Iqaluit (Nov 01/04) - Businesses across Nunavut are scrambling to respond to a proposed power rate hike by the Nunavut Power Corporation.

Public consultations on the proposed rate hike begin on Thursday in Iqaluit. The hike, if allowed to proceed, will amount to a 92 per cent increase in Iqaluit.

"We recognize they need to do something, but does it have to be this significant?" asked the president of the Iqaluit Chamber of Commerce, Glenn Cousins.

Currently, the present rate for commercial users is 26 cents per kilowatt hour.

The Power Corp. has proposed a flat rate of 49.83 cents per kWh for commercial use and 53.33 cents per kWh for residential use.

In Cambridge Bay, the proposed rate amounts to a hike of 41 per cent.

Green Row Executive Suites president Bruce Peterson says he understands price increases are a fact of life, but he finds the proposed hike in Cambridge Bay hard to accept, especially since the hamlet recently doubled his water bill.

Peterson said he is also facing an $11,000 bill from the Power Corp. after the company forgot to bill for its base rate over the last 17 months.

It's simply another example of the Nunavut power provider's incompetence, he said.

"They've pissed away millions of dollars and given golden handshakes to their executives. There's going to be a horrendous backlash," said Peterson.

"Maybe it's about time we got some common sense people on that board and got rid of the high rollers."

Peter Groenen, business support division manager with Arctic Co-operatives Ltd., said his company will be making a presentation to the Utility Review Council in Cambridge Bay on Nov. 16.

They may also be doing the same in Rankin Inlet on Nov. 21-22.

"We think there are alternatives," said Groenen.

Groenen said the federal government has put more emphasis on helping the Nunavut government develop hydroelectricity.

What should happen, said Groenen, is the Power Corp. should cut costs first.

"The Power Corporation needs to be profitable. Our question is what should the real increase be?" he asked.

The Power Corp.'s annual revenues sit at $58 million, but its expenses are closer to $77 million.

The flat rate system is being proposed to help the Power Corp. recoup a $19 million annual shortfall.

The government subsidizes the real cost to most customers so they pay only 15 cents per kWh. In public housing, rates are subsidized down to six cents per kWh.

The government has not said whether the subsidy rates will be changed to address the proposed rate hike.