POP: Rural Gas Program
Res #: POP 6-14A
Responses Received: No
Departments: Ministry of Economy
WHEREAS the cost of installation of natural gas services to rural residents has become cost prohibitive and is preventing many rural ratepayers from accessing this service; and
WHEREAS the Province of Saskatchewan has provided assistance under the Rural Gas Program in the past;
BE IT RESOLVED that SARM lobby the Ministry of Economy to re-introduce a Rural Gas Program to rural individuals and/or rural gas co-ops to help defray the cost of installing natural gas services and to help reduce energy costs for residents of rural areas.
RESPONSE FROM SASKENERGY
Since 1992 SaskEnergy has provided natural gas service to rural areas using a cost/less investment model which invests in the revenue from newly connected customers over a 30 year period. This investment approach is applied to all customers in Saskatchewan. Prior to this period natural gas service to rural areas was provided under the Rural Gas Distribution Program from 1982 to 1991.
SaskEnergy has continued to connect a significant number of rural customers to the gas distribution network in recent years. This has typically occurred where a group of individuals have joined together to create an economically viable infrastructure project in their area- sharing the costs of the common infrastructure requirements. Most recently, the natural gas requirements are often driven by high energy demand for grain drying equipment.
The design and installation of the infrastructure is done at cost (no mark-up by SaskEnergy). These costs include the cost of design work, material, labour and external contractor costs. SaskEnergy works with landowners and regulatory bodies to effectively route the new facilities to minimize cost but also adhere to all regulatory approvals (including environmental permits).
While the cost of installing natural gas infrastructure has experienced upward pressures, the economics of natural gas as an energy choice remains highly favourable versus other fuels such as propane, fuel oil or electricity. In many cases, the cost of permanent pipeline delivery infrastructure can have a simple payback for the customer of 5-10 years versus other fuel choices. SaskEnergy also offers gas line financing to spread the costs over a period of time which allows energy savings to offset the costs.
While in certain situations, the cost of providing natural gas infrastructure may not be the right fuel choice for the customer, often a decision to connect to natural gas can produce long term energy savings for rural customers.
SaskEnergy has over 25,000 rural customers today and continues to add new rural customers each year. SaskEnergy's area representatives would be pleased to work with any rural customer to evaluate the cost/benefits of natural gas service to their area or farm.