Rankin Inlet (Mar 26/03) - Nunavummiut may soon be paying more to keep the lights on.

The Nunavut Power Corp. is seeking a five-cent-per-kilowatt-hour hike in power rates.

The rate hike is for a fuel stabilization rider (FSR).

The FSR is an automatic procedure to reduce the fuel stabilization fund -- a fund set up to dampen the impact fuel costs have on power rates in Nunavut.

Fuel costs account for more than 50 per cent of all Power Corp. expenses.

A 3.4-cents-per-kilowatt-hour rider was in place from July 1, 2000, until March 31, 2002, before being removed.

Rising fuel costs have the fuel stabilization fund projected to be running a $10-million deficit by the end of the 2002-03 fiscal year.

The Power Corp. wants the five-cent rider to be put in place on April 1, and remain until the fund is zeroed out.

Depending on the price of fuel in 2003-04 and 2004-05, that could take as long as two years.

Ray Mercer of Rankin Inlet chairs the Utility Rate Review Council (URRC).

Mercer says the URRC has been asked by minister Ed Picco to review the application and submit its recommendations on the issue.

He says the URRC's recommendations will then be taken to cabinet, which has the final say in whether the rate increase is approved.

The three person review council has 90 days from the time it receives a request to submit its recommendations. The URRC received Picco's request on Jan. 8.

"The council looks at an application to ensure it's just and reasonable," says Mercer. "We don't make decisions. We make recommendations."

"The application is still in the review stage. We're waiting to hear back from the Power Corp. on questions we forwarded after reviewing the application."

Rankin Inlet SAO Ron Roach says the five-cent rider represents a 15.5 per cent rate hike to the hamlet. That works out to an additional cost of about $37,000.

Roach says should the rider be approved, hamlets will look to the Nunavut government for additional funding to meet the cost.

"We'd look to Community Government and Transportation, but there's no guarantees," says Roach.

"For most hamlets, at this point in time, the hike would have to come out of their regular budgets."