News Release - January 23, 1997
SASKENERGY PROPOSES RATE INCREASE FOR 1997
After decreasing natural gas rates by more than 11 per cent over the
last two years, SaskEnergy has submitted to the Government of
Saskatchewan a rate adjustment package that proposes to increase
natural gas rates by an annual average of 2.3 per cent for utility
customers. The adjustment will increase the average home's monthly gas
bill by $1.25. If approved, rates will become effective on Apr. 1,
1997, after the 45-day public accountability process is completed.
"SaskEnergy is endeavouring to protect customers from any rate
increases during the coldest part of this winter," said Ron Clark,
SaskEnergy's president and chief executive officer. "Therefore,
SaskEnergy's 1997 proposed rate adjustment, if approved, would not
become effective until this April.
"Due to rising costs, a decrease is not possible for 1997. The
proposed rate adjustment is not related to higher gas costs or the
extremely cold weather but is driven by increased transportation and
storage costs of $3.7 million and increased depreciation expenses of
"SaskEnergy's rate proposal is very competitive with other natural gas
utilities in Canada. This winter, Western Canadian utility rate
proposals range from plus seven per cent to plus 14 per cent. With the
rate increases proposed by other gas utilities this year, Saskatchewan
will have the lowest residential natural gas rates of any province."
In addition, SaskEnergy's rate adjustment will further move rates
closer to the point of fully recovering the cost of providing service.
Therefore, included in the rate adjustment are increases to basic
monthly charges. For example, 65 cents of the average $1.25 monthly
increase to residential customers will be due to the increase in their
basic monthly charge.
"This winter has been one of the coldest in the 45 years of our gas
system operations," Clark said. "The cold winter has driven up the
price of natural gas on the spot market. SaskEnergy does not own any
natural gas reserves and must buy its natural gas supplies from
producers. However, SaskEnergy has protected its customers from any
additional gas cost increase by locking in gas prices for 1997 before
prices started increasing.
"If the higher gas prices currently being experienced in Canada are
sustained throughout 1997, gas costs may increase for Saskatchewan
customers in 1998."
The rate recommendations are open to public input for 45 days under the
government's public accountability process, which will include six
public meetings in February. Customers can call a toll-free line,
1-800-969-9975, starting Jan. 23 to Mar. 7 from 8 a.m. to 5 p.m. to
request more information on the rate adjustments.
For more information, contact:
Vice-President, Gas Supply
Phone: (306) 777-9366