10/29/2013 06:15 EDT | Updated 12/29/2013 05:12 EST

Opposition NDP blames Saskatchewan government for power rate hike

REGINA - The Opposition is blaming the Saskatchewan government for proposed power rate hikes of about five per cent a year for the next three years.

New Democrat Cathy Sproule said SaskPower raised rates, in part, because the government took money from the Crown utility.

"They stripped SaskPower of $120 million in a special dividend in 2012 and as a result, SaskPower had no choice but to jack up the rates," Sproule said in the legislature Tuesday.

"And now, with their new rate hike application, SaskPower is being forced by this government to jack up rates again — almost 40 per cent since 2009."

Sproule said that means seniors and families will have to dig deeper into their pockets for power.

When the province took the dividend, it said the move was because SaskPower's revenue for 2011 was significantly higher than anticipated. Revenue was up because flooding helped generate more hydroelectricity.

The province said it used the special dividend to help pay flood costs, such as disaster claims and washed-out roads.

Crown Investments Minister Donna Harpauer acknowledged Tuesday that the rate increase is "significant."

"But we are well aware that SaskPower has a lot of pressures in the infrastructure," she said.

"It is an aging infrastructure. It's about 30 to 50-years-old, much of it, so we need some replacements and some upgrades and that is not a cheap cost to SaskPower."

The utility spent $1.35 billion to rebuild or replace aging infrastructure this year and plans to spend about $1 billion a year for the long-term on the electrical system.

SaskPower has applied for rate increases of 5.5 per cent in 2014, five per cent in 2015 and five per cent in 2016.

The rate hike would work out to an extra $5 a month next year for an urban homeowner.

Farms would see rate increases of 3.5 per cent in 2014, 4.5 per cent in 2015 and four per cent in 2016. That means farms would pay about $7 more a month next year.

The increase still has to be approved by the province's rate review panel and cabinet.