Plan could see lower power rate hike
PUB must approve agreement

by Mark Sproxton
Northern News Services

NNSL (DEC 02/96) - Power rates across the North will be going up, but not as much as the NWT Power Corporation originally thought.

A proposal to increase base power rates by $17.5 million over three years, has been reduced by $7.9 million.

The change comes after the corporation and representatives from the municipalities of Yellowknife, Inuvik, Con Mine, Royal Oak Mines, and Northland Utilities reached agreement on a new proposal under the eye of a Public Utilities Board-appointed facilitator.

"Because a number of the base-line financial conditions were changed in those negotiations, that will have an impact across the North," said Bill Braden, the corporation's director of corporate development.

The agreement must meet approval from the PUB -- the agency that regulates utilities in the NWT.

A majority of the $7.9-million power rate reduction proposal comes from reducing expenses associated with equipment amortization. Revisions come in worth $3.9 million.

"Basically we're getting more life out of our equipment than expected," Braden said.

About $2.5 million can be removed from the total if the corporation can lower its rate of return, he added.

Deferring costs for the new Snare Cascades Hydro Plant also help make up the reduction.

With the changes, Yellowknife power customers could see their bills drop by 2.5 per cent over two years.

Although the base power rate will increase about six per cent, the low water surcharge expires next March. The surcharge was higher than the new base rate.

That was welcome news to Yellowknife Mayor Dave Lovell.

"Anything that's visibly being lowered is good to see," he said.

Because the territorial government's power support program is based on Yellowknife's base rate, domestic customers outside the Taltson and Yellowknife systems will see power costs increase about $13 a month. The previous estimate was an increase of $18 a month.

The agreement also includes a new vehicle to collect money for low water or high fuel costs.

Instead of collecting a half-cent for each kilowatt-hour used per customer, the corporation will be able to establish temporary rate riders and/or use any overpayments to respond to those situations.

If the PUB grants approval to begin using these rates next April, the West and Nunavut will be paying their own cost of service.

This is the first time the corporation has used the negotiation process. If allowed in the future, it should help reduce the cost and improve the efficiency of setting power rates, said Leon Cournoyea, corporation president.

Power rate schedules are re-examined about every four years.

The corporation begins public hearings before the PUB this week in Hay River and in February in Yellowknife.