City to intervene in power rate hearings
NTPC seeking electricity cost hike of 4.8 per cent starting Aug. 1
Shane Magee
Northern News Services
Wednesday, July 6, 2016
SOMBA K'E/YELLOWKNIFE
Yellowknife Mayor Mark Heyck says the city will intervene as the Public Utilities Board examines a request to raise electricity rates by up to 12.8 per cent over three years in all NWT communities.
The Northwest Territories Power Corporation formally submitted a general rate application (GRA) to the Public Utilities Board, which screens and sets power rates. The power corp. is seeking increases of approximately 4.8 per cent for 2016-17, four per cent for 2017-18 and four per cent in 2018-19.
The power corp. estimated the increase could translate to an extra $10 for residential customer bills per month in the winter and $6 in the summer.
As part of the process, those affected can formally intervene and pose questions. Without the increases, the power corp. forecasts budget shortfalls of $8.2 million in 2016-17, $11 million in 2017-18 and $12.7 million in 2018-19. It has stated the increases are needed to cover higher costs tied to inflation, a decline of about two per cent in power sales in recent years, higher costs to maintain generators and dams and higher regulatory costs.
"We understand that costs do go up and that the power corp. has to cover those costs but at the same time we want to make sure that everything is being done that's possible to control those costs and make sure that power rates are as low as viably possible for our residents and businesses," Heyck said in an interview Tuesday.
The power corp. announced in April it would apply for the GRA this summer. In the meantime, it had applied for an interim rate hike of 4.8 per cent. The quasi-judicial board rejected that request in May, stating in its ruling that lower fuel prices would largely cover the shortfall.
"I thought it was very interesting that the Public Utilities Board took a very strong position on that interim rate application. We were appreciative of that position," Heyck said.
The power corp. has again applied for an interim increase of 4.8 per cent which it hopes the board will approve so it can be applied to rates Aug. 1.
The Crown corporation's letter requesting the interim rate states that without the extra money, it could be forced to take on more debt to pay infrastructure costs, potentially leading to unsustainable debt-loads.
"Denying an interim rate increase would be detrimental to both the corporation and customers, as increasing debt levels put upward pressure on revenue requirement and could eventually become unsustainable," it stated.
Interim applications and GRAs have different approval processes.
A GRA takes longer and results in public hearings where the board can hear from intervening people or entities like the municipality.
The power corp. proposed in a letter to the board to have a public hearing on its GRA on Jan. 26, 2017. Heyck said he hopes the board denies the interim application until a decision is made on the GRA.
The Yellowknife Chamber of Commerce board of directors has not taken a position on the issue, executive director Deneen Everett said.
The Northwest Territories Association of Communities previously wrote a letter to the Public Utilities Board urging rejection of an increase, a position it maintains now that the formal application has been made.
"The NWTAC would like to see the NTPC respect both the widely-acknowledged problem of unaffordable energy in the territory and the existing high cost of living, and strive for greater efficiency rather than passing this burden to customers," states the letter from Sara Brown, CEO of the organization representing the 33 community governments in the territory.
