SaskPower returns to profit as it releases 2023-2024 annual report

After a large loss last year for SaskPower, Crown Corporation is back in the black for the 2023-2024 season.

The company’s annual report on Tuesday showed net income of $184 million. — loss of $172 million in 2022-2023. The difference of $356 million was mainly due to lower fuel costs and a $312 million increase in revenue from electricity sales.

The company said sales have topped $3 billion, thanks in part to a 4 percent increase in system-wide rates, a half-percent increase in the carbon tax and nearly 2 percent growth in sales volume, mostly from industrial and oil customers.

Crowns Minister Dustin Duncan said SaskPower has no immediate plans to raise rates again. However, he said it will happen eventually because of the carbon tax, and rate increases will be needed because of SaskPower’s capital and infrastructure needs.

SaskPower has spent $1.213 billion on capital investments in 2023-24, a near-record amount. This includes $520 million to repair and upgrade aging generation, transmission and distribution infrastructure and $621 million on expansion, such as new facilities and capacity expansions.

The company collected $269 million in carbon tax revenue, up $59 million from the previous year. The carbon tax is no longer paid to the federal government. The money is now collected by a Saskatchewan program and used for energy projects in the province.

SaskPower no longer collects the carbon tax from home heating customers, but the company still pays the amount. It cost SaskPower $1.3 million in the first three months of 2024.

Duncan said it involves a small number of customers and a smaller amount than with SaskEnergy, while in SaskPower’s case the money remains in the province’s system.

“This stops the federal government from trying to renegotiate the agreement that we had between the federal government and the province for the remaining dollars in the province,” Duncan said.

The report explains that SaskPower’s goal is to reduce greenhouse gas emissions by half from 2005 levels by 2030 and achieve net zero emissions by 2050 or sooner.

However, the reduction in 2023-24 was just four percent – ​​the target was eight percent. One of the main reasons the company managed to improve from three percent the previous year was a 0.9 percent drop caused by an emergency shutdown of the Poplar River Power Station that lasted almost three months.

“We are confident we can achieve this goal by 2030 and then ultimately achieve net zero emissions by 2050 or even earlier,” Duncan said.

The pace of emissions reductions is expected to accelerate as more coal-fired power plants in the province are retired and replaced by renewable energy projects such as wind and solar farms.

In the company’s financials, SaskPower added $579 million in debt, bringing its total debt to $9.407 billion. Crown’s debt ratio came in at 74.4 per cent, below its target of 75 per cent.

The Crown paid the province an $18 million dividend, approximately 10 per cent of its net income, at a rate set by the Crown Investments Corporation.

Duncan admitted this was a lower percentage than other crowns but defended the level.

“We felt that in this way the government could contribute to the overall goals of the province while maintaining a healthy financial situation,” the minister explained.