City staff are recommending that councillors vote to keep Naka Power as Yellowknife’s electricity distributor for the next decade.
The city could hold a competitive process to invite bids from other companies but staff say the better option is renewing with Naka Power, formerly Northland Utilities, until 2035.
Extending the current deal – with some tweaks – “will provide continuity and certainty,” a briefing note for councillors states.
It will also allow “time for proper planning and budgeting for the significant administrative and legal resources required should a competitive opportunity be undertaken at the conclusion of the new term,” the note adds.
By 2035, the city observed in its note, the NWT government’s proposed Taltson hydro expansion may be in progress or even complete.
Advertisement.
Advertisement.
If so, that would add an extra dimension to the next contract: the prospect of cheaper power flowing from the South Slave’s Taltson hydro dam. How that would work, who would distribute the power and so on have yet to be fully determined.
Right now, the city stated, about 80 percent of a Yellowknife home’s power bill ultimately goes to the NWT Power Corporation, which generates the electricity. The remainder goes to Naka Power, which distributes it. The city charges a “franchise fee” to Naka for the right to act as distributor – a fee passed on to customers – and this nets the city just over $1 million a year at present.
The Town of Hay River decided in 2016 to drop Naka Power (then Northland) in favour of having the power corporation do the distributing. That set off nearly a decade of legal and regulatory wrangling that has only just ended.
That’s one reason why the city says a simple extension might be best.
Advertisement.
Advertisement.
“Impacts to community and residents with respect to electricity distribution situations in other NWT municipalities are still being assessed,” the briefing note states, in an apparent reference to Hay River.
At the same time, the extent to which the power corporation or any other firm had expressed serious interest in taking over Yellowknife’s franchise is not clear.
The note to councillors asserts that staff have already worked with Naka Power to make “improvements and clarifications” to the existing deal, which ended in December, though its terms remain in effect until a replacement is agreed.
If councillors agree – they’ll discuss this on Wednesday, February 18 – a new agreement will be signed following third reading of a bylaw approving it, then submitted to regulator the Public Utilities Board for approval.
