Power shift
NTPC competes for business

Terry Halifax
Northern News Services

Fort Simpson (Dec 06/99) - The plug has been pulled on the monopoly power supply in the North.

The Northwest Territories Power Corporation (NTPC) has found itself in a bidding war to stay in business in Nunavut and now, in the west too.

Power Corp. president and CEO Leon Courneya said his company will do their best to win the contract in the east, but if they don't, he's making plans.

"If we don't get that contract, I have 15 months to come up with ways to mitigate any impact that will have on the west," Courneya said.

The facilities in Nunavut are currently owned by the newly-formed Nunavut Power Corporation. That ownership came following the division of assets when the two territories were formed, he said.

"After division they became NPC's property," he said. "The whole thing was owned by the Government of the Northwest Territory -- it was just another asset that they had to divide up."

As well, NTPC has found itself bidding in the west for a contract for the Fort Simpson supply.

"Fort Simpson wants to have a look at what's out there, I guess to confirm that they are getting a good deal," he said.

This is not new, Courneya said. Other communities have looked at outside power suppliers and come back to NTPC. Both Norman Wells and Hay River have compared suppliers.

He said the existing power plant and lines in Simpson are owned by NTPC, but in the event of a new supplier, he would mark up the sale price of the equipment and sell them off to the community.

"I would sell the distribution facilities at a premium to the village and the village could do with them what they wanted."

Courneya said that the competition is a way communities can better judge the service supplied by his company.

"I think it's a good thing," he said. "One of the problems with being a monopoly is that nobody really has anybody to benchmark you against, so this is a good opportunity for the market all over Canada to say this is how we would do it."

Fort Simpson Mayor Norm Prevost said they have already made their choice for a new power supplier and although he wouldn't name the company, he said it's not going to be NTPC.

"We've already picked the supplier to supply us -- council already knows which one they want, but we're working on the distribution part of it now," Prevost said. "We might marry two companies; one to supply the power and one to do the distribution."

He said of the three short-listed suppliers, NTPC's rates were much higher. As an added perk, the other bidders also offered the community incentives.

"All three that we've short-listed have given us cheaper rates," Prevost said. "Two of them have made us some really good offers other than good rates; one has given us all the residual heat for our heating system; they've included scholarships and programming for education and in the end, the municipality owns the generating system."

Prevost said the contract will run about 18 years, an agreement Prevost said the municipality hasn't had in 50 years.

"We've never had a franchise agreement with NCPC (Northern Canada Power Commission) or NTPC," he said. "The act says that if you don't have an agreement, the municipality has the right to purchase the assets."

"They've evaluated the distribution system, but they refuse to do the generating plant. They say it's not part of the deal, but the Public Utilities Act states, '...all equipment used for generating and distributing power...'"

He's aware of NTPC's plan to sell the equipment at an inflated price, but if need be, Prevost said the new supplier would finance new lines and generators.

"So, basically what (the selected bidder) has told us was, 'We don't need any of their distribution or generating equipment, we'll put in new power lines and generating equipment.'"

He said the community would be better off using the existing supply, but he feels they should not have to pay for equipment they have already made payments on since day one. He said council feels the equipment should be given back to the community.

"That's what the federal government did for the GNWT, they just gifted them the assets."

"I don't think it would be morally right for another government to make profit on a lesser government," he said. "Our community has already paid for these assets through the cost of doing business."