Tuesday, October 25, 2005

Sask: Province may subsidize natural gas

From the Leader Post:

Atkinson said the provincial cabinet will announce whether it accepts the
rate review panel's recommendation next week at the same time as it unveils its relief program, which the government wants to apply as broadly as possible.

The minister said it's be unlikely the government will dispense cheques directly to consumers but it is considering subsidizing SaskEnergy so customers' bills are kept low.

"Options for such a program would be capping any rate increase so people could get through the winter, energy conservation programs, including assisting people with getting a high-energy furnace, weatherization programs," she said.

The possibility of a further rate increase in January as outlined by the rate review panel is "the tricky part" the government must deal with as it comes up with its relief plan, said Atkinson.

In a news conference in a Regina hotel, rate review panel chair Boris Kischuk said the recommendation of a reduced rate was made out of concern about the massive financial impact of the full hike on customers.

As well, the volatility in the natural gas market suggests that the full 41 per cent increase may not be needed.

First, the province will subsidize natural gas thereby overriding the natural market message to consumers to conserve. And they'll do it with our tax dollars and reduce the chances of any tax relief or debt reduction in the future.

The Rate Review Panel is saying they don't necessarily agree with SaskEnergy's original request for a 41 per cent rate increase, saying that gas prices are volatile and may come down in the near term. That's right, gas prices always go down in the winter. The panel consists of a consulting engineer, a home-based accountant, an economist, a political science student, a sociologist, a political scientist, an accountant, and another sociologist.

That means there is a 4-4 tie on the panel between the social scientists and the numbers people. The future of our most important Crown corporation is in their hands.

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