Manitoba Hydro is asking the Manitoba Court of Appeal to review and overturn parts of an order directing the company to create a special rate class for customers on First Nation reserves who would then be exempt from the company's 3.6% rate hike.

The Manitoba Public Utilities Board in May authorized the company to increase rates in 2018, with the condition that it exclude First Nations reserves from the hike.

Manitoba Hydro President and CEO Kelvin Shepherd said the board has overstepped its jurisdiction in creating the directive, which contravenes the company's legislative requirement to implement uniform rates regardless of where the customers reside in its service area.

"This appeal isn't about the social policy merits of these special rates, rather it's primarily a question of whether the current legislation enables the [board] to create them," Shepherd said in an Aug. 10 news release.

Manitoba Hydro is also appealing a directive under the order which requires the company to hire a consultant to evaluate the implementation of various asset management initiatives.

Previously, Manitoba Hydro asked the board to review its decision but the specified directives were not altered in the board's newly issued order. The utility said it has already created the special rate class, in compliance with the board's directive.