‘This will haunt you,’ NTPC told over proposed rate hike
Fort Smith residents and leaders used a Thursday public hearing to vocally oppose a possible power rate hike of more than 20 percent over the next two years.
NTPC is seeking significant increases for people in Fort Smith and Fort Resolution, where rates would rise by 20.78 percent over two years. The power corp says those communities currently pay the territory’s lowest rates.
The Public Utilities Board, an independent body, has the final say over rates. This week’s hearing is designed to help the board assess the power corporation’s request.
A power corporation spokesperson on Thursday said big increases were necessary in some communities because “significant pre-existing shortfalls” had built up – in part because previous requests for rate hikes were denied or reduced by the Public Utilities Board – and rates in communities like Fort Smith are lower than they should be, compared to other areas.
Smaller rate increases, of around 3.5 percent over two years, are planned in other parts of the NWT.
“It’s going to increase a lot of hardship,” Chief David Poitras of the Salt River First Nation said of the NTPC proposal for the Fort Smith area.
“Rather than come to us like the lords of long ago when they taxed the peasants,” Poitras told the power corporation at the hearing, “it’s time you started looking at alternatives.”
He concluded: “This is going to come back in the future to haunt you guys.”
NTPC model ‘does not make sense’
That haunting takes multiple forms.
For one, Fort Smith residents think the power corporation will ultimately lose money by pushing the price of power in the community higher.
While NTPC says the town currently pays the NWT’s lowest rates, hiking someone’s bill by 20 percent then telling them it’s still cheaper than the other guy’s electricity does not necessarily make for an easier sell.
Fort Smith resident Karl Cox, appearing at Thursday’s hearing by video link, said residents will find ways to leave the grid and revenue will drop.
“Your business model does not make sense,” Cox told the power corporation.
“You guys are pricing yourselves out of the market. Everybody wants to use less power, and organizations like the Arctic Energy Alliance are doing everything they can to help us use less of your product.”
Cox said he plans to build a new home and will attempt to go off-grid, saying residents like Dennis Bevington – who considers his office to be net-zero – had proved that can work.
“Solar costs are dropping dramatically,” said Cox. “Hydro rates are proposed to go up dramatically. I don’t understand how this works.”
Thebacha MLA Frieda Martselos, who represents Fort Smith, asserted via the same video link that Fort Smith has the highest number of seniors, per capita, in the territory.
“Most seniors live on a fixed income, so any major changes to their monthly expenses put them into a vulnerable and fragile financial situation,” Martselos said.
“I can say with certainty all Fort Smith residents are firmly opposed. It is totally unfair to increase rates so much, so soon.”
Dianna Korol, a Fort Smith councillor, warned that the municipality itself was ill-equipped to absorb a large increase in power costs and would need to issue a 10-percent tax increase to cover it, meaning residents would be hit twice.
The town’s mayor, Fred Daniels, added: “You can’t start stealing from these communities because you’re in a panic mode. Think of something.”
‘There needs to be a settlement’
The second form of haunting Poitras may have in mind is greater opposition from Indigenous groups toward the power corporation.
He told the hearing the Taltson hydro dam – the territory’s most powerful hydro facility, central to many plans for grid expansion and emissions reduction – is at the centre of Salt River First Nation land.
Yet the First Nation has not, he said, seen the kind of benefits that would have been offered had a diamond mine been built there. There is no impact benefit agreement for the Salt River First Nation related to Taltson, he said, and no consultation with Indigenous people took place when the dam was built more than half a century ago.
“That has to happen in the future,” said Poitras, who steps down as chief later this month.
“There needs to be some sort of settlement. The people of my nation are going to suffer because of the increase in power.
“When you’re dealing with us, you’re dealing with the people that own this land.”
Any assertion from an Indigenous group that they must benefit from a power facility like Taltson would add a new financial and political dimension to the power corporation’s work.
The power corporation has already insisted virtually no spare money exists to replace ageing, crumbling infrastructure across the NWT and run the system at the same time, which is why NTPC says it needs to raise rates.
On Thursday, NTPC spokesperson Doug Prendergast said the power corporation was trying to keep rates as low as it could while having enough money to keep systems running reliably and reduce emissions in line with the NWT’s targets.
NTPC had tried to save money, he said, adding that “factors beyond our control have more than offset the benefits received from our cost-control efforts.”
Timing of the request
But residents of the territory say they, too, don’t have any money at a time of soaring inflation, leaving the Public Utilities Board in the position of trying to decide where the burden of rising costs should fall when nobody has any money to spare.
Paul Grant, NTPC’s chief financial officer, told Cabin Radio the corporation had delayed its application for rate increases during the pandemic in the hope of finding a better time to make the ask – only to end up doing so at a worse time, during a global energy crisis.
Asked what the power corporation will do if the Public Utilities Board does not agree with its application, and does not make residents pay the prices it is trying to set, Grant responded: “That is a very interesting question.”
Prendergast added: “We would have to look at all the options.”
One possible option, both men said, would be to return with a fresh request that raises the cost of power by the same percentage across the territory.
That is what Martselos and other Fort Smith leaders requested on Thursday, saying a lower increase territory-wide would be fair. But the power corporation has previously said that is not the case, as communities are starting from different existing rates, Fort Smith’s being the lowest.
Why a Yellowknife hearing?
The Public Utilities Board itself was a target on Thursday.
Other than the power corporation, only residents of Fort Smith addressed the hearing – and several wondered aloud why the event was held at Yellowknife’s Tree of Peace, with other communities joining via video, when Fort Smith and Fort Resolution face the largest increases. (Norman Wells also faces 10-percent annual increases, but the power corporation says a GNWT program will reduce the hike for most of those customers to an average of 3.5 percent over two years.)
“You’ve got to come and consult with the communities,” said Allan Heron, President of the Fort Smith Métis Council. “It’s no good talking on a computer. Come face-to-face. Visit this community.”
Gordon Van Tighem, the former Yellowknife mayor who now chairs the Public Utilities Board, insisted the board had made progress simply by opening the hearing to other communities via video link, and would “work toward” a future where meetings are held in communities like Fort Smith.
Don Jaque, longtime publisher of now-defunct Fort Smith newspaper the Northern Journal, argued for the Public Utilities Board to take on broader oversight of the power corporation’s work.
Jaque queried disparities in power costs between Fort Smith and Hay River, the power corporation’s approach to power infrastructure in Fort Smith, and the NWT government’s longer-term vision for expanding the Taltson hydro system to the North Slave and beyond, calling on the Public Utilities Board to scrutinize all of those matters.
“I ask the PUB, investigate this stuff. Do your jobs, please, so that good decisions can be made on all of this,” said Jaque.
The board, consisting of five part-time members and a full-time secretary, receives just under half a million dollars in annual funding for its operations. Its budget also pays for legal counsel and technical expertise to understand complex files.
The hearing continues on Friday morning, when two more people are expected to speak.
Van Tighem said on Thursday the power corporation has until mid-October to respond to outstanding questions from communities, then a final decision on rates is likely “early in the new year.”