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The GNWT will borrow up to $29.7 million to offset low hydro power output and the extra cost borne through reliance on diesel power in the NWT. Finance Minister Michael Miltenberger, left, and NWT Premier Bob McLeod make the announcement in Yellowknife on Sept. 2, 2015. - Walter Strong/NNSL photo

Power consumers bailed out again
GNWT gives almost $30 million to power corp to keep rates from rising because of excess diesel use

John McFadden
Northern News Services
Friday, September 4, 2015

Despite the premier calling the territory's financial resources "strained," the GNWT is giving the NWT Power Corporation nearly $30 million so consumers don't see higher power bills.

Citing extreme drought and record-setting low water levels in the Snare hydro system, which has caused an increased reliance on costly diesel, the territorial government announced during a news conference Wednesday at the legislative assembly it has no choice but to provide the corporation with a $29.7 million subsidy.

Both Premier Bob McLeod and Finance Minister Michael Miltenberger, also the minister responsible for power corp., insisted it's either the subsidy or a rate hike for power consumers.

"Those costs have to be paid and we really only have two options - either the GNWT makes up the difference or power rates for all NWT residents increase. While our financial resources are already strained, we do not believe that passing on those additional costs to our residents make sense," said McLeod.

Power bills would have been increased by between $30 and $105 per month had a rate-rider been approved, based on GNWT projections.

The funding comes on top of the $20 million the GNWT gave power corp. last year for exactly the same reason. Both the Snare and Bluefish hydro stations are operating well below capacity due to the low water. That leaves Yellowknife's Jackfish diesel plant to pick up the slack.

"Continuing to subsidize power costs this way is not sustainable for the long term," McLeod said.

"While we have to take this step to shield all NWT ratepayers at this time we continue to look for longer-term solutions. Those solutions include efforts to reduce Northerners' energy consumption as well as continuing to look at options for generating power that would help mitigate future events like this."

Miltenberger said that he believes power in the North as well as infrastructure funding should be important parts of the federal election campaign.

"Some of the federal parties - the Liberals and the NDP - I'm not so sure about the Conservatives at this point - have promised a considerable amount of money for green energy and alternative energy," he said.

"We would see ourselves taking advantage of that, recognizing as everybody does across Canada that the North is on the vanguard in terms of dealing with these types of extreme weather events," he said. "There are a number of avenues we are going to explore with the federal government."

McLeod was adamant he does not view the financial help as a subsidy.

"I wouldn't use the terminology that we're subsidizing (power corp). We're not passing on the cost to the consumer," McLeod said.

Miltenberger, on the other hand, had a different perspective.

"What we are doing is subsidizing the cost for the constituents, including everybody. We don't draw a return on investment from (power corp.). The return on investment is keeping the cost of living down," he said.

Range Lake MLA Daryl Dolynny was the only regular MLA who attended the news conference. He says it amounts to a bailout or a subsidy any why you slice it. By his estimates the GNWT has bailed out power corp. to the tune of more than $100 million since 2008. He said the latest government plan is short-sighted and that it doesn't address concrete solutions or serious alternatives.

"If we were to pull out every report, every symposium, every document in the last 10 years on how to solve our energy woes - we could plaster every wall at the legislative assembly and still have paper left over," Dolynny said.

He said the territory could connect the Northern grid to the southern grid, adding there's extra power at Taltston (hydro dam) in the territory's southeast, which could be sold to Saskatchewan for a profit.

He said the decision was made without proper input from regular MLAs.

Unlike last year, this year's funding did not follow an application from power corp. for a rate increase.

At the end of June, power corp. had spent all but $1 million of the $20 million it received last year, according to spokesperson Pam Coulter.

"We normally generate 95 per cent of our power in the North Slave by hydro, however this year only 70 per cent was generated with hydro and the remainder was generated with diesel," she said.

The money will be borrowed and will include up to $22 million for the remainder of fiscal 2015 and an additional $7 million in 2016-'17 to cover diesel costs until July of next year, said McLeod.

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