Proposed increase will result in an extra $5 per month electrical bill payment in 2014, and an aditional $4 per month in 2015 and 2016
SaskPower has announced they have submitted a multi year application to the Saskatchewan Rate Review Panel, requesting an increase of over 15 per cent over the next three years.
SaskPower President and CEO Robert Watson said the application calls for system average rate increases of 5.5 per cent effective Jan. 1, 2014, along with five per cent hikes in 2015 and 2016.
The request comes in response to growing power demands and annual expenditures of $1 billion on electrical system upgrades.
"These increases are needed to fund investments in the provincial electrical system, keep up with our growing economy, and maintain reliable electric service for our customers," Watson said during a Friday conference call.
As a result of the proposed increase, the average urban residential customer will pay an extra $5 per month for their electricity this coming year, with the 2015 increase costing an additional $4 per month, while in 2016 the planned increase will result in an additional $4 a month payment on electrical bills.
Watson noted that growth across Saskatchewan has provided challenges in meeting demand for electrical services. Last year SaskPower spent a record $222 million to connect new customers into the electrical system, reflected by a 14 per cent increase in new customer connections.
Between 2000 and 2010, electricity demands grew by 1.4 per cent per year, and provincial growth is resulting in the demand for higher capacity in the system.
"Incredibly, demand is projected to grow eight per cent over 2013-14. This increased demand for service is projected to continue into the foreseeable future," Watson noted.
There are also challenges caused by equipment and distribution lines nearing the end of their operating life. SaskPower is spending $1.35 billion this year on upgrades, and approximately $1 billion annually to ensure the reliability of the distribution system.
To add increased capacity, SaskPower's major project is to expand the QE Power Station, increasing capacity by 200 megawatts in 2015, providing enough power for over 200,000 homes.
Despite the challenges of providing power to a widely spread population, SaskPower notes they continue to offer competitive electrical rates with other utilities in Canada.
"We realize paying more is never welcome news. We will continue to work with our customers to help offset the impact of rate increases."
Watson noted that their multi year request will also benefit their customers, providing certainty in prices for their large customers to help them in business planning, and helping household budgeting for residential customers.
The opposition Saskatchewan NDP voiced their disappointment with the hike, arguing Saskatchewan taxpayers have already dug deep enough. The government took $120 million from SaskPower in 2012, and cost overruns on a carbon capture project cost taxpayers over $115 million.
“Saskatchewan people are already doing their part for the economy and our own household budgets. The government should hold up its own end of the bargain -- not force ratepayers to cover off more government expenses,” said Cathy Sproule, NDP critic for SaskPower.
If the new SaskPower rate hike is approved, power bills will end up being more than 38 per cent higher than 2009.
“With such a strong economy, it’s frustrating to families that the government’s Crowns have to turn to Saskatchewan people to pay more and more."
Sproule argues that the government cancelled Saskatchewan’s goal of offering the lowest-cost utility bundle in Canada – a promise that should have been easy to keep in a strong economy with profitable Crown corporations.