Saturday, October 08, 2005

Sask: Karwacki the cypher

Liberal leader David Karwacki wades into 40 per cent Sask Energy rate increase (subscriber only).

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.


Union Member said...

Why are you covering this topic?
This as nothing to do with taxes. Where's your article on Centra Gas raising rates ?
If Sask NRG were run at a loss then the CTF would have endless articles about the "money pit" on taxes. If it is run for-profit the CTF goes on about it being a hidden tax. If it was run not-for-profit, you would probably have some complaint about it. All companies are raising prices, all are increasing profit margins. The only difference is one goes to running a province and keeping taxes ,lower. The other is making a few equity holders very wealthy.

David MacLean said...

It has everything to do with taxes, and everything to do with accountability.

Questions about the management of major public assets are of course part of our mandate: Lower taxes, less waste, government accountability.

Union Member said...

I think you are taking your "mandate"(which of course isn't one in the fact that you don't have a large portion(20%) of voters backing you)and stretching it to fit your purposes. It is quite obvious, to any with grey matter, that this is beyond any corporations control. This is an issue of overconsumption of a limited resource(a result of a market based system), not management. It seems that you are advocating that these industries be, completely. nationalised in order to control prices and "manage" public resources properly.I'm all for it.

David MacLean said...

I know this is hard for you to understand, but we have a mandate from our voluntary supporters.

Union Member said...
This comment has been removed by a blog administrator.
David MacLean said...

Union Member, we want to have full-knockdown debate here. But if you're are just here to complain about the CTF then go somewhere else. There are plenty of other blogs out there for exactly that purpose. Unless you are being constructive, I'm nuking all your comments.

Union Member said...
This comment has been removed by a blog administrator.
Anonymous said...

Union Member:

Go away. You are getting sickening. Get a job.

Anonymous said...

Looks like the CTF is against Freedom of Speech.

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Interesting piece.

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