Northland Utilities has accused the Northwest Territories Power Corporation of overcharging Yellowknife residents to the tune of millions of dollars while simultaneously trying to push them out of business.
Doug Tenney, vice-president of Northern development with Northland Utilities, delivered a presentation to Yellowknife city councillors Tuesday more than a month after he shared similar concerns with MLAs.
Addressing councillors, Tenney accused the government-owned power corporation of creating an unfair playing field by overcharging Northland Utilities to distribute power to Yellowknife customers.
Northland – a private company – currently distributes power that’s generated by NTPC to customers in Yellowknife, Hay River, Fort Providence, Trout Lake and Wekweeti.
But come November, the power corporation will take over distribution in Hay River once an existing franchise agreement with Northland Utilities expires.
Earlier this year, Hay River Mayor Brad Mapes said the NTPC proposal “affords the Town the best opportunity to reduce electricity rates within the community.”
Tenney, meanwhile, feels his company was cheated once a bidding process began saying NTPC overcharged Northland some 130% to provide electricity to customers there.
With Yellowknife’s franchise agreement set to expire in 2020, Tenney’s concerned the power corporation will resort to the same ‘unfair’ tactics then.
“In our mind [NTPC] is overcharging because number one, they want to expropriate Northland Utilities,” he told councillors.
“We just think it’s an unfair ploy that they’re setting the rates that they’re charging us just to be able to use it later on to come back and give you the proper rate and claim that it was a reduction.”
In fact, the NWT Public Utilities Board sets power rates across the territory. The independent, quasi-judicial agency reviews any interim or general rate applications before deciding to reject or approve them.
How much are Yellowknifers being overcharged now?
Making little distinction between the government and NTPC, Tenney says the power corporation is overcharging Yellowknifers by 9 per cent so that customers in NTPC-served communities can receive an ‘artificial’ discount.
Altogether, he says Yellowknife customers are paying 30 per cent more for electricity than residential customers in Fort Smith and Fort Resolution – amounting to approximately $500 in extra costs per year.
“[NTPC] has decided that Yellowknife is a loser and Fort Smith and Fort Resolution are winners,” said Tenney.
“Yellowknifers are going to continue to be forced to pay too much so that residents in NTPC-served communities can pay less.”
Since 2008, Tenney believes the power corporation has overcharged Yellowknife customers some $28 million for power and says that will continue in order to subsidize lower rates elsewhere.
So what exactly is Northland Utilities proposing?
Tenney says real solutions exist when it comes to tackling the high cost of power in the Northwest Territories.
One, he says, would be to consolidate the territory’s seven rate zones down to two in order to eliminate overlap and the risk of overcharging customers.
NTPC: Rates across the NWT
“That way everybody who’s served from hydro in the NWT would be on the same rate,” he said.
“Everybody who’s served from diesel or thermal generation would also be on the same rate so it stops the ability to pick winners and losers because we’d all be sharing the same rate schedule.”
A second potential solution would see Northland and NTPC form a partnership to distribute power territory-wide, thus eliminating redundancies and inefficiencies.
The power corporation sought permission from the NWT Public Utilities Board to increase rates earlier this year to cover a revenue shortfall of roughly $8.4 million.
If another proposed rate hike is approved, the cost of power in the NWT in three years will be over 40 per cent higher than it was in 2012.