Rankin Inlet (Sep 13/06) - Energy Minister Ed Picco opted to turn down the heat on energy consumers just a little Friday, rejecting a 6.1 per cent hike in power rates requested by Qulliq Energy Corporation.

Qulliq's customers will still be on the hook for a 5.91 per cent increase, which translates to $10 more per month for most users.

"Last year there was a significant turnaround in the power corporation in its financial position, and it has further improved to the point that (Qulliq) has delivered a modest profit on its annual operations this year," said Picco.

The energy provider posted a $1.7 million surplus.

That compares to a $3 million dollar shortfall projected in the company's rate application presented to the Utility Rates Review Commission in the spring.

Turnaround is "based on tighter financial management, administration, improved energy efficiency and a (15 per cent) base rate adjustment during the spring of 2005," said board chairperson Simon Merkosak in a news release.

The profits will help Qulliq develop alternative energy sources and "break Nunavut's addiction to fossil fuels," Picco said. Dale Smutylo, general manager of Arctic Heating in Rankin Inlet, said the 5.9 per cent increase will make the bottom line that much tighter for businesses.

"I don't think you can find anybody who's going to be happy about that," he said.

Smutylo said his outfit watches its energy consumption closely already.

The rate hike will come into effect Oct. 1 and the delay from spring will cost Qulliq nearly $5.2 million.

Instead of passing that on to ratepayers, the rate commission recommended the Government of Nunavut cover that cost, to which Picco agreed.

That extra subsidy will be shown on customers' bills.

Glen Cousins, executive director of the Nunavut Economic Forum, said the decision is good news for consumers.

"It appears the power corporation is going forward with what you would think is a clean slate," he said. "They've put the past deficits behind them."

Cousins said that compared to the double-digit rate hikes of a couple of years ago, Friday's increase shows Qulliq has come a long way.

Nunavut's current fuel stabilization rider, which helps defray spikes in the cost of oil, currently sits at 3.98 cents per kilowatt hour.

But that rate will change shortly, though Picco wasn't giving any hints about what the new rate might be.