Power rate hike possible
City continues $50,000-a-day diesel dependence as low water levels persist
Meagan Leonard
Northern News Services
Wednesday, June 10, 2015
SOMBA K'E/YELLOWKNIFE
Consumers may have to foot the bill if the city continues to rely on diesel for its power.
Northwest Territories Power Corporation spokesperson Pam Coulter told Yellowknifer the corporation won't know for sure where reservoir levels are at until the melting peak in July, but currently the water is five feet lower than last year.
"It's going up slightly right now as it does in the spring but it's really hard to anticipate ... we don't expect to see that change much unless we get a big influx of water in July," she said. "Should water remain lower than normal, we will continue to burn diesel as required to supply Yellowknife and North Slave with power."
Currently the city is running on 70 per cent hydro and 30 per cent diesel power at a cost of $50,000 per day. The ratio typically is 95 and five respectively.
"It's not that we're not running any hydro at all, we definitely are, but we're just managing when we run it and not running it 24/7," explained Coulter, adding consumers can do their part to help reduce the amount of diesel consumed. "Conservation helps. When people don't use as much, it means we actually cut down directly on the amount of diesel we burn."
Last summer low water levels threatened to send energy bills soaring by 13 per cent, but the GNWT bailed out ratepayers with a $20 million commitment intended to offset the cost. A turbine downed for a month earlier this spring at the Snare plant incurred an additional $1.7 million in backup diesel generation.
Coulter says to date, the corporation has utilized $15 million of the $20 million contribution but could not estimate when it may run out. At $50,000 a day, $5 million will last 100 days. However, once it is depleted, the company will turn to a $2.5 million rate stabilization fund - in place to offset the cost of rising fuel prices or unexpected events - to alleviate some of the burden from customers. However, once it is depleted a rate rider will be applied to consumer bills. Coulter cautioned if the situation continues as it has been, there is a good chance this will become a reality.
"If the rate stabilization fund does get over $2.5 million - there is probably a good chance that it will, then we will have to apply for a (rate rider)," she said, adding if a rider is applied, it could be in place for more than two years.
"We're hoping that we get a huge influx of water from the melt and that reaches our system in mid-July," said Coulter. "At that point we'll be able to get a much more accurate estimate and we'll make our plan based on that number."
The corporation's next general rate application is slated for 2017.
Yellowknifer requested an interview with Minister Responsible for the Northwest Territories Power Corporation Michael Miltenberger, to see if the GNWT was prepared to give the corporation more money if necessary.
In an e-mail to Yellowknifer, cabinet spokesperson Shaun Dean said the GNWT was not prepared to comment until after the melt.
"It's a bit early to answer that question yet," he said. "The run-off from the spring melt isn't complete, yet, so we don't have a final picture of water levels in the system and how they will affect operations."
