Power rates increasing by 2.5% for many NWT customers

Power rates for many NWT residents are increasing by 2.5 percent from May 1, the territory’s power corporation said on Tuesday.

With territorial subsidies applied, the NWT Power Corporation said, that increase will equate to a 1.68-percent change in “the average bill” for most affected communities, and a slightly higher 2.37-percent increase in Fort Smith and Fort Resolution.

Customers in areas like Yellowknife and Hay River receive power from Northland Utilities, which buys it from the power corporation, meaning those customers’ rates depend on how Northland passes on the increased cost of purchasing power.

The May 1 increase is the first of at least two announcements. Two separate but linked processes are at work: an interim application for this year and a general rate application, which is broader.

The increase announced on Tuesday is an interim, one-year shift while the Public Utilities Board – an independent body that approves rate increase requests – considers the general rate application, which takes longer to examine.

In its Tuesday news release, the power corporation said the Public Utilities Board had allowed an interim increase to offset some costs while awaiting that broader decision.

However, the board did not give the corporation the full interim increase it had sought. (The board has not yet published its decision to its website.)

The power corporation’s interim application asked for increases this year of around 10 percent in Norman Wells, Fort Smith and Fort Resolution. The interim increase granted by the board is much lower than that.

“It was not the increase that was included in the application for interim rates,” power corporation spokesperson Doug Prendergast told Cabin Radio.

“The Public Utilities Board raised an issue about which they would like more information before they would approve the requested increase.”

Larger increases sought

In its interim application, the power corporation said it faced a $7-million revenue shortfall in 2022-23 even if the board fully approved the application.

Prendergast said the shortfall “will be recovered” if the board approves the general rate application, which was filed in late March.

The corporation is seeking some significant increases in its general rate application, 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 general rate 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 a statement on Tuesday, power corporation president Cory Strang said the corporation “recognizes that electricity rates in the NWT are higher than most other jurisdictions in Canada and is working hard to grow electricity sales and to reduce costs to keep rates as low as possible.”

Strang continued: “Rate increases are necessary at this time to ensure that customers provide sufficient revenue to cover the cost of delivering power.”

In March, power corporation minister Diane Archie admitted the timing of increased power rates, 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.