Thursday, May 1, 2008

SaskPower posts profit



Bruce Johnstone, The Leader-PostPublished: Wednesday, April 30, 2008

SaskPower posted a $138-million profit in 2007, thanks to record peak load, customer hook-ups and service applications, and is expected to show another $130-million profit in 2008.
But the utility's record results don't necessarily mean that SaskPower customers will be spared a rate increase in 2008.

Rising natural gas prices, unpredictable hydroelectricity supply and large capital budgets could see the Crown corporation applying for a rate increase this fall.

A five-per-cent increase in the fall is quite reasonable and is not out of the question,'' Crown Corporations Minister Ken Cheveldayoff told reporters Tuesday following the release of SaskPower's 2007 results.

"The last increase was 4.3 per cent in February of 2007, so we will take a long, hard look at it,'' Cheveldayoff said. "If rates do increase, we'll be able to provide the business plan to support that.''

Cheveldayoff stressed that the company will look at cost factors, like natural gas prices, which have risen to $10 per gigajoule (GJ) from the forecast level of $8 per GJ. Natural gas represents about 17 per cent of SaskPower's annual $500-million fuel and purchased power costs.

In addition, the amount of mountain run-off, which affects the availability of hydroelectric power, will remain an unknown until after the second quarter. "It's a too early to say,'' Cheveldayoff said of any decision on rates. "If we have strong run-of from the west, as well as natural gas prices go down from where they are now, that increase may not be entirely necessary.''

But SaskPower is proposing to add or replace 2,800 megawatts (MW) of electrical generation capacity by 2030, which will require a large capital spending program over the next 20 to 30 years. SaskPower currently has installed capacity of just over 3,200 MW, as well as 454 MW of generating capacity from other sources.

Read More From Johnstone HERE

More riches flow into Sask.

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