Swift Current to increase electricity rates due to federal carbon tax
Swift Current residents will pay more for electricity use starting April 1 due to the federal government's plan to put a price on carbon pollution.
Councillors approved the carbon pricing electricity rate adjustment at a regular council meeting, March 11.
The federal carbon pollution pricing system will be applied to electricity generation in Saskatchewan and SaskPower will pass on this carbon tax to all customers.
Swift Current Light & Power therefore recommended the implementation of the carbon pricing electricity rate increase on April 1.
Light & Power residential customers will see an average increase of 1.7 per cent, which amounts to a monthly increase of about $1.10 for an apartment, $2.10 for an average home, and $3.05 for a large home.
All commercial customers in Swift Current, both small and medium businesses and large commercial customers, will have an average increase of 2.3 per cent on their total annual billing.
“Technically it’s a rate increase, although that rate increase is dedicated towards paying SaskPower so that they can pay the carbon pricing that they are going to have to pay to the federal government,” City General Manager of Infrastructure and Operations Mitch Minken said after the meeting. “It’s an outputbased system, so it’s based on their emissions. Their coal emissions will be at a higher price than their natural gas emissions and so on. So it will depend on how much they actually emit and how much they use in different types of generation.”
The carbon pricing rate rider for SaskPower customers is based on the Crown corporation's estimate of annual carbon pricing recovery. According to Minken the City of Swift Current will pay approximately $360,000 to SaskPower in 2019 for the carbon pricing rate rider.
“In the early stages it’s going to be put into an equalization account and then they’ll figure out whether they’re positive or negative on that account when they pay at the end of the year, and then adjust the rates going forward,” he explained. “Of course the rates are going to rise every year as carbon pricing gets more expensive. So there will be rate increases for it on top of that as well.”
SaskPower will adjust this carbon pricing rate rider to ensure that the money collected for the carbon tax will remain revenue neutral.
All funds collected by the City of Swift Current as a result of this carbon pricing electricity rate adjustment will simply be passed on to SaskPower.
“For us it is revenue neutral,” he said. “Anything that we collect we’ll pay in to SaskPower.”
The electricity rate increase by the City of Swift Current matches the amount that it needs to pay to SaskPower for the federal carbon pricing.
“We always match our rates to SaskPower’s,” Minken said.
“They’ll be charging us that rate rider for the carbon pricing, so we’ll just pass that on to our customers, and it’s exactly the same amount that they’re passing onto their customers.”
The federal government's climate action plan includes carbon pricing rebates to Saskatchewan residents. Although the federal carbon pricing system will only come into effect on April 1, residents can already claim this rebate when they file their 2018 tax returns.