SOMBA K'E/YELLOWKNIFE - Yellowknife's business community and city council are opposing the territorial government's most recent electricity review.

The Yellowknife Chamber of Commerce sent a letter to members of the legislative assembly on Nov. 16, saying it was "dismayed and concerned by the lack of thought and research" of the review commissioned to study electricity regulation and rates in the NWT.

The letter, sent by Patrick Doyle, president of the Yellowknife Chamber of Commerce, challenged two of the report's recommendations: an increase to city power rates, and that the NWT Power Corporation be the sole distributor of energy for the NWT.

During a technical briefing held on Nov. 12, Mark Cleveland, a member of the three-person team who wrote the report, said power costs in Yellowknife could climb by two cents per kilowatt hour - a 10 per cent increase above the current rate of 20.77 cents, an amount that has the chamber and city concerned.

Doyle said high power costs are a huge barrier to economic development.

"Most of the GDP for the entire territory comes from the hydro communities. We've got to look at ways to make them even more competitive to keep our economy going. We need to bring our power rates down from even where they are now to make us more competitive," said Doyle.

Mayor Gord Van Tighem said the city is still feeling the effects of the damage caused by the last power rate increase.

"The last general rate increase was really the straw that broke the camel's back. The rates per kilowatt hour, even in hydro zones, have gone to where they're unmanageable. They're not competitive," said Van Tighem.

He said Fortune Minerals recently announced it will process materials mined from its NICO property 165 km northwest of Yellowknife in Saskatchewan instead "almost completely due to energy rates."

"That's cost (us) the possibility of a couple hundred jobs in the area, for a period of time," said Van Tighem.

The Chamber of Commerce also questions the rationale of a recommendation that the Northwest Territories Power Corporation (NTPC) become the sole distributor of electricity in the NWT.

Doyle said the recommendation comes with "no research or information on what that would mean to the ratepayer."

Doyle said a switchover to NTPC could have costs associated with it, and those are not delved into in the report.

Power generation and distribution in the NWT is presently shared between NTPC and Northland Utilities. The latter supplies and generates power for Trout Lake, Kakisa, Dory Point, Fort Providence, Snare Lake, Wekweti, Enterprise, Hay River and the K'atlodeeche First Nation. In the Hay River region Northland buys power from the Taltson Hydro station - operated by NTPC and sells it back to the communities. In the smaller communities, such as Kakisa, it uses diesel generators to produce and sell electricity.

Cleveland said the reason the review recommends NTPC take over power distribution is to give it an "economy of scale" which means that costs would be reduced for the corporation as it expanded production.

"Our view, as indicated in the report, is the best way you're going to find those economies of scale, given the size of the territories and given the size of the customer base, is through a more consolidated system," said Cleveland.

Doyle argued that if NTPC has a monopoly then "there's no incentive ... to find ways to help the ratepayer and bring the cost down."

Cleveland said the NWT is too small to see much in the way of benefits from competition. The report suggests the 33 different power rates across the territory be condensed into three - the thermal zone - the communities which run on diesel fuel - the Taltson Hydro zone - all communities powered by hydro from the Taltson River - and the Snare Hydro zone, which includes Yellowknife.

Cleveland said making NTPC more efficient to drive power rates down was not one of the report's goals.

"There are a couple of other studies that are currently underway - one of them is to look at efficiencies within NTPC. That was not within the scope of our mandate," said Cleveland.

Cleveland said the report examines how to simplify the power distribution system itself.

The review will be forwarded to the legislative assembly and MLAs will decide whether or not to implement the recommendations.