Jennifer McPhee
Northern News Services

Yellowknife (July 22/02) - Electricity rates could rise in all NWT communities next month and Finance Minister Joe Handley says the only long-term solution is hydro power.

Last May, the Northwest Territories Power Corporation (NTPC) applied to increase rates.

Joe Handley: Long-term solution is hydro power

As the approval process is lengthy, the NWT Public Utilities Board allowed the NTPC to put a temporary increase in place to cover a $9.1-million shortfall for 2001-2002.

It took effect a year ago and resulted in a fee increase of about $10 per household per month.

Saying the company still has a $5.1-million shortfall, NTPC is applying to tack on a 12-month shortfall rider -- an additional flat rate of two cents per kilowatt hour --across the territories.

NTPC is also applying to increase the temporary, interim rate to make up for future costs.

The Public Utilities Board must approve the increases. Eventually, when final rates are set next year, refunds may be in order for some areas.

Currently the government of the Northwest Territories subsidizes power rates in communities that use diesel generators to make them equal to the present Yellowknife rate of 17 cents per kilowatt hour. This subsidy only applies for the first 700 kilowatt hours per month.

Most NWT communities still use expensive and polluting diesel generators.

Subsidizing communities costs the GNWT more than $7 million annually, said Joe Handley, Minister of Finance.

"It's a lot of money we pay," he said.

For example, in Colville Lake, power costs about $2 a kilowatt hour. But the GNWT subsidy reduces that to the current Yellowknife rate of 17 cents a kilowatt hour.

If approved, the Yellowknife rate is expected to rise by 18 per cent.

Handley said rates could rise to $3 per kW-h in Colville Lake.

Although the GNWT subsidies will absorb most of this, diesel communities will still pay the new Yellowknife rate.

$20 a month more

On average, that could mean $20 extra each month.

The handful of communities outside of Yellowknife using hydro power won't suffer as much since power costs are already much lower.

"I think this is a message to all of us that we better look seriously at hydro," said Handley.

Hydro would save money

He said switching to hydro "in a way that would have some capacity for the future" would cost billions of dollars.

To offset costs, he said he'd like to introduce hydro and sell it to large customers such as mining companies.

"Then, it's like having a house and renting half of it," he said. "You'd get some revenue from your sales which would help you offset your costs of supplying hydro to communities."

He said the Bear River alone could produce enough power "to give us 10 times our needs."

Of course, any hydro development on Bear River is dependent on the approval of aboriginal groups.

"The decision is clearly up to them because it is on their land," said Handley.

Area chiefs, just arriving back from the Dene Assembly in Fort Simpson, were unavailable for comment.

Handley said a short-term solution is conservation.

"That's the other way of keeping bills down."