SaskPower taking revenue hit from COVID-19; too soon to rule out rate increases
The Crown utility says sales were down by 10% from April to June
REGINA — SaskPower says it’s taking a hit from the COVID-19 pandemic, but it’s too early to say what impact that will have on customer rates.
The Crown utility says sales were down by 10% from April to June, amounting to millions in lost revenue.
It also reports that deferred bill payments totalled $47 million as of the end of last month.
Environment Minister Dustin Duncan is responsible for SaskPower and says it’s too early to decide whether rates will have to increase to make up for the revenue shortfall this fiscal year.
“We’re obviously very mindful of what COVID-19 has done to not only our economy in Saskatchewan, but also the economy around the world,” he said at a news conference July 6.
“We are still largely an export-based, commodity-based economy and right now the world isn’t buying as much of Saskatchewan as what they would have in the past.”
SaskPower president Mike Marsh said they are watching carefully as the economy starts to rebound.
He said some of the utility’s expenses are falling and the $50-million drop in revenues doesn’t necessarily mean a hit to net income, which is the main factor for rate increases.
The utility has not raised rates for the last two years, Marsh noted, and any thought of doing so would have to balance the needs of the Crown with the financial impact on customers.
“It’s too soon to tell whether we’re going to seek that application,” Duncan said.
“That certainly wasn’t the intent. The intent was not to have a rate increase, but we’ll see what the future holds in the coming months.”
SaskPower’s 2019-20 annual report shows the global health and economic crisis had little impact on last year’s books. The Crown reported net income of $205 million.
The utility also collected $83 million from customers who started paying the federal carbon tax in April 2019.
SaskPower says there was about a 2% drop last year in energy sales to industrial, commercial and residential customers, which was unrelated to the COVID-19 pandemic.
It believes some of the factors behind that to be weather-related and due to better energy efficiency.
SaskPower says it hasn’t seen a correlation between energy prices and consumption. It acknowledges charging a carbon price could have an effect, but there’s not enough data to gauge an overall impact.
By Stephanie Taylor