by Richard Gleeson
Northern News Services
NNSL (NOV 20/96) - The city has just received a glimpse of at least part of the price of getting into the public utility game.
A controversial $100,000 appraisal of the assets of Northland Utilities Yellowknife Ltd. arrived at City Hall on Monday.
Though Northland had not seen the report as of Monday, it had received indications of it's bottom line.
"We had figured probably $20 million," said Northland Yellowknife manager Brian McLuskey. "From what I've heard the number they've come up with is about $3.5 million less."
The city and Northland split the cost of the $100,000 appraisal. But there seems to be some question about whether or not the price the valuation assigns to Northland is the purchase price.
"I think it would be a subject of discussion," said Northland vice president Michael Shaw.
City director of finance Joe Kronstal said any discussion of additional cost would be very limited.
"There likely would be some small amount of additional costs, small in terms of a company worth millions, tens of thousands of dollars, for things like office furnishings, stationary, and other things not covered in the valuation."
Asked if Northland wants to continue operating in Yellowknife, Shaw replied, "Absolutely. We've operated it for approximately four years, and in that time we've brought costs under control."
Shaw noted the city's interest in purchasing a privately held utility runs counter to the prevailing trend of privatization.
Northland bought the utility from Centra Power Ltd. in 1991.
The city's buy-out option is spelled out in a 10-year franchise agreement between the city and Northland.
Under the terms of the agreement, the city has until March to purchase the utility.
If city council decides to pursue the purchase, a plebiscite would need to be held to authorize a loan to finance the purchase.
If it doesn't buy the company, the agreement would continue for the next five years.
Northland is the third-largest customer of the NWT Power Corporation. It purchases power from the corporation, and resells it to the city. Miramar and Giant have separate agreements with the corporation.
Northland is owned by three organizations. Northland Utility Enterprises of Edmonton owns 75 per cent of it. Denendeh Development Corporation has a 14 per cent share and Arctic Investors owns 10 per cent.