Annual rate hikes of about 5% a year will be the norm for SaskPower for the foreseeable future according to the company’s president.
Today the crown corporation released its annual report, which shows another big drop in profits despite three years of rate hikes. Net income was 26 million, down 35% from the previous year.
Rates on the other hand, have been increasing about 5% a year since 2013.
President and C.E.O. Mike Marsh says future rate hikes are inevitable as the corporation continues its major infrastructure rebuild which is costing about a billion dollars a year.
“Our objective is to keep rates as low and consistent as we can,” he said.
He adds SaskPower is trying to do its part by deferring non-essential capital spending, “The better we can control future spending the better we can control future rate increase and we are doing a very good job of that, but any alternative going forward is going to be expensive,” he said.
Power rates went up 5% July 1st, with another 5% rate hike scheduled for January 1st of 2017. SaskPower minister Bill Boyd says it is part of the cost of doing business as the province grows and demand increases.
“SaskPower has added an average of 9,500 new customer accounts per year over the last five years and demand for power has risen,” he said.
SaskPower is also committed to reducing its use of fossil fuels by 50% by the year 2030. The alternatives, largely wind power, will slowly be brought on line, but they are expensive.
One of the highlights in the corporation’s annual report was the completion of a new 300 kilometer transmission line in the province’s north from Island Falls to Key Lake. The cost of the project was 327 million dollars.