by Doug Ashbury
Northern News Services

NNSL (Jan 26/98) - As the North heads for division, three scenarios have emerged on splitting Northwest Territories Power Corporation shares.

At stake is $43.1 million in original equity and $55.8 million in retained earnings.

The GNWT is recommending a 60-40 share ownership split -- about half way between the Interim Commissioner's office and the Western Coalition.

"I have a letter from the Office of the Interim Commissioner (suggesting shares be split) 50-50," Charles Dent, the MLA responsible for GNWT-owned Power Corp., said.

The Western Coalition wants the utility's shares split 68 per cent for the West and 32 per cent for the East.

"Obviously, I have to find a way to discuss the issue with both sides," Dent said.

"I'm confident we will find a way to bring both sides together."

Dent said he expects to hear Nunavut parties calling for both sides to sign off on the final proposal prior to third reading in the legislature.

On Jan. 15 and 16, the standing committee on government operations heard submissions during two days of public hearings in Yellowknife.

Submissions will next be heard in Iqaluit, possibly in early March, but a date has not been set.

The government's 60-40 split results from blending the original capital and the retained earnings.

Both new territorial governments should share equally in the $43.1 million "windfall" the GNWT said.

The $43.1 million was "gifted" to the NWT in 1988 when the federal government sold the utility, then called the Northern Canada Power Commission, to the GNWT for $1.

The $55.8 million in retained earnings should be split between the two governments based on the proportion of rate base in the East (31 per cent) and the West (69 per cent), government said.

The rate base represents the net assets the corporation has invested in to serve eastern and western customers, government said.

Western Coalition chairman and Inuvik MLA Floyd Roland said the GNWT's proposed 60-40 split short-changes the West.

The coalition wants ownership of the utility based on net earnings contributed by each territory.

Acting for western interests, the organization draws its members from the Aboriginal Summit, the legislative assembly, the NWT Chamber of Commerce and NWT Association of Municipalities.

Roland also said if the original equity of $43.1 million were to be split on a per capita basis, "the West rightfully deserves more than 50 per cent," as 1993 census figures showed 63 per cent of NWT residents lived in the West.

Though not opposed to continuing the corporation as one utility, Roland said the coalition would like to see Power Corp. have two operating divisions.

Two profit centres will ensure no cross-subsidization, he said.

And if the corporation were to be divided at a future date, having two profit centres would make it easier, he said.

The coalition is also proposing a termination clause which includes a detailed plan describing how the corporation would be divided if the proposed partnership fails.

"We see this (all the proposals) as best for the West. We are looking out for western interests."

Under proposed GNWT legislation, Power Corp. will continue as one utility after April 1, 1999 but be owned by two governments.

The creation of two utilities would raise rates seven and five per cent East and West respectively, Dent said.