The Saskatchewan government has approved a 3.6 per cent natural gas delivery service rate hike.

The average residential SaskEnergy customer will see an increase of $1.65 per month or about $20 annually.

A fixed, 75-cent-per-month increase will be added to the basic monthly charge, with the remainder of the rate hike placed on the volume charge. The government says customers who use less natural gas will pay less.

The delivery charge will be slightly higher than recommended by the Saskatchewan Rate Review Panel to account for a higher interest rate outlook, the province said.

The remaining portion of the bill, the commodity rate, will remain unchanged at $3.65 per gigajoule.

“Government accepted a majority of the (panel’s) recommendations on SaskEnergy’s Delivery Service Rate, which will increase fairness amongst customers,” Joe Hargrave, the minister responsible for SaskEnergy, said in a news release Friday.

“Government felt a slightly higher increase was necessary for SaskEnergy to meet its targets for investing in safety and infrastructure, so the rate change will reflect the original application amount of 3.6 per cent.”

The rate increase is expected to generate more than $9 million annually for the Crown-owned utility. It will allow for additional investment in major capital and system integrity projects across the province.

“The increase will support core operations that keep our natural gas system operating safely and reliably through preventative maintenance and pipeline integrity programs, including leak surveys, service connection upgrades and transmission pipeline inspections,” said SaskEnergy president and CEO Ken From.

“SaskEnergy has steadily added more dollars into these budgets since 2011, and the results are positive with the lowest pipeline leak rate in history last fiscal year and a significant decrease in infrastructure damage.”

An additional 4,500 SaskEnergy customers are expected in 2017-18. Planned infrastructure investments will focus on expanding and moving pipeline infrastructure away from development, particularly in Saskatoon and Regina.

SaskEnergy is projecting $4.4 million in efficiency savings this year.