NORTHWEST TERRITORIES

The GNWT's strained financial situation has shelved a proposal to merge the NWT Power Corporation with Alberta-based ATCO Ltd., said the chairman of the power corp.

In a phone interview earlier this month, Brendan Bell said the plan, which originally surfaced in 2009 as the GNWT began looking at the option of merging the government-owned corporation with the private utility company, isn't something the government, in his opinion, is looking to pursue at this time.

Bell said the current concerns with the GNWT's financial situation, being so close to its allowable borrowing limit of $500 million - due to the government taking on the beleaguered Deh Cho Bridge project last year - was a big reason the proposed merger was put on hold.

"The GNWT's borrowing issues are not going to be resolved imminently, so we're going to need to find other organizations, other provincial governments with room on their balance sheets we can work with," said Bell.

When talking about the future growth of the power corporation, Bell said it will likely have to reach out to the private sector - or provincial governments - to help fund any major grid or line expansions in the territory.

"Whether as partners or core customers, all that's uncertain," he said.

When asked about the proposal being put on hold, Kam Lake MLA Dave Ramsay said he hadn't heard anything from Premier Floyd Roland or cabinet about it and wasn't really surprised.

"Regular members haven't had a lot of knowledge about the discussions that have been going on and this goes back a couple of years," Ramsay said on March 21.

"If the government isn't going to be pursuing any more talks with ATCO, it's news to me."

Concentrating on providing better quality service to residents of Yellowknife and the rest of the communities serviced by the corporation should be the focus of the government, said Ramsay, adding businesses in his riding in particular are getting tired of the outages.

"It's a good thing they are going to be concentrating their efforts of finding more reliable power for residents," he said. "It's very disruptive for business. I've got a number of owners in Kam Lake and when the power goes out it costs them money.

"The reliability has been an issue and always has been."

The proposed merger faced harsh criticism from the Union of Northern Workers. In May 2009, the union held a rally outside the legislative assembly in protest of the publicly-owned company being sold off to the private sector.

Todd Parsons, president of the union, said at the rally that jobs and profits will go south if the corporation is privatized.

"It's obvious it's going south," he said. "There's no one large enough to take over the power corporation up here."

Parsons said when other governments sold their power companies to the private sector, residents saw increases in their rates.

"Privatizing our power corporation is unlikely to lower costs," he said. "Private industry is in the business of making money."

Even though the proposal is on hold, Ramsay said what's interesting is the fact the plan was curbed due to the financial issues with the territorial government.

Ramsay pointed to two large infrastructure projects - the Deh Cho Bridge and the Inuvik super school - as reasons why residents and the government need to be concerned about how close the government is to the debt wall.

"If there are any slippage or cost overruns it's going to hurt us big time," Ramsay said, adding the cost of the two projects, by his estimate, total approximately $330 million.

"The other thing we have to be mindful of is the bad fire season looming. With the low precipitation rates this winter, I think we're going to be in for a serious fire season this year. Historically, we under-budget for these things and if it's a bad fire season we're going to be in a bad situation."

Premier Floyd Roland was unavailable for comment as of press time.

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