A Regina restaurant owner says small businesses face hard times ahead if SaskEnergy's proposed 40 per cent natural gas rate increase is approved.

With a monthly energy bill of $3,700 for his business, Adam Sperling says that paying another 40 per cent beginning in October would have a big impact on his bottom line.

"It makes it very difficult to do anything but break even when there's a gas hike like that, and there's labour hikes and, of course, food costs are going through the roof," Sperling said Wednesday.

"It has to be passed on to the general population," he said.

The increase is expected to cost the average homeowner between $35 and $40 a month, SaskEnergy estimated.

Single parent Jon Carey said it will mean less money to buy other essentials for his family.

"That's an extra $30 I could be putting towards food or stuff like that, and I am sure there's a lot of others who would feel the same way," he said.

Higher prices spur conservation

But companies in the heating industry see a silver lining to higher gas rates.

Dale Neuman, who runs a company that specializes in solar and geothermal heating, said he expects a flurry of calls from potential customers looking for alternatives.

Companies that sell more efficient furnaces also anticipate a surge in business.

SaskEnergy said the rate increase is needed because the price of natural gas on the open market has risen.

NDP critic Kevin Yates said the government should consider subsidies, since it is also receiving more money from increased natural gas royalties.

"The taxpayers of the province are getting money back through these high prices, through the government, because we sell this commodity to others, so some of those royalties should be spent to cushion that increase for consumers," Yates said.

The minister responsible for the Crown corporation, Ken Cheveldayoff, said the government has not ruled out subsidies, but people need to get used to higher energy prices and do more to reduce their consumption.

If the rate increase is approved, consumers will start paying more in October.