LLI GOLINE/NORMAN WELLS
With less only eight months remaining before Imperial Oil shuts the natural gas off to Norman Wells heating customers, town council is ramping up efforts to ensure the community is prepared to meet the deadline.

Eric Whitworth: Town wants to take a proactive approach to ensuring energy conversion is smooth and timely. - NNSL file photo

Council has formed an energy ad hoc committee – which met for the first time on Feb. 13 – to look at strategies for informing the public as well as determining how to allocate financial assistance to customers.

Eric Whitworth, Norman Wells' town manager, says the committee will be tasked with gathering all the variables – which there are many and some of them still unknown – to construct a plan that will make the transition away from natural gas as painless as possible.

“The purpose is to be proactive and look at what the impacts when we are going to close down our natural gas system. Part of that will be too look at any profits we have left in our fund and how we fairly are going to allocate that,” said Whitworth. “It's more of a brainstorming type of committee and with that we'll bring in, as needed, people from industry here … to talk about what's needed.”

Back before the new year, council announced a plan to provide financial assistance to residents and businesses to help pay for the costs to convert from natural gas to another heating source – such as propane, diesel, etc. Those funds are expected to be generated through $1 million in aid from Imperial Oil and a commercial rate increase which was applied before the end of last year. Whitworth said the money from Imperial is still being negotiated because the company has to approve how the town plans to use those funds.

How much each customer will be compensated will depend on a variety of factors including the town's decommissioning costs for the natural gas system.

Back before the new year, council announced Imperial Oil was considering providing financial assistance to residents and businesses to help pay for the costs to convert from natural gas to another heating source – such as propane, diesel, etc. Those funds – an expected $1 million – are contingent on users being off the natural gas system and Imperial's approval of the method of distribution, which the company wants to ensure is equitable, said Whitworth. A commercial rate increase which was applied before the end of last year might add additional assistance, he added. “If we have any funds remaining after the decommissioning from the rates charged between November 2013 to October 2014, which includes the commercial rate increase, we will refund back to the users for this period based on the percentage they have contributed to the profits before decommissioning costs,” he said. How much each customer will be compensated will depend on a variety of factors including the town's decommissioning costs for the natural gas system.

Whitworth said work is being conducted to nail down what those costs will be. The first step will be to determine if sections of pipe can be flushed with an inert gas and then left under ground or if they will have to be dug up. Leaving the pipe in ground will be the cheaper option, Whitford said.

“One of the main reasons behind this is just to make sure that it's not the eleventh hour and everyone is running and don't know what's happening. We're planning now to say, 'OK, this is what we need to do to make it a successful transition from A to B.'”

While a lot of the work will include examining the town's costs to determine what its financial aid package will look like, Whitworth said the committee will also look at gathering information on possible outside sources of assistance. With programs possibly available through the GNWT, federal government and not for profit groups, the goal is to disseminate that information so people have to tools and resources to make decisions.

“To alleviate the pain,” said Whitworth adding the cost to convert a system could be as high as $19,000. “It's a chunk of change. So how do we alleviate that? This is not something the town has chose to do. We're just the intermediary here between the consumer and the supplier. All we do is the billing,” he said.

As of last week, 194 customers were still using the natural gas system and Whitworth says he expects that number to rapidly decrease when the warmer months hit to the Nov. 1 deadline when the supply is shut off. Fortunately, efforts made to decrease the burden on the natural gas system have been sufficient that usage has not exceeded the volume limit set by Imperial Oil of 12 cubic metres.

“We do know we've taken the coldest day so far and we were under that limit … we were 11 point something” he said. “We know that we will pull through the winter without any problems. That's a good sign.

As the committee's direction becomes clearer, Whitworth said he expects meetings will be held to inform and gain input from the public as well as identify those people who might struggle with the conversion cost.

“We want to make sure people have all the information, that is our responsibility,” he said. “The worst case scenario is you have someone wake up Nov. 1 and have no heat. Nobody wants that.”

Rate complaint

The town is still in the process of addressing a complaint made to the Public Utility Board over last year's rate increase which saw business rates for Natural Gas jump to $47.63 per thousand cubic feet (MCF) from $20/MCF while residential rates remained at $20/MCF.

That complaint focused on the fact that one class of consumer was targeted with higher rates and uncertainty over how the net profits the town generates, in part, from the rate increase would be redistributed to customers to help with conversion costs.

After submissions were made to the PUB it decided to give the town and the complainants the opportunity to negotiate an agreement. Both parties have until next week to come to terms or the matter will be referred back to the PUB to make a decision on their behalf.

“We've met with the complainant and we've had some discussions,” Whitford said. “I think the commercial users are going to be satisfied with what we propose. It's a win-win,” he added, saying those details will be public once the negotiations are complete. “This is my recommendation to the committee … if residential put in 30 per cent and commercial put in 70 per cent then maybe that profit should go back 70/30.”

Those negotiations are waiting on finalizing the estimation for the decommissioning costs – a factor in the rate increase – and specifically whether the town will have to dig up sections of the pipeline.