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NTPC seeks power rate hike
Application to be filed seeking an approximate increase of 13 per cent over three years

Shane Magee
Northern News Services
Monday, May 2, 2016

The cost of electricity may be on the rise again if the Public Utilities Board agrees to a Northwest Territories Power Corporation request to raise rates.

NNSL photo/graphic
The Northwest Territories Power Corporation is seeking to raise power rates by 4.8 per cent starting June 1, followed by increases that would hike the cost in all communities by 12.8 per cent over three years. - NNSL file photo

On April 29, the Crown company submitted an interim request to raise rates in all communities for 2016-17 starting June 1 by 4.8 per cent.

It plans to then submit a general rate application to the Public Utilities Board which would see the cost of power increase by a total of 12.8 per cent over three years, inclusive of the original interim increase of 4.8 per cent.

The increase could mean an extra $10 for residential customer bills per month in the winter, and $6 in the summer. The general application would be subject to public hearings later this year.

The utilities board is an independent, quasi-judicial agency that regulates public utilities in the territory.

If approved, the cost of power by the end of those three years would be 40.8 per cent higher than it was in 2012.

Pam Coulter, spokesperson for the power corp., said NTPC needs to recoup the cost of generating power. She pointed to four main reasons for climbing power generation costs: inflation, a decline of about two per cent in power sales in recent years, higher costs to maintain generators and dams and higher regulatory costs.

"We recognize that it puts additional pressure on our residents and businesses," Coulter said. "NTPC needs to recover the costs that it needs to generate power ... it's how we ensure that people who are using the power pay for the cost of generation."

According to documents filed with the Public Utility Board, the power corp. forecasts to bring in $100 million at existing rates this fiscal year but plans to spend $110 million, creating a $10 million shortfall.

The 4.8 per cent rate increase starting June 1 is only projected to raise revenue by $3.7 million, leaving the power corp. with a deficit of $4.7 million.

Gordon Van Tighem, chairperson of the Public Utilities Board, said interim requests are handled like general rate applications.

"We've received notice so we're gearing up to do the due diligence that's required of us," Van Tighem said.

A schedule for how the board will review the interim application is expected to be released this week. A schedule for the public hearings for the general rate application is expected to be issued once that application is received by the board, Van Tighem said.

The proposed hike comes at a time when the price of diesel has gone down by 9.5 cents since last March and 34.5 cents since March 2014, according to Statistics Canada. NTPC maintains a stabilization fund to offset the fluctuating commodities markets. Coulter said the drop in the price of diesel was factored into the power corp.'s proposed increase but could not elaborate how that calculation was made.

"Details won't be completed until we actually file the general rate application at the end of June," she said.

There are 20 communities in the NWT that depend exclusively on gas and diesel for power generation.

In an interview with News/North, Inuvik Mayor Jim McDonald expressed concern that the potential rate hike would exacerbate the already high cost of living in communities across the North.

"Everything from food to rent is impacted by it," he said. "It's added pressure on everyone."

He said the town, which has a diesel and a gas power plant, would be submitting a letter to the Public Utilities Board to speak out against the propose rate hike.

The cost of living, and to a large degree the cost of power, was a frequent topic in the territorial election last fall.

Earlier this year, Hay River town council announced plans to switch from Northland Utilities as its power distributor to NTPC in an effort to cut the cost of power. Council estimated the move could cut costs by about 20 per cent.

However, the process to purchase the infrastructure - lines and other equipment - from Northland still must take place. No price for that infrastructure has been revealed yet. Hay River Mayor Brad Mapes was not prepared to comment on the rate increase.

Coulter said the rate applications were not related to what occurred in Hay River.

"This is in absolutely in no way connected to that," she said. "This is about the cost to run our systems."

The last time ratepayers in the NWT did not see a rate increase was between 2007 and 2011.

- with files from Cody Punter

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