SaskEnergy has moved one step closer to seeing their rates in the delivery portion of energy bills increase this fall.
The Saskatchewan Rate Review Panel has approved of the Crown corporation's rate increase, however they recommend a 2.95-per-cent bump instead of the 3.6 per cent SaskEnergy put forth.
After reviewing the proposal, the review panel pointed out two calculations that were off: an interest-rate forecast that was off by $800,000 and their projected load forecast, and the resulting revenue, that reduced the revenue requirement by between $500,000 and $550,000.
"We also felt that the company could find some extra saving and efficiencies in their operating expenses to make up a total (savings) of $1.6 million," Albert Johnston, chair of the Saskatchewan Rate Review Panel said. "That's how we got to a 2.95-per-cent increase."
The increase is partly caused by the attempt to stay ahead of the rate of inflation as well as SaskEnergy's increased Capital expenditures including replacing old infrastructure and allowing for growth.
"I believe they have an additional 4,000 to 5,000 connections in the last year," Johnston said. "There is still growth in the province and there is still the demand for new lines and distribution systems to be put in place."
The application put forth by SaskEnergy doesn't include an adjustment to the rate of natural gas, although average residential customers will still see their bills increase by approximately $1.42 per month.
"The average residential customer will see an increase of about $17 a year," he noted. "So it's not a very large increase."
The Saskatchewan government will now review the recommendation within the coming weeks and decide the applications fate.
If given the go-ahead by Cabinet the rate changes will take effect November 1, 2017, but Johnston noted the changes may not be approved until the beginning of November, so the November 1 day is fluid.