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Hay River won't buy electricity system Paul Bickford Northern News Services Published Monday, July 4, 2011
Instead, town council has renewed a franchise agreement with Northland Utilities (NWT) Ltd., which owns and operates the distribution system, for another five years. Council approved a bylaw to renew the franchise agreement at a special meeting on June 29. A committee of council was formed in November to look at the purchase idea and determined the municipality is not in a position to buy the distribution system. Deputy Mayor Mike Maher, a member of the committee, said it heard from legal counsel that a purchase would cost the town somewhere between $17 to $25 million. "That's why, at this point in time, we're looking at not purchasing those assets," Maher said. Instead, the committee recommended council renew the franchise agreement. "I don't think we have any option at this point," Maher said. The idea of buying the system has been raised as a possible way to lower electricity costs in Hay River. Maher said he is not suggesting Northland is doing a bad job, but noted it is a for-profit company. Northland's return on investment is regulated by the utility board at a margin of 9.25 per cent. "So are we getting the best deal possible for the residents of Hay River?" he said. The franchise agreement expires on Nov. 30, 2011, meaning an extended deal will expire on that date in 2016. "We're obviously very pleased they decided to extend the franchise for five years," said Ross Stanley, manager of Northland Utilities (NWT) Ltd. "We'd love to continue to serve the town of Hay River for a further five years and hopefully after that for a long time to come," he said. Stanley noted this year is Northland's 60th anniversary of serving Hay River. The idea of a possible purchase by the town had not reached the stage of any negotiations between the two sides. The council committee consisted of Maher, Mayor Kelly Schofield, Coun. Ken Latour and Coun. Kevin Wallington. The last time the town flirted with the idea of buying the system was a decade ago. Maher said a five-year extension of the franchise agreement will give the town more time to consider a possible purchase. "If it's determined that that's somewhere the community wants to go in five years, you've got to start planning for that a little bit more in advance," he said. Northland purchases the electricity it sells in Hay River from the NWT Power Corporation. The power is produced at the Taltson River hydroelectric site north of Fort Smith.
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