Nine things we learned at last week’s NWT power public hearings

The NWT Power Corporation and Naka Power each spent last week in public hearings over the rates they want to charge.

No big decisions were made – that comes later – but the hearings allowed us to hear from bosses at both utilities as well as representatives of various NWT communities.

NTPC had a hearing on April 7-8 about its plan, announced last year, to increase rates by 15 percent (after a new territorial government subsidy is applied).

The second hearing, on April 8-9, focused on Naka Power NWT, which serves the South Slave and is related to Naka Power in Yellowknife but isn’t the same.

NTPC recently took the Hay River power franchise from Naka Power. The aftermath of that transfer formed a large part of both hearings: examples of topics include what each company should charge, whether things are being handled in a manner fair to both, and whether the rules around power rates should change in future.

The hearings also took in a lot of other topics. NTPC’s hearing, in particular, covered how costs are expected to change for residents across the territory.

Here are nine key points from both hearings. Those involved now have until late April to file arguments that sum up their positions, and regulator the Public Utilities Board is expected to make decisions later this year.

1. We know a little more about Taltson’s problems

Remember how the South Slave’s Taltson hydro plant was offline for almost two years when upgrades were only supposed to take six months?

NTPC provided some more detail about what was going on during that 18-month delay.

We already knew a wildfire that rolled through the Taltson site in 2023 caused a work stoppage, and we knew an equipment issue was responsible for a second major delay.

The public hearing was told the piece of equipment was a distributor ring, a vital part of a turbine that helps regulate how much water is entering it.

Because of the wildfire, crews had to carry on working at Taltson in the winter of 2023-24. Members of NTPC’s panel at the hearing said both the wildfire and the winter had an impact on the distributor ring workers were hoping to install, creating a problem “contracted engineering staff had never seen before in all their time doing hydro site overhauls.”

Patrick Bowman, a consultant who appeared on NTPC’s panel, said there are still “outstanding claims against the contractor” related to Taltson.

NTPC has said that while Taltson is back in action, there are still some lingering problems that will need to be fixed later this year.

2. We know more about the Taltson costs, too

Two weeks ago, NTPC said the final cost of the Taltson overhaul is coming in at $115 million, $17 million of which is offset by federal funding.

At the public hearing, we learned NTPC has always had that $17 million in promised federal support. Back in 2017, when NTPC thought the Taltson project was going to cost $23 million, it applied for and received a promise from Ottawa to pay for 75 percent of that cost – which would be $17 million.

In the intervening years, the project’s overall cost leapt by more than $90 million but the federal funding didn’t budge.

A new table produced by NTPC breaks out exactly how the project got to $115 million. That figure is more than four times what the power corporation initially expected and about double what NTPC eventually decided the project would cost when work was about to begin.

The table shows NTPC spending around $33 million more in fuel than it had expected, primarily because South Slave communities had to run on diesel while Taltson was out of action. The wildfire cost several million dollars.

3. Communities have concerns about how NTPC estimates costs

Dennis Bevington, the former NWT MP who represented Fort Smith’s interests in NTPC’s public hearing, said a key issue is how NTPC estimates the cost of things it plans to do.

The Taltson costs, above, are a prime example. Bevington says NTPC keeps providing estimates far lower than what projects actually end up costing, while providing no estimates for alternative courses of action – other ways to do the work or other means of generating power.

Without accurate estimates and the costing of alternatives, Bevington argues, “no one can determine whether they’re doing the right thing.”

Bevington noted the NWT Association of Communities has asked for an independent operational review of the power corporation because, in his view, “their overhead costs are very high, their ability to deliver on these capital projects is very bad, and there’s not much confidence left in that company.”

The power corporation contends it has been operating in a time of unprecedented crisis and rising fuel costs, and has “managed to control cost increases to below inflationary increases over the last several years.”

4. Power rates could shoot up when the GNWT’s subsidy ends

The NWT government recently came in with a $48-million subsidy – $12 million per year – designed to cap NTPC’s rate increases at 15 percent.

But after that, what happens? If the subsidy evaporates at the end of the decade, residents may face “rate shock,” a sudden increase in costs well above the 15 percent that already has some people concerned.

“We are certainly aware that once the GNWT funding comes to an end, there will be a significant rate spike,” NTPC chief financial officer Grant told last week’s hearing.

“We are hoping to be able to find ways to alleviate that. The most obvious way of alleviating that it is to have a large industrial customer online.”

Grant means the proposed Pine Point mine, which is in talks to buy the excess power Taltson generates. But Pine Point won’t be able to subsidize residents’ rates if it isn’t open by the end of the decade.

“Whether the timing lines up exactly or not, I can’t say for sure,” said Grant.

“The start date of any mine that might go up in Pine Point would certainly be on their timetable as opposed to ours, but we do feel there’s a relatively close match as long as the mine carries forward.”

5. Fort Smith and NTPC seem not to be on the same page

Fort Smith’s deputy mayor, Mike Keizer, was the only person to speak during the “public consultation” portion of either public hearing.

Keizer spoke at the NTPC hearing to complain that the power corporation “has not achieved the goals of delivering secure, sustainable and affordable electricity.”

He said Fort Smith wants to use energy from Taltson to heat local residents’ homes rather than keep relying on heating oil, but according to Keizer, NTPC isn’t really on the same wavelength.

Keizer said NTPC, presented with that plan, countered with a $20-million-plus project to upgrade the local distribution network. He says that will create capacity the town doesn’t need and force residents to pay more as a result. (NTPC did not directly address Keizer’s concerns in this portion of the hearing.)

6. Is Naka Power in the South Slave too small to be viable?

Hay River’s decision to drop Naka Power and go with NTPC for power distribution means Naka Power’s South Slave company – known as Naka Power (NWT) – now has just 700 customers.

Naka Power alleges NTPC is trying to create a system where Hay River residents will pay less than they should and Naka Power’s remaining South Slave customers have to overpay significantly. The company has “lost economies of scale” without Hay River’s 1,700 or so customers, Naka Power’s Jay Massie said last week.

NTPC panellists, in response, suggested Naka Power (NWT) may now be too small to remain economically worthwhile.

Seven hundred customers “may be below the break point where you can viably operate a utility under this model,” said Bowman, the consultant who appeared on NTPC’s panel.

He said the GNWT and regulators may need to help Naka Power “rethink what it means to be a utility serving 700 customers, including whether it can even be a stand-alone operation.”

7. Naka Power keeps pressing for a whole new rate system

Naka Power says it has already done some rethinking.

For months, the company has been calling on the GNWT to completely revamp the way power rates in the territory are decided.

Naka Power continued that call at last week’s hearings.

“This is a pivotal point for the NWT, and it cannot be overstated,” Naka’s Massie said, adding that now is “a unique opportunity to reshape the electricity sector in the Northwest Territories into one that is fair and equitable for all customers.”

He wants a system based on one used in the Yukon, which he said would mean the same rates across many communities. Critics of that approach say power generation and distribution in the NWT is more complex than in the Yukon, so the Yukon system can’t be as easily applied here.

8. Two Nakas are set to become one

Partly as a means of finding cost savings, Naka Power is working toward merging Naka Power (NWT) – the South Slave arm of the company – and Naka Power (Yellowknife), which, you guessed it, distributes power in Yellowknife.

“Naka is taking concrete steps to initiate an amalgamation,” said Massie, “anticipated to be completed as of January 1, 2026.”

Massie said Naka thinks turning the two into one entity will cut costs by 10 percent.

The amalgamation isn’t a done deal yet. For one, different unions are involved, which Naka says will require some complex negotiations.

9. We got a more detailed account of YK’s big power failure

At Naka Power’s public hearing, executives provided a fresh account of the Saturday, April 5 power outage that ended up being Yellowknife’s biggest this century.

In a nutshell: a breaker at the Niven Lake substation failed (we knew this part) and that triggered an automatic shut-off “upstream,” in other words further back in the network, to try to preserve all the remaining equipment.

“I can say from experience, in these large outages and when there’s two utilities working to coordinate to get the lights back on, it can be pretty hectic for the folks in the field to figure out exactly what the cause was at the beginning,” said Naka’s Massie.

“That takes some time, to figure out just what that exact cause was.”

The outage ended up lasting seven hours or more for some people.