The mayor of Hay River says the community supports a decision by councillors to terminate the town’s power agreement with Northland Utilities.
Hay River will let its deal with Northland expire in November 2016.
In the meantime, the town’s legal team is putting together a request for proposals. It hopes a competitive bidding process will drive down the price of power for residents struggling to meet the cost of living in the North.
“There’s been a lot of talk about power costs,” the town’s mayor, Andrew Cassidy, told CBC. “We know as a council that this is certainly the direction the community wants us to go.
“This has nothing to do with the level of service, it simply has to do with the cost of power right now. This is one way the council feels we can influence the cost of living.”
Cassidy hopes the new bidding process will attract interest from southern power providers based in British Columbia and Alberta, alongside the Northwest Territories Power Corporation (NTPC) and a renewed bid from Northland.
“We’re fully expecting Northland Utilities to put in a bid,” said Cassidy.
Letting the current deal expire means the town of Hay River is set to acquire the physical electricity distribution assets, like power poles and generators, from Northland Utilities.
Cassidy admitted that despite taking steps to end the deal, the town does not yet know how much those assets will cost. Northland is preparing a valuation.
The mayor hopes to recover those costs in the proposals it receives from potential future power providers.
“The cost of the assets will play into that request for proposals. We’re not quite there yet, we don’t know what those costs are going to be,” he said.
Under the town’s plans, a new agreement would be finalized by this fall, allowing the winning bidder a full year to “begin implementing the strategies identified in their proposal to reduce the power cost”.
Cassidy has previously claimed Hay River is paying more than 10 cents per kilowatt hour above the price of power in neighbouring communities like Fort Smith.
Northland Utilities argues the current price in Hay River is fair.