The Saskatchewan Rate Review Panel (the Panel) has recommended the provincial government approve SaskPower’s proposed 4% rate increase effective September 1, 2022; and a further 4% rate increase effective April 1, 2023 (pending a financial review submitted to the Panel by December 1, 2022).
The Panel also approved the proposed rate rebalancing, which will consolidate the urban and rural residential customers to one rate class. As a result, the basic monthly charge will increase for urban customers and decrease for rural customers.
The bill impacts will be different for individual customers. For a typical urban residential customer (monthly usage of 625 kWh), the bill increase from April 1, 2022, to April 1, 2023, will be approximately $11 per month (10 per cent). However, the bill the customer pays, which includes taxes and levies, is expected to increase by $14 (11 per cent). For a typical urban residential customer, their bill at April 1, 2023, will include $24 in taxes (16 per cent of the total bill).
Residential (625kWh) Comparison of Rates at Relevant Times
Urban Residential at 625Kwh Annual Usage
|Date||Monthly Bill Before Taxes||Monthly Bill Including Taxes||Reason for Increase|
|April 1, 2022||$112||$133|
|September 1, 2022||$119||$140||4% Rate Increase|
|January 1, 2023||$119||$142||Carbon Tax Increase|
|April 1, 2023||$123||$147||Second 4% Rate Increase|
(Note that the increase is greater than 4% due to combining and rebalancing the urban and rural customer basic monthly charge.)
Rate increases and the impact of rate redesign affecting other customer classes are detailed in the report of the Panel and the consultants.
The Panel also made several other recommendations including:
• That SaskPower prepare public versions of its business plan, integrated resource plan, and depreciation study as part of its future rate applications
• That SaskPower complete an analysis of the potential impact of eliminating the price hedging element of its natural gas exposure management policy on the corporation’s net income requirements at the time of the next application.
• That SaskPower continue to focus on limiting growth in Operations, Management and Administration (OM&A) per customer account to less than inflation and to continue to track and provide OM&A per residential customer for future applications.
• That SaskPower provide a report in its next application that indicates how it achieved the contingency savings that was presented in the OM&A budget.
• That the Capacity Reservation Service Rate, which is currently an interim rate, be confirmed and that in future applications the capacity reservation rate be updated as part of the application process.
The Panel’s recommendations, which follows a review of the application and other documentation, as well as input from the public, is consistent with the analysis and recommendation made by the Panel’s independent technical experts.
The Panel also noted that the pressures impacting rates today will continue in both the short-term and longer-term future and that SaskPower’s ratepayers will likely see increasing rates in the years to come.
The mandate of the Panel is to review the application and provide an opinion on the fairness of the rate adjustments requested, considering the best interests of the customer, the Crown corporation, and the public. The Panel believes these recommended rates, along with its other recommendations, represent a fair balance impacting the affected parties. These recommendations to the Minister will be reviewed by the government and a final decision on implementation will be made by Cabinet.