Plug pulled
Council puts Northland Utilities purchase on hold

by Jennifer Pritchett
Northern News Services

NNSL (Aug 13/97) - City council's once enthusiastic plan to buy Yellowknife's electric company is on hold until the turn of the century.

Mayor LovellDespite a previous push to explore the purchase of the Northland Utilties, council voted Monday to put it off until the existing franchise agreement expires.

"No matter what happens ... it's still guesswork until you know the price," said Mayor Dave Lovell (left).

Council agreed to wait until March of 2000 before seeking arbitration to determine a value of the company. The current agreement between Northland and the city expires 18 months later, in September 2001.

Arbitration is required to settle the worth of the utility because Northland does not want to sell out to the city.

City staff said last March that because of a buyout clause in the franchise agreement Northland has with the city, the city could have begun a process to force Northland to sell at a price set by an arbitrator.

Northland has fought city hall all the way, saying the buyout clause may not be exercisable. A lawyer acting on behalf of the city, Leo Burgess, said last week Northland may be contemplating legal action against the city if it went ahead with the arbitration process.

Earlier this year, resource Management International Inc. put the value of the power distribution company at $15.7 million. Northland Utilities, however, says it's worth closer to $22.5 million.

Lovell, as recently as last Wednesday, supported the purchase. He stated in that meeting that the owning utility could allow the city to offer residents lower electrical rates.

The apparent change of heart on council seemed to confuse Alderman Vi Beck, who said she had understood that the city would spend up to $250,000 to find out the true value of Northland Utilities.

"Now all of a sudden, we're saying let's not do it this way?" she asked.

Alderman Blake Lyons, who has maintained he is not a proponent of arbitration, said that this process would remove control from the city.

"I think it's obvious that Northlands doesn't want to sell," he said. "It would be a hostile takeover. It's an issue of timing."

Al Brekke, manager of Northland Utilities, said that he is pleased with council's decision and that the company will work with the city to ensure that residents get the lowest price for power in the meantime.

"With this decision, we welcome the opportunity to work with he city to keep electrical rates down," he said. "Northland and its Northern-based partners are committed to this community."