The City of Yellowknife is set to extend its franchise agreement with Northland Utilities to distribute electricity for another five years.
The existing franchise agreement, which was extended for 10 years in 2010, is set to expire on December 31, 2020. It gives Northland the exclusive right to distribute electricity in Yellowknife and grants the company access to city lands to construct, maintain, and operate electricity distribution assets.
In return, Northland pays an annual franchise fee. That fee came to $1.2 million in 2019.
In preparation for the agreement’s expiry, the city considered three options: extending the existing agreement with Northland for up to 10 years, entering into a new agreement with Northland for up to 20 years, or opening electricity distribution to a competitive process.
The Town of Hay River underwent a similar process several years ago, eventually choosing to end Northland’s term as its power distributor, purchase Northland’s assets, and turn over distribution to the NWT Power Corporation – a process understood to be still under way, and which has involved the NWT Supreme Court.
After evaluation from an external consultant, Yellowknife city councillors decided on Monday to renew the existing agreement with Northland for five years.
The city will re-evaluate the franchise agreement before it expires at the end of 2025.
City administrator Sheila Bassi-Kellett said this option will provide “continuity and certainty” while awaiting the potential of the Taltson hydro expansion.
Councillors Niels Konge, Shauna Morgan, Julian Morse, Cynthia Mufandaedza, Steve Payne, and Robin Williams said they were in support of the five-year extension.
“I certainly feel quite strongly that this is the best thing we can do as council for our residents,” Konge said.
‘There are a lot of people upset’
Many councillors said they want to lobby the NWT Power Corporation, which is owned by the territorial government, to reduce the cost of generating and transmitting power in Yellowknife.
According to the city, less than a quarter of the average power bill comes from power distribution.
While Northland Utilities distributes power in the city, the NWT Power Corporation is the primary generator and operator of electricity in the territory.
Pricing is determined by the NWT’s Public Utilities Board, an independent, quasi-judicial body that sets rates in the absence of any competitor for the power corporation.
“There are a lot of people upset about our power, how much we’re being charged for power,” Payne said, adding he feels Northland “does a great job” at keeping costs reasonable.
“If they have ideas about how to decrease our power consumption, I’m all ears.”
Morgan said she would like to see the power corporation integrate renewable technologies and make its power system more efficient.
“There are technologies out there that are proven that I think we could be incorporating in the NWT,” she said. “I think we all have a role to play.”
City councillors are set to officially vote on the franchise agreement during a September 28 council meeting.