Today
Rates
Everything
we know tells us Saskatchewan’s demand for electricity and the cost
of meeting that demand will continue to rise. We have a commitment to provide
the people of Saskatchewan with a safe, reliable, and environmentally responsible
supply of electrical power at the lowest and fairest possible cost.
Our preference for future rate increases will be small, regular adjustments when possible.
Rates have three components
The basic monthly charge: covers fixed costs associated with delivering service to a customer, regardless of the amount of power used. This includes items like meter reading and billing.
The energy charge: covers fuel costs, royalties and water rental fees.
Demand charges: recoup the cost of the facilities to meet peak load requirements for specific customer classes.
Why are rate increases necessary?
Aging infrastructure – Most SaskPower equipment was installed between the 1950s and 1980s, and is reaching the end of its planned lifespan. Replacing or rebuilding is a costly and long-term process.
Rising fuel costs – Our fuel and purchased power costs account for 45% of our total expenses. Since we’re at the limit of our ability to generate power using hydro and coal, we rely more and more on natural gas and other environmentally friendly sources of energy. In 2000, natural gas cost $2 a gigajoule. Today it’s $8-$10.
Unique geography – At 560,000 square kilometres, SaskPower’s service area is second only to that of Ontario’s Hydro One, which serves 650,000 square kilometres. We also have the lowest customer density in the country – three customers per circuit kilometre compared to the Canadian average of 12. Our rural network is expensive to own and operate.
“We set our rates based on expected expenses during ‘normal’ operating years. We strive to implement rate increases that are more gradual and not subject to short-term fluctuations like abnormally low water flows or high gas prices, which can affect our expenses significantly in any given year” – Ian Yeates, manager, Corporate Planning and Regulatory Affairs.
