are important, at least the two are important, the dai ly one and the annual one. MR.

CRAI K: On the daily one then, if you use that as the smal lest yards tick, is the household more irregular than the curling rink or is the curling rink, does it tend to be flat on the dai ly basis? MR. CARTWR IG HT: I would have to see some skip char ts on that before I could comment. MR. CRAIK: How easy is it going to be, whether it's a household or a curling rink, to actual ly, by applying this sort of a metering system, how easy and what is the likelihood of having people change their patterns of living and patterns that they follow whether it's making ice or having supper at six o'clock? MR.

CARTWRIG HT: That is up to the individual, of course. All we can pro vide for them is the means to do this. MR. CRAIK: We ll unless Hydro has made some advance judg ment on this, then the net results ... If you don't have some sort of conviction that this metering system is going to change the patterns of the use of electricity, then really what it is going to do is just change the revenue picture. You know that it is going to change your revenue picture. But at this point the question is, do you have some sort of strong feeling that the pattern of utilization is going to change? MR.

CARTWR IG HT: We would hope so, yes. We would hope they would control their demands within their reasonable requirements, and so reduce that to the optimum level for each customer . MR. CRAIK: By putting in special equipment, flipflops and other things ... MR. CARTWRI GHT: Yes. Customers that have had this since Day One are very fam iliar with this and some go to some very sophistic ated control ling equipment to do it. You can do it manually but when you rely on people to do it, sometimes it isn't too reliable. You can go from very crude methods of control to very very sophisticated methods of control. MR.

CRAIK: Are you embarking on a program through this to try and reduce the total energy consumption in a year, on a yearly basis? MR. CARTWRIGH T: You mentioned energy consumption versus demand? MR. CRAIK: Total electrical energy consumption. MR. CARTWRIGH T: We're trying to make them recognize that the capacity component is very important to us. MR.

CRAI K: In some of your meetings that you've been holding with recrea tion groups, in addition to ad vising them on the type of lighting fixtures and so on, is there any thought of incentive programs to get them to put in different types of lights, so dium lamps, mercury arcs and this sort of thing? MR. CARTWRIGH T: We are not in the consulting business but anytime we are asked to provide assistance where they can't get it elsewhere, we're very pleased to go along and make whatever recommendations we can.

And we do have a case where one of the community centres came to us about their lighting and we so advised them to put in metal arc where they had incande scent before. This substantial ly reduced the number of fixtures and substantially reduced both their demand and consumption. We'd be prepared to do that where other consu ltants are not available. MR. CRAIK: That's all I have, Mr. Chai rman . MR. CHAIRMAN: Mr. Premier. MR. SCHREYER: Mr. Chair man , still on the general question of rates and demand metering.

I would like to ask the Chairman, just as a general rule of thumb, if one of the major factors in there having different rates and the like, is because of the historical fact that some few decades ago there were perhaps one to two dozen local municipal distri bution utilities and that as they were bought out, consolida ted within Power Commission or Hydro, that each had their own peculiar categories and levels of rates and that gr adually this has been consolida ted? MR. BATEMAN: Yes, basically that is correct, Mr. Premier.

You will find the same situation today across Canada, that there are a great number of different rates. There seems to be because of the new incremental cost of new capacity affecting everybody the same way, there is a tendency toward 82

Public Utilities Tuesday, March 29, 19 77 providing for th is demand charge in the form of a service charge and then an energy charge after that. And we are gradually worki ng toward that. We will eventually have our rates, I hope, on the basis of the cost of service to a customer and the energy he uses will be at a rate that will be comparable pretty well throug hoblt the province. MR. SCHREYER: But more specifically, I can reca ll years back that the Town of Selkirk had its own distribution arran gement. MR. BATEMAN: That's right. MR. SCH REYER: The Town of Beausejour had its own.

I ra ther suspect, although I don't know specifically, that there must have been in the order of one to two dozen such arrangements and that each one of them had somewhat different categ ories and levels of rates. That is point one. Point two, if I may as k, again I am not so much interested now in a precise quantifica tion but would it be co rrect to say that there were several dozens of different rates because of different communities and different categories and that gradually and slowly but stead ily the number of rate categories has been dimin ished?

Could you give us a rough conceptual estimate as to how many rates there were at the extreme high and how many there are today? MR. BATEMAN: Wel l, only speak ing from memory, I do n't know whether Mr . Cartw right has a better memory than I on the number of rates but it was in excess of a thousand and you might tell us how many we have today. MR. CARTWRI GHT: We have approximately 46 rate tari ffs today. MR. SCHREYER: Wo uld you give us an estimate as to its historic peak? MR . CARTWRIGH T: I don't have figures readily avai lable for that.

Last year it was about 75 and the year before that it was in the order of 13 0. MR. SCHREYER: Wo uld it be far-fetched to suggest that some several years back it could have been as high as 200? MR. CARTWRIGH T: lt was cert ainly in excess of 13 0 because one of the comments made by the Public Utility Board in 19 70 was the fact that we had done our best at that particular point in time in trying to reduce the number of rate categ ories and combine them into more practical groups. MR. BATEMAN: I think, Mr.

Chairman , to try and get that informati on we could perhaps review the transcript of the Public Utility Board hearing if it is important to you, Mr . Premier, to have that figure but I think we came out of the Public Utility Board with the submission we made with some 300-and some-odd rates but I think we went into it before making that rate increase, I was under the impression that it was in excess of 1, 000 rates. We could check that. MR. SCHRE YER: I am not sure, Mr.

Chai rman , that it is important enough to get detai led and painstaking precision but it would be useful to get an overall perspective, to get an appr oximation of the movement of consolidation of rates and where it stands at the moment. My next question, Mr . Chairman , is to ask whether there is any comparison or relationship at all to be drawn between rate treatment, rate consolidation and treatment, as between communities and the problem of geography on the one hand and categories of users on the other?

What I am actually getting at is whether it is in fact misleading or whether it is somehow clar ifying to suggest that there is some relationsh ip between consol idati ng rates accord ing to category of user and somehow relating that to consolida tion of rates based on geography and based on communities. MR. BATEMAN: Perhaps Mr. Cartw right could answer that also, Mr. Chai rman . MR.

CARTWRIGH T: We have two general groups now, residential and non-residential, and in the non-residential we have what we call the small capacity user, up to 55 kva, and in that group we have a rate for Winnip eg , another rate for cities, and another rate for those outside of cities. There are three groups that are being br ought closer together all the time, closer together in respect to what their total bill would be for the same consumption.

With regard to residentia l , we have a Winnip eg rate, again a cities rate, we have a towns rate and we have a rural rate for those that are served off the rural distribution lines and those rates are being brought closer together agai n, closer together in respect to the bill for the same consumption. Apart from that we have a farm rate that is in three categ ories, smal l farm, medium-size farm, and large farms. Another rate that we have is for all those customers except residential that are over 55 kva.

No matter where they are in Man itoba that rate is the same, the bill is the same for the same capacity and consumption char acte ristics. MR. SCHRE VER: Mr . Chair man , I will be even more specific.

I should think that one of the policies that has been a fundamental one with Man itoba Hydro over many years, I would think certainly since the inception of rural electrification and a policy which I would endor se whole-heartedly, has been to not atte mpt to determ ine the amount of cross-subsid ization as between one community and the next and that we have proceeded with a general level of rates that would be equa l as -w ell, there are some exceptions unfortunately but those are being consolida ted - rates that would be equal as between a community of a given size somewhere in eastern Man itoba and a community of the same size somewhere in western, southwestern, northwestern Man itoba, regard less of the fact that if you did a 83

Public Utilities Tuesday, March 29, 19 77 deta iled calcu lation, the cost of transm itting the power might be somewhat different as between one community and the next. So that kind of differentiation in rates has been - I guess the word is "ign ored ." There has been an implied cross-subsidization as between communities of approximately equal size or within categories that connote equal size but once you leave the notion of communities and deal with categories of user, then I wo uld think that the policy that is being attempted to be pursued is one of the elimination of hidden subsidies. Is that the idea? MR.

CARTWR IG HT: That is the co rrect answer, yes. MR.

SCHRE YER: That being the case, I would like to know if, since we have ag reed to certain material being put in the appendices of the transcript, certai n charts, whether it would be a mana geable task and I think it is important - Man itoba Hydr o should not be expected to be operating in simplistic isolation from the forces of the general economy of the country and indeed of the continent - whether you can obtain, based on the samples you used, four or five sam ples, whether you can obtain data in char t form which would ind icate whether our community facilities based on scales of operation such as you have would be approximately comparable with community fac ilities of the same kind in neighbouring provinces, I would think at least from the Lakehead to the Rockies, to see whether or not there is something undue here.

Are you optimistic, Mr. Cartw right, that this can be obtained mana geably ? MR. CARTWRIGHT: We'd be prepared to contact our sister utilities to see if that information is avai lable. We do know that in many of the utilities, they do not have a special rate for non-profit organ izations, and those that have them, in some cases are being instructed to eventually eliminate them. We know in our sister province of Saskatch ewan, the utility itself does not have a rate for recrea tional fac ilities, but the Province of Saskatchewan does have an energy grant system that they ad minister. MR . SCH REYE R: Wel l, Mr .

Chairman, I would be more interested in obtai ning a somewhat broader ba sis of information, if we are to do this, I'm suggesting from the Lakehead to the Rockies, to see whether ther e is anything undue. MR. CHAIRMAN: Mr. Bateman. MR. BATEMAN: Could we clarify that, Mr. Premier, to the extent that these facilities are on the standard power demand billing rate. Could we compare the rate they would pay if they were on that rate, with what they are paying in Man itoba, and then we would have the ... Now if there was any subsidy toward that, then we would try and find tha t out as well. MR.

SCHREYER: Perhaps it is too easily, sort of calculable in my mind' but I would think that given a recrea tional facility of X-type of service, KVA, XKVA and an energy of consumption of given amou nts that relate approximately to your samples, whether you just couldn't chart it in on that basis. MR. CARTWR IGH T: Yes we could do that on that basis. We then would n't have to contact them for specific costs of clubs, shal l we say, in Thunder Bay, but we could get the rate that is applicable and apply it on the common base of what we've used here. MR. SCH REYER: We ll that's ali i' m suggesting.

I would, however, ask if you can do it because even though some may disa gree I do not, in saying that it is absolutely important to know where the treatment stands in the order of things elsewhere in the country and whether we are practising (and when I say we I mean Man itoba Hyd ro) practising something that is undue in the context of the world around us. That's all. MR. CARTWRIGHT: That can be provided. MR. CHAIRMAN: Okay ' is that agreed Mr. Cartwright. Mr. Bate man. MR. BATEMAN: Wel l, Mr.

Premier, if we could show you this, I think this would give you a picture of the power custo mers monthly bill comparisons. Now if one of these com munity clubs happens to be in that 30,000 kilowatt hour a month with 75 kilowatt demand category, there is the example of what they would pay in Wi nnipeg as compar ed to the other centres across the country. Now our Winnip eg rate is the same as the country rate, in this particular example,

whereas the province of Quebec is the same throughout the province also in this rate but the other provinces may not be the same. In other words you might have a different rate in the country in Alberta than you do in the city. And looking at the larger demand type customer with 1, 000 kilowatts of demand, the lower chart shows that where there is an average consumption of in the order of 400,000 kilowatt hours a month that Mo ntreal is lower than Wi nnipeg but Winnip eg is still the second lowest in the country for that type of billing demand.

We can verify these with the type of facility that you have asked for and see what the rate is in the country surrounding these major centres, as we have shown them here. MR. SCHRE YER: Mr . Chairman, if I may, these two charts are informative but it is my distinct impression that certainly not the second one and not even the first is really sized to any of the sam ples that Mr. Cartwright used this morning which really portrayed the actuality of the scale of operation of the community curling and skating rinks. You're tal king not in the order of 30,000. What was the largest sam ple? MR. BATEMAN: 69,000. 84

Public Utilities Tuesday, March 29, 19 77 MR. SCHREYER: I beg your pardo n. MR . BATEMAN: 69,0 00 to 70,000. The exam ple Mr. Cartw right used this morning was 69,000, I believe, and it was in the same demand level, 75 to 10 0 KVA of dema nd, this is 75 kilowatts of demand but we'll work out simila r information to those that were shown in the earl ier char ts by Mr. Cartwright. But we happened to have this one ... And this you'll notice, Mr. Premier, the comparisons are the March 19 77 bill comparis ons. This includes the rates that we now have in effect. So that's up-to-date. MR. SCHREYER: Mr .

Chai rman , if I may, back on the general question of rates. Could I ask for confirmation that with respect to a community that is on main-line tra nsmission in northern Man itoba such as, oh let us say Snow Lake, Lynn Lake, that these communities which in a rough and ready way are roughly the same in size as say Neepawa, McCr eary, that indeed the rate sched ule is the same for all those communities. MR. CARTWRI GHT: They are the same as a comparable community in any other part of the province. MR. SCHREYER: And with respect, Mr.

Chai rman, to the isolated diesel communities that their rate is based on rural service rates with respect to private and household customers? MR. CARTWR IG HT: Yes, with the restricti on of the capacity limitation. MR. SCHREYER: Understood . A nd finally, Mr. Chai rman , could I ask for confi rmation as to whether there was in fact always a dichotomy of rate treatm ent with respect to community curling and ska ting rinks as between those located in the area of service of Wi nnipeg Hydro and those in the area of service of Manit oba Hydro. MR.

CARTWRIGH T: In surburban Wi nnipeg they were treated differently than they were treated outside the City of Winnip eg - Man itoba Hyd ro. MR. SCH REYER: We ll that's why I am asking you the question because the impression was left that the dich otomy or differentiation in rate treatment of community skati ng and curling rinks was as between the area of service of Winnip eg Hydro and the area served by Man itoba Hydro. Now you're qualifying that, if I understand you, to say that really there were three rates then, th ree rate trea tments. Not two but three. MR.

CARTWR IGHT: I'm not completely familiar with what Wi nnipeg Hyd ro did prior to the rate equal ization in 19 73. MR. SCHREYER: Is there some way we could ascerta in this? MR. BATEMAN: We could ask Winn ipeg Hydro and I'm sur e they would be prepared to give us that informati on. We'l l undertake to try and get that, Mr . Premier. MR. CHAIRM AN: Fine' when that information is avai lable we'll make it avai lable to the members of the committee. Mr. Graham. MR. GR AHAM: Thank you, Mr. Chai rman . In the demand billing process we have a rate that is uniform at all hour s of the day, is it?

Or do we have a sepa rate rate in off-peak hours? MR. CARTWRI GHT: No, it's the same rate. MR. GRAHAM: Mr. Cha irman, is this consistent with other jurisdictions throughout Canada? Do they have special off-peak hour rates that are applicable, that we do not have? MR. BATEMAN: We ll I'm not aware of many off-peak rates. We have a few on our own system but Mr. Cartw right could perhaps give you his un derstan ding of time-of-day metering across the country. MR.

CARTWRI GHT: As far as I know time-of-day rates are only avai lable to very very large customers of other utilities, not of the size of customer that we are discussi ng here today. MR. GR AHAM: There would not be ... In the 75 KVA class there would be no special rates? MR. CARTWRI GHT: Not to my knowledge. MR. BATEMAN: One other point, Mr.

Graham, where in looking at the total system on our maxi mum use days, the several days in the wintertime when we are at maximum use and our customers are using the maxi mum amount of electricity, our daily use factor, or what we call our load factor, in that day runs somewhere between 92 and 94 percent. So if we were to encourage off-peak metering or different time of day metering there isn't much room left to maneouver. You'd get a small amount of change made at a great investment and then you'd find the peak occu rred at a different time of day than the time that it actually occur s.

And they have done this in England. They recognized that they wanted to get a lot of this storage heat appliance use in, in fact some people actually have cooked their meals on a storage range. You use the energies, heat a whole bunch of rocks on storage energy in the night-time and then you draw from it in the day time.

We ll all that they succeeded in doing in England was transf erring the peak from the evening, between five and seven in the evening, to somewhere around four o'clock in the morning, and yet they still need the same capacity after having invested a very consider able number of dol lars in time-of-day metering for their customers and imposing a special storage rate. Now they have since increased the rate for the storage energy more than they have for the norma l time of day rate. So you see that you can go overboard on these things very easily. MR. GR AHAM: Wel l, Mr.

Chai rman, the reason I asked the question, I think because of my 85

Public Utilities Tuesday, March 29, 19 77 location in the province of Man itoba and having numerous constituents who do work in the potash industry in Saskatc hewan, I believe it is my understanding there that they do operate on off-peak hours and dur ing the peak hours of energy consumption that's when they shut down and do their maintenance. MR. BATEMAN: Yes. They have a much different annual use factor than we do in Manitoba. Their's is much lower and there is more room on peak days to manoeuver, in Saskat chewan. They are encouraging some ...

But in the case of the potash mine certainly that is a big consumer relative to one of these recreational faci lities we are tal king about. MR. GR AHAM: There is something else that was brought to my attention, Mr. Chai rman . ! believe you indicated that out of the 73 examples you showed here that roughly 50 percent benefited from the demand billing concept of char ging tor energy.

I was just wondering it there has been any liaison between your department and the Department of Tourism and Recreation, which I understand is conducting seminars throughout the province on energy utilization, and I refer to one that was held a couple of weeks ago in Brandon. And acco rding to the examples that they give there, eighty percent of the examples that they give show that there's a higher cost under the demand billing, which isn't cons istent with the 50 percent figure that you gave here. Now I don't know whether they take examples of recreational facilities that exist within that area or not.

This was held in the Westman regions, but the examples they gave there and I'll just use ... They gave five examples and one I'll just quote you. Under demand billing, Chart No. 5, it would cost $8,727.34 under demand billing and under the general service rate it would be $5,1 04.72. MR. BATE MAN: Wel l, just before Mr. Cartw right adds some comments on this about what we are doing, I wanted you to know that as well as attending these seminars we have had staff at a number of them, and Mr.

Cartw right can give you the details, but we also have found that some of the people that we would like to see attend these energy mana gement seminars, that are complaining about their bills, are in tact not at the seminars.

And it there is any influence you can use upon your constituents to ensure that they attend and par ticipa te in the discuss ion as to how to manage the load that they have connected in their recreat ional facilities, we would find it useful from our point of view and certainly I am sure t hat the customer would find it useful from his point of view, because we are prepared to go to any area and cond uct an educa tional program in wise load mana gement. MR. GR AHAM: We ll, Mr. Chai rman, I believe it was a Mr.

Lawrence Baran iuk who attended that particular seminar but I would also like to say that it would not be my intention or would I hope to ever l live in a soc iety that forced people to attend meetings whether they wanted them there or not. t MR. BATEMAN: I wouldn't recommend that either, Mr. Graham. MR. LYON: Following along the line of questioning that the First Minister was engaged in with respect to comparative rates. lt would seem, Mr. Chairman, through you to Mr. Bateman or Mr.

Cartw right, that the datum that is causing the conern in Man itoba is not the comparison between here and the Lakehead, or here and Saskatc hewan, the datum is the bill that they ha ve to pay today as compared to what they were pa ying in 19 73. And I was wondering it we could, in the course of preparing these figures, and I ask first of all it it's possible realizing that there has been a change in the rate structu re, can we not compare this on the basis of cost per kilowatt hour as between say 19 74 and 19 77.

This is really getting to the root of the problem. it's all very well to indicate from samples and so on, that roughly 50 percent of the faci lities are experiencing a smal ler bill after you factor in certain other conditions, but what the basic datum we're looking tor is why 78 communities through the Man itoba Parks and Recreation Association are on the door step of Man itoba Hyd ro and the government asking tor some subsidy tor these rates of energy that are, from their standp oint, running out of control . I used the ex ample last week of Wawanesa.

I give you the example of the curling club in Boissevain this year with the figures that were given to me last tal l. Their estima ted hydro bill fort h is year alone $7,800, which is a phenomenal increase over what it was only three to tour years ago. And it's all very well to talk about demand charges being helpful to them, the only thing that they see is the bottom ; the line only thing that they know is that they have X number of people in that community to pay tor it.

The only further thing they know is that it these char ges keep escala ting at the present rate they're going to have a facility which is necessary to keep that community socially cohesive, and it's desirable tor the facility from the sports standpoint , from the recreat ional standp oint, the standship of fellowship, society and everything else, they are going to have a facility that is going to be costed beyond their capacity to pay tor it because of the chan ges that are being made either in the rates or in the demand char ges or whatever. So with respect, Mr.

Chairman, I suggest that that is the kind of da tum we are trying to get at in this committee. MR. BATEMAN: Mr. Chai rman, I would just like to just make reference to the information that Mr. Cartwright did give us. I think it showed that the electrical in use did not increase only because of the rates. There are other factors. They have increased their electrical consumption very significantly which somebody has to pay tor. MR. LYON: Quite so. 86

Public Utilities Tuesday, March 29, 19 77 MR. BATEMAN: Also these communities, the cost of electricity isn't the only thing that has gone up as you saw from the information Mr. Cartw right gave you and which I could put on the screen again. The cost of the electric bill to the total cost has actually declined in some of these cases as a percent of total operating costs and we could perhaps show that slide again just to bring that into focus. The electric utility bill has in some cases gone from, as the first line indicates, 11. 2 percent down to 9.6 percent.

So you know you can't lay this all at the doorstep of the demand billing or the electric utility rates. lt is a symptom of the society we are living in. Costs are going up in all things we have to deal with. They affect us just the same as they affect some of these community clubs. And here we have ... yes, the days of voluntary labour for exam ple in some of these community clubs is a thing of the past. The community club that I live near is ask ing for another capital fund dr ive to add a lot more faci lities which will increase the operati ng costs.

I mean you have got to start think ing about the increase in operating costs when you add these new facilities. I think this quite well demonstrates the fact that it is not only the electricity that is going up. lt is actually going down relative to the other costs as you can see from this chart, not in all cases but in a good number of them. MR. LYON: Mr.

Chairman , I thank the chai rman for his commentS but l think that the point that we are missing in this discussion is the fact that the vast majority of the people of Man itoba up until 19 73 and 19 7 4 accepted the fact that Man itoba Hydro was the lowest cost factor that they could have in the operation of these facilities. lt is no longer that lower cost, and the question is being asked and will continue to be asked in this committee , why? And I think that that is the point that we are getting at fundame ntally.

So I welcome the chai rman's remarks, I apprecia te the comparisons that he makes and so on, but the heritage of this province has been up until 19 73-1974 cheap hydro electric energy. The people of Man itoba are saying this is no longer our heritage, what happened to it? And that is the point we are getting at. MR. SCHREYER: If I co uld be al lowed an equally len gthy preface, I would like to start by saying that at no time did I suggest that a full broad spectru m of all relevant base datum be brought forward .

That indeed was the whole point of my question and when viewed in total perspective and not simplistic isolation, I am rather confident that all of the relevant data will show when viewed in total perspective, that the movem ent, the cost of energy in Man itoba, has been well in line with the movement of per capita income, disposable income, and in relation not only to that but in relation to the historical context within Man itoba alone, the cost of electrical energy in relation to disposable income is certainly not deteriora ting.

And furthermor e, in relation to other parts of the country, not to mention the continent and the world, the relative - since that is the word that has been used - the relative cost of energy here in all of its dynamic s when compar ed to the dynamic s elsewhere in the country is certainly not deteriora ting but holding its own and indeed some have suggested it has improved by one tranche. So I mean I would like to express a whole lot of obiter as well. dicta MR. BATEMAN: Mr.

Chairman , if I could draw the Premier's attention to the chart I have on the board , you will see that it supports what you are saying qu ite properly. The average cost of power to the ultimate consumers in Man itoba in 19 65 was 10 .77 and 14 .7 4 in 19 75, for an increase of 1. 37 . Now the consumer price index for Winn ipeg in that same time has gone up to 1. 67. I think you will find that on the basis of the comparisons we have made in this char t of the economic indices that the average cost of power shows up the best of all those that we have compar ed.

For instance, the industry price selling index for all manufacturing industries in Canada has gone up 1. 78 and the wholesale index has gone up 1. 96 and that is a pretty impeccable source, Stat istics Canada. MR. LYON: That is two years old though. Those figures are two rate increases behind us. MR.

BATEMAN: They are the latest information we have and I am sur e, gentlemen, I appreciate the fact that we have had rate increases since then but we have had price increases since then as well and if we could get the up-to-date Statistics Canada information for last month even I am sure we would show equally as favourable a relationship. MR.

SCHREYER: I realize that the char t that has just been displa yed is approximately eighteen months old, but it is I understand, the most recent Stat istics Canada publication which poses a bit of a dilemma because it is the only statistical sou rce that I imagine we could accept as authori tative. I am sure many gentlemen wouldn't accept any statistical base datum that I would bring forward and I can say without meaning to be offensive that I sure as hell wouldn't accept some of the statistical base datum that would be brought forward by some of my worthy opponents .

So we have to continue to rely, even if there is an eighteen-month time lag, on Stat istics Canada informati on. MR. BATEMAN: I haven't got information from Stat istics Canada up to date but I have got up-to date informa tion, Mr. Chairman, on the residential customer monthly bill comparisons for our service area relative to other similar service areas across the country and you will notice that as of March, 19 77, in the 750-kilowatt-a-month categ ory, we are marginally higher than Calgary with Montreal being the lowest and everyone else higher.

And in the larger consumption like the electrical ly-heated home, 5, 000 kilowatt hours per month, we are ahead of Calga ry significantly and the only one that 87

Public Utilities Tuesday, March 29, 19 77 beats us is Montr eal and these figures are as of March, 19 77, current, up-to-date. MR. SCHREYER: Wo uld that Toronto figure, Mr. Chairman, include or exclude the 30 percent increase that was announced by Ontario Hydr o to be effective 19 77? MR. BATEMAN: That includes, as I understand it, the 30 percent increase in Ontario Hyd ro's rates Jan uary 1s t this year. it does not include the increases that they have currently asked for for next year. MR. SCHRE YER: Which is how much? MR. BATEMAN: I think it is fifteen percent. MR.

CHAIRM AN: This would be an appropria te time to stop, Mr. Crai k. l have your name, a list . Mr. Johan nson, a point of order. · MR. JOHANNSON: A point of order. I know, Mr. Chairman, that they also serve who only stand and wait but I waited two-and-a-half hours today. Can I be assu red that I will come up next time? MR. CHAIRMAN: Yes. MR. JO HANNSON: No, my questions will take too long. MR. CRAI K: Mr.

Chairman , the only deviation that took place in the whole discussion this morning, the deviation from the exami nation of demand metering was the last one which went back to the same information we saw last week, so Mr. Joha nnson appropria tely should have been in order before that came on. But before we adjourn, Mr. Chairm an, I wonder if I could just ask again the Hyd ro people whether they could provide aga in that informa tion I asked for. Could they itemize the effect on the total dema nd, the peak demand, of the recreat ional church facilities, community facil ities?

Can they give some indication of what that total demand peak effect is going to be? And secondly , can they provide the total revenues in 19 75 from recreational facilities that they are mentioning here, the 675, and compare it to what the total revenues will be in 19 77? MR. CHAI RMAN: We have reached the time of adjour nment. I believe there have been a number of questions taken as notice and the information will be provided . You have a particular point, Mr. Lyon? MR. LYON: Mr. Chairma n , just to re-establish fort he purposes of the next meeting, could we ... ? MR. CHAIRM AN: Yes, we have April 7th date. MR.

LYON: I was wondering if you could consult the committee about that before you unilaterally made a decision. MR. CHAIRMAN: Wel l, I believe that the way matters have been done has been based ... the committees have been estab lished by the House Leader in consultation with the availabil ity of the people, of the chai rman of Man itoba Hydro, to be present at that particular time. it is the House Leader's job to ascerta in as to the proced ure when the committees are going to be sitting. MR. LYON: Okay, so this committee with respect to Hyd ro will be sitting again on Thursday, April 7th, is it? MR.

CHAIRM AN: April 7th. MR. LYON: At the same hour We will have the Hans ard from this meeting some several days, hopefully, before that MR. CHAIRMAN: Mr. Premier, . . . MR. SCHRE YER: Yes. MR. CHAI RMAN: I indic ated that I shall ask the Speaker to see if this can be pos sible. The transcripts were made available to you from the last meeting. MR. SCHRE YER: Yesterday. MR. CHAIRM AN: I indicated earlier that I will ask the Speaker if that shall be possible. I canno t make any comm itments on behalf of the Speaker. Mr. Premier on a point of order. MR. LYON: Mr. Chairman , with respect, on a point of order.

I think it is not a question of "if it's possible," it is possible. And all I am suggesting is that this comm ittee should agree that before it reconvenes again it will have the transcri pt of these hearings in order that we can carry on the exam inat ion and the cross-exami nation. Now that is not an "if fy" point, that is not an outrageous request, it is a continuation of something that has been done, with respect, for years, long before you, Sir, were Chairman of this committee. Man itoba Hydro used to take the transcrip ts and prod uce them in someth ing less than a week so that they would be available.

All I am suggesting is that we reassert that practice. The chai rman nods his head, Mr. Chairman. MR. CHAIRMAN: I am not arguing. MR. LYON: The Chai rman was not here when that practice was initiated . MR. CHAIRM AN: I reca ll very well when the transcripts were made ava ilable from Man itoba Hydr o. MR. SCHREYER: Mr . Chairman , I indic ated that it would seem to be possible to acco mmodate the request by agreeing to the 7th of April and ifth ere is general agr eement, we can set that date as being the time by which we meet agai n.

The effort to have the transcri pt I think is one that we should make every effort to meet. Unfortunately Mr. Lyon raises a point which I can't let go unchalleng ed. I have to say that maybe you weren't here, Mr. Chai rman , but I was for many years and I have just a little bit too 88 I

Public Utilities Tuesday, March 29, 19 77 good a memory to know the extent to which, the consistency with which, and the degr ee to which transcri pts of committees of this House were kept so I don't want any nonsense. And I put it very well; it is abso lute nonsense. MR. l VON: In 19 66, 19 67 , 19 68, there were transcripts made available and Hydro had the staff here to do it. Mr. Bateman was here at the time, he can recollect it. lt is a point of no particular concern to me at all but I don't wish to argue with the Premier who wasn't even in this House at that time. MR.

SCHRE VER: No, but I was here for years before that. -(l nterjections)- MR. CHAIRM AN: I don't see the particular point of order. -(I nterjection)- Order. Mr. Lyon, order please. I have indicated that I shall speak to the Speaker and see if that will be possible and I am sure that he will have those transcripts available. Mr. Joha nnson on a point of order. MR. JOH ANNSON: I was going to move adjournment, Mr. Chai rman. MR. CHAI RMAN: Thank you. Committee rise. 89

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Collection	Manitoba — Debates (Hansard)
Citation	30-4-pu5
Type	hansard
Volume / chapter	30th 4th hansardpdf pu5.pdf
Language	en
Format	pdf
Source	PROVINCIAL
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