The NWT Power Corporation can’t cut the power rates it charges and residents must “be realistic” during the Covid-19 pandemic, the minister responsible said on Friday.
Shane Thompson said for every percentage-point drop in rates, the territorial government – which owns the power corporation – would lose a million dollars and be less able to support other programs.
“So if we’re going to cut 20 percent, that’s $20 million,” Thompson told Cabin Radio’s Covid Corner in a live interview. “People have to be realistic with it.”
Many NWT residents pay at least two to three times the rates charged in southern provinces. In the past month, forced to work and study from home, residents have reported power bills of $500 or more.
“I think it’s unfair that … we have to pay a lot of money just to live in Yellowknife,” one resident, John Gon, told Cabin Radio this week. “I think my future here in Yellowknife is coming to an end.”
Asked if power rates could be cut, Thompson replied: “Right now? No. I have got to be honest with people.” He similarly suggested rate riders on residents’ bills can’t be deleted.
The minister said the power corporation had “looked at every avenue” and is “still looking to see if there are other alternatives available.”
He said dropping rates would, for example, mean the territory had less money for initiatives like its Friday announcement of $5 million to support childcare for essential workers.
“Right now our focus is: if we have to take $20 million out of the government, then there’s a whole bunch of other areas that we may not be able to do,” said Thompson.
“It’s about trying to help people as best we can. I understand the power rates, you know? It’s a difficult time and it’s a challenging time. But we have costs and basically our power rates are based on our cost to operate.”
Lower diesel prices don’t help, says minister
World oil prices have plummeted since the pandemic took hold, amid evaporating demand for fuel in the transportation industry.
Thompson, however, said the NWT Power Corporation would see no immediate benefit from lower prices for the diesel used to help power many northern communities.
“When you look at our isolated communities, we purchased the fuel last year. If we were able to get our fuel in daily or weekly, like some of the communities, we’d be able to see a reduced rate but right now, we can’t,” said the minister.
Asked if the power corporation could buy next year’s fuel now, at bargain-basement rates, and pass on that saving, Thompson replied: “We’re looking at all options right now. And again, at the end of the day, what we’re trying to do is to help the residents as best we can with all the programs we have available to us.”
So far, the power corporation has allowed residents to defer payments and promised not to use limiters during the pandemic. (Limiters periodically cut power to homes whose bills have been unpaid for more than 28 days.)
Twenty-year plan to fix infrastructure
Thompson suggested another reason power rates can’t come down is the need to save money for replacement of ageing infrastructure.
Many of the hydro systems and other facilities relied upon by the NWT Power Corporation are decades old. Their age, and the cost of replacing them, has been a worry for years.
Thompson said a strategic plan to finally replace ageing equipment was being drawn up.
The plan will span 20 years. The price tag attached to the work is not yet clear. Thompson said the federal government has been approached for help and green energy will be used “where possible.”
“When I first became the minister, I thought, ‘Oh, we can make some huge changes.’ Unfortunately, right now, we have ageing infrastructure which … needs to be replaced sooner than later,” said Thompson.
“They don’t run as efficiently as a brand-new system. So we’re looking at new systems that are coming in place, trying to use them. But we can’t change everything overnight. And so we’re looking at every avenue that’s possible.
“I know it’s probably not making people happy about it but, at the end of the day, we have to be realistic on what we’re trying to be or what we’re able to achieve.”