Thursday, 29 December 2016 05:17

New year to start with an electricity rate increase for Swift Current

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Swift Current residents and businesses will start the New Year with an electricity rate increase of 3.6 per cent.


Councillors approved the electricity rate adjustment during their final 2016 council meeting Dec. 19.
The increase is a result of a rate application by SaskPower to the Saskatchewan Rate Review Panel earlier this year. City of Swift Current’s General Manager of Infrastructure and Operations Mitch Minken said the goal of the City’s Light and Power division is to keep local electricity rates at the same level as the SaskPower increase.
“We do this for a couple of reasons, mostly to provide equity for all electric customers in Saskatchewan and to make sure that our businesses aren’t at a disadvantage when it comes to those electrical rates,” he mentioned.
This will be the second SaskPower rate increase in six months. The Saskatchewan Rate Review Panel approved the previous rate increase of five per cent, which came into effect July 1.
SaskPower asked for another five per cent rate increase, but the panel recommended the Jan. 1 rate increase be reduced to 3.5 per cent, and this was accepted by the provincial government.
Light and Power will implement the 3.5 per cent system average rate increase, but in practice residential and commercial customers in Swift Current will see an increase of 3.6 per cent.
“There is a small difference in math,” Minken explained. “SaskPower applies what they call a system average increase. It is applied across all customer classes. We don’t have as many customers as SaskPower does. So a lot of times those rate increases will be slightly different depending on which classes are there. We have residential and commercial classes where SaskPower is a little wider set, typically farm or oilfield customers.”
For residential customers the 3.6 per cent increase will mean paying on average $2.50 per month more for an apartment, $4 more for an average home, and $5.50 more for a large residence.
Light and Power purchases electrical power in bulk from SaskPower at a wholesale rate, which is lower than the retail rate paid by Swift Current residents and businesses.
“We buy at a bulk rate because we’re a large single customer,” he said. “So we buy at a lower rate than the customers and then we put it back at SaskPower’s retail rate to our customers. There is definitely a difference between our rate and the customer’s rate. … Our full profit margin is approximately 20 per cent. So we make about a 20 per cent profit on the utility.”
The bulk rate helps Light and Power with the cost of operating and maintaining the power supply and distribution system in Swift Current.
“We buy it at the bulk rate, but don’t forget that we have to operate the system,” he said. “We have to look after the assets. We have the staff and have to pay the cost for all the staff, and we have to buy the poles and the transformers and the underground wire and all the rest of it that we have to invest in order to receive that profit.”

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Matthew Liebenberg

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