City considered buying Northland
Northern News Services
Friday, August 14, 2015
SOMBA K'E/YELLOWKNIFE
In hopes of lowering hydro rates, the City of Yellowknife considered buying Northland Utilities in the 1990s.
Former Yellowknife mayor Dave Lovell said when the franchise agreement was up for renewal in the mid-1990s, the city considered buying out Northland Utilities and taking control of its own power supply.
Looking back on the events of 1996, Lovell said not purchasing the company was one of his biggest regrets as mayor as it was an opportunity not likely to present itself again.
"The city had the option of buying it or putting it out for tender and we actually ran the numbers and we would have done very well on the whole thing," he said.
"I've always been really sorry about that ... it was a real mistake not to buy the thing."
He said ultimately it was negative publicity that killed the idea. While Lovell maintains it would have been a wise economic move, he says he has never had a complaint about Northland's delivery of service - it was all about inserting competition and lowering hydro rates. Now watching the development in Hay River, Lovell says he sympathizes with the community.
"I think it's desperation," he said. "(The town is) doing their best to get cheaper power. I wouldn't call it a power play ... it's an attempt to hold the line on power rates, not strong arm somebody else. Hay River is trying to represent their customers and do what's best for them."
When asked if there was a possibility of current Yellowknife council doing what he could not in his time, Lovell said not likely.
"By that time it will be too expensive to take over," he said. "It was a time and place and missed opportunity."
Current mayor Mark Heyck said he could not speculate with any certainty what may happen in 2020, but said council is monitoring the situation in Hay River closely.
He added the cost of transferring existing infrastructure would likely be too great for the city to consider buying out Northland, and would only end up increasing power bills.
"As a city we are always interested in addressing concerns about the cost of living, which is why the city has acted as an intervenor on behalf of residents every time there is a rate application ... whether it comes from Northland or NTPC," he said.
"We have usually been successful in mitigating the requested rate increases."
In 1997, the city charged Northland approximately $50,000 in franchise fees collected from ratepayers to maintain control of the city's power. In 2007 the city collected $720,513 in franchise fees. In 2013, the city collected $955,000.
