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SOMBA K'E/YELLOWKNIFE - Even though the average home is using less electricity, customers will have to pay up to cover missing revenues.

Between 2004 and 2006, power consumption by residential customers dropped to just above 8,000 kilowatts per year from 9,000 kilowatts per year, a significant decrease in a two-year period.

Northland Utilities manager Jeff Barbutza said a major contributing factor to the need for a rate increase is the declining electricity use by the average customer. "The actual use by customers is declining, but for the last ten years it's slowly declining. The growth is not just there," he said.

The combination of decreased usage and the rising cost of goods and services have led to what he would call a modest increase - when compared to inflation rates.

If the new rates are approved, Yellowknife residential customers will pay $4.24 more in the standard customer charge, increasing to $22.24 from $18.00 and an increase in the energy charge of approximately two and a half cents.

If you used 600 kilowatt hours per month in 2008 it will cost $89.64 but in 2009 it could cost you $104.24 if the Public Utility Board approves the increases proposed by the Northwest Territories Power Corporation (NTPC) and Northland Utilities (NUL).

The power corporation is seeking a 15 per cent increase in revenues over an 18-month period to recoup outstanding costs, which will increase residential customers' bills by approximately $144 annually.

The power corporation has $15.43 million in revenue shortfalls from the 2006-2007 and 2007-2008 General Rate Application.

The city of Yellowknife's director of Corporate Service, Carl Bird, said the city is pleased with the rate increases and supports the power corporation and Northland Utilities in their efforts to collect an additional $12.7-million in revenue to cover money already spent to provide services to customers.

"We recognize the difficulties NUL are under with respect to making sure they can provide power and the costs involved," Bird said. "We want to make sure we have stable power generation."

Bird said the increase in fuel cost is causing difficulties for the power corporation to make ends meet.

"If over the course of your budget period the price of fuel goes up and at the rate it's been going up, it takes a huge chunk out of their revenue stream," he said. "You only have so much discretionary revenue to offset that."

The cost of fuel has gone up by almost 60 per cent since the last rate application in November 2006. Approximately $5.77 million will be needed annually to keep up with the rising fuel costs.

"The most obvious cause is the increase in fuel cost which have a huge impact on any utility generator," Bird said.

"Even though we're on a hydro grid we have some dependence on diesel-generated power. So they're looking at the whole."

The power corporation currently collects $3.38 million annually to pay off some of these outstanding costs, but seeks an additional $12.6 million to erase some of the outstanding debts. Over an 18-month period they hope to erase most of the lost revenue still outstanding.

"We're going for a three-year rate application so we can stabilize the costs and so customers know what to expect," said Barbutza.

NWT Power Corporation did not return phone calls.