NTPC seeks back-to-back 10% rate increases for some customers

The NWT Power Corporation has filed its latest application to increase the base rates all residential customers pay.

General rate applications, as they are known, take place every few years. In each application, the power corporation adjusts its rates to account for the costs of providing power and maintaining infrastructure.

This time around, the corporation is seeking some significant increases, most of all for people in Fort Smith and Fort Resolution, though the power corp says those communities currently pay the territory’s lowest rates.

The application asks for the following increases in 2022-23 and 2023-24:

Taltson zone Fort Smith and Fort Resolution

• 10-percent increase in 2022-23, another 10-percent increase in 2023-24
• There are no relevant GNWT subsidies available in these communities, NTPC said
• Rates in these communities will still be the NWT’s lowest, even post-increase, NTPC said

Snare zone and Thermal zone Behchokǫ̀ and Dettah plus 20 NWT communities on diesel, natural gas or liquefied natural gas

• 2.5 percent increase in 2022-23, another 2.5-percent increase in 2023-24
• “A portion of this” will be covered by GNWT subsidies, the power corp said
• That means your power rate increase would be a total of about 3.5 percent over the two years

Norman Wells

• 10-percent increase in 2022-23, another 10-percent increase in 2023-24
• However, GNWT subsidies will bring that down to about 3.5 percent over two years, NTPC said

Yellowknife and Hay River

• These communities have power delivered by Northland Utilities, not NTPC
• NTPC says its proposal would see rates go up by 3.5 percent over the two years in Yellowknife and 3.7 percent in Hay River
• However, Northland Utilities could also make its own application to change rates

In all, the proposal amounts to a seven-percent increase in electricity revenue for the corporation over the two years.

These proposed increases are not final. An independent body, the Public Utilities Board, will study the power corp’s application and decide whether what is proposed is appropriate.

As of 6:30pm on Thursday, the board had yet to add the latest application to its website.

The board could choose to reject the application, as has happened on occasion in the past.

Timing ‘less than ideal’

In the legislature, Diane Archie – the minister responsible for the power corporation – said her government was “aware that residents of the Northwest Territories are concerned about the cost of living, including the cost of electricity,” and that inflation was putting pressure on household budgets.

However, Archie said, “current rates are not producing sufficient revenue to cover the cost of producing and delivering electricity to customers.”

The corporation, she said, had “worked very hard to keep rates as low as possible while providing reliable service and investing in new and refurbished assets such as hydro units, local power plants, transmission lines and power poles.”

The minister continued: “Many of its assets are beyond their serviceable life and require investment now, to avoid risks associated with catastrophic failure. We simply cannot risk waiting any longer.”

By Archie’s estimation, your bill in the Snare, Thermal or Norman Wells zones will go up by an average of $11.50 monthly after two years.

Both Archie and the power corporation steered clear of providing the estimated monthly increase, in dollars, for Fort Smith and Fort Resolution residents. If you live in that area and use around 600 kilowatt hours of electricity in a month, Cabin Radio’s calculation suggests you’ll pay an extra $30 per month by the end of the two years.

Archie admitted the timing of the proposed increase, as world energy prices destabilize and inflation reaches highs not seen in many years, was “less than ideal.”

The application is based on December 2021 fuel prices, meaning price changes since Russia invaded Ukraine are not reflected in the increases requested. NTPC can adjust your bill based on fuel prices using a separate device, the fuel fund rider.

‘Consistent with provinces’

In a bid to offset the likely response to Thursday’s announcement, the power corporation insisted it was trying to find ways to save money even as ageing infrastructure eats up more and more cash.

Electric cars have been proposed as one way the power corp can start making more cash through energy sales as their adoption increases. The corporation said on Thursday it was “striving” to increase all forms of electricity sales.

Work is under way to reduce diesel consumption, for example by making sure newly purchased engines are efficient, the corporation said, and staff are trying to bring in as much GNWT and federal funding as possible.

Part of the problem, the power corp said, is – in at least some sense – renewable energy.

While large-scale renewable projects paid for by someone else help the power corp, the corporation says small backyard or rooftop renewables – while, in many communities, helping the planet – can mean less demand for NTPC’s electricity.

That drops the power corp’s revenue but all the infrastructure, which can’t be easily downsized to match, still must be paid for.

Critics of that argument say the power corporation has to find solutions that do not rely on residents opting not to install their own wind and solar power, particularly as the NWT government languishes some distance away from fulfilling its 2030 emissions reductions target.

The power corporation said it was trying to find more large industrial customers to pay for energy.

“We are facing the same cost pressures as other businesses here in the NWT and elsewhere,” said power corp president Cory Strang, who is overseeing a general rate application in that role for the first time.

“Our proposed rate increase is consistent with increases occurring in other provinces across Canada.”