Northland Utilities warns of power corp. takeover
Executive accuses company of subsidizing energy to communities by overcharging Yellowknife customers
John McFadden
Northern News Services
Tuesday, June 21, 2016
SOMBA K'E/YELLOWKNIFE
Northland Utilities has unleashed a scathing critique of the NWT Power Corporation, accusing it of subsidizing electricity to communities across the territory on the backs of Yellowknife power consumers.
Doug Tenney, vice president of Northern development for Northland Utilities, addressed MLAs during a priorities and planning committee meeting June 16 at the legislative assembly. Tenney asked MLAs delay the NWT Power Corporation's takeover of the contract to provide electricity to Hay River. - John McFadden/NNSL photo
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The company released a document called "The Facts Behind the NWT Energy Agenda" to the government's priorities and planning committee, made up of regular MLAs, Thursday at the legislative assembly.
In it, Northland states the GNWT is overcharging Yellowknifers by nine per cent so that its residential customers in other communities can receive a 25-per-cent discount.
Doug Tenney, vice president of Northern development for Northland, told MLAs that with the government overcharging, the average Yellowknife customer is paying 34 per cent more for electricity than customers in Fort Smith and Fort Resolution, which equals $500 a year.
"Yellowknife consumers are paying nine per cent too much and customers in Fort Smith and Fort Resolution are undercharged 25 per cent. That's where the 34 per cent figure comes from," Tenney explained. "Yellowknife consumers pay on average $185 a month based on a consumption of 600 kilowatts using rates that are expected to be approved on July 1, while residents in Fort Resolution and Fort Smith pay only $142 a month for the same amount of power usage."
Tenney also suggested that the power corp.'s takeover of the contract to provide power to Hay River from Northland can only be paid for by overcharging Yellowknife electricity consumers. He described the takeover in Hay River as an "expropriation," which is defined as a government takeover of a private business.
He then suggested the government's real agenda is to force Northland out of business in the territory, adding the government intends to eliminate consumer protection by dissolving the Public Utilities Board (PUB) and assume complete control of the power corp., currently considered a Crown corporation, and turning it into a government department.
Indeed, in May, the government replaced the entire NTPC board of directors with six GNWT deputy ministers, a move it said would save the GNWT about $1 million, savings that the government said would be passed along to consumers in their electricity bills.
Tenney asked the committee of MLAs to draft a resolution asking cabinet to put the Hay River deal on hold until a third party comes in to evaluate a possible partnership model between Northland and NTPC. He said if the Hay River deal is allowed to proceed then the GNWT might as well consider buying out Northland's operation in the territory entirely, including its $180 million in power infrastructure. Tenney added that for almost a decade, Northland has tried to convince the government that a partnership between it and NTPC would be in the best interest of consumers. He said such a partnership would create a savings of at least $2.5-$3.5 million annually that could be passed on to consumers.
Government responds to allegations
Louis Sebert, minister responsible for the NTPC, told reporters on Friday that he still hasn't had a chance to review Northland's presentation and that he had been busy with other matters. However he did respond to some of Northland's allegations including that the government wants to dissolve the PUB.
"That's simply not true. The PUB has been active for many years. There are no plans to dissolve it," Sebert told reporters on Friday.
He added that although the deputy ministers took over the NTPC board in mid-May, they have yet to hold a meeting.
"It is true that the corporation is now closer to the government but it's long-term situation ... They will come back to us with some ideas of the long-term future of the corporation," Sebert said. "We haven't given them any deadlines."
Sebert said that a PUB would still be needed to be a consumer watchdog even if NTPC becomes the sole power provider in the territory. Sebert said the idea of a proposed partnership between the power corp. and Northland is news to him.
"We don't have a response to this proposal because we simply haven't heard it before," Sebert said. "There may have been approaches in the past but I think they were some time ago. For this cabinet this is something new which we haven't heard from them during our mandate."
Northland's presentation came just days after the PUB rejected the power corp.'s request for a 4.8 per cent rate increase across the territory. Sebert said the request was merited even though the PUB ruled lower fuel costs offset declining revenues for NTPC.
"The amount of power actually being sold is stable or in decline - people are using better refrigerators, LED lighting and so on so to keep the power corporation going they simply need to increase costs or find new customers," Sebert said.
Tenney said the hit to Northland also negatively affects aboriginal-owned Denendeh Investments, which currently owns 14 per cent of Northland.
Yellowknife North MLA Cory Vanthuyne said NTPC has its stance as does Northland, but that the numbers have to be evaluated.
"The power corporation, over the last four years, has had nearly a 40 per cent increase in their portion of the rates. It's interesting to note that Northland Utilities in that same period of time, was roughly four per cent," he said.
