Iqaluit (May 15/06) - Energy costs in Nunavut, already three to six times the national average, could go even higher if Qulliq Energy Corporation wins a 6.1 per cent rate hike it asked for last Tuesday.

The company says it needs the increase to break even, despite a 15 per cent increase approved by the Utility Rates Review Council (URRC) in February 2005.

That decision recognized that even with the 15 per cent increase, Qulliq would still fall 6.3 per cent short of breaking even.

"Instead of a 6.3 per cent adjustment, the new application looks for a base adjustment of 6.1 per cent thanks to our savings to date and revised calculations," said Simon Merkosak, chair of the company's board of directors in a news release.

A Qulliq spokeswoman referred News/North to the company's rate application, which says QEC is facing a budget shortfall of more than $12 million.

If approved, the rate hike wouldn't take effect until Oct. 1, which means Qulliq would need to make up an "interim shortfall" of $5.8 million.

To do this, Qulliq wants to add an 8.4 per cent surcharge to bills for 12 months to cover the difference. Qulliq also faces a debt of $77 million.

Energy minister Ed Picco has the final say on any rate hike. The URRC must recommend Picco accept, reject or modify the request within 90 days.

Picco wouldn't give any hints as to which of those options he's considering, but said Qulliq's rate increases fall below the national average.

"It's not out of line, but everything is more expensive in Nunavut," he said.

Tivai Kiguktak, manager of the nine-room Grise Fiord Lodge, says the hotel uses a lot of electricity and expects a rate increase would just add to costs. But she wouldn't be taken by surprise if Qulliq's rate hike gets the go-ahead.

"I've noticed the bills are going up," she said.

The commercial rate in Grise Fiord is 70.65 cents per kilowatt/hour.