By Andy Labdon
SaskPower recently announced that it was suspending the net metering program that reduces the cost to homeowners who install solar panels on their roofs and will not be accepting further applications to the program.
Coincidentally on the same day a report from the Frontier Centre for Public Policy titled, “Running Hard to Adapt in a Dangerously Fast-Changing Industry” by Ian Madsen, was sent out in a news release. The paper conducts an in-depth evaluation and strategic appraisal of SaskPower. In short, it suggests that SaskPower be sold off and become a private company.
The report suggests that the sell off may not be done entirely at once, because it may not be possible to sell the whole company into the stock market and get the maximum price for the seller. It also suggests selling part or all of the company would make the company much healthier, with much of the proceeds from the sale used to reduce debt. It would also allow it to fetch a higher price upon its sale, benefiting Saskatchewan citizens, ratepayers and taxpayers.
The report notes that unlike some of its Crown utility peers in Canada, SaskPower is not in a bad financial condition. The company has negative free cash flow and low returns on assets, equity, and capital employed.
The report goes on to state several reasons that make the sale of SaskPower the right step as new advances in natural gas and battery technology are making private power corporations more competitive. SaskPower will soon require additional capital investment to become a successful and valuable corporation, says the report, and also states that taxpayers, citizens, and suppliers should not be forced to face the risks of economic and technological trends, that is what private investors do best.
Established in 1923, SaskPower is responsible for providing electricity to the province of Saskatchewan, serving over 522,000 customers.