Manitoba Hydro customers could see their rates double in the next two years if the Crown utility's mounting debts from the Bipole III transmission line and Keeyask dam projects are not dealt with soon, says a former chair of the province's Public Utilities Board.

Graham Lane, a chartered accountant who served as PUB chairman from 2004-12, said he warned Hydro over a decade ago about costs spiralling out of control.

Manitoba Hydro's current board says a review of both projects has revealed costly issues, from construction delays and rising costs to a more expensive choice of route for the Bipole III line.

"I wouldn't be surprised if Bipole and Keeyask go higher. The losses are going to be huge," Lane told CBC News late Wednesday.

"By my own calculations, by the time it all ends, Hydro will have lost somewhere in the area of $5 [billion] to $10 billion, and that money will basically have to be covered by the ratepayers. Rates are up more than 45 per cent since the process began in 2004 with [the Wuskwatim dam], and I fully expect the rates will double from what they are now and potentially could go higher."

Manitoba Hydro could risk losing business sales if rates go up too much, as customers come to the province for the low rates, he added.

Hydro board chairman Sanford Riley said the utility's debt is expected to grow from its current level of $13 billion to about $25 billion within the next three or four years, jeopardizing both the utility's financial situation and that of the province.

Manitoba Hydro has already signed export contracts worth $4.5 billion that are dependent on the 695-megawatt Keeyask dam being operational, the utility said Wednesday. (Keeyask Hydropower Limited Partnership.)

'Take these losses off of Hydro's back'

Lane said the provincial government should bail out Hydro and pay off the debt before it drags the economy down and further hurts the province's credit rating.

"I'd actually favour having the government take these losses off of Hydro's back. I don't think we want to ruin our economy like Ontario," he said.

As for Manitoba Hydro, Lane said it should cut its losses now and cancel construction of the Keeyask dam, even though $2 billion has already been spent on the project.

Manitoba Hydro has committed to scheduling public information sessions over the next few weeks to answer people's questions about its financial situation.

Lane said there should be a public inquiry into how Hydro ended up so deep in the red in the first place.

"I think that what should happen really is an inquiry," he said. "I'm not looking for a witch hunt or something like that, but I think people need to see this, that it can happen."