DEH CHO - As of Oct. 1, high-usage residents and business in five Deh Cho communities along with 17 other communities across the territory will see their electricity bills decrease.

On May 14, the territorial government announced its plans to restructure the NWT electricity system. The establishment of seven electricity rate zones compared to the current system of different rates for all 33 communities is one of the primary changes.

Beginning in October, residents of Fort Simpson, powered by this diesel generator, and four other Deh Cho communities will be paying less when they draw power from their Northwest Territories Power Corporation generators because of a restructuring of the territorial electricity system. - Roxanna Thompson/NNSL photo

Twenty communities including Fort Simpson, Wrigley, Jean Marie River, Fort Liard and Nahanni Butte are now grouped in the Northwest Territories Power Corporation Thermal Zone. For the next two years, beginning on Oct. 1, the residential electricity rate for all communities in that zone will be set at 49 cents per kilowatt hour. Commercial customers will pay 42 cents per kW-h.

Nahanni Butte, which has the second highest electricity rates in the territory, surpassed only by Colville Lake, will see the greatest change in the Deh Cho. Rates in Nahanni Butte are currently 166.40 cents per kW-h for residential and 214.65 for commercial. The change brings rates down by 70.6 and 80.4 per cent, respectively.

The government also announced a change in the Territorial Power Subsidy Program for every community. Beginning in October residential customers will be subsidized to the Yellowknife rate of approximately 26 cents per kW-h for the first 1,000 kW-h each month. The subsidy will run from September to March yearly with a 600 kW-hr subsidy for the remaining months. Currently the first 700 kW-h are subsidized monthly.

Sean Whelly, the mayor of Fort Simpson, said he approves of the increase in the subsidy for the winter months.

"I think that it makes sense. I think that will benefit most residents," he said.

Whelly said he was waiting to see the exact electricity rates that will be charged in the village. The decrease might not be as large as residents wanted but it could be balanced by an increase in business, he said.

As a regional business centre, Fort Simpson will benefit if residents in surrounding communities like Nahanni Butte have more disposable income, he said.

"If this is a gradual move to a one-rate zone over time, then we are moving in the right direction," Whelly said.

The changes simplify the entire electricity system and make it more understandable, said Dave Nightingale, the director of energy planning with the Department of Industry, Tourism and Investment.

"It helps the businesses and the cost of living in the communities," Nightingale said.

Electricity rate reductions were made possible by a reorganization of headquarter costs and acceptance of lower returns. The territorial government is foregoing their dividend of $3.5 million a year for two years. This allows the Northwest Territories Power Corporation (NTPC) to take lower profits in the thermal communities, said Nightingale.

The dividends will be reestablished after October of 2012, but at a reduced amount, he said. As part of the transition plan the government is also spending $6 million to pay off the two rate riders that are currently on electricity bills.

In total, the government is spending $13 million to make the reduction possible.

After the rate freeze ends in 2012, it is expected that the NTPC will submit a general rate application, said Nightingale. It's also expected the government at the time will pay close attention to the application, although the rates will be set between the NTPC and the Public Utilities Board.

"It would never go anywhere near where it is now," Nightingale said of perspective future rates. This is because the NTPC would then be collecting too much revenue.

Some work still remains to be done on the electricity system. Electricity rates haven't changed for the thermal communities serviced by Northland Utilities - which includes Fort Providence, Kakisa, Trout Lake and Wekweeti.

The government will be working with Northland Utilities over the summer and would like to have an agreement in place by the fall or slightly later, Nightingale said. The intent is to get as close to the NTPC Thermal Zone as possible so the system is equitable to all communities, he said.