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Yk is not overcharged for power says minister
Document shows Northland being charged 14 per cent more than what it costs to provide electricity

John McFadden
Northern News Services
Friday, October 21, 2016

SOMBA K'E/YELLOWKNIFE
The war of words continues between Northland Utilities and Louis Sebert, minister responsible for the NWT Power Corporation, over the utility's claims the city is being overcharged for its power.

Northland buys electricity from GNWT-owned and operated power corp. and then distributes it to customers in Yellowknife.

The company has been running a media campaign for months now insisting overcharging on power is costing Yellowknife customers about $500 a year on average.

The utility points to power corp.'s general rate application from June 2015 showing that it was charging Northland 114 per cent - meaning 14 percent more than what it costs to produce power for Yellowknife.

In the legislative assembly on Tuesday, Sebert told MLAs it was "simply not the case" that power corp. was overcharging Yellowknife.

When asked by Yellowknifer to explain the figure of 114 percent, Sebert was unable to, saying he did not have the document in front of him. Regardless, he insisted NTPC has never charged Northland 114 percent for Yellowknife power and said the current rate is 98 percent.

This is the same figure Sebert raised in the house in his minister's statement on Tuesday, referring to a "proposed" rate rather than speaking to the current rate.

"Mr. Speaker, the latest GRA proposes to charge Yellowknife customers only 98 per cent of the cost of service for 2016/17 and to hold that rate at around a hundred per cent for the next few years."

Sebert's statement came in response to a question by Kam Lake MLA Kieron Testart the previous day, who asked if Northland was being charged 14 per cent more than what it costs to provide the city with power.

Sebert told MLAs there was no basis for that "assumption," an assertion Northland Utilities said is wrong. The minister also insisted Yellowknife was not subsidizing other rate zones in the territory.

Doug Tenney, vice-president of Northern development for Northland, insisted NTPC's own documents show Northland is being charged 14-per-cent more than the cost to produce power for Yellowknife.

"His other statement that he says one rate zone doesn't subsidize another rate zone is also an incorrect statement," said Tenney.

"He has to be ill-prepared because some of his statements are just incorrect. I'm hoping he is ill-prepared. I'm hoping it's nothing more than that."

When Yellowknifer provided the minister with a copy of the page from the general rate application containing the 114-per-cent figure, the answer came back to go to the Public Utilities Board (PUB) for an explanation.

PUB chair Gordon Van Tighem could not be reached for comment prior to press time.

What Sebert is sure of, according to his minister's statement on Tuesday, is there are different electricity rates paid by different NWT communities. However, he maintains other communities are not being subsidized by Yellowknife power consumers.

"During a couple of dry seasons (2014-15), taxpayers of the NWT subsidized essentially Yellowknife, the North Slave region, to the tune of $40 million plus," Sebert said. "I don't think that Yellowknife is being badly or unfairly treated in any way."

Testart said he cannot understand why a drop in power production rates to 98 per cent doesn't translate into a drop in Yellowknifers' power bills.

He said he does not think NTPC has a solid plan to reduce the price of electricity in Yellowknife specifically or in the territory in general.

"What we need is a way forward. Northland is not just criticizing the government ... for predatory pricing. But they've also presented options for a public-private partnership for power. That's something that we need to let Northerners decide. Simplifying the rate structure ... might be a higher cost to government but it would be a lower cost to consumers."

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