June 13, 2022

Thank you for your letter of May 5, 2022, requesting a formal response to SARM’s resolution regarding affordable access to SaskEnergy services for rural Saskatchewan residents.

I understand you met with SaskEnergy officials on May 11, 2022, to discuss this resolution, which advocates that rural resident s pay no more than $7,500 for each new natural gas service connection. My officials informed me that, during the meeting, they explained why capping the cost of new rural service connections at the amount specified in the resolution is not feasible for SaskEnergy.

Every natural gas service quote is unique and can require road, rail, utility, and/ or waterbody crossings, additional easement s and approvals, and environmental and heritage surveys. These requirements can imp act a project’s cost. Currently, to reduce customer contribution s for new service application s, SaskEnergy applies an appropriate level of utility investment based on the customer’s load, duration of use and life time of the gas requirement. In 2021, SaskEnergy invested about $20 million in new service connect ions across the province.

Where natural gas capacity is available close to a farm or rural residence, SaskEnergy can provide a price that has a reasonable payback period. However, if a property is far away from existing SaskEnergy infrastructure, or where there is a lack of available natural gas distribution capacity in an area, new service requests can result in much higher price quotes that are often not economic for the applicants.

If SaskEnergy were to provide subsidies to new service connections for remote and rural locations, customers across Saskatchewan would see increased natural gas bills over the next 20 years, as the cost of the debt incurred would be borne by SaskEnergy’s full customer base.

I understand SaskEnergy officials will attend SARM’s next Board meeting to further explain SaskEnergy’s Rural Distribution Capacity Charge- a fund for building additional natural gas infrastructure and capacity throughout rural Saskatchewan. SaskEnergy has also committed to working closely with SARM to provide details on how rural residents can benefit from the federal government’s Agricultural Clean Technology Program for the purchase of energy-efficient grain dryers. In April 2021, the federal budget provided an additional $50 million for this program, on top of $166 million in funding that was previously announced.

Natural gas is a safe, reliable and affordable fuel source that has less environmental impact compared to other fossil fuels. It has become the fuel of choice for many in our province. New customers who wish to receive SaskEnergy’s natural gas service can submit a service application to the Corporation at: www.saskenergy.com/services/residential-new-service. SaskEnergy then provides a service quote for the customer to consider.

I encourage SARM to continue working with SaskEnergy, and I thank you again for raising this import ant issue with my office on behalf of the people of rural Saskatchewan.

Hon. Don Morgan, Q.C. – Minister Responsible for SaskEnergy