Advocacy group says SaskEnergy's proposed rate increases will hurt farmers

·2 min read
Grain drying will cost farmers more this year, thanks to next month's proposed 17 per cent SaskEnergy rate increase. (Mike Zartler/CBC - image credit)
Grain drying will cost farmers more this year, thanks to next month's proposed 17 per cent SaskEnergy rate increase. (Mike Zartler/CBC - image credit)

SaskEnergy's proposed rate increases are putting pressure on agricultural producers.

Effective Aug. 1, rates are expected to increase 17 per cent, giving farmers little notice for the added cost.

According to SaskEnergy's application, rates are increasing because of a higher forecasted cost of gas over the 12 month period between Nov. 1, 2022 and Oct. 31, 2023.

Farm organization concerned for this year's crop costs

Natural gas is used for many aspects of agricultural production, such as heating livestock, heating shops, grain drying and fertilizer production.

Due to a late harvest, the Agricultural Producers Association of Saskatchewan (APAS) expects farmers will need more natural gas for grain drying this year, an added cost they weren't anticipating.

"We're going to be harvesting later, which is probably going to equate to more grain drying," said Steven Donald, the District One Director of APAS.

APAS advocates on behalf of agricultural producers to all levels of government.

Donald said his concern is price fluctuation for agricultural products.

"As a price taker, we are forced to take whatever the market value is at that day or that time," he said. "So as as a producer, any time we get an added expense, it just cuts away at our bottom line."

He said that as long as commodity prices are high, farmers could take on the extra costs.

"But the concern I have is, when the commodity price comes down, are [utility providers] going to drop their prices in the same time?" said Donald.

SaskEnergy says increases neeeded to maintain infrastructure

"SaskEnergy's delivery service rate increases are primarily required to support investment in the system and public safety efforts," according to the Crown corporation's rate application.

The application also cites regulatory expectations, maintenance and financial sustainability as contributors.

The last commodity rate adjustment was in Nov. 2021, when it was increased to reflect the higher price of natural gas. Since then, natural gas prices have continued to increase.

SaskEnergy says it will still be providing the lowest commodity rate in Canada, despite the increases.

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