Scrapped board won't affect power rate proposal: GNWT
$1 million savings from eliminating power corp body already factored into 12 per cent rate hike
John McFadden
Northern News Services
Friday, May 13, 2016
SOMBA K'E/YELLOWKNIFE
Northerners hoping a decision to scrap the NWT Power Corporation's board of directors will spell relief from the utility's proposal to raise power rates by 12 per cent over the next three years are out of luck.
Dave Nightingale, director of energy policy and planning with the Department of Public Works and Services, takes questions from the media after it was announced that Lou Sebert, minister responsible for the NWT Power Corporation, has revoked the appointments of the board of directors for NWT Power
Corporation. - John McFadden/NNSL photo |
That's because the $1 million the territorial government expects to save by eliminating the standalone board has already been factored into power corp.'s rate proposal, which asks the Public Utilities Board (PUB) to increase power bills by 4.8 per cent as early as next month, followed by four per cent in 2017 and four per cent the year after that.
Lou Sebert, minister responsible for power corp., announced Wednesday that the reason why the GNWT decided to scrap power corp.'s eight-member board of directors was to save on honorarium and travel expenses paid to the board, as well as consultant's fees and costs associated with the chair's office and boardroom. As of May 24, oversight of power corp. will fall to a six-member body made up of deputy ministers with the territorial government.
"The GNWT, as sole shareholder (of the power corp.), is accountable for the subsidies provided to the corporation and increasingly it is the GNWT as shareholder, not the board, that is expected to answer questions related to the corporation," Sebert stated in a news release that morning.
"I consider the appointment of deputy ministers to the board as a lower cost option while we consider the future governance of the corporation."
Alas, scrapping the current board of ministerial appointees won't affect the rate hike proposal power corp. introduced in April.
"The $1 million in savings has been factored into the general rate application that NTPC will be filing with the PUB at the end of June," stated cabinet spokesperson Andrew Livingstone in an e-mail later that afternoon.
The deputy ministers will assume the new duties as part of their current positions, with no additional pay, said Dave Nightingale, director of energy policy and planning with the Department of Public Works and Services, during a news conference Wednesday.
Travel expenses will also be alleviated, with all six new board members working and living in Yellowknife.
The move is not unprecedented. In 2002, the power corp. board was dismissed after disagreements arose between cabinet and the board on establishing a one-rate system across the territory. An independent board was eventually reinstated - Sebert being one of its members. Nightingale insists, however, that this latest decision comes under different circumstances.
"This is not a reflection on whether the current board was following direction or anything like that," said Nightingale.
"This is the changing nature of the crown corporation. You do have many examples across the country of governments taking an active role and involvement (in crown corporations) because it is so closely tied to the cost of living, the cost of doing business."
If approved, the initial increase in power corp.'s rate hike proposal could mean an extra $10 a month for residential customer bills during winter and $6 in the summer. Just days after that application was announced, power corp. submitted another application seeking approval of a rate rider decrease of 0.8 per cent which it said was due to the decrease in the cost of diesel to run power generators.
The net effect would be a 12 per cent increase in rates over three years if all applications are approved following public hearings by the PUB.
According to documents filed with the PUB, power corp. forecasts to bring in $100 million at existing rates this fiscal year but plans to spend $110 million - creating a $10 million shortfall. This year's increase is only projected to raise revenue by $3.7 million, still leaving power corp. with a deficit.
With the board change-up, the PUB - an independent, quasi-judicial agency - will retain its responsibilities of reviewing the power corp.'s general rate applications, determining electricity rates and regulating public utilities in the territory.
Kam Lake MLA Kieron Testart said he is uncomfortable now that Sebert, as the minister responsible for the power corp., is now effectively calling all the shots.
"The premier has to figure out what he wants to do with the power corp. Terminating the board and calling it an austerity measure does not speak to good governance - it speaks to cost savings," Testart said.
"What's the plan? We still haven't seen it. This is a half-measure to save a million bucks. What we need to do is make the power corporation work for Northerners - invest in clean energy technology, invest in expanded transmission lines, sell our power to the south and take the burden off consumers."
Yellowknifer asked power corp. president and CEO Emanuel DaRosa to comment on the change but was told he was in meetings and traveling and was unavailable.
Deputy ministers taking over NTPC board of directors
- Chair: Paul Guy, deputy minister of Public Works and Services
- Mike Aumond, deputy minister of Finance
- Martin Goldney, deputy minister of Aboriginal Affairs and Intergovernmental Relations
- Sylvia Haener, deputy minister of Justice
- Russell Neudorf, deputy minister of transportation
- David Stewart, deputy minister of Education, Culture and Employment
NTPC board of directors to be removed
- Chair: David Tucker, Yellowknife
- Vice-chair: Jack VanCamp, Fort Smith
- Eric Menicoche, Fort Simpson
- Joseph Mackenzie, Behchoko
- Louis Dundas Mathews, Yellowknife
- James McDonald, Inuvik
- Gerald F. Avery, Yellowknife
- Liezl van Wyk, Yellowknife
Source: GNWT
