Manitoba Hydro will have an appeal hearing to argue against an order directing it to create a special rate class for Indigenous customers on reserves.

The Public Utilities Board ordered the Crown corporation last year to create an "On Reserve First Nations" customer class.

It had to freeze rates on reserves while implementing a general rate increase of 3.6 per cent elsewhere.

Manitoba Hydro has said the board exceeded its authority and it must provide the same rates to customers throughout the province.

The Manitoba Court of Appeal says in a recent decision that Manitoba Hydro has an arguable case and will hear the appeal.

Manitoba Hydro says it can't comment on the matter as it's before the courts.

A date for the hearing has not been set.

The board said the special rate was needed to deal with what it calls energy poverty. When it was announced, the Assembly of Manitoba Chiefs said the rate was recognition of the hardship faced by people who live on reserves.

The court dismissed Manitoba Hydro's attempt to appeal a second order that the Crown retain an independent consultant to study its assessment management program.