Cost of Serview Methodology hero image

A Cost of Service Methodology (COS) Review helps us make sure all our customer rates are fair. Meaning the rates customers pay will earn a suitable return for the services we provide.

Learn how we figure out the COS Methodology here.

We review the COS every 5 years. This is through a separate consultant that's observed by the Saskatchewan Rate Review Panel (SRRP). They check to make sure our rates are fair and follow industry standards.

The most recent consultant chosen for the review was Elenchus Research Associates.

Download the final Elenchus report.

See our reply to the final report.

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Questions and answers about the
review and report.

Review Q&A

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How the review process

Review Process

1. Review, in cooperation with SaskPower staff, SaskPower’s existing rate design methodology including the development of ideal cost based demand, energy, and customer rates and minimum charges for each rate code.

2. Identify the main functionalization, classification and allocation methodologies used by utilities in Canada and the United States for cost of service modeling. Prepare for each method a written summary of the relevant advantages and disadvantages.

3. Prepare and implement a survey of the functionalization, classification and allocation methodologies currently in use by Canadian and U.S electric utilities. The survey should include the functionalization, classification and allocation results in percentages (minimum of 7 Canadian utilities contacted).

4. As requested by the Saskatchewan Rate Review Panel, specifically review the following items:

4.1- The calculations associated with the Equivalent Peaker Method, which is the methodology employed by SaskPower to classify its generation rate base and expense to demand and energy related components.

4.2- The calculation of the minimum system method to classify distribution lines and transformers.

4.3- The implications of any class consolidation that SaskPower may consider reasonable to propose.

4.4- Whether the Winter/Summer (2CP) allocation method continues to be reasonable for demand-related costs functionalized as generation, transmission and distribution and verification of the data inputs used to determine overall customer class demand allocation.

4.5- The calculation of class coincident peaks and non-coincident peaks, including the appropriate number of historic years of data and number of peaks to include.

4.6- The functionalization and classification of overhead costs.

4.7- Documentation and explanation on how the demand response program affects participating customer class historical peak demand used as input data for cost allocation and any resulting adjustments in the cost of service study.

5. In person in Regina, Saskatchewan, provide a preliminary update of the review to SaskPower, the Saskatchewan Rate Review Panel and interested stakeholders.

6. Prepare and file a draft report to SaskPower, which includes an overall assessment of SaskPower’s cost of service methodology and specific recommendations, if any, on how the Corporation can improve its methodologies. The consultant’s report should include:

6.1- A review and assessment of SaskPower's existing cost of service methodology.

6.2- The Survey results of the functionalization, classification and allocation methodologies currently in use by Canadian and U.S electric utilities as well as the functionalization, classification and allocation results in percentages (minimum 7 Canadian utilities contacted).

6.3- A verification of whether or not the current methodology is consistent with accepted electric power utility practices and is appropriate for SaskPower’s system characteristics.

6.4- A proposal, if required, for the enhancement of SaskPower’s cost of service methodology including the reasons for the changes.

7. Present the draft report and its findings to the Saskatchewan Rate Review Panel and stakeholders at a public meeting in Regina, Saskatchewan. At the meeting, the Consultant will explain the review process; describe SaskPower’s basic system and current cost of service methodology and the results from the draft report. The Consultant will respond to questions directly, as well as invite stakeholders to submit written questions.

8. Respond to all stakeholder questions in writing. Stakeholders will be invited to prepare written submissions to the Consultant on the draft report.

9. Following a review of all stakeholder input, the Consultant will finalize the report and provide an electronic copy of the final report to SaskPower by June 30, 2017. The Consultant will include in the final report responses to the written questions and submissions provided by stakeholders.

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