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IQALUIT
In a bid to standardize electricity rates across Nunavut, representatives of Qulliq Energy Corporation are touring Nunavut this month as part of a Utility Rates Review Council hearing process.

Qulliq Energy Corporation president Peter Mackey argues in favour of a territorial rate at a public hearing to get input on how to recover revenues from ratepayers, held Nov. 10 in Iqaluit. - Casey Lessard/NNSL photo

The Phase II General Rate Application aims to equalize rates so all users share the cost of last year's 18.88 per cent rate increase.

If approved, residential rates in Rankin Inlet, Baker Lake, Iqaluit, Pangnirtung, Cape Dorset and Iglulik would rise by up to five per cent to help reduce rates in other communities by up to four per cent.

Commercial rates could rise by up to five per cent in Rankin Inlet, Iqaluit, Pangnirtung, Cape Dorset and Iglulik.

This is Nunavut's first Phase II GRA since Nunavut became a territory. Phase II GRAs are intended to deal with how revenue requirements determined in a Phase I GRA are recovered from ratepayers.

The most recent Phase I GRA ended in April 2011, when Lorne Kusugak, the minister responsible for QEC, approved the utility's proposed 18.88-per-cent rate increase.

That increase was required to pay for capital investments of $125 million over the next five years, and $240 million over the next 10 years.

The Utility Rates Review Council recommended QEC look at three options: a community rate that recovers costs in each community based on the actual cost to supply their power; a zone rate that sees communities in a zone share capital costs but pay actual operating and maintenance costs based on where they live; and a territorial rate that is the same no matter where people live and work in Nunavut.

QEC Peter Mackey said the utility prefers the third option.

Mackey said the eventual goal is to have everyone pay the same rate depending on use - residential or commercial - regardless of community, to "make the delivery of electricity an essential service equal for all Nunavummiut."

Of the three options, High Arctic communities would benefit most from the territorial rate. For example, under the community-cost-of-service option, Grise Fiord residents (currently paying 82.09 cents per kiloWatt hour) would see their electricity rate increase by 88.8 per cent to $1.55 per kWh. Under the capital-zone option, that increase would be 39.2 per cent. But under the territorial rate, Grise Fiord residents would see a four per cent decrease in their rates.

That comes at a cost for communities that have better infrastructure and a larger user base, such as those mentioned previously.

"So this is a fait accompli," said Reverend Mike Gardener, one of the few community members who spoke at the Nov. 10 evening meeting. "The rates will be going up for us in Iqaluit no matter the option."

Iqaluit residents currently pay 52.39 cents per kWh - the lowest residential rate in the territory. All the rates are available on the Qulliq Energy Corporation's website.

The utility proposed moving to a flat territorial rate immediately, said Mackey, "but it would have been a large adjustment for many." To minimize the sticker shock from the proposed change, the increase for those affected by this GRA would be limited to a maximum of five per cent. The next rebalance would be in 2013/14.

"We'd be looking at nine or 10 years before meeting that standardized rate," he said.

The URRC consultations continue this week in Taloyoak on Nov. 14 at 6:30 p.m. in the hamlet chambers. Cambridge Bay hosts two meetings at the community hall at 2:30 p.m. and 6:30 p.m. Those unable to attend a meeting who would like to comment on how QEC should collect its revenue, are asked to contact the Utility Rates Review Council by Dec. 16.

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