GNWT gives power corp $15M to avoid charging residents more

The NWT government says spiralling costs and low water mean a $15-million emergency cash injection is needed to stop residents’ power rates soaring.

The territory’s MLAs approved the payment to the NWT Power Corporation on Friday. Residents were told that without this payment, the $15 million would have come from riders on customers’ bills.

In one respect, the announcement amounts to a shuffling of money within government – the territory controls the power corporation – but the upshot is that the GNWT must find millions of dollars for which it did not budget, and a large chunk of that money will be assigned to diesel fuel.

The territory says “naturally occurring low water levels” at its Snare and Bluefish hydro dams, in the North Slave, mean the power corporation “has had to generate significantly more power with diesel to meet the territory’s energy requirements.”

Meanwhile, the power corporation is paying 40 percent more for fuel than it was in December 2021, the territorial government added in a Friday news release.

“Revenue from electricity sales has been insufficient to pay for the increased cost to deliver power over the past year,” the GNWT declared.

“This contribution to NTPC will offset outstanding fuel costs and will benefit all electricity consumers in the NWT. Without this contribution, the outstanding fuel costs would have been borne by the consumer through a fuel rider that would have increased monthly bills for customers.”

On Twitter, the NWT branch of the Canadian Federation of Independent Business said the payment “could not come at a better time, as businesses are struggling to keep up with rising costs, with many citing fuel/energy costs as one of their top cost concerns.”

While the measure was voted through without opposition on Friday, Frame Lake MLA Kevin O’Reilly said he was only supporting it because the power corp payment was bundled with around $4.8 million in other cash to support programs focused on issues like homelessness and suicide.

“We had no heads-up whatsoever about this or discussion with MLAs before this was brought forward,” O’Reilly told colleagues in the legislature.

“This is really as a result of some poor planning by NTPC,” he said, adding that residents had witnessed “a failure to actually lower energy costs here in the Northwest Territories – and that’s what NTPC should be doing, building energy self-sufficiency and doing itself out of a job through the use of renewables and alternatives.”

O’Reilly further expressed frustration that the power corporation’s board remains entirely populated by GNWT deputy ministers rather than being run at arm’s length, saying cabinet had “broken a promise” to change that.

Thebacha MLA Frieda Martselos, however, struck a different note in calling for the power corporation’s president – Cory Strang, appointed in 2021 – to be given more time to effect change.

“There has to be some support for the staff and the direction that [NTPC] is taking for greener energy and for climate change in the Northwest Territories,” Martselos said.

“We have to give the president and their staff an opportunity to do that, and it hasn’t been long since he’s been in that position.”

Martselos reiterated her support for expanding the Taltson hydro system, near her electoral district, as a means of supplying cheaper power to the North Slave. That project is supported by some MLAs but criticized by others for having no public business plan, a huge price tag and few, if any guaranteed large-scale industrial customers.

Rate increase could have hit 35%

Finance minister Caroline Wawzonek said Friday’s $15-million payment, referred to by the GNWT as “temporary relief to electricity rates,” had to happen to avoid residents being asked to pay even more.

NTPC is “facing costs that were built in at $1 and suddenly are at $1.50,” said Wawzonek.

“That’s a significant change. Add to that, we’re in a low water cycle. Therefore, at the Snare facility, they’re having to burn diesel to make up for the water – and they’re bringing that diesel up at higher rates.”

Wawzonek said a rate increase of some 20 to 35 percent would have been applied to customers’ bills without government intervention.

The increase comes after a number of MLAs lost a battle over the federal carbon tax. O’Reilly and others had sought to vote down a territorial bill in the spring that brought the NWT in line with new federal carbon tax requirements. Critics argue that the tax unfairly punishes NWT residents who have no lower-carbon alternative sources of heat and energy.

James O’Connor, executive director of the NWT Chamber of Commerce, said Friday’s payment was “the federal carbon tax at work.”

Last month, federal environment minister Stephen Guilbeault insisted that “the day is not very far” when renewables will make a significant difference to the NWT’s fuel costs and diesel consumption.

“Most of us will have solar panels on our rooftop, we’ll be using geothermal energy, [or] community members will get together to get some of their power from a wind turbine that they will have purchased collectively or cooperatively,” he told Cabin Radio.

“It doesn’t mean that we won’t rely on large sources of electricity production … but more and more, we are talking about a decentralized grid.”

Although some renewable technologies may not be immediately useful in the North, Guilbeault said there are “tremendous developments in the energy sector.”

As progress continues, he said, “we will see more and more of those technologies used, even in the North.”

But MLAs – and even Wawzonek, as finance minister – have pointed out that timelines for large-scale adoption of some of those solutions don’t yet exist.

“We have tried to show the realities of the North. And I’m certainly not in favour of the carbon tax, of the federal carbon tax and the way that it applies to the North,” Wawzonek said in March.

The minister said she would work to bring ministers like Guilbeault to the NWT “so they can, in fact, see the lack of alternatives we have, and – if there is federal money – that it starts to come here, so we can get off fossil fuels. We need to do that for climate change reasons, and we need to do that for the cost reasons, and to do it because it’s the right thing to do.”