HAY RIVER
NWT Power Corporation is charging Northland Utilities 30 per cent more than what it costs to provide power in Hay River, according to documents obtained by News/North.

Doug Tenney, vice-president of Northland, made the claim last week, something Michael Miltenberger, the minister responsible for the Northwest Territories Power Corporation (NTPC), categorically denies. But figures in power corp.'s cost summary for its 2006/07 and 2007/08 Phase II general rate application show the corporation is charging Northland 130.2 per cent of its costs to produce power for Hay River.

The cost overage for Northland-NWT - the company arm responsible for distributing power in Hay River, Hay River Reserve, Enterprise and several other smaller communities - is the highest on the list. Yellowknife is charged 102.6 per cent while Fort Smith is listed at 103.2 per cent. The lowest is Fort Resolution, which is required to only pay 51.7 per cent of the cost of power in the community.

Gordon Van Tighem, chair of Public Utilities Board, which regulates power rates in the Northwest Territories, confirmed the figure when contacted by e-mail last week. He did add, however, that the numbers were "somewhat outdated" and that power corp. is expected to file a new cost of service study for 2013/14 this month.

Van Tighem was asked why NWT communities are paying different cost recovery rates but he did not respond before press time.

Miltenberger insisted Northland was not being overcharged for Hay River when contacted earlier this month.

"There is no surcharge in place and the rate being charged NUL is in line with costs," he wrote in an e-mail to News/North. "The Public Utilities Board would not arbitrarily allow NTPC to overcharge NUL."

The utility has complained in recent weeks that the territorial government is trying to scapegoat Northland for skyrocketing power rates and intends to push it out of Hay River with the GNWT-owned power corp. now that the town has opened the power distribution contract to other bidders.

Northland did not respond to a request for clarification of its cost claims by press time.

In the same e-mail, Miltenberger laid out what he expects the power corp. to save money on if its bid is successful. He pointed out that NTPC already possesses accounting and billing systems, as well as technical and capital planning staff and senior management already working in Hay River.

He also said detailed savings plans would be presented through the request for proposals process to the municipality but that they would also be subject to review and approval by the utility board. The figure associated with those potential savings, he said, is $3 million, but not in a single year.

"Detailed figures will be provided to the Town of Hay River through the RFP process," Miltenberger said. "As this process has been initiated, it would not be appropriate to get into a detailed discussion on numbers."

One potential area of savings could be the franchise fee currently charged by the town to NUL, about $200,000 each year. Mayor Andrew Cassidy said there was a possibility of deviating from that system and looking for other solutions.

"We do get some revenue from that, and if the town were to forfeit that revenue, we would hope to see it reflected in power rates," he said.

Different models could include a tax on the land on which the infrastructure sits, something Northland does not currently pay. Of course, a reduction in revenue for the town - and thus possible reduction in power rates - would need to be dealt with as well. Cassidy said raising taxes was one option but budgeting and seeking funds elsewhere were equally possible.

"Maybe there are going to be some real innovative thinkers out there who can figure out how to save money for themselves and for the town too," he said.

The RFP process closes July 10 and Cassidy said it would take between two and three weeks for the town to make a decision based on those proposals.

- with files from Mike W. Bryant

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