SOMBA K'E/YELLOWKNIFE - The territorial government's plan to restructure the power system in the NWT will bring relief to businesses and high-usage residences in the Sahtu, Beaufort Delta and some Dehcho communities.

In a response to the independent electricity review released in January, the GNWT, on Oct. 1, plans to implement seven rate zones to help simplify the current system which relies on a different rate for all 33 communities and increase the government power subsidy from September to March to 1,000 kilowatts per hour, an increase from the current 700 kW-h.

Bob McLeod, chair of the Ministerial Energy Co-ordinating Committee, said it's critical the government make the system more efficient.

"In many communities the impact is significant," he said Friday afternoon, adding the current system works only for those who aren't using more than the power subsidy. "It was not working for families who may have four or five people in that home or businesses."

The government expects to spend $13 million over the next two years to help reduce the cost of power. Due to the loss of revenue, the Power Corp. will experience from the rate change the government will not be collecting $3.5 million it receives annually from the power corporation during that two-year period.

As a result the government will spend $6 million to cover the cost of two rate stabilization funds which ratepayers are currently paying on their bills as rate riders.

After the two year period it is expected the Power Corp., as a result of changes to the power system, will be able to find organizational efficiencies to begin paying the $3.5 million again. After the two-year period the Power Corp. will undergo a general rate application which could result in a rate increase but the GNWT says it's unlikely.

"Ultimately, the access to power is an issue of fairness," McLeod said.

The zone which will see the biggest change is the proposed NTPC Thermal Zone. Residence in the zone, consisting of all the communities from the Beaufort Delta and the Sahtu, excluding Norman Wells and the Dehcho communities serviced by the corporation, will pay 49 cents per kW-h, levelling out the rates across the 20 included communities. This means 27 per cent of homes in the 20 communities who use between 700 kW-h and 1,000 kW-h and 15 per cent of homes using more than 1,000 kW-h will save because of the new 49 cent rate.

While power customers will get much needed relief on their bills, they might also benefit from savings in their cost of living. Businesses across the Thermal Zone will pay a fixed rate of 42 cents kW-h. So for a business paying $8,495 per month for power on the current rate system, under the new system their bill would be $1,829, resulting in a total savings of $6,666 monthly. McLeod said the community store in Nahanni Butte spends approximately $100,000 annually on power and under the new plan, its annual bill will be approximately $25,000.

"We expect to see a clear reduction in the cost of goods and services," McLeod said.

David Nightingale, head of energy planning for the department of Industry, Tourism and Investment, said the department will monitor the impact of the rate changes on goods and services after implementation to determine what kind of effect the changes have on cost of living in the 20 communities.