Bring Power Smart home

In 2017 I sat in a legislative committee room and asked a simple question about the bill that would take Power Smart out of Manitoba Hydro and turn it into a brand-new Crown corporation:

“What problem does this solve?”

I never got an answer. Not long after, I was sitting as an independent.

Nine years later, we have the answer. It didn’t solve much.

Efficiency Manitoba began operating in April 2020. The law that created it says it must cut Manitoba’s electricity use by 1.5 per cent every year. It has never once done that. By its own reporting, it reached 69, 82, 83, 84 and 80 per cent of its target in its first five years. After five years, it’s roughly 340 gigawatt-hours behind where the law says it should be.

To be fair, it has done better on natural gas, meeting or nearly meeting its target of 0.75 per cent most years. And it started in the middle of a pandemic. But electricity is the target that matters to Hydro.

Now look at the cost. Under the act that created it, Manitoba Hydro must pay for whatever plan Efficiency Manitoba gets approved, less anything Ottawa puts in. Since 2018, Efficiency Manitoba has taken in about $326 million, and $289 million of it came from Hydro ratepayers. Hydro’s share has nearly tripled in four years, from $27 million in 2020-21 to $78 million in 2025-26, the same year Hydro lost $446 million.

Ratepayers haven’t even seen the full bill yet. Hydro doesn’t count its payments as expenses when it makes them. It parks them on its balance sheet and charges them to ratepayers over as long as 10 years. At the end of March 2026, Hydro was carrying $323 million in energy-efficiency spending that customers had yet to pay for.

What do we get for it compared with before?

In 2016-17, Power Smart spent about $65 million inside Hydro and saved 287 gigawatt-hours. In 2023-24, Efficiency Manitoba spent $55 million and reported 283. Roughly the same money and the same results, but now with a second board, a second CEO, a second head office and a second set of regulatory hearings. For an organization with efficiency in its name, that’s an odd way to save.

Even that comparison flatters the new agency. When the Public Utilities Board reviewed Efficiency Manitoba’s first plan in 2020, it found that about 99 gigawatt-hours a year came from a single customer project Power Smart had already signed, counted again every year. The board objected. If that project is still being counted, it’s about a third of Efficiency Manitoba’s reported electricity savings.

The environmental case is thinner than most people assume. Manitoba’s grid is about 97 per cent hydro, so Efficiency Manitoba itself claims no greenhouse gas reduction from electricity savings. Every tonne it reports comes from natural gas. Last year that was about 19,300 tonnes, well short of its own plan of 33,600 and less than a 10th of one per cent of Manitoba’s emissions. Those gas customers belong to Centra, which Hydro already owns. The separate agency wasn’t just a Progressive Conservative idea, and the argument for it deserves a fair hearing. In 2014, the Public Utilities Board recommended moving efficiency programs out of Hydro. The logic was that a utility that makes money selling power has little reason to help customers buy less of it. That made sense when Hydro had surplus power to sell. It doesn’t today.

Hydro lost $446 million last year. It carries more than $24 billion in debt, and about 35 cents of every revenue dollar goes to finance costs. Its own resource plan warns of a capacity shortfall by 2030 of up to 600 megawatts. To fill it, Hydro is planning new gas turbines at Brandon at a cost of $2 billion to $3 billion.

In that world, every megawatt saved at the winter peak is a megawatt Hydro doesn’t have to build or buy. The people planning Manitoba’s electricity supply should be in charge of it. That’s why Power Smart was part of Hydro in the first place.

I want to be straight about what folding Efficiency Manitoba back into Hydro would and wouldn’t do. Most of its budget goes to rebates and incentives for homeowners and businesses. Those should continue. The savings would come from overhead — the separate board, executive team, audit, offices, regulatory filings, and its own finance, HR, IT and evaluation staff. That’s millions a year, not the whole budget.

Some will say folding Efficiency Manitoba back into Hydro would cost us federal money. It shouldn’t. Ottawa’s support for Manitoba’s efficiency programs, about $37 million so far, pays for programs, not for a separate corporation. The first $31 million came through an agreement with the province, which chose where it went. The current federal agreement, worth up to $33.7 million to 2030 for retrofits in lower-income homes, should simply move to Hydro along with the programs. The federal money would keep helping the same households. It just wouldn’t be paying for a second head office.

The bigger gain is accountability. One plan, one organization, one set of books, and one minister answering for whether the lights stay on at a reasonable price. Hydro already has the customer relationships and the billing system. The new heat pump program already collects repayments on Hydro bills.

This is an opportunity for the Kinew government. In 2019, Wab Kinew called Efficiency Manitoba “a figment of this government’s imagination.” He’s now in a position to do something about it.

The steps are simple. Amend the Efficiency Manitoba Act and bring the staff and programs back into Hydro. Then set efficiency targets through Hydro’s resource plan, as the PUB recommended in 2020, instead of a fixed number in a statute that nobody has met.

The result would be lower overhead, a modest boost to Hydro’s finances, and efficiency focused where it does the most good, on the winter peak. That’s good management and good environmental policy. It would also show that this government is willing to fix something it inherited instead of defending it.

In 2017 I asked what problem this new Crown corporation was meant to solve. The government of the day couldn’t say. This government can solve one. Bring Power Smart home.

Steven Fletcher is a professional engineer and a former member of Parliament and of the Manitoba legislature. He served as federal minister of state for transport and for democratic reform.