Iqaluit (Jan 31/05) - Qulliq Energy Corp. posted a net profit in recently released financial statements.

The corporation's (QEC) annual report, released Jan. 27, shows revenues of $54,494,000 and expenses of $63,945,000 for the fiscal year ending March 31, 2004.

Qulliq Energy Corp. chair Simon Merkosak, left, and Energy Minister Ed Picco say the Qulliq Energy Corporation's latest financial statements indicate it is on its way to being financially stable. - Brent Reaney/NNSL photo

However, QEC still shows a profit of $4.459 million. That's because of a decision by the Government of Nunavut (GN) to put $14 million into the QEC in May of 2003 instead of adding a fuel surcharge to deal with diesel price shocks.

"I think we've ascertained what the revenue requirements of the corporation are," said Ed Picco, Energy Minister.

Some estimates - including speculation by Picco in the legislative assembly - had predicted a $10-15 million loss for the QEC.

Eighty per cent of all revenue received by the corporation comes from the GN, Picco said. But because the information in the annual report is nearly 10 months old, Picco expects the GN will have to contribute more money to cover revenue shortages in the current year.

It is too early to speculate about what that number might be, Picco said.

He expects to have that answer once he's reviewed the Utility Rates Review Council's report. The council is an independent committee charged with recommending whether Picco should accept or reject the QEC's application for a rate increase.

An announcement regarding the new rates should be made during the next sitting of the legislative assembly, Feb. 22.

The government's subsidy level - how much of the new rate it is willing to pay - will be announced at the same time.

The rate increase will take effect April 1 and should make the corporation financially viable, said Simon Merkosak, QEC chairperson.

"We're not just trying to deal with today's problems, we're trying to deal with the future," he said.

Picco said he hopes to have an annual report for the year ending March 31 available by June.