Speech - June 4, 2001: SaskEnergy Rate Increase

PRIORITY OF DEBATE
Impact of SaskEnergy Proposed Rate Increases
(continued)

Mr. Wall: — Thank you, Mr. Speaker. It was very disappointing in question period I think to hear the Minister of Finance question the motives behind our questions. I think the term he used was crocodile tears. That’s what he called, I guess, our questions or the tone of our questions as if we don’t have a concern about our constituents — whether they have a low income, a medium income, or a high income. Well and the member for Regina South apparently agrees with the Minister of Finance that they are the only ones that care about people that may be on low income; that they might be the only group of people that care about those that might be able to effect energy bills. Yes, he says that’s about right. It’s that ignorance, Mr. Speaker, it’s that level of ignorance that has this government destined for the same place that its predecessor headed, Mr. Speaker. It is so out of touch and it is so arrogant, and now it’s questioning anybody that criticizes it. The motives — whether it’s the opposition politicians or not — motives are impugned, motives are questioned, Mr. Speaker. That’s unacceptable today.

It’s why the people of Saskatchewan are fed up with that government and it’s why they can’t wait to turf them out of office, Mr. Speaker. Because I haven’t been a . . . I’ve only been an MLA since September of 1999 but, you know, I had the pleasure to get to know a lot of these people quite well I think over that period of time. I think members on that side of the House would agree that in this job you get to know, well you get to know all the members of this Assembly a little bit, and you also get to certainly know your caucus members even a little better than that. And I’m not offended for me, but I’m offended for them because I’ve had the privilege of working with them. I’ve seen their attitude in terms of their work for their constituents. I’ve seen how they . . . (inaudible interjection) . . . Well and they’re still chirping from their seat and laughing, Mr. Speaker, because this apparently isn’t serious — to impugn the motives of the members across the way about why we would raise questions. It’s just absolutely sad, Mr. Speaker, because I happen to know these men and women and I happen to know about their motives. I’ve happened to see them in action in terms of trying to help their constituents. They’ve come to me and said there’s this community rink that’s threatening to close down, that it’s going to have to close down simply because they can’t afford to keep the lights on and the ice plant working. They’ve come to me with those, they’ve raised those concerns directly with the minister, they’ve called SaskEnergy. Well, Mr. Speaker, that...

The Speaker: — Order, order. Order. Thank you.

Mr. Wall: — Well, Mr. Speaker, I just think it’s an indictment of the government. I think it’s an indictment of that member for Regina South, that he would choose to play that sort of politics, to assume that anybody who raises concerns on behalf of low-income people is doing so for anything other than the best of reasons, Mr. Speaker. It’s very unfortunate. It’s not totally unexpected from a government that’s morally bankrupt, from a government that fires people that try to report wrongdoing, from a government that breaks its health care promises, from a government that says it’s against privatization and in the backrooms is planning the sale of Crowns, from agovernment whose leader makes energy decisions apparently by  the toss of a coin and eight hours after he’s made one pronouncement he flip-flops, Mr. Speaker. That’s the kind of government we have, so maybe we shouldn’t be surprised of the attitude that we get over there. But I can tell you, Mr. Speaker, my constituents maybe aren’t surprised by it but they are sick of it; and constituents of members represented over here, and I dare say the constituents of those members, are sick of it. And they are waiting for the day when they can give this group the boot in a big way, Mr. Speaker.

Some Hon. Members: Hear, hear!

Mr. Wall: — Our motion also outlines several specific ways . . . or considers the government . . .  requests that the government consider specific ways that they might be able to provide some relief. Make no mistake, Mr. Speaker. We’re saying that based on the international forecast for gas that we’ve seen, and based on the level of costs that have been suggested by SaskEnergy, we believe that this entire increase may not be needed. Make no mistake about that. But to the extent that some level of increase may be needed, we would also urge the government in this motion to consider every measure possible to provide some relief for Saskatchewan businesses and for non-profits and for families.

You know the Minister of Finance actually made the suggestion not long ago — one idea, that’s pretty good — he talked about the government using its windfall oil and gas revenue, about $400 million, to help pay down all or part of SaskEnergy’s gas cost variance account. That is the account that was set up at the direction of the rate review panel last fall when the first 22 per cent increase was approved. And that account, at the risk of oversimplifying it, Mr. Speaker, simply measures the difference between the price SaskEnergy’s getting and the price they have to pay. And the panel told SaskEnergy clearly and rightly so, when it gets into the ditch in a big way, when it gets to a certain number, that should automatically trigger a request for another increase. That’s what they said. And so when word got out — and we were the first to break the story — that SaskEnergy was considering a 30 to 40 per cent rate increase, the Minister of Finance, to his credit, to his credit, started thinking about ways that he could help the people of Saskatchewan. Mr. Speaker . . .

Mr. Wall: — Thank you, Mr. Speaker. When we raise these concerns about the spectre of this increase, the government initially said there would be no relief other than that $25 pizza rebate, Mr. Speaker. Other than an extra large cheese pizza, the government was going to provide no relief. The minister was even asked in the rotunda — and it’s a matter of public record, the Minister of CIC (Crown Investments Corporation of Saskatchewan) — they said, well if SaskEnergy comes with this huge rate increase, will there be any more help and the minister said no. Twenty-five bucks; that’s it. A couple of days later, the Minister of Finance wandered out to the rotunda and publicly began to muse about paying down the gas cost variance account as a way to alleviate SaskEnergy’s need for an increase. The media asked us what we thought about that. We said well that’s one option that sounds pretty good. It’s certainly a lot better than the Minister of SaskEnergy’s pizza rebate — certainly much better than that. And we encouraged the government to consider that. So that’s one measure, Mr. Speaker. The other measure the government could consider as a result of our motion is a more general rebate to Saskatchewan families. There’s good and bad of course with that. Rebate programs seem to always have inherent administration problems. There’s always lines that seem to have to be drawn with this and people on either side of the line may or may not qualify. But it’s an option that they have and I’m sure their officials are looking at that option. And the other option, and one that we would urge the government to consider today, and we would urge them to provide some relief. If they’ve committed to that, then even better, I think, than the gas cost variance account might be some consideration for the government to assist with the distribution charge that the TransGas portion of SaskEnergy must charge. Even though that part’s not being increased by the way in this rate request, and we readily  admit that, the transmission fee isn’t going up. But, Mr. Speaker, in our province there are other companies other than SaskEnergy that are selling natural gas. CEG is one and they employ a number of people in our province. And they sell gas on SaskEnergy’s transmission lines. Now, Mr. Speaker, as it turns out many of the customers of CEG are schools and hospitals, and large institutional organizations. And there are . . . of course in our province there’s room for other providers. We hear a rumour, in fact, that there is a natural gas company in Alberta considering also coming to Saskatchewan to do . . . to operate. So we heard that, Mr. Speaker. Now what . . . they may not be interested . . . they may not be interested in coming, Mr. Speaker, if we as a government pay down that gas cost variance account and effectively subsidize one of their competitors. But, if we were to help people in terms of the distribution charge, that of course would alleviate that problem. So through you today, Mr. Speaker, that’s a suggestion — hopefully viewed as a constructive suggestion — that we would make to the government and to the cabinet as they consider this rate review request. We ask them to do two things. One, we ask them to look very carefully at the fact that the price SaskEnergy’s based their request on is 40 per cent higher than the price being forecast to run through to October,  2002. That’s the first thing. Excuse me, Mr. Speaker. And the second thing is that we ask them to look at every measure of relief should some increase be approved. And the last one I want to reiterate again, because it’s very important. There are other gas suppliers operating in the province of Saskatchewan. Now there’s not very many. Right now there’s really only one major company and it’s CEG. And they have many institutional customers and a good solid Saskatchewan-based company. But there are others apparently at least having a look at our market, having a look at investing in the province. And if we could do something on the distribution side in terms of relief, if that’s the direction we went, it would not be a disincentive for those considering investment in the province of Saskatchewan. Certainly that doesn’t preclude some of the other initiatives as suggested by the Minister of Finance, but that is one that we would like to make. But the heart of our motion . . . the heart of the motion today, Mr. Speaker . . . the heart of the motion today is that there is this huge discrepancy between the price that SaskEnergy has based its increase request on, and arguably the price that the panel has also based their recommendation on, and the price today, about 4.75 to 4.90, and the long-term price as forecast now by the New York Mercantile Exchange — if you want to check that on the Internet — by AECO in Alberta, by CIBC (Canadian Imperial Bank of Commerce), and others. That’s the price being forecast today, about $5, and a high of about 5.30. There is one other prognosticator involved in this debate, Mr. Speaker. There is one other economist who has waded into the debate about the price of natural gas, and that is none other than the Minister of Finance. The Minister of Finance waded in on what the future price of gas would be. And all you’ve got to do is check out page 44 of his budget, Mr. Speaker. We’ve heard from the banks, we’ve heard from the economists, and now I am going to refresh the memory of my colleagues, the prognostications of . . . the Minister of Finance — what does he say? What does he say? Natural gas, Canadian dollars per gigajoule, 2002, Mr. Speaker — and by the way, this rate increase will take us to October, 2002, so it’s very germane; 2002 is exactly the time period that we’re talking about — and the price is $3.39 a gigajoule. That’s about half — half — of the $7.28 . . .

Mr. Wall: — Well, Mr. Speaker, other members will touch on this. It is germane; it’s the forecast for the price of gas made by the government — the same cabinet that will be considering the request of the rate review panel. Mr. Speaker, this motion is, this motion is a constructive one. It urges the provincial cabinet to consider every possible measure it can to blunt the effects of this very serious increase. And also to consider sending this back to the rate review panel, pending the clarification of what the future price of natural gas will be. What is the price? Who do believe? The Minister of Finance, the economists, the bankers, the rate review panel, or Ron Clark. So with that, Mr. Speaker, I would move, seconded by the member for Saltcoats: That this Assembly urge cabinet to implement measures to reduce the severe negative impact on homeowners, businesses, farms, and public institutions of the Saskatchewan Rate Review Panel’s recommended SaskEnergy rate increase; and that, in light of recent forecasts projecting a dramatic decline in natural gas prices, this Assembly urge cabinet to reconsider rejecting the current recommendations and referring the matter back to the Saskatchewan Rate Review Panel for further consideration.