Another power rate hike avoided
GNWT coughs up nearly $30 million to cover second year of low water on North Slave hydro system
John McFadden
Northern News Services
UDATED: Monday, September 7, 2015
SOMBA K'E/YELLOWKNIFE
Electricity consumers in the NWT have been spared a second year of power rate increases – amounting to as much as $105 more per month – after the territorial government decided yet again to cover the costs of extra diesel to compensate for low water levels at hydro generating stations.
Citing a nearly four-year-long drought and record low water levels on the Snare and Yellowknife Rivers, which supply hydro power to Yellowknife, Behchoko, Ndilo and Dettah, territorial ministers announced Sept. 2 they had no choice but to provide NWT Power Corporation (NTPC) with a $29.7 million subsidy. The drought has caused an increased reliance on power produced by costly diesel.
The bailout comes despite what Premier Bob McLeod called the territory's "strained" financial resources.
Both McLeod and Finance Minister Michael Miltenberger, who is also the minister responsible for power corp., insisted it's either the subsidy or a rate hike for power consumers.
"Those costs have to be paid and we really only have two options – either the GNWT makes up the difference or power rates for all NWT residents increase. While our financial resources are already strained, we do not believe that passing on those additional costs to our residents make sense," said McLeod.
The funding comes on top of the $20 million the GNWT gave power corp. last year for exactly the same reason. Both the Snare and Bluefish hydro stations are operating well below capacity due to the low water. That leaves Yellowknife's Jackfish diesel plant to pick up the slack.
"Continuing to subsidize power costs this way is not sustainable for the long term," said McLeod.
"While we have to take this step to shield all NWT ratepayers at this time we continue to look for longer-term solutions. Those solutions include efforts to reduce Northerners' energy consumption as well as continuing to look at options for generating power that would help mitigate future events like this."
Election issue
Miltenberger said he believes power in the North as well as infrastructure funding should be important parts of the federal election campaign.
"Some of the federal parties – the Liberals and the NDP – I'm not so sure about the Conservatives at this point – have promised a considerable amount of money for green energy and alternative energy," he said.
"We would see ourselves taking advantage of that, recognizing as everybody does across Canada that the North is on the vanguard in terms of dealing with these types of extreme weather events," he said. "There are a number of avenues we are going to explore with the federal government."
McLeod was adamant he does not view the financial help as a subsidy.
"I wouldn't use the terminology that we're subsidizing (NTPC). We're not passing on the cost to the consumer," McLeod said.
Miltenberger, on the other hand, had a different perspective.
"What we are doing is subsidizing the cost for the constituents, including everybody. We don't draw a return on investment from (NTPC). The return on investment is keeping the cost of living down," he said.
Range Lake MLA Daryl Dolynny was the only regular MLA who attended the news conference. He says it amounts to a bailout or a subsidy any why one slices it. By his estimates the GNWT has bailed out NTPC to the tune of more than $100 million since 2008. He says the latest government plan is short-sighted and that it doesn't address concrete solutions or serious alternatives.
"If we were to pull out every report, every symposium, every document in the last 10 years on how to solve our energy woes – we could plaster every wall at the legislative assembly and still have paper left over," Dolynny said.
He believes the territory could connect the northern grid to the southern grid, adding there's extra power at Taltston (hydro dam) in the territory's South Slave region, which could be sold to Saskatchewan for a profit.
He added the decision was made without proper input from regular MLAs. Unlike last year, this year's subsidy did not follow an application from power corp. for a rate increase.
At the end of June, NTPC had spent all but $1 million of the $20 million it received last year, according to spokesperson Pam Coulter.
"We normally generate 95 per cent of our power in the North Slave by hydro, however, this year only 70 per cent was generated with hydro and the remainder was generated with diesel," she said.
The money will be borrowed and will include up to $22 million for the remainder of the 2015 fiscal year and an additional $7 million in 2016-17 to cover diesel costs until July of next year, said McLeod.
