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Small communities face larger power increase

Yellowknife welcomes board's decision to reject territory-wide hike

Nathan VanderKlippe
Northern News Services

Yellowknife (Aug 21/02) - Yellowknife power users will be spared a rate increase -- for now -- but the Northwest Territories Power Corp. will return with a new application within the next three weeks.

NNSL Photo

Figuring out riders
and rate applications

- In May 2001, the power company applied to the Public Utilities Board (PUB) to increase rates. The General Rate Application (GRA) is split into two parts. First, the power company needs to submit a plan for how much revenue it will take in. That is phase one, and needs to be approved by the utilities board.

- NTPC applied for revenues of $69.6 million in the 2001/02 fiscal year, and $70.9 million for 2003/03.

- In February, the PUB approved $63.5 million for 01/02 and $66.6 million for the following year.

- The second phase will set the rates that will be charged to different users. A decision is expected next spring.

- Also in May 2001, the power company asked for a temporary rider on the electrical bill which would allow it to come up with some extra cash before the entire two-phase general application is approved. NTPC asked for 50 per cent of the amount it was asking for in the GRA.

That was approved and went into effect July 1, 2001, bumping up the price of electricity in Yellowknife by 0.82 cents per kilowatt hour. In smaller communities like Rae Lakes and Wha Ti, the price leaped a full 10 cents per kilowatt hour. Residents of those communities do not feel the full brunt of price increases, however. A GNWT grant, paid in part from electricity sales generated in Yellowknife, subsidizes the cost of the first 700 kilowatt-hours per household to the bulk power rate in Yellowknife.

- In May 2002, NTPC discovered that despite the interim rider -- the one approved last July -- it came up $5.3 million in the red. It applied for another temporary rider. This time, it would be a shortfall rider of two cents an hour for all communities.

- To prevent another shortfall in 2002/03, the power company also asked for another rider, an additional across-the-board increase of 10 per cent in rates.

- Last Thursday, the utilities board said no to both riders.

- NTPC has until Sept. 5 to submit a new application for an interim rate hike.

The power corp. (NTPC) said it was "disappointed" that the Public Utilities Board denied its interim rate application to increase electricity charges by more than 10 per cent.

NTPC said it needed to raise rates across the territory by two cents per kilowatt hour plus boost all power rates by 10 per cent to make up for a $5.3 million shortfall in 2001.

And the company is accusing the PUB of paying too much attention to the territory's larger communities -- Yellowknife and Hay River.

The company now plans to rejig its application to follow the existing rate structure, something that will result in a larger increase in smaller communities.

The City of Yellowknife is happy with the board's decision, even though rates will still rise in the city in the next few months.

"The city was quite pleased that at least they (PUB) didn't like the direction that NTPC was going in, and that was a single rate zone," said city finance director Robert Charpentier.

The city opposed the interim rate application on the grounds that the increase would affect the entire territory equally, even though the cost of providing electricity in Yellowknife is lower than in most other communities.

The city didn't say no to a rate increase, however. Instead, it asked that an increase for Yellowknife be kept to $0.0076 per kilowatt hour, or about $4.50 per month for a family of four.

When it submits a new application -- which it has to do by Sept. 5 -- the power company will have to ask for rate increases that are much higher for the smaller communities, much lower for larger communities. That is supposed to recognize the fact that generating power in communities with diesel generators is much more expensive than generating power by hydro-electricity, which feeds Yellowknife and Hay River.

Reward power savings

Blake Lyons, the president of the Northwest Territories Association of Communities, said he believes a better way to push up power prices is to reward communities who are conserving electricity.

"I don't want to blame them for the fact that it's difficult to get power out there if they're doing their best to control consumption," he said. "I think there should be some reward for them."

Wary of the power larger communities have wielded over the decision-making process, NTPC is planning a series of public consultations in the smaller communities.

Peter Watt, spokesperson for NTPC, said the utilities board may yet consider a flat rate across the territory when it reads through the power company's phase two submission.

"Those are the issues that need to be debated during the phase two process," he said. "All we can do is encourage our customers who have a vested interest in this to find a way to be represented at the table."