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Proposed power rate hike 'a killer,' says Cam Bay mayor
Northern News Services
Published Monday, February 14, 2011
Qulliq Energy Corporation is proposing to increase electricity rates by 19.3 per cent across Nunavut to address a $22.7 million shortfall, it stated in its general rate increase application filed last fall.
The five-member Utility Rates Review Council is reviewing the application. If approved, the rates would change this year. The council approved an interim rate hike of six per cent this past Nov. 1.
Cambridge Bay spends $250,000 annually on electricity, and the proposed increase would add $55,000 more to the bill, said Mayor Syd Glawson, who made a presentation at the meeting. He added since the hamlet is non-tax-based, the territorial government will have to foot the bill.
"They've got to think it over," he said. "They've got to really look at it, put it on the table and really go over it again because a smack in the head of 19.3 per cent, that really is a killer."
Glawson said 40 people attended, all of whom except one spoke to the council.
"It was polite. There was no sarcasm tossed back and forth," he said.
Bill Lyall, president of Ikaluktutiak Co-Op and president of Arctic Co-Operatives Ltd, which represents 23 member co-operatives across Nunavut, said a 19.3 per cent power rate increase would add some $800,000 per year to his costs. In Cambridge Bay alone, it would add about $61,000 to its current yearly $313,000 electricity bill. If the rate hike is approved, customers will see higher prices in co-op stores, said Lyall.
"The customer is the one that is going to be hit because we have to pass that rate down to somebody," he said. "If we're not able to pay the power bill, you would be forced to closed."
The corporation stated in its application it anticipates expenditures of about $101.2 million for the 2010-11 fiscal year but with the current electricity rates, the corporation would collect around $76.2 million in revenues, representing a shortfall of $22.7 million.
This is the second general rate application since the territory was formed, the last being in September 2004.