City reaches agreement with SaskPower to expand electrical franchise area

Posted on 7 September 2022 by Matthew Liebenberg

By Matthew Liebenberg

mliebenberg@prairiepost.com

The City of Swift Current has achieved a longstanding goal to expand the electrical franchise service area to include the entire area within its municipal boundaries.

The negotiations between the City and SaskPower were successful and the two agreements were formally approved during a regular council meeting, Aug. 22.

The purchase and sale agreement sets out the terms for the City’s acquisition of the expanded electrical franchise service area from SaskPower. It replaces a previous agreement from 1986, which was amended in 1989. The two parties also agreed to resolve the 2005 court actions that was initiated by the City against SaskPower.

The second document is an updated electrical service agreement between the two parties, which had to be negotiated as a result of the changes to the City’s electrical franchise area.

“This is a big occasion for the City of Swift Current and our residents to finally to be able to approve this purchase and sale agreement,” Councillor Pat Friesen said. “It’s been a long time in the making and I would especially like to thank all the people who worked so hard and diligently on putting all these agreements together and working on negotiations. … I think this is going to be a long-time benefit for all the citizens of Swift Current.”

Mayor Al Bridal thanked current City administration as well as previous councils for their efforts over the years.

“Right now, our electrical utility is a huge bonus for our citizens and for the future of Swift Current this is going to be another added bonus and it will continue to pay,” he said. “We can look back and thank some council back in the 1950s for not selling our electrical utility to SaskPower and saying no, the City of Swift Current is going to keep it.”

Swift Current’s electrical franchise area boundaries were originally established in 1958, and thereafter it was expanded in 1986 and 1989.

However, the electrical franchise area boundaries remain unchanged after City boundaries expanded again in 2011 with the annexation of land from the adjacent Rural Municipality of Swift Current. The City had been negotiating with the provincial government and SaskPower since then to expand City Light and Power’s electrical franchise area to include the annexed land.

The purchase and sale agreement means that all electricity users in the expanded electrical franchise area will now become City Light and Power customers.

The value of this electrical franchise area was determined to be $14.8 million plus taxes, and the City will pay this amount to SaskPower through a loan.

The loan period for this debt is 15 years and the annual repayment will be close to $1 million. It was indicated during a previous discussion of this matter at a council meeting in July 2021 that 80 per cent of the loan cost will be recouped through revenue from the approximately 400 customers in the expanded franchise area and the future expansion of the customer base in the area.

Bridal therefore felt the expansion of the City’s electrical franchise area will have a clear long-term benefit.

“As the City grows, we’re going to see a benefit and as there are rate increases, we’re going to see a benefit,” he said.

He compared Swift Current’s situation with that of other cities in the province that do not have their own electrical utility.

“If you compare us to Yorkton, we put about $3 million more into our coffers,” he said. “SaskPower pays money back to Yorkton. There’s a franchise fee that they get. Every bill in Yorkton and every bill in Regina, SaskPower collects money and gives to those cities and here we don’t have that, because we own it. … That $3 million we’re going to use for streets and sidewalks and inclusive playground and that’s how we balance our budget here. So I’m beyond excited. … It’s been a long negotiation and lots of work from our staff, from our City lawyers, from consultants and from SaskPower themselves, and it’s going to be a good deal for the citizens of Swift Current.”