SASKATOON – One can only hope Toto isn’t afraid of the dark. On his remote Kansas farm, and on farms in Iowa and in neighboring states, the lights may be dimming.
Electrifying rural North America has always been an expensive proposition subsidized by tax dollars, government-owned utilities and higher power rates for industrial users.
But now the North American Free Trade Agreement and U.S. federal policy have brought deregulation to the electrical sector. In Canada and the U.S. that has led to the loss of subsidized electrical rates for residential, small business, rural and farm users. According to experts, that means rural power users can expect to pay more.
Read Also
Poilievre promises EV action and calls for canola compensation
Conservative leader Pierre Poilievre promises EV action and calls for canola compensation
Roya Stanley, bureau chief of the Iowa department of energy, has seen some of the changes in her state, which now has more than 100 electricity producers. She said rural users may have to look at different ways of generating and distributing power.
“These changes are coming whether we like them or not. We had better prepare for them, otherwise we will be overwhelmed,” she said, speaking at an electrical conservation conference in Saskatoon last week.
Power of the future
Stanley said the industry was surprised when SaskPower cut its wind generation program last spring.
“These types of projects reflect the future of power generation for the rural consumer.”
Stanley said options such as wind, solar, gas, biomass and coal-fired energy from smaller, localized power utilities could provide alternatives for rural electricity customers. Her department is providing programs examining those options.
In Alberta, provincial legislation requires large industrial consumers of electricity to buy a portion from alternative and experimental sources at premium prices, thus allowing further development of alternatives.
Dane MacCarthy, chair of the Canadian Electrical Association, said the recently announced 12 percent increase in SaskPower’s residential and rural rates is only the beginning of higher rates. The power utility must close the price gap between large industrial consumers paying as much as 160 percent of actual cost and domestic and smaller users who now pay as little as 70 percent, he said.
The more than $20 million raised through the Saskatchewan increase will be passed on as savings for large industrial users to entice them to stay with the government-owned company after private power producers are allowed to operate.
David Sutherland of Ipsco, a steel and pipe producer located in Regina, said his company is happy with its current power contracts, but would have to consider any utility that might save money if it could provide for company needs. Ipsco is one of the top five power consumers in the province.
It could be seven to 10 years before farms, small businesses and domestic customers get to choose power companies or realize any savings from deregulation, said energy experts at the conference.
Saskatchewan’s minister of energy and mines, Eldon Lautermilch, said in an interview that if SaskPower doesn’t make the changes now, it will cost farm, rural and domestic users more in the long run for electricity.
Lautermilch cited commercial power rates 20 to 30 percent lower in Manitoba and Alberta as additional pressure to lower Saskatchewan rates.
