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SOMBA K'E/YELLOWKNIFE
There are a few certainties in life: death, taxes and, in the North, higher power rates.

The new year began for Yellowknife residential power users with a 2.5 per cent per kilowatt hour increase to the cost of electricity. The hike comes after the Public Utilities Board approved Northland Utilities' request for rate increases last month.

It's not all bad news - the general service class - business and government buildings - will see a decrease of 0.3 per cent this year, although their rates will increase with residential rates by 1.21 per cent next year.

Yellowknifers pay significantly higher rates for their electricity than residents in southern parts of the country. This, says Public Utilities Board chair Joe Acorn, is for exactly the same reasons why many other things are more expensive in the territory.

"It's simply a factor of living in a more remote location," said Acorn. "We're not part of a big grid the way you are down south.

"There's a lot more distribution costs, there's a lot more maintenance costs."

Acorn said the power rate is only increasing for residential users this year because that group has cost the utility more money in new projects and new capital investments over the past three years. If a new industrial park had to be wired into the grid, commercial rates would be likely to increase too, he said.

How this rate increase will affect a resident's power bill depends on how much power is consumed. The increase puts the residential rate for 2012 at 23.72 cents per kilowatt-hour. Other stable charges in a monthly bill from Northland Utilities include an $18 customer charge, franchise tax and various riders.

Northland Utilities applied for a general rate increase last April. This was standard practice, as rate applications are negotiated every three years between the utility and the city.

In other years, there have been public consultations to hear from Yellowknife residents, however for this year's negotiation process, the city negotiated on their behalf, Acorn said.

"In other jurisdictions, there are ratepayers associations that participate in the process," said Acorn.

Northland Utilities purchases its power from the NWT Power Corporation and then distributes it to consumers. Yellowknife power mainly comes from the Snare Rapids hydro dam, located approximately 250 km northwest of Yellowknife, and Bluefish Lake, about 30 km north of the city, but backup power currently comes from diesel generators, said Duane Morgan, manager for Northland Utilities in Yellowknife.

"On the bigger picture, our grid is not as large and our backup system is diesel," he said. When the backup generators are needed, the cost of providing energy to the city increases dramatically, he said.

Morgan said that power rates are higher than average in the territory because there is a lack of large industrial customers to offset costs from smaller consumers, and because there are so few people living in the territory, each individual has to carry more of the load of building and maintaining the infrastructure.

Mayor Gord Van Tighem chalked the higher cost up to not having enough people living in the territory.

"There are less people here to spread the costs around," said Van Tighem. "That's one of the biggest challenges we have in the NWT.

"I'm never happy when there's an increase but in this case, the way that it was a negotiated, it was a reallocation between the residential and the commercial," said Van Tighem.

A lower energy charge for commercial buildings should also lead to lower prices for consumers; though this is not always the case, he said.

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