N.W.T. Power Corp. didn't make convincing case for higher bills, says regulator

The Northwest Territories Power Corporation (NTPC) didn't make a convincing case for why it should be allowed to increase power rates this year, says the territory's utilities regulator.

The N.W.T. Public Utilities Board has denied an application by the power corporation to raise energy rates for all its customers by 4.8 per cent from June 1 to the end of March 2017.

The increase would have addedan extra $10 in winter and $6 in summer to the monthly power bill of the average N.W.T. resident.

The N.W.T. Association of Communities wrote in to the board to oppose the interim application, saying "the N.W.T. communities are already burdened by the highest electrical rates in the country, and these proposed increases stand to place additional financial burden on consumers already challenged by high prices."

The power corporation, which is owned by the N.W.T. government and isnow run by some of the government's senior bureaucrats,said it needed the increase to help offset a projected revenue shortfall of around $8 million this year.

But the board, in a decision issued two weeks ago, saidit needed more information from the power corporation about its revenue projections.

It also pointed out a curious contradiction underminingthe power corporation's argument for an increase.

The board noted that while the corporation is predicting a $4.7-million reduction in revenues for 2016-2017, the corporation is also predicting that low fuel prices will reduce how much it has to spend on fuel and power purchases during the same year by $4.2 million nearly offsetting the revenue loss.

'Substantial unanswered questions'

The board said there are also "substantial unanswered questions" about some rising operation and maintenance costs at the power corporation.

That includesan extra $2.8 million for salary and wage increases the power corporation said was consistent with itscollective agreementand the need for more staff "to address infrastructure renewal needs and increased regulatory requirements," according to the corporation costs that are expected to continue rising over the next two years.

"When all the cost increases and decreases are taken into consideration the board is not convinced, based on the evidence filed by NTPC, that there is likely to be a substantial revenue shortfall in 2016/17 as to warrant an interim increase in rates effective June 1, 2016," the board concluded.

The board did approvethe corporation's application forarider to refund some of the money in the fuel stabilization fund to customers, at a rate of 0.36 cents per kWh effective June 1.

Power Corp. will try again

Pam Coulter, a spokesperson for the power corporation, saidit plans to re-apply for the 2016-2017 rate increase by the end of this month.

If approved, the increase would be reflected on customers'bills by August and the power rate increase thatwould have originally been spread over 10 monthswould now be spread over seven months the kind of minor "rate shock" the power corporation tries to avoid.

Coulter said the reapplication will be filed along with the previously-announced general rate application to raise power rates in the territory by four per cent in both 2017-2018 and 2018-2019.