NUNAVUT

What residents and businesses owners across Nunavut hoped wouldn't happen, has.

The Government of Nunavut has approved the 18.88 per cent power rate increase Qulliq Energy requested to help cover a large shortfall in revenues the corporation expected during the most recent fiscal year, which ended Friday.

The Government of Nunavut approved the 18.88 per cent rate increase requested by Qulliq Energy Corporation to help it deal with rising costs and flat-lining revenues. It was the first rate application put forward by the corporation since 2004. - NNSL file photo

The corporation anticipated about $101.2 million in expenditures in the 2010-11 fiscal year, but due to revenues in the range of $76.2 million, a shortfall of $20 million was expected.

Due to a cash infusion from the territorial government, the overall burden on the customer, both residential and commercial, will be lower. A 12.3 per cent increase is expected for businesses across the territory's 23 communities, while residential customers will see a rate increase of 2.5 per cent.

For a business in Cambridge Bay, for example, a customer using 2,000 kWh will pay 58 cents per kilowatt, up from 44 cents, an increase of $137.39 per month.

The increases take effect this month.

Living in Nunavut is already expensive enough, said Olayuk Akesuk, senior administrative officer for the hamlet of Cape Dorset, and the increase in rates will have a negative effect on the price of goods - especially food.

"We're just a little concerned the 12 per cent to the businesses and with Nutrition North starting on April 1, it's going to be a big effect on the food prices for the people in our territory," he said. "If they're going to be increasing power costs, the cost of the food will also increase."

Which is exactly what Bill Lyall, president of Ikaluktutiak Co-op and president of Arctic Co-operatives Ltd, said this past January.

At a community meeting in Cambridge Bay in January, Lyall said a large power rate increase would add $800,000 per year to Arctic Co-op's costs. In Cambridge Bay alone, it would add about $61,000 to its current yearly $313,000 electricity bill.

"The customer is the one that is going to be hit because we have to pass that rate down to somebody," he said. "If we're not able to pay the power bill, you would be forced to closed."

Akesuk said because of the increase in power rates, people with limited income will have to put more money towards paying their bills and less to eating properly.

"It's going to affect what the low-income earners buy at the grocery store," he said.

Stephen King, senior administrative officer for Cambridge Bay, said the increase in rates will cost the hamlet an additional $50,000 a year. With this increase, he said the hamlet is going to be strapped financially and programs like recreation and water and sewage services will likely sacrifice funding to cover the extra energy costs.

"I am disappointed with the rate increase," King said. "We were hoping for a lower increase. It's going to be hard for us to make it up out of our general fund. That's the only areas we have to recover this money from."

King said he hopes the Government of Nunavut is working on some sort of plan to help communities now facing bigger power bills. He said the pressure is going to show in programs and services.

"I don't know if the GN has any plans to increase our municipal funding, it would help alleviate some of the financial pressures were going to face," he said.

In a press release issued last Tuesday, Lorne Kusugak, minister responsible for the Qulliq Energy Corporation, stated the increase will help balance revenues with expenditures.

"This provides a true indicator to our customers of the true cost of their energy," he stated.

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