Panel Confirms SaskEnergy Delivery Rate Increase
The Saskatchewan Rate Review Panel (the Panel) conducted a review of a Financial Update provided by SaskEnergy in support of the previously approved 2.3% average increase in the rate that SaskEnergy charges its customers for the delivery of natural gas. The rate increase is to take effect September 1, 2014.
The increase formed part of SaskEnergy’s multi-year delivery rate application submitted to the Panel in April, 2013. In its Report to the Minister Responsible for Crown Investments Corporation on August 12, 2013, the Panel recommended approval of the proposed 3.6% increase in the average distribution delivery rate, to take effect September 1, 2013. The Panel also recommended conditional approval to an average distribution delivery rate increase of 2.3% to take effect September 1, 2014, subject to a review of a limited scope filing submitted in
June, 2014. Cabinet approved both the 2013 and 2014 rate increases, and directed SaskEnergy to provide a Financial Update to the Panel.
After reviewing the financial update and other information from SaskEnergy, an independent technical assessment of the information commissioned by the Panel, and input from the public through the Panel’s website and other channels, the Panel confirms that the proposed increase remains reasonable.
The Panel notes, however, that SaskEnergy’s delivery service revenue requirement for the 2014-15 period covered by the proposed increase is almost $4.9 million, or 2.24% higher, than forecasted in the original Application, due to a combination of factors. SaskEnergy is now forecasting a $2.9 million shortfall for the
2014-15 test year, but chose not to request a further increase to the conditionally approved increase.
Panel Chair Kathy Weber said the increase in forecast revenue requirements since the 2013 rate Application is a concern to the Panel.
The panel would encourage SaskEnergy to examine methods by which the $2.9 million shortfall can be reduced in the 2014-2015 test year. In its report, the Panel suggested SaskEnergy consider several measures to mitigate future rate increases, including monitoring overtime and vacation payouts.
Residential customers will see an increase ranging from 2.0% to 3.7% on the delivery portion of their bill.
