Rate hike denied
Public Utilities Board quietly nixes NTPC request to raise power cost by 4.8 per cent this year
Shane Magee
Northern News Services
Friday, June 17, 2016
SOMBA K'E/YELLOWKNIFE
Power rates have decreased for city customers after two separate rulings by the Public Utilities Board.
Earlier this year, Northwest Territories Power Corporation sought permission from the board to increase power rates at the start of this month by 4.8 per cent, citing a need to cover a revenue shortfall.
The board decided May 30 to deny the request. NTPC had also applied to lower rates slightly because it didn't spend all of the money the GNWT provided in previous years to cover spending on diesel caused by low water levels.
That request was granted, meaning rates went down June 1 by 0.36 cents per kilowatt hour.
"We're pleased that we can refund them the money that we were able to save," said NTPC spokesperson Pam Coulter.
In April, the power corp. sent notice to the Public Utilities Board that it was seeking the interim rate hike for all communities. It stated the increase would be followed by a general rate application to increase power rates by 4.8 per cent this year - making the interim rate permanent - followed by four per cent increases the following two years.
It claimed the increase was required to cover a shortfall in revenue of about $8.4 million.
The shortfall was largely driven, NTPC stated, by a 3.8 per cent, or $4 million, decrease in power sales.
However, interim increase would raise only $3.7 million which would still leave the power corp. with a shortfall.
The Northwest Territories Association of Communities had opposed the interim increase, calling power rates among the highest in the country and already a significant burden for communities and residents.
In filings with the board, the power corp. stated it forecasts to spend $4.2 million less in this fiscal year than 2013-14 on fuel.
In the ruling, the board states the revenue decrease would be "substantially" offset by lower spending on fuel. It also said NTPC had left a number of questions about
its operations and maintenance costs unanswered.
"When all the cost increases and decreases are taken into consideration the board is not convinced, based on the evidence filed by NTPC, that there is likely to be a substantial revenue shortfall in 2016/17 as to warrant an interim increase in rates effective June 1, 2016," the ruling states.
Coulter said the general rate application will be filed with the board by the end of the month. That application will result in public hearings about the proposed increases.
"We still have the ability to collect the full amount that is required," Coulter said.
Meanwhile, in a separate decision the board granted a power corp. refund rider application.
That means the utility is applying a rebate on customer bills because it ended up paying less than expected last year during low water levels in the Snare hydro system.
The rebate applies to all customers except for Northland Utilities Ltd. customers in Hay River.
