Here's why NTPC wants to hike the cost of power in the N.W.T., and what happens next

The Northwest Territories Power Corporation (NTPC) says it would have preferred to have "more concrete data" in its recently submitted application to increase the cost of electricity. 

"There's quite a few moving parts … that makes this a challenging time to put a rate application in," said Paul Grant, the corporation's chief financial officer. 

NTPC submitted an application to the territory's Public Utilities Board last week asking to increase the cost of electricity for all its customers by nearly 18 per cent. The application lumps that new request in with an interim rate increase of seven per cent which already took effect in the summer, for a total increase of 25 per cent. 

The corporation is the main generator and transmitter of power in the N.W.T. It sells a portion of its electricity to Naka Power which, in turn, sells it to residents and businesses in the Hay River and Yellowknife areas. NTPC is in the process of taking over the distribution process in Hay River as well. 

Grant said the NTPC submitted its last rate application in 2022 and is usually required to submit a new one every four years. But this year, he said, the Public Utilities Board directed both NTPC and Naka Power to submit a new general rate application as part of the transition unfolding in Hay River. 

"We probably would have waited a little while before our next rate application was put out," he said.  

Grant pointed out the NTPC doesn't have a full year of data about electricity produced by Inuvik's new wind turbine, or about changing water levels in the territory which can affect hydro generation. The corporation is also in the midst of overhauling the Taltson hydro facility north of Fort Smith. 

NTPC has different types of customers, but it calculated what the monthly increase would look like for non-governmental residential customers in different areas who use 600 kilowatt hours of power. The increase would be a little more than $33 for people in Yellowknife, a little more than $32 for people in the Snare and thermal zones, and nearly $38 for people in the Taltson zone.

The Snare zone includes Behchokǫ̀ and Dettah, while the Taltson zone includes Fort Smith, Fort Resolution and — new as of this year — Hay River. The thermal zone covers the rest of the territory.

Why NTPC wants to increase rates 

The corporation has said the proposed increase stems from major issues that are beyond its control, such as the rising price of fuel, low water levels, capital projects, and inflation. 

Asked to explain in more detail, Grant said he couldn't "get right down into the nuts and bolts" of the application, which is hundreds of pages long and has been uploaded to the board's website in the form of nine documents. 

He was, however, able to provide a bit more information about how the corporation had reached its overall 25 per cent request.

Grant said the application is based on what has happened over the past few years, and also what is expected to happen in the future. It uses the current fiscal and upcoming fiscal years as test cases. 

He said the price of fuel has gone up 40 per cent since NTPC submitted its last general rate application in 2022, in part because of the conflict in Ukraine. He also said the corporation's been dealing with a few "big years" of inflation. 

"It's a little bit more under control now, but there's a big catch-up component there as well," he said. 

Another factor is the 60-year-old Taltson hydro facility, which NTPC said needed major upgrades that are taking longer and costing more than expected — now with a price tag of $97 million. 

What happens now? 

Gord Van Tighem, the chair of the Public Utilities Board, said it will be reviewing all the information from NTPC and will decide whether the increase is reasonable. He expects the board will have a decision by the end of the calendar year.

"We will question anything that we feel is questionable and try and get all of the information out in the open, and from that we will come up with a decision," he said. 

Van Tighem was not able to say when rates would go up, if the increase is approved. That's something yet to be determined, he said. 

He also said the public would be able to provide feedback on the application, but the board was still figuring out how that process would unfold, including whether there would be public hearings or not. 

Van Tighem has been chair of the Public Utilities Board for more than a decade, and said that he's never seen a percentage increase as stark as the one NTPC is asking for now. 

The board has rejected the corporation's requests in the past. Van Tighem also said the board found about $2 million in NTPC's 2022 application that was "not supported" and it had the request revised before approving it.