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SOMBA K'E/YELLOWKNIFE - Power rates across the NWT normally rise with fuel prices. In the past two months however, power rates have increased despite drastic declines in the price of fuel - largely because the NWT Power Corporation purchased this year's fuel resupply in July, when the price of fuel peaked.

Consequently, according to Judith Goucher, director of finance with the power corporation, current power rates will not change until at least this February.

"Over 70 per cent of the fuel needed for the 2008-2009 fiscal year was purchased and delivered during the barging season," said Goucher.

Government purchases of fuel are limited to the barging season. John Vandenberg, director of petroleum products with the government - who purchase fuel for the GNWT - said they can only purchase fuel during specific periods.

"There is a fuel resupply that occurs every summer for communities that have marine access only," said John Vandenberg, director of petroleum products with the GNWT. Winter ice limits access to many communities, he said, and ice only comes off "at a certain time of year."

The price they paid is what fuel cost the day it was loaded onto the barge.

In July, the price of oil peaked at a little more than US$132 per barrel. This past Tuesday, a barrel of oil closed at just over US$52.

He said the price of fuel does not change after it is purchased regardless of market prices, because the government must collect on what they pay for the product. Prices would not change until fuel was resupplied. Thirty per cent more of this year's resupply remains to be purchased.

The NWT Power Corporation tacked on a rate rider earlier this month to recover money lost paying for increasingly expensive fuel. The money from the rider will be put toward the fuel stabilization fund, which is in place to stave off rate increases due to shifting fuel prices.

Since 2005, the power corporation has purchased more than 33 million litres of fuel from petroleum producers and close to seven million litres in the past six months, said Goucher.

In its base rates, the corporation had been directed by the utilities board to charge an average of 95 cents per litre for diesel communities and 76 cents per litre in Yellowknife for fuel. So far this year, they have had to pay $1.12 per litre in diesel-powered communities and an average of $1.02 per litre in Yellowknife.

To make up this difference, and the difference for the two previous years, the corporation added a 55 cent per kilowatt hour rider in Yellowknife - and larger increases for diesel communities - for the next 17 months.

Goucher said what the corporation has been paying for fuel in "the last couple years is higher than what was approved to be collected in rates."

"We only collect the amount we actually pay," said Goucher.

The Public Utility Board instructed the corporation to come up with a forecasted fuel price as of Oct. 27. If the price of fuel is lower than the new forecasted price, the fuel stabilization rate rider could decrease.

In the past two months fuel prices have dropped considerably and Goucher said when the corporation goes in front of the utilities board in February, ratepayers could see a decrease, if the resupply is cheaper than the forecasted price.

"If the price of fuel stays low as we resupply for the rest of the season, we'd apply for the rider to go lower," she said.

The power corporation goes in front of the public utilities board to show where the fuel stabilization fund is every six months, and the fuel rider can be adjusted depending on the price.