SOMBA K'E/YELLOWKNIFE - The average household utility bill in Yellowknife could increase by nearly $5 per month later this year if the Public Utility Board approves Northland Utilities' general rate application.

The 2.4 per cent increase, equalling an extra $4.94 a month for an average household, will also effect commercial customers, who can expect an additional $6.73 per month on a bill for 1,000 kilowatt hours.

Tim Doyle, executive director of the Yellowknife Chamber of Commerce, said although the chamber recognizes the fact that the cost of business increases each year, it will be keeping an eye on the rate application to ensure it's not excessive.

"We're going to cautiously monitor this and hope that any increases are going to be reasonable and not excessive because it's getting harder and harder to run a business in this town and this territory," he said.

"And that's only one of the costs, whether it's property taxes or leases or whatever it is, it's just everything is going up and it's going up in big numbers."

With all of the increasing costs, Doyle said it makes it difficult for Yellowknife businesses to compete with companies down south. So it's important that any rate increases are reasonable and justified.

Kevin Lailey, operations superintendent with Northland Utilities, said the utility company submits a general rate application to the Public Utility Board every three years.

The last application was submitted in 2008, requesting a cumulative increase of 7.7 per cent between 2008 and 2010.

In the most recent application, submitted April 21, the utility company is requesting an increase of 2.4 per cent for 2011, 1.4 per cent for 2012 and 0.6 per cent for 2012.

The utility company is also asking to be approved for an interim rate increase beginning July 1.

Lailey said that hike would be 80 per cent of the requested increase. This is done so that utility bills for 2011 aren't billed retroactively.

The Public Utilities Board is hoping to issue a decision on the interim rate increase by June 23, said Louise Larocque, board secretary.

Public hearings dealing with the overall increase are scheduled for Sept. 7 and 8.

Lailey said the increases reflect inflation, property and equipment costs, and the cost of converting to a more efficient power system.

Northland Utilities is currently on a five-kilovolt system. In 2004, the company began converting to a 25-kilovolt system.

"The 25kV conversion will bring the system to today's standards," said Lailey, noting it will provide a higher level of safety, reliability and power quality.

"Like vehicles change, so do utility systems."

The eight year, $23 million project will be completed next year. It includes the construction of three new 25kV substations and the removal of seven old 5kV substations.

Lailey said the benefit of less substations is that there is less equipment, so there's less chance of damage.

The new system will also make it easier to deal with new customers as the city grows, he said.

For example, Lailey said if the city stayed on the 5kV system, Northland Utilities would have to build two new substations just to service the new developments being built in the Niven Lake subdivision.

The utility company will be focusing on the Kam Lake area this year, which will lead to some road closures and service outages.

Old Town will be last area of town to be converted next year.

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