The NWT government is directing the territory’s power regulator to make changes that the GNWT hopes will modernize the system and promote more renewable energy.
Changes announced on Thursday include allowing more renewables in diesel-powered communities, adding more regulatory support for electric heating, and creating a “low water rate rider” fund that the GNWT says will “better buffer electricity costs” during droughts.
Most of the changes will happen under the regulatory hood. They are shifts in the rules the territory’s regulator – the Public Utilities Board – will apply to the operations of companies like the NWT Power Corporation and Naka Power.
For example, many of the rule changes refer to net metering, which is the policy that allows residents to generate their own renewable power – through the likes of solar – and sell that power back to the grid in their community.
On the face of it, more renewable energy is great. But because it doesn’t reliably generate the same electricity all the time (for example, solar generation looks different on a sunny day versus the night), power grids need to factor that in, which becomes complicated.
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Power firms also say net metering can have an effect on how much money they bring in to maintain their infrastructure. Their perspective is that if every resident except one in a community starts generating their own solar power and selling it, but relying on the power firm’s diesel as a backup, the power firm suddenly has virtually no customers or revenue but still has to maintain its entire grid for when it’s needed.
As a result, net metering is capped in most communities. There is only so much renewable generation the territory allows.
Thursday’s update from the GNWT states that “community renewable energy caps in diesel-powered communities will increase from 20 percent to 30 percent with further flexibility if battery storage is used.”
Net metering will also expand to allow larger commercial projects.
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For Indigenous and community-owned power production, the GNWT says it will introduce a new program named Independent Power Production to “prioritize Indigenous and community ownership and ensure transparency in power purchase agreements.” Little detail about that program was immediately available.
Anyone signed up for net metering or becoming a part of Independent Power Production will now also be regulated by the Public Utilities Board, which will set the compensation they get when they sell power to the grid. The GNWT says that will allow the regulator to take all factors into account and promote “fairness for all ratepayers.”
Other changes announced on Thursday include:
- allowing firms to increase fixed charges associated with the costs of maintaining power infrastructure, which a GNWT directive issued in 2017 had prohibited;
- adding electric vehicle chargers as a regulated part of any utility’s operations, which the GNWT said will let firms “support EV infrastructure development;” and
- new electric heating rate options designed to help communities on hydro power who want to use surplus energy to heat buildings using electricity. This has been an ambition, for example, in Fort Smith.
Lastly, the GNWT said it will introduce a low water rate rider fund to act as a cushion when droughts hit the territory’s hydro systems.
How that fund will work wasn’t set out.
The GNWT said the overall package reflected years of research and would try to “balance system costs with the benefits of increased community participation and renewable energy adoption.”
“This work responds to long-standing issues raised by utilities, communities and residents, while creating more space for northerners to generate their own renewable power and manage their energy costs,” the territory stated.
“It will also better position Indigenous and community governments to advance renewable energy opportunities and support local economic development.”
