Richard Gleeson
Northern News Services

Yellowknife (Oct 03/01) - The battle against higher electricity rates is heating up, but all-out war is yet to begin.

Eleven intervenors, including the City of Yellowknife, are going over the NWT Power Corporation's general rate application with a fine-toothed comb.

"It's obvious they've gone for a substantial increase," said Allen Mueller of Northland Utilities. "As an intervenor, we're asking, 'What extra are you providing our customers that warrants this increase?' "

In its first general rate application since division, NWT Power asked the NWT Public Utilities Board to approve increases for this financial year and the next. The budget the corporation proposes for 2001-02 would require a 30 per cent hike in power rates.

"A big issue for us is the rate of return on equity," said Yellowknife's director of finance, Robert Charpentier, noting that the company has requested 12.5 per cent on a $67 million of equity financing. "We feel the rate of return they're asking is fairly excessive, so they have to justify that."

The city has asked the corporation to provide additional information on 10 other areas of the application.

Yellowknife customers got dinged for 17 per cent of the proposed 2001-02 rate hike July 1, after the PUB approved an interim rate application from the corporation.

With the increase, the territorial government realized a substantial savings in its power support program. Under the program, the government pays the difference between the more expensive cost of energy in smaller remote communities and the Yellowknife base rate.

The subsidy applies only to the first 700 kilowatt hours of energy used each month. Thanks to the increase in city rates, however, that difference is now considerably smaller.

NWT Power spokesperson Peter Watt said the main reason for the rate-hike request is higher prices for diesel fuel.

But Mueller said that does not justify increasing the price of power in Yellowknife and other communities that rely mainly on hydro power.

"We have found more efficient ways of doing business," said Mueller. "They feel all costs should go to their customers. Mueller said the price of power distribution has not increased since Northland assumed control in 1993.

Establishing how much revenue the utility requires will be only half of the general rate application. Phase 2 of the application will deal with the sticky question of how that cost will be shared among the communities.

The government has yet to respond to a report, released in December, that recommended two rates be established, one for hydro communities and one for communities using diesel power.

A public hearing for the first phase of the general rate application is scheduled for Nov. 21 at the Yellowknife Inn.