This winter will be easier on the wallet for many people this year. The Saskatchewan Rate Review Panel has recommended the government accept SaskEnergy's application to lower the commodity rate. That means that the rate will be going down from $5.21/GJ to $4.55/GJ, a significant decrease. SaskEnergy President and CEO Doug Kelln explains that this new rate is the lowest in a long time, and is touring the province to emphasize what this means.
"The rate is equivalent to what we haven't seen since 2000, so that's a long time ago," Kelln emphasizes.
Gas rates are two thirds of the gas bill, and part which SaskEnergy is not making money on, Kelln says. Instead, the other third, which pays for the services SaskEnergy provides, is the part where the company makes its profit. The gas prices themselves are designed to be as close to what the company pays for the gas itself annually as possible.
"The idea is we buy it on the market, and we pass it to the customer," Kelln says.
While that is the goal, the challenge SaskEnergy has is to get a rate that will reflect the average value throughout the year. The reason for this, Kelln explains, is to keep bills for businesses and homeowners from fluctuating wildly as rates change. Kelln points out that the rate variance over a year can be over $4/GJ, and variation like that can make it difficult to budget.
"If you're a homeowner, you don't necessarily want to change your budget that much. If you're a business pricing a product based on what you think natural gas will be, and it changes dramatically, that can be pretty tough on businesses too," Kelln says.
Kelln notes that this is a contrast to the policies in place in Alberta, for example, which has a rate change monthly. Kelln believes that makes things difficult for consumers, especially if the increases come in winter months.
The rate is decided using forecasts and current prices, in order to get a number which is as close as possible to what will actually be spent. While Kelln admits that this usually isn't completely accurate, and the variance will be calculated into the next rate. Kelln says that they have shot both high and low in past years, but that consumers are paying the right amount, and SaskEnergy winds up as close as can be expected most years.
With rates low, Kelln says SaskEnergy is looking at ways to lock the rate in as much as possible, in order to continue to provide a low price for consumers.
"You're not only going to get a low price this winter, but you can have some assurance that SaskEnergy is planning for next year already... The curve is flatter than it has been for a long time, so it gives us an opportunity to some certainty for consumers," Kelln says.
Kelln also took the opportunity to promote the equalized payment option for the energy bill, which allows the price of winter energy use to be spread over the course of the year.
"It gives people a better feel of what their natural gas bill, on average costs, and it just ends up being a good thing for everyone. We find that some customers have difficulty paying their bills in January and February, and that's not a good thing for them or us," Kelln says.
One area where Kelln says that Saskatchewan is leading is in energy conservation, with twelve per cent of homeowners participating in energy conservation programs, which look at the ways in which a home's energy efficiency can be improved.
Kelln also emphasized SaskPower's involvement with community organizations throughout the province, something he says is a priority because the company services the entire province. Kelln says that 300 communities have received sponsorships for 1200 projects. Kelln notes that SaskEnergy's efforts are focused on helping with events and fundraisers which have the potential to raise more money, such as providing a barbecue for a fundraising event. He says this effort allows for a greater reach.
Kelln admits that people remember rate increases more than they remember cuts, but that with energy rates going down significantly it is time to emphasize what SaskEnergy does in the province.
