The great rate debate
City questions power corporation figures

by Mark Sproxton & Richard Gleeson
Northern News Services

NNSL (NOV 01/96) - Yellowknife residents don't deserve the high electricity bills proposed by the NWT Power Corporation, says Mayor Dave Lovell.

"The main argument we're putting forward has to do with the timing of putting that new plant on Snare," he said. "We're saying, 'Okay, you made a bad deal; don't pass it on to us.'"

The power company is applying for a rate increase - in part to cover the cost of a new dam and generator at Snare Cascades - that would hike Yellowknife residential bills by about 11 per cent, or $18 per month beginning next April.

Those bills would drop about six per cent in April 1998 after low water surcharges are fulfilled.

The proposal is part of a three-year general rate application to the Public Utilities Board (PUB).

"Generally everything else is going the other way," said Gabrielle Decorby, president of the Yellowknife Chamber of Commerce. "Commercial rents are decreasing and domestic rents are as well.

"Obviously people aren't able to deal with any increases."

But the power corporation said its plans are to bring customer costs in line with the actual cost of producing power, said Bill Braden, director of corporate development.

The last general rate hike was in 1992. In the meantime, however, the low-water riders were introduced to make up for lost revenue in the years between 1992 and 1996.

The surcharge on Yellowknife customers should end by next March.

Negotiations with intervenors earlier this week may change the application, however.

Yesterday the power corporation said an agreement in principle was reached between itself, the city, Con and Giant, the Town of Inuvik, and Northland Utilities.

The agreement is subject to approval by the PUB and all participants. Braden said more details on the agreement would be released in about two weeks.

The addition of the Snare Cascades dam this year isn't Lovell's only problem with the corporation's profit counts.

"When they say a place is only paying 99 per cent of its cost, they're factoring profit into the cost," Lovell said. "The profit they make from us is used to subsidize communities up north."

And Yellowknife isn't the only target of rate hikes. Thirty-eight of 54 communities the corporation services face hikes, while 16 will see decreases.

The city, Chamber of Commerce and other interested parties are intervening on the corporation's application to the PUB.

Informal negotiations began this week with formal public hearings scheduled for December and early next year.

The formal hearings, which the corporation believes will cost over $2 million this time around, also help drive up the cost of power.

Interventions are a bit of a gamble. If they are successful, the costs of the intervenor's lawyers and consultants are passed on to the Power Corporation; if not, the intervenor pays its own way.

"When the City of Yellowknife intervenes they hire legal counsel and a consultant, and I suppose the total cost of that would be in the $40,000 to $50,000 range," said PUB analyst Jamie Cameron.

"For this one the city has also hired a couple of highly specialized consultants to review the depreciation study that was part of the application and the Snare Cascades hydro project."

Cameron also pointed out that the cost of any successful intervention is ultimately passed along to consumers the same as any other expense incurred by NWTPC, he said.

The PUB regulates power rates in the NWT.