GNWT may step in with cash as YK, Hay River intervene over rate hike

The NWT government is considering sending cash to the NWT Power Corporation to bring down a projected rate hike.

That development came as the City of Yellowknife and Town of Hay River said they had registered as interveners in NTPC’s regulatory application to have an overall rate hike of just under 25 percent approved.

On its own, the municipalities registering as interveners isn’t unusual – they would be expected to do as much in any application affecting the rates their residents pay.

However, it’s out of the ordinary for the municipalities to issue a news release about doing so. On Friday, the two published a statement saying they would take part in the regulatory proceeding “to ensure that rates remain as low as possible.”

In Yellowknife, distributor Naka Power (which is seeking a four-percent rate hike of its own) expressed concern that NTPC’s rate hike could mean an overall power rate increase of up to 30 percent. The power corporation later set out figures suggesting the overall increase would be more like 17 percent for the city’s residents.

In Hay River, NTPC has said the town’s power franchise moving from Naka Power to the power corporation – which should happen early next year – will bring rates down, even allowing for the 25-percent increase.

Figures provided by NTPC this week suggest that the power corporation expects a Hay River resident paying 45 cents/kWh now to be paying 26 cents/kWh after the switch to the power corporation, but before the 25-percent increase is factored in.

“Residents in the North already experience a high cost of living. NTPC’s proposed increase to power rates will significantly contribute to the economic challenges that many residents and businesses are currently facing,” the city and town said in a joint statement.

“In the current reality of rising costs, ensuring the delivery of reliable and sustainable power to residents and businesses at the lowest possible rate is of utmost importance,” Mayor of Yellowknife Rebecca Alty was quoted as saying.

Mayor of Hay River Kandis Jameson said the town was committed “to ensuring the most cost-effective, reliable, and safe electrical services are being provided to its residents and businesses.”

The Public Utilities Board is the regulator charged with assessing the applications of NTPC and Naka Power and deciding if they should go ahead, be amended, or be rejected.

That process will play out over the coming months.

Registering as an intervener allows the municipalities to make representations to the board and ask questions of the utilities about their proposed rate hikes.

GNWT looking at new subsidy

Separately, the NWT Power Corporation said this week that the territorial government is considering giving it extra financial help so it can reduce its rate hike request.

Paul Grant, the power corporation’s chief financial officer, told Cabin Radio he understands the territory is “looking at possible ways to mitigate the rate increase through a direct subsidy to NTPC, which could reduce the average rate impact to 15 percent.”

The math behind what, exactly, residents of each community might end up paying for power next year – factoring in the proposed rate hikes, a possible subsidy the GNWT might kick in, and what the Public Utilities Board might do – is complex. There is no certainty yet about the end result.

Grant said a new subsidy from the GNWT could provide “relief over time to ratepayers” to avoid a “large single increase” otherwise known as rate shock.

He said the intent of Caroline Wawzonek, the minister responsible, would be “to reduce the increase from 24.8 percent to 15 percent” over the pre-July 2024 rates people paid.

Wawzonek had already said she was “exploring options to provide additional financial support.”

There is a lot of nuance to what an overall 15-percent increase would mean, depending on where you live. Part of that comes down to how an earlier interim rate hike in July played out.

The July increase, which the Public Utilities Board approved, resulted in an average rate hike of about seven percent.

But in reality, Grant said, most of that increase was felt in what NTPC calls the “thermal zone” – communities that ordinarily depend on diesel or gas. That’s because the interim increase “was driven by the increased price of diesel fuel,” he said.

That meant the July interim increase was more like 14 percent in thermal zone communities, Grant said, which are listed by NTPC as the communities of Aklavik, Colville Lake, Délı̨nę, Fort Good Hope, Fort Liard, Fort McPherson, Fort Simpson, Gamètì, Inuvik, Jean Marie River, Łútsël K’é, Nahanni Butte, Paulatuk, Sachs Harbour, Tsiigehtchic, Tuktoyaktuk, Tulita, Ulukhaktok, Whatì and Wrigley.

In Yellowknife, by contrast, that July interim increase pushed the wholesale power rate about 0.5 percent higher according to NTPC’s figures. (Some other changes to rate riders – extra fees included in your bill – took place at the same time.)

The reason that’s important is the change to your power bill in July affects what further changes will be needed if the GNWT kicks in extra money and rate increases are kept to 15 percent.

“The thermal zone customers are almost to this increase already so would only have a small further increase,” Grant said. In other words, if you got a 14-percent increase in July, this would be another one-percent increase to 15 percent, rather than an extra 15-percent increase on top.

Other parts of the territory “would see larger increases” to get to 15 percent, Grant said.

Whether the GNWT will definitely take action to limit rate increases to 15 percent is not yet clear.

Minister Wawzonek’s office was approached for comment on Thursday afternoon.

Previously, Wawzonek said the GNWT had already supplied some $45 million over the past two years to offset the extra cost of power as low water levels affected hydro and diesel costs rose.