In the late 19th and early 20th centuries, forward-thinking visionaries who dreamed of a modern Manitoba were faced with two serious problems. First, the province had a very small population. Canada as a whole had five million citizens by 1900, but even by the standards of the country as a whole, Manitoba’s population was sparse, numbering only a quarter million people.
This leads to the second significant problem. Aside from large settlements in Winnipeg and Brandon, the population was spread out. Even today, Manitoba has a population density of only 2.2 people per square kilometer, less than half that of Alberta, and little more than one-seventh the population density of Ontario.
With businesses unable to profitably provide energy to such a widespread population, the government of Manitoba turned to regulatory solutions.
Bringing electricity and natural gas to such a spread-out population posed serious difficulties which outstripped the financial means of even the largest private companies. Private enterprises were capable of supplying power to larger cities and towns, but what about the rest of Manitoba?
This is why, in 1916, the province founded the Manitoba Power Commission, tasking it with the responsibility of supply power to people outside the bounds of Winnipeg. Slowly, the MPC expanded the reach of the provincial electricity grid, even as the Manitoba Hydro Electric Board did the same. It wasn’t until the mid 1950s that the process of electrifying Manitoba was largely complete.
In subsequent years, the MPC was renamed Manitoba Hydro, and gradually absorbed the few remaining commercial companies and local utilities. Since 1961, Manitoba Hydro has been Manitoba’s sole supplier of electricity. In addition, it is the province’s regulated distributor and supplier of natural gas, though retail companies are also allowed to sell natural gas directly to residents and businesses.
As the regulated supplier of electricity and natural gas, Manitoba Hydro provides all electricity consumers in Manitoba with the electricity services they require at a rate that is regulated by the provincial government. They achieve this by focusing on the continued improvement of the infrastructure necessary to supply customers with electricity and natural gas. This infrastructure allows Manitoba Hydro to lower costs through innovative procurement and operation of energy production and transmission.
As the above should make clear, the reason for Manitoba’s regulated natural gas and electricity markets stems from the history of the province’s development.
But things are changing, as evidenced by the fact that there is now a retail market for natural gas. It is highly likely that in the future, regulations will continue to loosen, and consumers will gradually gain more options for procuring electricity and natural gas.