Rate Review Panel Recommends 4.9% Rate Increase for most SaskPower customers
The Saskatchewan Rate Review Panel is recommending approval of SaskPower’s request for a system-wide average rate increase of 5.0% to take effect January 1, 2013. Most of its customer classes, including residential customers, will see an increase of 4.9%. The exception would be SaskPower’s large customers in the Power-Contract Rate class.
After a thorough review of all aspects of SaskPower’s operations, including a detailed examination by the Panel’s technical consultant, and formal and informal submissions from some of SaskPower’s key stakeholders, the Panel concluded the rate request is fair and reasonable in balancing the interests
of SaskPower, its customers and the shareholder. The government of Saskatchewan makes the final decision on the rate request.
In its report, the Panel congratulated SaskPower for initiatives it is undertaking to streamline business processes and improve service delivery, while achieving savings and reducing costs. The Panel recommended that SaskPower implement and track its productivity and cost control initiatives in a consistent manner on a year-over-year basis, and report these findings in future rate applications.
The Panel welcomed SaskPower’s decision to initiate long-term planning in two critical areas with its Far North Resource Supply Plan and 40-Year Resource Supply Plan, and encouraged the corporation to do more of this type of planning in the future. The Panel also commended SaskPower for its concerted effort in restoring service to customers following a powerful storm that rolled through central Saskatchewan in late June.
The Panel noted that SaskPower’s capital investments over the coming decade will be in the range of $10 billion. The Panel also observed SaskPower’s increasing reliance on natural gas for power generation. Should the price of gas increase from its current low level, this would also put upward pressure on the rates SaskPower must charge its customers.
The Panel cautioned that the productivity and other savings flowing from SaskPower’s productivity initiatives may help mitigate future upward pressures on rates, but would not eliminate the need for further rate increases, given the magnitude of the investments SaskPower must make in the next ten years in new and upgraded power generation facilities, and its transmission and distribution infrastructure, so that it can continue to deliver a reliable supply of electricity to its customers.
