04/14/2014 03:41 EDT | Updated 06/14/2014 05:59 EDT

SaskPower annual report shows record demand for power, net income $167 million

REGINA - SaskPower says 2013 was a record year for power consumption with peak demand reaching 3,543 megawatts — a seven per cent increase over last year.

The figures are in the Crown utility's annual report released Monday, which shows a net income of $167 million. The report also shows that there could be a big drop in the net income for 2014, down to $27 million.

The 2014 budget is based on SaskPower getting its requested rate increase.

Last October, SaskPower applied for a three-year rate increase — 5.5 per cent in 2014, five per cent in 2015 and five per cent in 2016. The increase still has to be approved by the province's rate review panel and cabinet.

"The rate increase is almost specifically attributed to capital investment," SaskPower president and CEO Robert Watson said at a news conference Monday.

"We were able to hold our operating costs flat year-over-year from 2012 to 2013, so the necessity of the big capital investment that we're putting through in the last several years is why the rate increase is required."

Watson says things will "be tight" if the increase isn't approved.

"We'd have to look at capital programs that we'd have to delay and also delay in any operational expenses," he said.

SaskPower plans to spend about $1 billion a year to renew and expand its infrastructure.

Bill Boyd, minister responsible for SaskPower, says he hopes people understand that things like transmission lines and power poles need to be rebuilt and that installing power to new homes or businesses in costly.

"I think they understand the challenges that there are going forward. I don't think they necessarily like the fact that power costs are going up, I mean none of us, I think, like the fact that we're going to pay more for anything that we use in our daily lives," said Boyd.

"But I think we also recognize that when we walk over to the switch and turn the lights on, that it happens, it works, everything is managed properly from that perspective."