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Rising diesel costs driving higher power prices

Jason Unrau
Northern News Services

Yellowknife (Dec 04/06) -Despite a marginal increase in 2006 annual profits, the power company wants to raise the price of electricity for its customers.

Last Friday, Northwest Territories Power Corporation (NTPC) applied to the Public Utilities Board for a review of its revenue requirements for 2006/2007 and 2007/2008 and following that, the board will look at its rate-increase application.

NNSL Photo/graphic

Judy Goucher, chief financial officer of NTPC: "Most of the communities we serve in the NWT use power generated by diesel engines (and) the cost of diesel has increased by 60 per cent."

"There have been a lot of changes in our business environment since the last time we filed a general rate increase in 2001," said Judy Goucher, chief financial officer of NTPC. "Most of the communities we serve in the NWT use power generated by diesel engines (and) the cost of diesel has increased by 60 per cent."

NTPC also blames the cost of hiring in a tight labour market and inflation that the company's revenue increase has not been enough to offset for its decision to ask for a rate hike.

In 2005, NTPC posted net earnings of $6,429,000. For 2006, that figure was $7,192,000.

The current cost of electricity for residential customers in the NWT is 18.22 cents per kilowatt hour, which is subsidized up to 700kW hours per month. If the board approves the rate increase, customers will pay slightly less than 20 cents/kWh.

NTPC expects the average residential power bill to increase by about $20 per month. In the meantime, customers will note an interim rate increase of between $12 and $13 per month on their bills.

The 2001 rate increase process involved 50 intervenors and took two years to complete; 10 months for phase one (revenue requirement) and 14 months for phase two (rate set).

A hike in the price of electricity will not only affect home owners, but also hamlets in the Beaufort Delta.

In Tetlit'Zheh Fort McPherson, Chief Administrative Officer Troy Jenkins said the hamlet currently spends a lot on power, which keeps its services running.

"Our major costs in respect to electricity are the water treatment plant and sports facilities," he said.

Jenkins added water treatment is an especially "huge cost" for the hamlet, because it takes electricity to pump and process water from Deep Water Lake.

In Tsiigehtchic, Chief Peter Ross said he didn't welcome the hike.

"We're paying enough as it is!" he said.

Ross added the hamlet will especially be paying more than home owners, because its buildings are exempt from an NWT subsidy.

Under the NWT program, home owners can receive assistance with their bills.

However, commercial buildings - like Tsiigehtchic's band office - are not eligible for the rebate.

"our band office is not subsidized," Ross said.

-With files from Philippe Morin