The proposed electricity rate hikes announced Friday by Saskatchewan’s utility crown corporation are likely to increase costs in other aspects of consumers’ lives, says a policy expert.
“When you increase electricity charges, you increase all other costs. So your food costs are going to go up, your driving costs for certain vehicles are going go up,” said Ken Coates.
On Friday, SaskPower announced that it will be hiking electricity rates by 3.9 per cent both this year and next year.
This rate hike is expected to cost the average customer around five extra dollars a month starting Feb. 1.
Farm customers can expect to see a higher increase in monthly costs, which will be around $11 more each month.
SaskPower owes the rate increase to capital investments and keeping the power supply to the province reliable.
“In the coming years, SaskPower will continue to revitalize its fleet of coal-fired power plants, expand its transmission and distribution systems, and modernize the provincial grid,” said SaskPower in a media release Friday.
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Last December, the government announced that the utility corporation is facing a $292 million revenue shortfall due to the removal of the federal carbon tax from residents’ bills.
Coates says it makes sense the government is looking for a balance, given the revenue cuts.
“If you lose revenue on one hand, you have to make it up somewhere,” said Coates. “But the other part is also equally true that our demand is growing very dramatically.”
Coates also notes that the rate hikes are likely to impact some residents more than others.
“We need to be far more aware of the fact that across the world, increases do not affect everybody equally. That people who are poor are affected in a very serious way. Whereas somebody who’s wealthier, it’s water off a duck’s back,” he said.
The Official Opposition is calling on the government to address rising costs across the province, asking the government to hold an emergency legislative session ahead of its spring sitting to pass measures aimed at increasing affordability.
“We’re not due to sit for another two months in the legislature, but Saskatchewan people simply cannot afford to wait,” said Saskatchewan Official Opposition Leader Carla Beck at a news conference Monday.
“Let’s get back to session. Let’s have this government show some accountability for the decisions that they’ve made.”
In a Monday statement, the government defended its affordability measures, such as removing the carbon tax from power bills and increasing tax exemptions, while also taking aim at Beck’s legislative attendance.
“All these affordability measures were debated extensively in the Assembly. If the NDP Leader showed up more when the House is sitting, she would know that the government continues to make affordability a priority and is working to ensure Saskatchewan remains the most affordable place to live in Canada,” the Government of Saskatchewan’s statement said.
SaskPower is not the only Crown corporation to propose rate hikes, as SGI, the province’s Crown insurance corporation, also announced increases on Friday.
SGI is looking at a two-year rate increase of 3.75 per cent that will take effect in June and is expected to cost around $38 more annually for nearly all Saskatchewan vehicles.
While both rate hikes are being rolled out now, they are subject to a public review process by the Saskatchewan Rate Review Panel, set to be completed by this summer.
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