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INUVIK
The Northwest Territories Power Corporation (NTPC) in Inuvik has now switched to diesel generators and not natural gas, due to the shortage at the Ikhil well and the GNWT will foot the bill.

Michael Miltenberger: $5 million will come out of general revenue. - NNSL file photo

The power corporation started testing the diesel fuel generators on Jan. 2 and completed the switch on Jan. 4. Unfortunately, at approximately 6 p.m. on Jan. 4, the town suffered a one-hour power outage which is still being investigated.

"We're investigating the cause to see if it was an engine or the central system," said Emanuel DaRosa, president and CEO of the power corporation. "It took one hour to get the system back up and the (natural) gas engines picked it up."

As of Jan. 6 the town is running on both diesel and natural gas generators. NTPC has two plants in Inuvik and usually runs 90 per cent of the time on natural gas and 10 per cent on diesel. The switch happened because Inuvik Gas discovered it would run out of gas before the end of 2012 if the power corporation didn't switch fuels.

NTPC generally uses eight million cubic metres of natural gas and one million cubic litres of diesel each year, but now that ratio has been reversed. Right now, Inuvik has 4.5 million cubic litres of diesel stored, which DaRosa said should last until the barge comes to replenish supplies in late summer.

The switch to diesel fuel will cost an additional $5 million due to the difference in the price of fuel, which the GNWT will pay. This means rates will not change because of the increased cost to the power corp.

"That's a lot. It's $5 million above what we would pay over natural gas," said Michael Miltenberger, minister of finance for the GNWT and chairman of the Financial Management Board, who NTPC applied to for the changes. "It comes out of our general revenue and we have to make adjustments elsewhere. As I've been saying for a while, our fiscal situation is tense."

Not many other options were available due to the "exceptional, extenuating circumstances," Miltenberger said. If the GNWT hadn't paid for the switch, the only other option would have been to stay on natural gas until it ran out.

"We looked at the bigger picture and what we chose was the most effective path chosen," Miltenberger said. "We're looking at alternative measures, such as biomass. We're looking at every possible solution."

Inuvik Gas had initially signed a 20-year contract to supply natural gas to the town of Inuvik, with NTPC as the anchor customer. In the summer of 2010 it announced that the well had approximately a year and a half left of gas.

The company and its stakeholders are now appealing to ConocoPhillips to drill a new well at Parson's Lake, which has massive stores of natural gas. Miltenberger suggests looking to fuels other than natural gas or diesel.

"We're looking at every possible option. The short-term solution of diesel is not sustainable," Miltenberger said. "I've asked NTPC to look at technology that will generate heat and power because those types of technology could capture the waste heat and heat downtown buildings."

Biomass, solar, wind or hydro are options for alternatives to diesel or natural gas. NTPC has already started looking at potential hydro sites, but no decisions have been made yet.

Inuvik power generation will remain on diesel until another source has been found.

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