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Thursday, August 20, 2009 

Why Are Saskatchewan People Paying More Than Double The Market Price For Natural Gas?

The largest producer of natural gas in Canada is the province of Saskatchewan. The people of Saskatchewan are paying more than twice the current market price for that commodity. Why? .....

Natural gas prices sink below $3 mark, lowest level in seven years
CALGARY - The price of natural gas fell to its lowest level in more than seven years Thursday, continuing a trend that dealt blow after blow to Canada's energy sector.
Lauren Krugel
THE CANADIAN PRESS


NDP Demands Natural Gas Price Reduction
Saskatchewan farmers, businesses and families should be receiving a significant reduction in their natural gas bills effective September 1 as the price that SaskEnergy is currently charging its customers is more than double the current market price of natural gas, NDP Leader Dwain Lingenfelter said today.

“The Wall government should not be waiting for winter to adjust natural gas rates. With the late, wet harvest in many parts of the province, farmers will be forced to use large quantities of natural gas to run grain dryers when they bring in their crops,” Lingenfelter noted. “Small businesses and residential customers were recently hit yet again with the highest cost of living increase in Canada and deserve cost certainty going into this winter as well. The Wall government should require SaskEnergy to introduce an emergency rate reduction request to take effect September 1st.”

In 2008 and again this year, the Saskatchewan Rate Review Panel recommended that SaskEnergy update its commodity price every quarter. It has been more than four months since the rate was last adjusted and Lingenfelter wonders why the Sask Party is causing the delay.

“It’s shocking that the Wall government hasn’t instructed SaskEnergy to come forward with a natural gas rate reduction to take effect September 1st,” Lingenfelter said. “Farmers could benefit during the harvest and residential customers could see their heating bills reduced before the winter. We have the highest increase in the cost of living out of every province in Canada yet where the government has the capacity to help, it does nothing.”

On April 1st the SaskEnergy rate for a Gigajoule of natural gas was set at $5.96, but the open market price has been well below that rate in each of the past four months. In April the average cost was $3.37 per Gigajoule; the average price in May was $3.46; in June the average price dropped to $3.00 and in July the average price dropped again to $2.87 per Gigajoule. So far, the average open market price for August has been $2.91 per Gigajoule, less than half SaskEnergy’s rate.

“Surely SaskEnergy has used the summer to lock in these record low natural gas prices for the coming winter, and has put considerable amounts of natural gas in storage. Let’s pass on these savings from the government to the consumer as quickly as possible,” Lingenfelter concluded.

-30-

For further information, please contact:
NDP Caucus Office - (306) 787-7388



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