NWT Power Corp will get second chance to prove “prudence” applying to increase the rate by 15 per cent, but some decisions are final. Among those is the board’s decision that costs incurred for taking over the Hay River franchise operations cannot be added to customers’ base rate.
Earlier this week, the NWT Public Utilities Board provided a transitional response to NWT Power Corporation’s application to increase customer rates by 15 per cent. Naka Power also received a response to their application. While some application points were approved and some were denied, both companies will have a chance to appeal.
“You have to prove that the costs were prudent,” explained Jay Massie, Naka’s vice president.
In their application, the Power Corp had sited costs from the Talston station overhaul. NWT Power Corp said the total cost for the overhaul was expected to total approximately $97.8 million. This included $70 million in project costs and about $45 million in fuel and other operational costs
The Power Corp also said that a major source of the increased costs included the forest fire in 2023 that damaged the plant, the loss of fuel during the fire and insurance costs along with inflation, and staffing costs.
In response, the board has approved some cost claims, including certain costs associated with the Talston overhaul. The board ruled that capital costs associated with the Talston overhaul can be included in the rate base, but not costs related to the 2023 wildfires.
“(O)nly those replacement fuel and non-fuel diesel generation costs that would have been incurred in the normal course of the overhaul—had there been no fire-related delays—should be included in rate base,” said the board in their response.
The board did not approve of some supply and service costs claims for Talson.
“NTPC is directed to reduce Taltson zone supplies and services costs by $700,000,” unless supporting evidence could be attained, said the board
The board added that their decision may be revised if the Power Corp. submits sufficient supporting evidence.
The board has not approved certain cost claims, such as increased management salaries. The board has asked the Power Corp to reduce management salaries by over $180,000.
Doug Prendergast, who is the communications manager at NWT’s Power Corp., told True North FM that they received the board’s response on June 16 for their General Rate Application, a process that began in October 2024.
“NTPC’s Finance staff requires time to assess the impact of the various directives included in the PUB decision. The next submission to the PUB is due within five weeks. NTPC will be working to comply with the directives and will provide its response in that filing.
The City of Yellowknife and Town of Hay River (YK/HR), Town of Fort Smith (FTS) the Town of Inuvik (Inuvik) and Naka Power Utilities (NWT) (NP-NWT) intervened in the proceedings. The hearing was held on April 7–8, 2025, in the city of Yellowknife.
The board ruled that costs related to the Power Corp’s acquisition of the Hay River franchise from Naka Power cannot be included as base rate amounts. In other words, costs from the acquisition will not fall on customers.
“Based on the evidence presented during the proceeding, the Board accepts that these costs were prudently incurred. However, they are one-time costs associated with NTPC’s acquisition of the Hay River Franchise from NP-NWT. As these costs do not provide ongoing benefits, the Board considers them to be sunk costs. Accordingly, the Board finds it inappropriate to include these amounts in base rates,” ruled the board in a decision document posted on their website Monday.
To cover the costs associated with their acquisition of the Hay River franchise, the board has asked the Power Corp to identify those costs acknowledged as “sunk” costs.
“The Board directs NTPC to establish a new Sunk Costs Deferral Account (SCDA), to record sunk costs including those arising from extraordinary events, that have already been incurred, but with no enduring value and therefore considered inappropriate for recovery through base rates.”
The board ruled that these costs should be covered through GNWT funding and not through ratepayers.
“This account for sunk costs is not intended to be funded through recoveries from ratepayers but through GNWT grants received over four years, pursuant to an amended GRA Funding Agreement. As described below, NTPC will be directed to seek any needed amendments to the GRA Funding Agreement to reflect the Board’s Decision.”
Naka was among the parties with intervenor status in NWT Power’s application. Massie told True North FM that one of the reasons why Naka took part as an intervenor has to do with how costs are borne.
“Part of NTPC’s costs, a good part of their costs, end up being paid by our customers. So we definitely want to represent our customers and ensure that all costs from NTPC are prudent. It’s the same thing for each utility and then there’s the allocation of costs in the application.”
“So you have to prove that the costs were prudent and should be borne by customers.
Jay Massie, who is Naka’s vice president,told True North FM that the Public Utilities Board has also given Naka Power a transitional decision for their application.
“It’s a stepped process,” said Massie. Like NWT Power Corp, Naka Power will have a few weeks time to respond, but the board has approved most of Naka’s application points.
After receiving the board’s response, Naka will now try to understand how the decisions will affect final rates for customers.
The board approved all of Naka’s operation expenses to operate and maintain the power system.
“To us, it really tells that the board agrees with our approach to operating and maintaining the power system,” said Massie.
Overall the board has approved the costs incurred by Naka for the transition of Hay River to NWT Power Corp.
“The other good part about this decision is it really gives a final decision and the treatment of costs from the whole Hay River disposition so we can really finalise that process, wrap that up and move forward from there,” said Massie.
“We’re pleased with and again on our part, there’s a final decision and a finality to the Hay River disposition,” explained Massie.
It’s been a multi-year process for Naka to transfer Hay River over to the NWT Power Corp.
Just having that final decision and for us to now, turn around and focus on our operations going forward is a really good thing.”
