Carbon tax pushing up power costs
Council approves another 2.4% in 2020 in addition to earlier increase of 4.6%
Power rates are going up again next year, and by more than you were told during City of Saskatoon budget talks.
On Monday, city council approved a further increase in electricity rates for Saskatoon Light & Power customers, starting in 2020, because the provincial government announced a new carbon charge rate on Friday.
The new charge will increase the power rates for Saskatoon residents by an additional 2.4 per cent. In the two-year budget approved by council last month, Saskatoon Light & Power rates were increased 4.6 per cent in 2020 and 4.15 per cent in 2021 to mirror increases by Saskpower.
Saskatoon Light & Power has consistently increased its rates to match those of Saskpower, the provincial Crown corporation from which the city buys its electricity.
Saskatoon Light & Power customers are generally located within Circle Drive, while Saskpower serves customers outside Circle Drive.
The province’s previous rate for the carbon charge was introduced on April 1. The charge is intended to offset the costs resulting from the federal government’s carbon tax.
In addition to the higher cost for customers, costs for the city, such as electricity for street lights and other civic operations, are also expected to go up.
A city report presented to council on Monday showed the higher rate approved by Saskpower would have created a shortfall for Saskatoon Light & Power of $105,600 over the approved 2020 budget.
Had council opted not to increase power rates for the city’s utility, that was expected to cost the city $2.8 million a year and another $290,600 in city operations funded by property taxes.
The increase will go into effect Jan. 1.
The provincial government’s plan to implement the federal government’s carbon tax is based on an initial cost of $20 per tonne of carbon emissions.