Rate hike denied: NTPC request to raise power costs on June 1 nixed

Northwest Territories Power Corporation (NTPC) substation near Yellowknife
An NTPC substation near Yellowknife. (Supplied by NTPC.)
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The NWT Public Utilities Board quietly denied a request for power rates to go up in the territory on June 1.

On April 29, the Northwest Territories Power Corporation (NTPC) applied to increase rates by 4.8 per cent by the start of this month.

NTPC then planned to submit a general rate application which would see the cost of power increase by almost 13 per cent over three years.

Read: The NWT Public Utilities Board’s full decision (pdf)

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But the board decided to deny that request May 30, stating that the power corporation had left a number of questions about its operations and maintenance costs unanswered.

Meanwhile, in a separate decision, the board granted an NTPC refund rider application filed in early May.

That means a rebate will be applied on customer bills because the power corporation ended up spending less than expected during low water levels in the Snare hydro system last year.

Combined, those two rulings mean power rates actually went down by 0.36 cents per kilowatt hour on June 1.

In its decision to deny an increase at the start of the month, the NWT Public Utilities Board cited a lack of recent information as a concern.

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“When all the cost increases and decreases are taken into consideration the board is not convinced … that there is likely to be a substantial revenue shortfall in 2016/17 as to warrant an interim increase,” the ruling states.

“NTPC did not provide more recent information on costs and revenues for the 2015/16 fiscal year even on an unaudited basis.

“This information would have helped make a better assessment of the most recent trend in costs and revenues.”

See: Residential electricity rates in the Northwest Territories

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The government-owned power corporation sought permission to increase rates to cover a revenue shortfall of roughly $8.4 million.

However, the interim rate increase would have only covered $3.7 million – still leaving NTPC with a significant revenue shortfall.

According to the board, another factor in its decision was that a projected revenue decrease of $4.7 million “would be substantially offset by fuel cost decreases totaling $4.2 million.”

The board also noted some opposition from the NWT Association of Communities, which identified existing power costs as a problem.

“NWT 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.

“This increase will be to the detriment of community governments, business and residents.”

The NWT Public Utilities Board says it expects NTPC to file a complete general rate application by the end of the month.

At that time, the power corporation is free to request an interim rate change which would once again be subject to the board’s approval.

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