Town opens process for power provider amid takeover fears
ATCO says power corp has advantage, Miltenberger wants lowest rate
Sarah Ladik
Northern News Services
Friday, June 5, 2015
HAY RIVER
Several layers of government attacked in Northland Utilities Ltd.s' media campaign last week are fighting back.
"The entire premise behind an RFP (request for proposals) is that it's an open and competitive process," said Mayor Andrew Cassidy. "It's not an invitational process - this is going national. This is not an attempt to get NUL out of the picture; we fully expect a bid from them."
While town council announced last winter that it would not be renewing the franchise agreement with Northland Utilities to distribute power in Hay River, the process finally took another step last week when council put out a request for proposals.
Doug Tenney, vice-president of commercial and community relations for ATCO, Northland Utilities' parent company, characterizes that process as uncompetitive, claiming that bidding against the Northwest Territories Power Corporation, which has indicated it will make a proposal for the franchise, is unfair.
The mayor disagrees.
"What's not a fair process is only ever negotiating with and renewing contracts with only one company," said Cassidy. "Our preferred company is the one that gets us the best rate on power."
Days after Northland Utilities bought full-page advertisements in newspapers across the territory, including this one, decrying alleged plans for government takeover of its power infrastructure, Premier Bob McLeod and Michael Miltenberger, minister responsible for NTPC, put out a statement confirming that the GNWT will support the power corp.'s bid on the Hay River franchise.
"We, like the Town of Hay River, have an interest in lowering the cost of power," Miltenberger said last week. "It's interesting that the town's decision to go to a public process has triggered this intense corporate soul-searching process from ATCO."
In articles published last week, Tenney had referred to a report commissioned by the GNWT that sought to restructure the electrical system in the territory. This week, he said that in addition to having been told of that report, the minister has made comments that proved cabinet has intentions of taking over power distribution in the NWT.
"He has mused out loud that there doesn't need to be more than one utility in the territory," said Tenney. "We heard that message loud and clear.
"We don't know what the name of the report is, we don't know much about what's in it, but our understanding is that it's about restructuring ... now, after all this came out, it looks like they're saying it's something a little bit different."
As for the Hay River franchise, Tenney said that ATCO is not afraid of true competition, but likened bidding against NTPC to an NHL in which commissioner Gary Bettman owned a team.
"We see it as a very slanted playing field," he said. "Comments made by the premier are bordering on some pretty serious government intervention."
He would not confirm that Northland will submit a proposal for the franchise, saying that the company is reviewing the situation.
Miltenberger said he did not know which report Tenney had been referring to, only that the GNWT is continuously involved in studying and improving the electrical system in the territory.
"There's a lot of misinformation that has been thrown out," he said, adding that he believes Northland Utilities began its campaign in response to Hay River's plan to go to a public process with the franchise.
"Everything else is a red herring to distract from a very simple issue.
"In Fort Smith and Fort Resolution, they're paying $0.21/kWh and in Hay River they're paying $0.31/kWh. We would like to see that gap closed, and we think the power corp. can do that."
The president of one of Northland Utilities' major shareholders, Darrell Beaulieu, said that with its current 14 per cent ownership, Denendeh Investments Inc. receives about $134,400 from the yearly revenues of the power company.
When it comes to the price of power itself, Beaulieu said there needs to be an energy strategy developed for the residents and businesses in the territory. He acknowledged the recent advertisements published but said there are other items that haven't been discussed yet. "People haven't asked why NTPC is overcharging Hay River by 30 per cent," he said. "I think that's going to be part of the due diligence the Town of Hay River or the government has to ask, and the residents."
-With files from Karen Ho
