Inuvik (June 06/03) - Inuvik residents are bracing for the arrival of their first natural gas bills since the utility imposed a 45 per cent increase came into effect May 1.

Following the 90-day notice of the increase from Inuvik Gas Ltd., the Town of Inuvik filed a formal complaint with the Public Utilities Board (PUB), stating the hike was unfair, but in the interim, gas customers will be charged the increased rate.

Mayor Peter Clarkson said the final information requests by the PUB have been submitted and now they will wait for a ruling from the PUB.

During the complaint process, both the utility (Inuvik Gas Ltd.) and the town posed a series of questions to each other through the PUB. The deadline for the answers to those questions was last Friday.

Clarkson said the town has argued that the hike is unfair, since IGL's costs have not increased and they hope to see the utility placed under full regulation.

When the Ikhill gas project was approved, the PUB approved decision 10-98 which stated:

"Having considered the existence of competition from alternative fuels and the limited potential for monopoly profits by IGL, at this time, the board concludes that IGL may not be subject to full regulation."

This is the first time a complaint has been filed against the utility and the town is seeking an investigation into the profits of IGL as the PUB would proceed with a fully-regulated utility.

"We don't believe that P-50 or diesel fuel is an option to prevent IGL from being a monopoly," Clarkson said. "Once you've converted, you can't convert back and forth, depending on what the price is."

"Also, the fact that there was a subsidy to get people to convert ... there's no subsidy to convert back."

He said it would cost the town about $100,000 to convert back to heating fuel, whereas they had paid about half that to convert to gas.

Most monopoly utilities are allowed a return on investment of about nine to 12 per cent, but the 45 per cent increase IGL has proposed represents almost all profit.

Clarkson said the gas company should have been regulated from the start.

"The PUB should have stepped in from the outset," Clarkson said. "It should have been a regulated utility."

In their submissions to the PUB, IGL argues that they have maintained a significantly lower price than alternative fuels with customer cost savings of up to more than 70 per cent, but Clarkson says those figures are exaggerated.

"It's been misrepresentative; it's been more like 20 per cent on average," he said.

"The 45 per cent increase definitely doesn't make sense -- especially since diesel prices have come down since February 1."

In their case to raise the rates, IGL has benchmarked their price to the price of P-50 heating fuel which spiked over the winter, but has since dropped.