What you need to know about NWT power rates right now

A lot has happened in the world of Northwest Territories power rates lately. Here’s a quick guide.

An interim power rate increase of about 5.5 percent was approved for the NWT Power Corporation’s Snare and Taltson zones about a week ago.

It’s the latest in a series of decisions and announcements that keep the territory’s power rates moving around like pinballs.

That decision was also complicated enough that it took us a few days to piece together its actual effect on power bills, which varies depending on where you live.

Meanwhile, rates will almost certainly change again in the months ahead.

So what do you actually need to know about everything that’s happening right now?

Here’s a guide that’s as simple as we could make it.

Another interim increase already?

Yes. There was one in the summer that mostly affected the “thermal communities” (here’s a list of those communities), pushing their basic power rate up by around 14 percent. That one had a smaller effect on other communities.

This latest interim increase affects the Snare communities (Yellowknife, Ndılǫ, Dettah, Behchokǫ̀) and the Taltson communities (Enterprise, Fort Resolution, Fort Smith, Hay River, the Kátł’odeeche First Nation).

NTPC applied for an interim increase that would have been larger than 5.5 percent, but that’s what regulator the Public Utilities Board decided was appropriate.

Meanwhile, NTPC has sent in a much broader request – known as a general rate application, or GRA – that would have the effect of increasing power rates across the territory by 25 percent year on year. The power corporation has said these interim increases are a way to gradually move rates up without doing all 25 percent in one go, which would be a big leap known as “rate shock.”

What’s the latest on the 25-percent rate hike?

That application is still being considered by the Public Utilities Board but there are three important things to bear in mind.

Number one is that the GNWT just said it will give NTPC $12 million a year for the next four years to bring down that 25-percent request to more like 15 percent. So the 25-percent year-on-year jump is now extremely unlikely to occur. (Fifteen percent is still a pretty large increase.)

Number two is that the Public Utilities Board could amend things further when it reaches a decision. The mechanism by which the Public Utilities Board factors in the GNWT’s new subsidy and reaches an overall conclusion isn’t entirely clear. Nor do we have a firm timeline for a final answer on how your rates will look next year.

Number three is that these interim increases have had the desired effect of already driving up power rates in smaller chunks, so there will be less of a big leap at the end once the regulator makes a final decision. (Rates won’t go up by another 15 percent on top of the interim increases, if 15 percent ends up being the final decision – the point of the interim increases is that they are considered part of the ultimate overall increase.)

What does the interim increase mean in the North Slave?

Firstly, be aware that Naka Power distributes power in Yellowknife and Ndılǫ while NTPC distributes power in Dettah and Behchokǫ̀.

In Yellowknife and Ndılǫ, you don’t pay NTPC money – Naka Power does, to buy the electricity from NTPC. Then you pay Naka Power. However, Naka Power has told us it will directly pass through all of NTPC’s changes to the end customer. That means NTPC’s rate changes still affect Yellowknife and Ndılǫ power rates.

With that out of the way: slightly weirdly, the decision that approved this month’s interim increase (which took effect on December 1) actually had the effect of slightly lowering the amount you pay for power – for the time being.

Wait, my power bill… went down?

Yes. In Yellowknife, Ndılǫ, Dettah and Behchokǫ̀, the amount you pay per kilowatt hour (kWh, the industry measure) should drop slightly for the next few months.

Of course, if you use more, your bill would go up anyway. But in a situation where you used the same amount of electricity every month, your bill would drop a little for the time being.

This is because two things have happened at once: NTPC’s interim increase was approved but the Public Utilities Board ordered it to stop charging a “drought O&M recovery” rate rider. We’ll call that the drought rider for short.

A rate rider is an extra fee added to your bill to cover something specific. In this case, NTPC was charging a drought rider in the North Slave to try to cover the extra costs of delivering power when low water levels were hurting its ability to generate hydro in its Snare system.

You’ve been paying the drought rider – either direct to NTPC or built into your Naka Power bill – for months. NTPC was expecting to keep charging it till 2027 or 2028, the corporation told us this week, but the Public Utilities Board said NTPC couldn’t have rate increases and keep charging the drought rider, because that might result in double-dipping: charging people twice for the same issue (the higher cost of generating power).

The drought rider was 2.29 cents/kWh, and that now gets deleted from your bill. The interim rate increase, on the other hand, increases NTPC’s basic energy charge by 1.34 cents/kWh.

The result – which NTPC confirmed by email – is that despite the interim increase, removing the rider decreases your bill by 0.95 cents/kWh.

So… yay?

Not really.

Firstly, if your power bill does drop a little, it won’t stay that way for long. Once the Public Utilities Board finalizes its response to NTPC’s broader general rate application, the chances are rates will go up again and cancel out the tiny 0.95 cents/kWh gain in those four communities.

Secondly, NTPC told us it “has not accepted” the decision to remove the drought rider and will be challenging that. This might mean you eventually end up paying the rider anyway, even though it has gone for now.

What about in the South Slave?

There wasn’t a drought rider in the South Slave so things are slightly more straightforward there. The interim increase did what you’d expect, which is to increase your bill.

In Fort Smith, the basic energy charge to residents went up from 26.22 cents/kWh before this month to 27.80 cents/kWh from December 1.

In Hay River, Naka Power is still the distributor. That will change soon, because NTPC has won a years-long battle to take over Hay River’s franchise. The franchise transfer is expected to take place on March 1.

While Naka Power is the distributor, the interim increase still affects Hay River because it increases the wholesale price Naka Power must pay. So you’ll see a similar uptick in your bill.

Why is this so hard to follow?

A system of rates has evolved over the years that relies on seven different zones, depending on your distributor, and then a range of categories within each zone depending on who is paying – a resident, a government etc.

Sometimes, multiple companies are involved in one person’s bill, such as in Yellowknife where your power is generated by NTPC but distributed by Naka Power.

Then, the process of applying for changes to power rates involves one announcement when a company asks for a change, then another announcement when the Public Utilities Board finalizes a change, and possibly more announcements along the way if interim changes are allowed before the final decision is reached.

On top of that, there’s an announcement any time the GNWT steps in and provides a subsidy – which has now happened on multiple occasions.

That whole setup, added to the low water and high diesel costs of recent years, has created a stream of changes to rates in recent months. Most of those changes are then slightly different depending on where you live, further complicating things.

If it’s any consolation, even those in the industry think the current NWT system is a little wild. Naka Power said last week it should be simplified.

You can also look at the NTPC rates for July and the rates for December to compare for yourself what has changed.

An extra YK-Hay River argument

The Hay River franchise is set to move from Naka Power to NTPC in March, and this is the subject of an extra argument about who pays what.

Earlier this week, Naka Power suggested NTPC’s general rate application – which takes into account the Hay River franchise switch – is unfair to Yellowknife residents.

A company representative told MLAs that NTPC’s current Taltson zone rates only cover approximately 75 percent of its costs in that zone, resulting in an annual shortfall of $5.7 million. (The reason for this shortfall goes back years and we won’t get into that here, but we have some background in an article from two years ago.)

Naka says expanding the Taltson zone rates to Hay River – which NTPC plans to do as part of taking over Hay River’s franchise – will increase that shortfall and mean Yellowknifers are asked to overpay for power to balance the books.

Naka argues that if NTPC’s application is approved, an example Yellowknife resident would overpay $15 per month compared to what it costs NTPC to serve them, while an example resident in the Taltson zone would pay $62 less than what it costs to serve them.

NTPC told us it had previously asked the Public Utilities Board to increase rates by 20 percent in the Taltson zone to correct that historic shortfall and bring revenue in the zone up to about 92.5 percent of costs, but the board had rejected that request. NTPC said revenues in the zone now cover about 85 percent of costs.

NTPC argues that the new GNWT subsidy (which was announced after Naka’s comments to MLAs) will solve the shortfall problem and all of its zones will end up with a “100-percent revenue cost coverage ratio” – in other words, Yellowknifers won’t be paying more to cover a shortfall in the South Slave – but only if the Public Utilities Board approves the current request.

Emily Blake contributed reporting.