Iqaluit (Sep 11/06) - Energy Minister Ed Picco opted to turn down the heat on energy consumers just a little, rejecting Friday a 6.1 per cent hike in power rates requested by Qulliq Energy Corporation.

Qulliq's customers will, however, still be on the hook for a 5.91 per cent increase. Effective Oct. 1, that will translate into $10 more per month for most users.

"Last year there was a significant turnaround in the power corporation in its financial position, and it has further improved to the point that (Qulliq) has delivered a modest profit on its annual operations this year," Picco told reporters Friday.

The profit stood at a $1.7 million. That compared to a $3 million dollar shortfall that the company projected.

Dale Smutylo of Rankin Inlet doesn't welcome the upcoming rate hike.

General manager of Arctic Heating in Rankin Inlet, Smutylo said the higher power bill will make the bottom line that much tighter for businesses.

"I don't think you can find anybody who's going to be happy about that," he said, adding that his outfit already closely watches its energy consumption.

Qulliq originally sought the increase in charges in spring, 2005. The delay in approval has cost the utility nearly $5.2 million as it banked on that additional revenue in its forecasts. Instead of passing the difference on to ratepayers, the Utility Rates Review Commission (URRC) recommended the Government of Nunavut cover those cost, to which Picco agreed.

Simon Merkosak, the chair of Qulliq's board, attributed the company's turnaround to tighter financial management, administration, improved energy efficiency and a 15 per cent base rate adjustment during the spring of 2005.

The profit will help Qulliq develop alternative energy sources and "break Nunavut's addiction to fossil fuels," Picco said.

Nunavut is the only Canadian jurisdiction that buys oil directly. The territory's current fuel stabilization rider, which helps defray spikes in the cost of oil, currently sits at 3.98 cents per kilowatt hour. But that rate will change shortly, though Picco wasn't giving any hints about what the new rate might be.

Glen Cousins, executive director of the Nunavut Economic Forum, said Friday's announcements offer some good news for consumers.

"It appears the power corporation is going forward with what you would think is a clean slate," he said. "They've put the past deficits behind them."

Cousins said that compared to the double-digit rate hikes of a couple of years ago, the latest increase shows Qulliq has come a long way.