Manitoba's Crown-owned energy utility is now forecasting a deficit because of ongoing dry conditions.
Manitoba Hydro says it is anticipating a loss of between $190 million and $200 million for the fiscal year that ends in March, down from a break-even projection three months ago.
The utility says low water levels are affecting its ability to sell surplus energy on the spot market, although firm export sales and domestic demand will be met.
Manitoba Hydro has been seeking regular rate increases to help service billions of dollars in debt racked up in the last 15 years as it built new dams and a major transmission line.
The provincial government was planning to set rate hikes of 2.5 per cent a year for three years, but withdrew the required bill from the legislature.
The utility says it is planning to apply to the Public Utilities Board the province's regulatory agency for new rates.
