It isn't so, says minister
Dent sets record straight on electric power subsidy

by Doug Ashbury
Northern News Services

NNSL (Feb 04/98) - Yellowknifers are not subsidizing electricity costs across the Northwest Territories, the minister responsible for the NWT Power Corp. said yesterday.

Charles Dent was reacting to an editorial in Friday's xxxYellowknifer that said Yellowknife power customers subsidize the higher costs of other communities.

In fact, according to Dent and NWT Power, it is the territorial government that subsidizes private homeowners through a rate-balancing program within each community.

Government buildings in each community pay more for their electricity than it costs NWT Power to supply it, while homeowners pay proportionally less. As a result, each community as a whole, from Yellowknife to Sanikiluaq, pays its own way.

But on the top of the rate balancing, which is being phased out over the next four years, the GNWT subsidizes the cost of power through a support program that uses dividends generated by the corporation.

The program works by making most consumers in the North pay the Yellowknife rate for the first 700 kilowatt-hours each month. The only exceptions are those communities with rates lower than those in Yellowknife, such as Hay River and Fort Smith.

Last year, for example, the program cost the GNWT about $6 million. In accordance with territorial legislation, NWT Power forwarded an equivalent amount to the GNWT in the form of dividends.

What happens to the support program when the NWT splits in 1999 is uncertain, however.

Dent said it is likely the support costs will soon be more than the dividend available. "The two governments (East and West) will have to look at the equalization and how it is financed. Governments will have to decide very soon if they want to top it up."

The GNWT recommends the corporation continue as one utility owned by the two territorial governments. At stake is $43.1 million in original equity and $55.8 million in retained earnings.

GNWT recommends a 60-40 split of original equity and retained earnings -- about halfway between the positions of the Western Coalition and Nunavut's interim commissioner.

The coalition suggests original equity and retained earnings be split 68-32, West and East. Dent said the commissioner's office is suggesting a 50-50 split of original equity and retained earnings.