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The Saskatchewan Rate Review Panel has given its approval to SaskPower’s request for a four per cent rate increase that would kick in April 1.
The request now needs to be OK’ed by the provincial cabinet.
The panel made the recommendation after reviewing the company’s financial statements, which don’t paint a rosy picture.
The Crown corporation applied in February of 2022 to institute a four per cent increase on Sept. 1, to be followed April 1 by another four per cent hike.
SaskPower also looked to have rates rebalanced that would put urban and rural residential customers in one rate class. As well, its application sought to have the basic monthly charge increase for urban customers and decrease for rural customers.
In July, the panel recommended approving the Sept. 1 rate increase and rate rebalancing and rate design changes, but suggested the April 1 increase be subject to a financial review.
“The updated financial information forecasts that SaskPower’s projected net income of $33 million in 2022-23 and a return on equity (ROE) of 1.1% is now forecast to result in a net income loss of $105 million (an overall decrease of $138 million),” the panel wrote in a media release.
“This loss is largely due to forecasted increases to fuel and purchased power. Forecasted increases to operations, maintenance and administration (OM&A) and finance charges also contributed to the forecasted net loss. Forecasted increases to Saskatchewan sales and exports will help offset losses in 2022-23.
“In 2023-24, forecasted net income decreased from $109 million in the original application to $23 million in the updated forecast. Forecasted ROE decreased from 3.8% to 0.8%.”
The panel said while it understood the impact the rate hike would have on customers, the financial needs of the corporation also were vital.
“A major Crown Corporation forecasting a significant operating loss in the current year is not in the best interests of any of the stakeholders,” the release said. “The Panel continues to urge SaskPower to focus on limiting growth in OM&A costs and specifically per customer accounts to less than inflation by finding efficiencies within the corporation.”
