Heating costs go white hot
Cost of high-temp heating jumps 124 per cent by Richard Gleeson
INUVIK (Aug 01/97) - This week or next, residents on the high-temp heating system will get their first bitter taste of a jump in their monthly heating bills.
In July a new NWT Power Corporation rate hike went into effect, an increase of 124 per cent.
The dramatic climb is the result of two factors, said Pun Chu, director of western operations for the Power Corp. Most significant is the fact that fewer people are sharing the cost of running the high-temp system. Most homes in Inuvik have converted to oil-fired boilers.
"The fixed overhead costs are not reduced," explained Chu. "So those who remain on must bear the brunt of it."
Twenty homes remain on the system, which feeds superheated water to heat exchangers in each house via the utilidor network.
Roughly half the increase is being used to make up $814,000 the Power Corp. lost operating and maintaining the system the last two years.
Once the corporation recoups those losses, likely in about a year, that portion of the increase will be eliminated, said Chu.
That's cold comfort for Don Patterson, among the 20 who will be stung by the increase.
"To me, it's totally ridiculous. Once people are totally off the high-temp system, (the Power Corp's) costs are still going to be the same," said Patterson, explaining superheated water will still have to be circulated to prevent water and sewer lines in the utilidors from freezing.
Patterson said his heating bill from November to May last year was $2,888. With the increase he would have been looking forward to a bill of $6,469.12 for the same period. He is planning to switch to a boiler.
The 20-year resident of Inuvik said the corporation is counting on passing costs they could minimize on to all but captive consumers.
"It's their inefficiency, not ours," said Patterson, noting sections of the utilidor system are so poorly insulated snow never collects on them all winter.
All increases in the cost of utilities must be approved by the Public Utilities Board of the NWT. Under the approval process, all interested parties are notified and given a chance to review and challenge proposed increases.
In its report informing the public of the increase, the board notes, "While both the Town of Inuvik and the GNWT had the opportunity to intervene in the hearing, neither party did."
Heating bills for those on the system are calculated using a formula that takes into account daily temperatures during the billing period and the size of home or building, explained Chu. Actual consumption is not a factor. |