Resolution 19-04A

WHEREAS, the electric bills for recreation facilities in the past two years has increased by 6.7% for kwh and the basic electric charge has increased by 12%; and

WHEREAS, the consumption charge on natural gas bills for recreation facilities has increased by 28.2%; and

 WHEREAS, the recreational facilities are finding it more difficult to pay these power and natural gas bills due to these increases, and even may have to shut down;

THEREFORE BE IT RESOLVED, that SARM approach the Government of Saskatchewan to have power and natural gas rates for recreation facilities reduced.

Response from the Honourable Frank Quennell, Q.C., Minister responsible for SaskPower:

SaskPower received numerous requests from various interest groups such as rink boards, civic authorities, figure skating clubs, and others with an interest in recreational activities for special treatment with regards to their rates. The Corporation has consistently denied these requests on the basis that it is unfair to other non-profit, community or charity minded groups, and also to all classes of customers who must then pay more. With the exception of a reconstruction charge introduced in January 1996 (which has since been rolled into the basic charge as recommended by the Provincial Auditor), power rates for recreational facilities were not increased between April 1994 and April, 2001. As well, smaller recreation facilities received a 2% reduction from 1995 rates in January 1996. SaskPower's costs, in particular fuel and purchased power costs, continued to rise over this period – to the point that SaskPower was unable to sustain a rate freeze.

In order to continue to provide safe, reliable power to its customers as well as provide an adequate return to the shareholder, SaskPower sought and received approval for rate increases effective April 1, 2001 and January 1, 2002. SaskPower has made efforts to apply a rate design philosophy under which all customers pay their air share for the services provided. Customer classes who historically have been doing the subsidizing, this is paying more than their fair share, continue to lobby SaskPower, government officials, the Saskatchewan Rate Review Panel and others to eliminate the subsidies as quickly as possible. To this end, a multi-year rate rebalancing initiative was incorporated into the rate applications noted above, which included a plan to gradually eliminate subsidies to "special customers".

While SaskPower recognizes the financial challenges faced by recreational facilities throughout the Province, the electricity rate structure is designed to reflect a fair and balanced approach for all customer classes. In an effort to reduce such costs, SaskPower encourages its customers to conduct an energy audit to identify cost savings that can be achieved through the efficient operation of equipment and appliances. The reduction of electrical charges for recreation facilities at this time would, in effect, introduce an additional subsidy, contrary to the fair and equitable treatment that SaskPower has been striving to attain for all customers.

Response from Ronald S. Clark, President and CEO, SaskEnergy Incorporated:

As a company, all our employees understand the impact high commodity prices have on our customers, including the skating and curling rinks found throughout Saskatchewan. In fact, many of our employees are active volunteers at these facilities, as coaches or on the many local rink boards that work so hard to keep these facilities in operation. The issue of helping rinks by offering a reduced rate is often raised, particularly during the temperature extremes we faced this past winter. SaskEnergy receives numerous requests from various interest groups such as rink boards, civic authorities, figure skating clubs, and others with an interest in recreational activities, for special treatment with regard to their rates.

We have consistently turned down these requests of the basis that it is unfair to other non-profit, community or charity-minded groups, and also to all remaining customers, who must then pay more. While SaskEnergy recognizes the financial challenges faced by recreational facilities throughout the province, our rate structure is designed to reflect a fair and balanced approach to ensure no group of customers cross-subsidize other customers. While we do not control the market price for natural gas, we still believe we can help our customers better control their energy costs.

We offer a free on-line energy audit at www.saskenergy.com which offers advice on how to cut energy costs in homes, businesses or other facilities. We are continuing to stress through our public service messages, the importance of energy conservation. We also offer tools and payment arrangements through our business offices to help our customers better manage how they pay their bills. If any of these services could be of use to the rink boards which contact your office or other SARM members, please have them contact their nearest SaskEnergy business office at 1-800-567-8899.

While the initiatives I have outlined do not take the sting of the natural gas market away, I hope they send the signal that we are concerned for our customers at a time when market prices are likely to remain high for the immediate future. Regrettable, there is no easy solution to assist any number of groups in our province who are experiencing the impact of high natural gas prices.