IQALUIT - Qulliq Energy Corporation's proposal to increase electricity rates by 19.3 per cent across Nunavut was met with opposition as residents and business owners echoed their discontent at a series of public hearings last week.

Harry Flaherty, president of the Qikiqtaaluk Corporation. - NNSL file photo

"I'm scared of this 20 per cent increase. It will be more and it's going to be a tsunami," said Iqaluit resident Mike Gardener at a public hearing organized by the Utility Rate Review Council of Nunavut on Jan. 7 in Iqaluit.

The review council hosted the hearing where the Qulliq Energy Corporation made a presentation as to why they want to increase electricity rates for both residential and commercial customers.

Ultimately it will be customers such as Celestin Erkidjuk, a retiree who relies on pensions, who will feel the pinch if the rate increase goes through.

"I don't have more money to give you," he said, speaking to Qulliq president and CEO Peter Mackey Mackey in Inuktitut.

Harry Flaherty, president of the Qikiqtaaluk Corporation, said he has concerns about the necessity and size of the increase but also about what is fair and reasonable.

"The effects of the application will be felt all over our operation," he said.

The corporation, which manages economic development on behalf of the Qikiqtani Inuit Association, owns more than $35 million in real estate and will see its annual operation costs significantly increase if the rise in rates goes through.

"We will have to incur another $100,000 just to support this increase for this one fiscal year and this would relate to cutting back in salaries, staffing and other areas," he said, adding there will be many disappointed and unhappy customers.

Sharing his sentiments was Linay Freda with Northern Property Real Estate Investment Trust.

The trust owns 150,000 square feet or 13,935 square metres of commercial space along with providing houses to 598 residents in Iqaluit. This is in addition to 150 residential units with some in Cape Dorset, Iglulik, Kimmirut, Hall Beach, Pangnirtung, Pond Inlet, Arctic Bay, Gjoa Haven and Taloyoak.

"The increase will certainly have a negative impact on our customers: the residents of Nunavut, local businesses, and the Nunavut economy," she said.

Both Flaherty and Freda recognize the fact there is population growth across the territory but that a one-time increase is not the solution.

In October, Qulliq filed a general rate application to the Minister Responsible for QEC, Lorne Kusugak. Based on the corporation's budget, it would be short $22.7 million for the 2010-11 fiscal year. Hearings on the proposed rates are being held across the territory and wrap up Jan. 18. The Utility Rate Review Council will then make a recommendation to the minister. Once this is received, the minister then has to decide if rates will increase and can disregard the recommendation of the council.

Qulliq president and CEO Peter Mackey said salaries have increased by three per cent and costs for supplies, services, travel, fuel and aging infrastructure have all gone up.

"This is something we can't do indefinitely. We need the increase now," he said.

The Utility Rate Review Council approved an interim rate hike of six per cent that came into effect on Nov. 1.

"We put it in to reduce the shock to customers," Mackey said.

This is the second rate change application the corporation has filed, with the first being done in September 2004.

Electricity rates have not changed since 2006.

Phase two of the application calls for the potential to use territory-wide rates for commercial and residential customers and then coming up with community-based rates in each class. Mackey told those in attendance the Northwest Territories is already looking at moving towards implementing territory-wide rates.

"While this may be politically attractive and easier to administer, it is by no means fair," Flaherty said.

He encouraged Qulliq to pursue other means of generating power such as windmills and hydroelectric dams rather than relying on diesel fuel.

Questions were posed as to why Qulliq cannot get money from the federal government to help replace aging infrastructure and to help bridge the gap with the cost increase.

"If we could actively bang on people's doors in Ottawa, we would hire someone down there and keep them there," Mackey said.

Gardener said he feels like Qulliq and the territorial government are not doing enough lobbying.

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