A SaskEnergy rate hike that’s likely going from an already daunting 27 per cent to over 40 per cent is raising questions about both the size of the potential increase and the amount of money being taken by the government in dividends from its Crown corporations.
A day after the 40-per-cent figure was dangled by the provincial government and SaskEnergy, Liberal leader David Karwacki said it doesn’t compute.
It’s based on the market price for natural gas, he said in a telephone interview, but SaskEnergy has been buying gas for storage at a much cheaper rate.
“They have basically a surplus of gas. I mean, they’ve stuffed every cavern that they have with gas. So to go and reflect today’s spot market to the people of Saskatchewan … is not appropriate,” said Karwacki.
“The gas they put in the ground, that gas was stuck in the ground at $7 (a gigajoule), under $7.”
Someone is full of gas. First off, the stored gas represents only 40 per cent of the supply for winter. Second, we have to factor in the cost of replacing that gas at market prices. So we are either hit with an increase now or six months from now.
Now there is something to be said for reducing the government take on SaskEnergy profits. In fact, if we're going to have crowns (and we shouldn't) they ought to be not-for-profit and, as we have suggested in the past, run like cooperatives. And there is the ongoing problem of the province hiding debt in the crowns by extracting heavy dividends to fill holes in the provincial budget, and then having the crowns turn around and raise rates.
Thanks for getting on board, Mr. Karwacki, better late than never.
Despite Karwacki's most recent brainwave, high energy prices are here to stay.