RANKIN INLET - Nunavummiut should be terrified by hikes to their power bills, said a Rankin Inlet councillor.

Coun. Kyle Sheppard said the Qulliq Energy Corp. (QEC) situation is the scariest single issue facing Nunavut.

He said it is, in a word, terrifying.

"The cost we're going to face during the coming years, just to keep the lights on, would scare anyone," said Sheppard.

"The 19.3 per cent rate increase QEC is looking for now is just for operational needs to cover a $22.7-million shortfall in its budget for the 2010-11 fiscal year.

"It's just to continue with the status quo and doesn't include any upgrades to the existing systems."

Sheppard said further increases were mentioned during a public hearing in Rankin earlier this month.

He said QEC is looking at a $25-million plant in Iqaluit which could be online in three years.

"QEC would like to do capital-cost averaging across Nunavut to pass the cost of the Iqaluit plant onto everyone.

"That's but one plant on a massive list of needs.

"Rankin isn't even on QEC's top 10 needs list and our plant is maxed-out.

"It can't be expanded anymore, so we're going to need a new building with Rankin's expected growth."

An interim hike of six per cent has been in place since Nov. 1.

Sheppard said if the utility rates review council approves the additional increase to Minister Lorne Kusugak, it will cost the Hamlet of Rankin Inlet an additional $36,000 just to run its arena and community hall.

He said that will send the hamlet back to the Nunavut government with hat in hand to make up for the shortfall.

"If there's no money to be had from the territorial government, that rate hike is a serious threat to the programs and services we run now.

"QEC put out all this literature to sell the rate increase by stating the average homeowner will only pay an extra $20 a month.

"But that doesn't take into account the added costs for everything else.

"The prices at our retailers will go up a full 19.3 per cent, meaning additional cost for everything we spend money on locally."

Sheppard said the rate hike will have a huge impact on the local economy.

He said it will be cheaper to source things from outside the community, rather than buy locally.

"Almost anything you buy in Rankin will be affected by this rate increase.

"It will become all that more cheaper for people to bring things in from the south."

Sheppard said the territorial government can't afford to keep the current system going and the only thing that might fix it is a massive cash infusion from the federal government.

He said 19.3 per cent is but the first of many potential increases.

"QEC's costs will continue to grow, so every few years we're going to see another rate hike and that still won't address its capital needs.

"If this goes through, retail businesses will pay the full hike because they don't get a subsidy like homeowners do.

"The Housing Corp. is in a financial pinch right now, and its power bill will go up in every unit it owns, so it's a massive cost to the territorial government all ready."

Sheppard said he's also concerned about QEC's projections showing the current 4.68 cents per kilowatt hour rate rider being zeroed out.

He said QEC is still vulnerable when fuel prices go into a state of flux.

"No one could tell me what price per barrel of oil would put a fuel rider back on, and they didn't seem to want to talk about it, either.

"So, on top of this hike, we could see a 10-cent per kilowatt hour rider added if the price of fuel goes up."

We welcome your opinions. Click here to e-mail a letter to the editor.