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Northland walks wire

50-year relationship with Hub reduced to month-to-month

NNSL Photo

Northland Utilities managers from left: Duane Morgan, Paul Goguen, Jerome Bayne, at Hay River town council Dec. 3. - Dave Sullivan/NNSL photo

Dave Sullivan
Northern News Services

Hay River (Dec 10/01) - Northland Utilities can't plan its future as long as the electricity carrier is kept on a month-to-month tether to Hay River, says general manager said Paul Goguen.

During a Dec. 3 information meeting with town council, Goguen pleaded for negotiations to resume on a long-term power agreement.

"For the past 18 months we've not known if we'll continue to serve Hay River. This does not create an atmosphere of certainty. We'd like to go back to the table," he said.

Previously Mayor Duncan McNeil said the town was waiting to hear back from another company interested in "bundling" municipal services. That would put electricity and other utilities like propane on one bill. At the Dec. 3 meeting, Northland also offered to examine bundling. But Goguen warned it may not translate into cheaper power bills.

Savings "may not even exist. The two companies are fairly lean right now."

Goguen was referring to Northland and Stittco Utilities, which pipes propane into many Hay River homes.

Northland has supplied the town's power for 50 years, but the relationship hit a "rough spot," Goguen said, when Hay River called for outside proposals before the last 10-year agreement expired last July.

The town's move caused the territorial government to halt competing proposals last year from Atco-owned Northland and Crown-owned NWT Power Corporation. Northland buys all of Hay River's power from NWTPC, which is generated at Talston dam.

In May of this year town council voted to resume talks with Northland, but called them off in September when Enbridge Inc. said it may be interested in pursuing the Hay River power franchise.

Northland relies on Hay River for 75 per cent of its earnings in the territory, not counting Yellowknife. Hay River is one of nine communities the company serves.

Some councillors don't like the lack of consumer choice.

"The franchise as I see it is a monopoly for your company," said Coun.. Glenn Smart. "The town deserves something out of it after 50 years."

Rules say Northland is allowed to earn a profit just under 10 per cent of the utilities'' investment in equipment used to get electricity to customers.

As part of the expired agreement, Hay River has the option of buying Northland. The price would be over $15 million. The town gets about $135,000 a year in lieu of property tax from the utility, which is four per cent of $3.4 million in revenue from residents' electricity bills.

Pine Point could drive power bills

Re-opening the Pine Point Mine could cause power bills to rise, it was revealed at a Hay River town council information meeting.

Northland Utilities manager Jerome Bayne estimates the mine could gobble 18 megawatts of power. The nearest generator at Talston Dam can produce 18 megawatts.

The remaining power would not be enough to supply Hay River and seven other communities which get their power from the dam. Residents of Hay River, the biggest user, consume five megawatts.

Enlarging the power grid by adding a diesel generator would be expensive, and the extra cost would be absorbed by all of Northland's customers on the Talston system.

But in the strange world of electricity economics, it's not that simple. Depending on circumstances, power rates could even go down, Bayne said. If Northland had power supply contracts for say, the next 20 years, it may be cheaper to build a pipeline and an efficient gas-fired generator in Hay River. But such planning is risky, he said, because a mine planning to stay open 20 years could close much sooner.

Northland Utilities general manager Paul Goguen said in an interview that his NWT customers would never likely be taken off hydro rates, which are much lower than diesel.

"I can't imagine the government not allowing Hay River to have hydro. Politically, it's not acceptable."