Stakes high in energy debate
Cody Punter
Northern News Services
Published Monday, November 10, 2014
NORTHWEST TERRITORIES
One thing that was made clear during last week's energy conference in Yellowknife - the second in two years - is that the territory's energy problems will not be solved by one idea alone.
Inuvik Mayor Floyd Roland, who was in Yellowknife for the meeting, said it was time for the territory to switch over to a single-rate zone from the current division of hydro and thermal communities relying on diesel generators to produce electricity.
"Look across Canada, do we have this kind of set-up where we hand-tie our power corporation, and tell them 'you have to operate in this manner,' which makes it more expensive?" he asked.
Roland said the GNWT's recent $20 million bailout of ratepayers to cover the cost of diesel needed to offset the decrease in hydro power as a result of low water levels in the North Slave region, exposed the weakness of the current system.
"It's nice for a hydro community to be hydro, but when they ran out, they became a thermal community," Roland said of Yellowknife.
"Let's face the facts and grow up a little bit as a territory, then when we take that step we can look at these other things that are three of four years down the line.
"Let's bite the bullet. Let the power corp run in a little more efficient manner as they would in any province."
Hearing Michael Miltenberger, the minister responsible for NWT power corp., however, the utilities' days may be numbered. The minister delivered a stunning rebuke at the conference, criticizing power corp.'s reliance on government subsidies and its inability to keep power rates in check.
The GNWT offered $80 million in subsidies over the past three years while power rates are expected to rise 29 per cent from 2011 to 2015.
"The power corporation could never survive as a revenue generator, charging what they charge," he told Yellowknifer after the meeting.
"If we hadn't given them this $80 million, I shudder to think what their rates would be."
Miltenberger suggested the GNWT might be better off dissolving power corp. - a company solely-owned by the GNWT and incorporating it into a new government department instead.
The minister also put Northland Utilities on the hot seat when he asked whether it was fair for the distributor to purchase power from power corp. and then resell it to customers at more than triple the price.
"Is it acceptable to purchase wholesale power at 9.8 cents (per kilowatt/hour) and resell it at 34 cents (per kilowatt/hour)?" he asked the audience.
A common refrain throughout the public portion of the conference on Nov. 3 was that the territorial government requires a portfolio of short, medium and long-term solutions to lessen the burden faced by ratepayers.
"There is no magic super energy solution," said Marlo Reynolds, vice-president of Alberta-based renewable energy company BluEarth Renewables.
Reynolds, who was invited by the GNWT to take part in the two-day conference, said the NWT's 6,500 megawatt energy distribution system is the most complex he'd ever seen.
Despite the challenges of power distribution in the North, he told the audience at the Explorer Hotel there is huge potential for renewable energy to help supplant existing systems, especially in small diesel-dependent communities.
Reynolds pointed out solar power in particular could be a viable alternative. Not only has the cost of solar panels dropped by 80 per cent over the last five years, the amount of sunlight available to power them in the North is only 10 per cent lower than in Ontario, and five per cent lower than in Calgary, he said.
With the cost of diesel power in small communities being approximately 30 cents per kilowatt hour, Reynolds said solar power could save ratepayers a significant amount of money, even if a conservative estimate for installing such a system in the NWT was doubled to take into account the higher costs associated with Northern projects.
"We can beat that price now with solar quite easily," said Reynolds.
When asked what could be done to reduce the territory's energy costs in the short term, Reynolds said the GNWT could easily target four small diesel communities and install solar panels there within 12 months.
Roland suggested that if it wanted to wean itself off diesel in the long-term, the territory should invest in drilling for liquid natural gas in the Beaufort Delta near Inuvik.
"The sweet money is going south and the rest of us are paying for it," said Roland on the effect of being dependent on diesel.
"You don't need the Imperials of the world or the Shells of the world, you can do it on a regional basis or a community basis as long as you're close to the gas source. You reduce your transport, you use your own resources, you put people to work, you're building an economy and sustainability.
"It's time to look at what we can do in the North and keep some of that money here."
While Roland would like to see drilling in the Beaufort, he said some form of shorter term actions would be required to reduce the immediate costs faced by customers.
"In between that time the power corp. has to do something, or in that sense the government of the Northwest Territories has to do something, other than writing a cheque every month."
The results of the conference, including input from the public, will be compiled and published in a public document on Dec. 1.
After being reviewed, the document will then be debated in the legislative assembly in the New Year.
