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Diesel dependence to persist for another year
Drought conditions mean hydro costs continue to rise; GNWT considering another subsidy

Meagan Leonard
Northern News Services
Friday, August 7, 2015

The territorial government could be on the hook for $12.7 million minimum should it choose to subsidize the cost of powering Yellowknife by diesel for the next year and if it doesn't, that cost could fall onto consumers.

NNSL photo/graphic

Drought conditions and low water levels in the Snare and Bluefish tributaries mean the city will continue to rely on diesel for its power for at least another year. The GNWT has not decided whether it will subsidize the between $35,000-and-$50,000 per day cost. - NNSL file photo

The territory's increased dependence on diesel - costing between about $35,000 and $50,000 a day - will continue into July 2016, Yellowknifer has learned. The GNWT's previous subsidy of $20 million given to Northwest Territories Power Corporation last fall has run out.

Sharla King, spokesperson for power corp. told Yellowknifer it is currently costing $35,000 per day in diesel generation to power the capital after record low water levels forced the company to switch to diesel reliance earlier this year and that number is only expected to rise.

Diesel generation was costing between $45,000 and $50,000 a day in July, power corp.'s Pam Coulter told Yellowknifer at the time.

King said it is predicted drought conditions will last well into July 2016.

"The city of Yellowknife will continue to rely on diesel generation until water levels increase," she told Yellowknifer by e-mail.

Last September, the GNWT committed $20 million to offset the cost of relying on diesel to avoid the increased cost being reflected on consumers' power bills. King said that money ran out mid-July.

"Last year, the Snare system was low but this year both the Snare and Bluefish systems are low," King said. "The full $20-million contribution fund from the GNWT has been spent and we are continuing to rely on diesel as a supplement to hydro generation."

King said the GNWT is currently considering complete or partial coverage of additional fuel costs incurred during the drought, but has not made a final decision.

Earlier this spring, Coulter told Yellowknifer if funding was not provided by the government, a rate rider may have to be applied to consumer hydro bills.

In an e-mailed statement, Environment Minister Miltenberger, who is also the minister responsible for power corp., told Yellowknifer the GNWT has not yet made a decision on "future actions" in response to a question about whether it will provide the subsidy to power corp. but said the GNWT "remains committed to addressing the high cost of living."

"Continued subsidies are unsustainable and the GNWT has made it a priority to identify ways in which it can encourage conservation, invest in renewable and alternative forms of energy and work at bringing down the cost of generating and distributing power," Miltenberger stated.

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