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SaskEnergy applies for first Delivery Service Increase in a decade

February 15, 2007

SaskEnergy applies for first Delivery Service Increase in a decade

Increased costs of doing business in Western Canada are a driving force behind SaskEnergy's application this week to the Saskatchewan Rate Review Panel (SRRP) for a Delivery Service increase of $2.00/month for residential customers. If approved for June 1, 2007, this would be SaskEnergy's first Delivery Service increase in a decade.

Delivery service rates recover the costs of operating and maintaining the natural gas system. Saskatchewan consumers will continue to pay among the lowest natural gas distribution charges in Canada.

"Over the past decade, we have avoided a Delivery Service increase through cost controls, higher productivity, reduced gas storage and transportation costs, and lower interest costs," said Doug Kelln, President and Chief Executive Officer, SaskEnergy. "While we continue to be diligent in managing these costs, the reality of doing business in the booming Western Canadian economy is that we're competing for expertise and resources. Our labour, fuel, vehicles and maintenance expenses have risen to the point where a modest Delivery Service increase is required to recover our costs, while still allowing us to remain competitive."

Since the last Delivery Service increase in 1997, the Consumer Price Index, which reflects many of the operational costs SaskEnergy faces, has risen over 20%.

If this application is approved by the SRRP, the Basic Monthly Charge would increase from $10.50 per month to $12.50 per month for a residential customer and modest Basic Monthly Charge increases for other customer classes. SaskEnergy's commodity rate, which represents the cost of purchasing customers' natural gas on the open market, remains unchanged at $7.17 per Gigajoule (GJ).

SaskEnergy encourages energy conservation and offers homeowners of all incomes ways to reduce energy consumption and save money. To find out more please visit www.saskenergy.com or call toll free 1-800-567-8899.

For more information, contact:

Dave Burdeniuk    
Manager, Communications    
Phone: (306) 777-9842 or (306)
535-6569 (cell)


SaskEnergy Delivery Service Application - Backgrounder

Basic Monthly Charge (Proposed Increase)
- the fixed monthly charge payable for natural gas service regardless of the volume of gas used

Delivery Charge (No Change)
- the charge, in dollars per cubic metre, for SaskEnergy to deliver your natural gas

Gas Consumption Charge (No Change)
- the charge, in dollars per cubic metre, for gas consumed

Current and Proposed Basic Monthly Charges by Rate
Class Effective June 1, 2007