Inuvik (Apr 18/03) - Calling power rates "unsustainable," communities and businesses have told the Public Utilities Board that a 15 per cent increase would only further penalize the Delta.

Inuvik Mayor Peter Clarkson represented Beaufort Delta communities opposed to a new rate increase proposed by the NWT Power Corp. The Public Utilities Board held a hearing on the proposal here on Monday. - Terry Halifax/NNSL photo

A hearing on a proposed rate hike was held Monday in Inuvik, drawing some 20 people to watch and testify to the board.

The eight Delta communities formed an association to act as an intervenor group to dispute a 15 per cent rate hike by the Northwest Territories Power Corporation (NTPC) that is currently being reviewed by the Public Utilities Board (PUB).

In the first phase of hearings, NTPC was granted a rate of return on equity of $66 million. Monday's hearing dug into how that money will be raised.

Last year, NTPC proposed one rate for all customers within the NWT. The GNWT fired NTPC's board of directors when they refused to withdraw that application.

A new application proposing community-based rates and a 15 per cent increase was drawn up by the power corporation.

Inuvik Mayor Peter Clarkson spoke on behalf of the Association of Municipalities for Fair Power Rates. The coalition said it was futile to argue in favour of the single rate, because they feared the political powers that run the power corporation would supersede any direction by the PUB.

Instead, the group argued that the rates paid by people in the Delta put an unfair restriction on community and personal growth.

"The rate structure is unstable. It's unfair and unjust for Northern communities," Clarkson said. "It forces people to be dependent on the government."

He said the Beaufort Delta has the longest winters and requires more electricity and the eight Delta communities should not be penalized by geographic circumstance.

Utilities more than mortgages

"For the first time in history ... utility bills are exceeding people's mortgages," Clarkson said. "(Utility payments) are even preventing some people from getting a mortgage."

Clarkson said that the price of electric power has jumped from 19 cents per kWh to 39 cents in just eight years.

The Territorial Power Support Program subsidizes residential customers to the Yellowknife rate to a maximum of 700 kWh per month. The government has not indicated that the subsidy would be discontinued, but with a looming debt wall, Clarkson said communities aren't certain that subsidy will continue past the next election.

"It would be political suicide for them to discontinue that program before the election," Clarkson said, drawing laughs from all in the room. He said 42 per cent of residential customers exceed the 700 kWh per month and the average rate for Beaufort Delta residents is about 72 cents per kWh.

"That is about seven to eight times (what) some communities are paying in the south," Clarkson said.

The association proposed a simplified rate structure that would lower the cost of administration for the corporation.

Currently there are 200 different rates paid in the NWT.

Clarkson pointed to Northern B.C., Yukon and Alaska power customers who all pay a levelized rate for electricity.

Businesses at breaking point

Vince Brown, chief financial officer for the Mackenzie Delta Hotel Group, said they have reached a point where they cannot cut costs, raise their rates any higher and they will seek alternative sources for their power.

"Our costs can only be cut so far and our customers will only pay so much and neither will make up for the NTPC increases," Brown said.

"We have only one other option to combat these costs and that option is to find another source for our electricity."

Brown said the hotel group, in conjunction with other related companies and land owners, they will seek to generate their own electricity.

"Once completed, this project could mean a loss of up to a million dollars for NTPC," he said.

"The power corp. need not be too concerned about this, but the ones who should be worried are the customers still on the NTPC grid, because NTPC will simply pass that shortfall onto them in a rider."

John Bursey, manager of the Fort McPherson Co-op, said they have arrived at the same conclusion.

"The rate of power that we're paying now, is basically not sustainable," Bursey said.

They plan to buy two power generators to provide electricity to their store, restaurant and hotel.

The PUB is expected to make a ruling on the application in June.

See next week's Drum for more on the power rate application.