Thursday, 22 February 2018 06:11

City council votes to increase electrical rates

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Swift Current residents and business will be paying more for electricity in March as a result of an electricity rate adjustment by SaskPower that will be passed on by the City of Swift Current’s Light & Power.

 

Councillors approved the implementation of the 3.5 per cent system average electric rate increase during a regular council meeting, Feb. 12.
Mitch Minken, the City’s general manager of infrastructure and operations, noted that Light & Power’s goal is to maintain an electrical rate structure in accordance with SaskPower rates.
“We set our electric rates in harmony with the SaskPower rates,” he said after the meeting. “So when they go up, we go up, and that equity is to ensure that our customers are paying the same as everybody else in the province. It keeps us competitive when attracting businesses and residents here.”
SaskPower originally requested a rate increase of five per cent, but in January the Saskatchewan Rate Review Panel recommended an increase of 3.5 per cent, and the provincial government approved the panel’s proposal.
The electric rate increase will come into effect on March 1. The system average rate increase is 3.5 per cent, but there are differences between the various rate classes. Swift Current residential users will see an increase of 3.6 per cent in electric rates. This will mean an average monthly increase of $2.60 for an apartment, $4.25 for an average home, and $5.70 for a large home. For small and medium businesses in Swift Current the rate increase will also be 3.6 per cent, but large commercial customers will have an increase of 3.5 per cent.
“When SaskPower applies for a rate increase, the number you always hear is the system average rate increase,” Minken explained. “Within that system there are approximately 10 different rate classes and from time to time rate adjustments are made within those rate classes to ensure that they stay equitable so each rate class is paying its fair share of the cost. In this particular rate increase, when they brought it out, there was some minor adjustments made, which resulted in a slightly larger increase for residential, small and medium sized commercial businesses to 3.6 per cent and the large businesses are exactly right on the 3.5 per cent system average.”
Light & 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.
“The wholesale rate or the rate we pay SaskPower for the bulk electricity that we buy also goes up the same system average increase and this time I believe we got the 3.6 on ours, so it went up a little bit more,” he said. “The margin between what we pay for the lower rate for bulk and what we charge at the retail rate is used by the City to fund our capital projects. So whether that be road improvements, paving new streets, repairing sidewalks or the like, that surplus that’s generated from the Light & Power utility is used to go back into capital programs.”
According to the City of Swift Current’s 2018 budget document, the Light & Power utility has a surplus forecast of $555,728.
“The Light and Power utility actually makes a profit,” Minken mentioned. “It’s designed that way, unlike the solid waste or the water utility, which are designed to break even. The Light & Power one, because of the spread between what we pay and what we charge, based on keeping equity with SaskPower, does make a profit, but that profit all remains within the City. It is used to effectively reduce property taxes and deliver programs for the citizens of Swift Current.”

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Matthew Liebenberg

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