SOMBA K'E/YELLOWKNIFE
The territorial government is determined to push Northland Utilities out of the territory and will spend $180 million in taxpayers' money to do it, according to company officials who have launched an all-out publicity campaign this week in effort to convince power users their presence in the North has merit.
A Northland Utilities worker checks out a power line near Tin Can Hill last March. The company is warning customers that the territorial government intends to use tax dollars to expropriate $180 million in assets in an effort to push the utility out of the territory. - NNSL file photo |
The utility distributes power generated by NWT Power Corporation (NTPC) in Yellowknife and Hay River. The company says talks with cabinet have not been successful after learning the GNWT had commissioned a report into restructuring the territory's electrical industry.
"We (were) told that they did not require or did not want any of our input even though they acknowledged that the report would be coming out with recommendations," said Doug Tenney, vice-president of Northland, on Monday.
The company believes cabinet is moving toward expropriating Northland's $180 million worth of assets across the territory in what it perceives as an attempt to lower electricity prices for consumers.
Michael Miltenberger, the minister responsible for the power corp., flatly denied allegations about expropriation or that cabinet commissioned a report on restructuring the industry.
Tenney said the company was advised by cabinet if it wanted to provide input it should go to the media. The company has purchased advertising and met with editors and a reporter from Northern News Services on Monday where Tenney described the government's actions as "frustrating."
Tenney is urging cabinet to refrain from any decisions on the matter until after the Nov. 23 territorial vote to allow for a public debate on the issue and to make it an election topic.
Northland Utilities is jointly owned by ATCO and Denendeh Investments Inc. Denendeh, owned by 27 First Nations in the territory, increased its ownership share of Northland earlier this year from 14 per cent to 50 per cent.
In addition to Yellowknife and Hay River, Northland provides power to Trout Lake, Kakisa, Dory Point, Fort Providence, Wekweeti, Enterprise and K'atlodeeche First Nation.
Last year, the Town of Hay River decided not to renew its five-year franchise agreement that allows Northland to distribute power in the community.
The agreement expires Nov. 30, 2016 but the town's competitive process to select another power provider is expected to be decided in the fall. Tenney believes the GNWT-owned power corp. will bid to take over power distribution in the community in an opening gambit that would eventually see the government take over all of Northland's assets in the territory, including Yellowknife.
Miltenberger admitted there was a report on whether power corp. should put in a bid for the Hay River power franchise agreement but said there are no plans to take over Northland's assets.
"The power corp. will be putting in a bid," he said.
Tenny says Northland is not afraid of competition but the playing field is tilted in the power corp.'s favour because it is owned by the GNWT.
"The Hay River process is not a competitive process. It will not end with a level playing field," said Tenney.
As part of the franchise agreement, the town has legal right to take over the company's assets.
If the sides disagree on a price, it can go to third party arbitration. Tenney made it clear Northland assets are not for sale.
While the franchise decision is a town choice, he believes the GNWT will move to expropriate Northland's assets.
"I believe that cabinet is marching on its own merry way before there is a change in leadership or a potential leadership change," he said, referring to the fall election.
The company has valued its assets territory-wide at $180 million, an amount Tenney and Denendeh CEO Darrell Beaulieu said could be better spent, such as on improving social services.
At that price, they argue the cost to service the debt taken on would outweigh the desired rate reduction. The move would also send a negative message about the business environment in the territory, they said.
"Running (a) private business is challenging enough without the government trying to take you over," Beaulieu said.
Instead of trying to take over assets, Tenney said the company should be in a room together with the power corp. and the GNWT to come up with a joint solution for the cost of power.
It has suggested costs could be cut by collaborating or merging some operations, such as billing or on-call staff.
There's a range of options from merging back-office staff functions to creating one power company.
As well, Tenney said the number of rate zones across the territory should be reduced from seven to perhaps two - one for communities on hydro and another for those using thermal.
"If they have something specific, they should put it on the table," Miltenberger said when asked about whether the GNWT would consider proposals from Northland.
Tenney said he's hopeful that applying public pressure will result in making the topic an election issue and cabinet holding off on any decision until after the vote.
The company has spoken to several MLAs who they hope will push the issue when the legislative assembly resumes Wednesday.
Northland representatives will present their position to the assembly's standing committee on priorities and planning Thursday morning.
