Hay River fears outages are symptom of years-long power struggle

“I’m not sure if we’re on year seven yet. We just flipped the calendar, maybe we’re even beyond that. The town and residents are frustrated over the time it’s taking.”

Glenn Smith’s timeline is almost correct. It’s now eight years since the Town of Hay River decided not to automatically renew its power franchise with Northland Utilities, and almost seven years since it chose the NWT Power Corporation as a replacement.

In early 2016, town councillors and the power corporation said residents could expect up to a 20-percent drop in their rates when the franchise agreement – which controls who distributes power in the town – changed hands at the end of that year.

But after years of litigation and arbitration to settle the terms of that transfer, 2023 dawns with Northland Utilities still in charge of Hay River’s power distribution.

Smith, the town manager, feels a series of power outages in the early hours of Monday – he says he counted at least a dozen – are symptomatic of an electricity grid caught in a years-long dispute.

“It’s been a long time, obviously, that we’ve been working through this franchise agreement,” Smith told Cabin Radio on Monday.

“Over time, the town has had some growing concerns with the power distribution reliability to the residents. As that process continues to be drawn out, there are more risks associated with it. It’s difficult for any business to maintain its assets and serviceability when a contract termination is pending.

“The town has been calling on Northland Utilities and the GNWT to support the interests of the town and community. We want to see both parties moving expeditiously through that. That’s the best way to ensure that we have reliability in our power distribution.”

By early Tuesday morning, Northland Utilities had not responded to a Monday 4pm request for further information about the cause of the outages. The NWT Power Corporation said a Northland-owned automatic recloser – essentially a circuit-breaker – had been triggered by some form of fault, but did not elaborate.

Smith ‘confident’ decision was right

In theory, 2023 is the year in which power distribution finally transfers over to the power corporation, which is currently in charge of generating the power but not distributing it. (The same is true in Yellowknife. In most other NWT communities, the power corporation does everything.)

Smith says he expects the deal to be complete by the fall and, in a mid-December letter filed with the NWT’s energy regulator, Northland Utilities said it expects to finalize the transfer “later in 2023.”

But there’s still a possibility it won’t happen at all.

In October, Northland asked regulatory body the Public Utilities Board to rule on whether the entire transfer is actually in the public interest. The company argues that the loss of Hay River will affect its business to the extent that significant costs may need to be recovered from other customers, which it says would be unfair.

“We want to make sure the remaining customers aren’t affected, and that’s that public interest test,” said Jay Massie, Northland’s vice-president of northern development and Indigenous relations, two months ago.

Northland has suggested to the Public Utilities Board that calling off the whole transfer – to protect customers, the company asserts, from higher power rates that might result – should be considered, despite the town council’s initial decision.

“That’s a reasonable outcome,” said Massie.

“The board could rule: ‘Yes, this can proceed, it’s in the public interest.’ Or the public is saved harmless, let’s put it that way. Or the PUB can say: ‘This doesn’t make sense, there could be customers harmed, and we’re not going to approve it.’

“I don’t know what that looks like, to be honest. This is our first time ever doing this. If that happens, I’m not sure what happens next.”

Smith says the Town of Hay River and NWT Power Corporation are working on a response. The Public Utilities Board has asked for more information to be filed this month so it can consider Northland Utilities’ arguments.

Smith told Cabin Radio the town remains “confident” that choosing the NWT Power Corporation almost seven years ago was the correct decision, despite the intervening delay and the associated costs.

“There are certainly some increased costs through the process that weren’t expected,” he said, adding inflation had also played a role.

“We’re still confident, based on what’s been submitted through the proposal process and letters of intent from NTPC, that we will see a reduction in rates and long-term benefits to businesses and residents – not only in Hay River, but throughout the Northwest Territories.”