Wednesday October 22, 2014

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SaskEnergy seeking a rate increase

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SaskEnergy has applied for its first commodity rate increase since 2008, thanks to higher market prices and additional gas purchases this past winter.

SaskEnergy customers used more natural gas than anticipated this past winter, due to extreme cold that lasted well into March. To meet the additional demand, SaskEnergy purchased additional gas at market prices higher than its current commodity rate. Forward market prices are elevated, according to the Crown corporation.

SaskEnergy has applied to the Saskatchewan Rate Review Panel (SRRP) for a proposed rate of $4.84/gigajoule (GJ), compared to the current rate of $3.82/GJ. The average residential customer’s bill would increase by $9.57 per month.

This past winter, SaskEnergy secured 20 million GJ of natural gas supply, as well as 18 million GJ in storage – the amount it obtains for an average winter. Increased demand from Saskatchewan homes and businesses, due to the below average temperatures, required an additional eight million GJ of gas to be purchased, enough to heat 100,000 more homes for the entire winter.

SaskEnergy’s last commodity rate increase was in November of 2008, which was followed by four consecutive rate decreases.

We appreciate it was difficult for homeowners to face higher heating bills from coping with one of the coldest winters in decades, but SaskEnergy kept rates stable during the highest consumption months,” said SaskEnergy president and CEO Doug Kelln. “At $4.84/GJ, our rate in Saskatchewan will be competitive as one of the lowest commodity rates in comparison to other regions across the country.”

Kelln said customer feedback received over the past few weeks indicated that if a rate increase was required, it should be kept as low as possible. SaskEnergy waited to set its commodity rate until markets across North America stabilized from the volatility of this past winter.

If approved, the proposed rate increase would take effect July 1.


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