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Lobby group decries power rate increase
Community association says deny hike; rates could go up four per cent by June

Shane Magee
Northern News Services
Wednesday, May 4, 2016

A lobby group representing community governments in the territory is decrying a proposed hike in power rates.

The CEO of the NWT Association of Communities has written a letter to the Public Utilities Board opposing the Northwest Territories Power Corporation interim application to raise power rates in all communities June 1 by 4.8 per cent.

The initial increase could mean an extra $10 for residential customer bills per month in the winter, and $6 in the summer.

"This increase will be to the detriment of community governments, businesses and residents," Sara Brown wrote Monday in the letter also sent to Yellowknifer after a request for comment.

Brown pointed out the mandate of the 18th Legislative Assembly includes increasing production and transmission of renewable and alternative energy.

"The NWTAC would like to see the NTPC respect both the widely-acknowledged problem of unaffordable energy in the territory and the existing high cost of living, and strive for greater efficiency rather than passing this burden to customers," Brown states, calling on the board to reject the power corp.'s requested increase.

The letter comes after the Crown corporation submitted to the board an interim application Friday. The power corp. intends to follow it with a general rate application to maintain the 4.8 per cent increase, and increase rates by four per cent next year and another four per cent the following year, resulting in a total increase of 12.8 per cent over the three years.

On Monday, the company submitted another application seeking approval of a rate rider decrease of 0.8 per cent, which it said was because of the lower cost of diesel. The net effect would be a 12 per cent increase in rates over three years if all applications are approved following public hearings by the Public Utilities Board.

The utilities board is an independent, quasi-judicial agency that regulates public utilities in the territory.

Power corp. spokesperson Pam Coulter said the corporation needs to recoup the cost of generating power. She pointed to four main reasons for climbing power generation costs: inflation, a decline of about two per cent in power sales in recent years, higher costs to maintain generators and dams and higher regulatory costs.

"We recognize that it puts additional pressure on our residents and businesses," Coulter said. "NTPC needs to recover the costs that it needs to generate power ... it's how we ensure that people who are using the power pay for the cost of generation."

According to documents filed with the Public Utility Board, power corp. forecasts to bring in $100 million at existing rates this fiscal year but plans to spend $110 million, creating a $10 million shortfall.

The 4.8 per cent rate increase starting June 1 is only projected to raise revenue by $3.7 million, leaving the power corp. with a deficit of $4.7 million.

Gordon Van Tighem, chairperson of the Public Utilities Board, said interim requests are handled like general rate applications.

"We've received notice so we're gearing up to do the due diligence that's required of us," Van Tighem said of the interim application.

A schedule for the public hearings for the general rate application is expected to be issued once that application is received by the board, Van Tighem said.

Mayor Mark Heyck said the city has intervened in the past on behalf of residents and businesses seeking to keep increases as small as possible.

He said the city will examine the power corp.'s figures presented to the board and will likely intervene again, referring to the upcoming Public Utilities Board hearing.

"We want to make sure the power corporation is doing everything they can to keep those increases as low as possible," Heyck said.

The proposed hike comes at a time when the price of diesel has gone down 24.3 cents per litre at the pump from March 2015 to March of this year and by 15.5 cents per litre over the 12 months before that, according to Statistics Canada.

Power corp. maintains a stabilization fund to offset the fluctuating commodities markets.

In a news release Monday about the application for a rate decrease, power corp. stated the falling price of diesel has resulted in a $2.5-million surplus in the fund which will be refunded to customers starting June 1, pending approval by the Public Utilities Board.

If the applications are approved, the cost of power by 2018-19 would be 40 per cent higher than it was in 2012. The last time ratepayers in the NWT did not see a rate increase was between 2007 and 2011.

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