To help ensure that SaskPower’s electric system continues to meet customer needs in the province in a safe, reliable and environmentally responsible manner, the corporation has submitted a rate change application to the Saskatchewan Rate Review Panel, seeking a 4.3 per cent system average increase effective January 1, 2007.

The average rate increase proposed for a typical residential customer living in a city, town or village is approximately $3 per month. For a typical farm customer, the average monthly rate increase proposed is approximately $6.

“Like many utilities across the country, SaskPower continues to face significant cost pressures due to a changing electrical generation portfolio, evolving regulations, and an aging infrastructure,” SaskPower President and CEO, Pat Youzwa said.

In recent years, SaskPower has moved toward natural gas-fired electrical generation because it is a more environmentally responsible fuel compared to conventional coal. As a result, the corporation’s fuel and purchased power costs have increased significantly over time - doubling to over $500 million since 1999. The Centennial Wind Power Facility at Rushlake Creek near Swift Current, another example of SaskPower’s diversification initiatives, was completed in 2005 at a cost of approximately $275 million.

The utility is also actively investigating the feasibility of clean coal technology in an effort to continue to use low-cost and stable-priced coal as the primary fuel source for electrical generation in Saskatchewan. SaskPower will invest $8 million in this initiative in 2007.

This year, SaskPower has dedicated $300 million to renewing and enhancing its infrastructure. Going forward, the company will continue to invest about $300 million annually to upgrade infrastructure such as generation units, and transmission and distribution facilities.

“These investments in our electrical system are financed over the life of the projects, which range from 20 to 30 years, so finance and depreciation charges must also be considered,” Youzwa said. “This has contributed to an additional $8 million in depreciation charges in 2006. We expect these charges to continue to increase as we add to our physical assets.”

An increasingly competitive labour market will pose another financial challenge. SaskPower expects the strong economic and construction activity in Saskatchewan and Western Canada to have a particular impact on materials and labour costs.

In an effort to improve service and manage costs, SaskPower has launched a comprehensive review of how it provides service to customers. Over the next few years, SaskPower will make a series of enhancements to customer service through process improvements and online service delivery. SaskPower will also continue to investigate ways to help customers - both large and small - reduce their electrical consumption and reduce their power bills.

The Saskatchewan Rate Review Panel will review SaskPower’s application and provide a recommendation to the government, which will then instruct the corporation on how to proceed.

To see a summary of SaskPower’s submission to the Saskatchewan Rate Review Panel, visit saskpower .com, your nearest SaskPower customer service office, or call 1-888-757-6937 to have a copy mailed to you.