DEH CHO - As of Dec. 1 it became 80 per cent less expensive for commercial electricity customers to flick on their light switches in Nahanni Butte.

At the beginning of the month the restructuring of the NWT electricity system the territorial government announced in May came into effect. One of the primary changes was the establishment of seven electricity rate zones compared to the previous system of different rates for all 33 communities in the territory. Twenty communities including Fort Simpson, Wrigley, Jean Marie River, Fort Liard and Nahanni Butte are now grouped in the Northwest Territories Power Corporation's Thermal Zone.

Residential customers in Nahanni Butte are paying 70 per cent less for the electricity they draw from the Northwest Territories Power Corporation's plant in their community since Dec. 1. - photo courtesy of David Overall

For the next two years the residential electricity rate for all of the communities in the zone is set at 49 cents per kilowatt hour. Commercial customers now pay 42 cents per kWh.

People in Nahanni Butte, which had the second highest electricity rates in the territory, surpassed only by Colville Lake, will see the greatest changes in their bills come January. Rates in the community dropped from 166.40 cents per kWh for residential and 214.65 for commercial.

"It will make a big difference," said Chief Fred Tesou of the Nahanni Butte Dene Band.

Tesou is looking forward to seeing the change in the band's bill, which is normally very large because it includes the electricity for the band office, the water plant, the fire hall and two garages.

The changes will also help residents "big time" especially during the winter months when more power is used, he said.

In addition to the power rates, changes have also come into effect for the Territorial Power Subsidy Program for every community.

Residential customers are now subsidized to the Yellowknife rate of approximately 26 cents per kWh for the first 1,000 kWh each month from September to March. A 600 kWh subsidy is in place for the remaining months. The subsidy was previously set at 700 kWh.

The increase to the subsidy in the winter months will provide the largest benefit for residents, said Mayor Sean Whelly of Fort Simpson.

People try to conserve energy but in the winter when vehicles are plugged in and people are inside more it was hard to stay under the limit, he said. The reduced electricity rates will also help.

"It means people don't have to fear going over the 1,000," Whelly said.

Whelly is hopeful the changes to the subsidy and the electricity rates will create a positive loop where residents spend the money they've saved locally and businesses pass their electricity savings back to customers.

"To me it was a move in the right direction to equalize the cost of living in the territory for everybody," Whelly said about the changes.

Whelly credited Nahendeh MLA Kevin Menicoche, who has always been a strong supporter of equalizing electricity rates, and the territorial government for seeing that all residents should share the costs as well as the benefits of living in the territory.

The electricity rate reductions were made possible by a reorganization of headquarter costs and acceptance of lower returns.

The territorial government is foregoing their dividend of $3.5 million a year for two years to allow the Northwest Territories Power Corporation to take lower profits in the thermal communities. The dividends will be reestablished in late 2012, but are expected to be for a lower amount.

As part of the transition plan the government is also spending $6 million to pay off the two rate riders that were on electricity bills.

In total the government is spending $13 million to make the reductions possible.

The Public Utilities Board (PUB), an independent public board, approved the revised electricity rates on an interim basis in November.

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