SaskEnergy rate cuts could be short-lived due to carbon tax

Natural gas rates for homeowners and businesses in Saskatchewan will be reduced beginning Nov. 1.

However, if a federal carbon tax is imposed in Saskatchewan, the province said the savings may be temporary.

SaskEnergy’s commodity rate dropped from $3.65/GJ to $2.95/GJ on Thursday, the lowest rate offered since 1999.

Rates could drop to $2.65/GJ by April 1 if the Saskatchewan Rate Review Panel approves SaskEnergy’s request.

“One of the largest commodity rate reductions in SaskEnergy’s 30-year history could be short-lived, due to the Trudeau government’s plan to impose a fuel levy this spring on every home, farm, and business served by natural gas,” Minister responsible for SaskEnergy Bronwyn Eyre said.

“While SaskEnergy has been able to pass along savings this winter, the corporation could be forced into several years of large, uncalled-for increases due to the federal carbon tax.”

Eyre said the rate reduction could potentially save customers about $80 per year, while the federal carbon tax will see a $1/GJ increase on April 1.

The increase would raise the average residential natural gas bill to about 12 per cent or $100-$120 per year.

SaskEnergy’s rate application includes both the commodity rate reduction to $2.65/GJ, along with a delivery service rate increase of 3.7 per cent.

SaskEnergy is also analyzing the impact of the federal carbon tax on its internal operations to see if it will need to amend its delivery service rate application.