As power rates increase, Fort Smith should benefit from nearby Taltson dam, says former MP

A former N.W.T. MP and ex-mayor of Fort Smith says his community has always had lower power rates than other parts of the territory because of its close proximity to the Taltson hydro system, and he doesn't want to give that up. 

Dennis Bevington is one of several Fort Smith leaders and residents who are fighting against proposed power rate hikes that would see their lower power bills become comparable with the rest of the territory.

The Northwest Territories Power Corporation (NTPC) is asking the N.W.T.'s Public Utilities Board to increase rates in Fort Smith and Fort Resolution — known as the Taltson Zone — by 20 per cent over a two-year period.

The request is part of NTPC's 2022 general rate application, which asks for more minimal rate increases throughout the rest of the territory. If the increases are approved, the average customer in Fort Smith and Fort Resolution will see an approximately $55 spike in their monthly power bill.

Other regions would see their bills increase by less than 5 per cent, or around $11 or $12. Even with the new rates, Fort Smith and Fort Resolution residents will still have the lowest rates in the N.W.T. 

"Fort Smith and Fort Resolution have benefited from being on the Taltson grid from day one," said Bevington.

But Bevington doesn't believe that's unreasonable. 

The Taltson hydro plant was built in the 1960s to power the Pine Point Mine, which closed in 1987. Surplus energy from the plant has allowed NTPC to supply low-cost hydro power to nearby communities for over 50 years.

"Every region gets to benefit from the resource that surrounds it," said Bevington.

"Fort Smith has low power rates, but that should not be something that is held against us. I mean, Yellowknife has a big airport there and has low airfare, but we don't suggest that we put a penalty on people for their airfares." 

'Wrong' to say Fort Smith, Fort Resolution, not paying fair share

Bevington decided to speak out after reviewing NTPC's application, which he thinks incorrectly portrays Fort Smith and Fort Resolution as "not paying their way."

"We pay a lower power rate because the costs are not that high in our system. But to say that we're not paying our fair share, I believe, is wrong."

Bevington and his company, Standalone Energy Systems, have been reviewing documents from NTPC and the Public Utilities Board for the past several months. Bevington says that the two communities are being unfairly tasked with covering higher costs at NTPC headquarters and other operating costs that other regions don't pay for.

The power corporation declined to comment on this assertion, saying it was unable to recreate Bevington's result without understanding the methodology he used to reach his conclusions. 

Bevington was also critical of NTPC's plan for addressing its "revenue shortfalls."

"NTPC can't just continue to add costs without trying to find ways to add revenue through bigger sales," he said. 

NTPC is currently working on the Taltson Hydro Plant Overhaul Project, which would see an expansion and updates at the Taltson hydro system at an estimated cost of over $66 million. 

Bevington says that NTPC should be focused on finding customers for the "4 million extra megawatts of energy" that will be created by the overhaul project, which would offset the cost of the expansion project.  

He also thinks that extra costs would be alleviated if NTPC upgraded their distribution system in Fort Smith to sell more electric heating, which would also help move communities towards net zero greenhouse gas emissions. 

Taltson Zone has fallen 'a bit behind' 

Gordon Van Tighem, the chair of the Public Utilities Board, confirmed that it has historically been cheaper to provide Fort Smith and Fort Resolution power. "But that's changing," he said, and they have "fallen a bit behind" the other regions.

"[The cost] of everything's gone up. Fuel costs have gone up, which doesn't really affect the hydro, but most of the stuff that exists is reaching its best before date." 

Doug Prendergast, NTPC's manager of communications, and Paul Grant, NTPC's chief financial officer, also talked about needed updates at the Taltson plant. 

Grant said they've managed to run and maintain the hydro site for about 65 years, but it's no longer brand new. "It's quite old now," he said.

Prendergast said that in previous years, all regions have seen power rates increasing at the same rates. According to Van Tighem, that's because the territorial government had instructed that rate increases not exceed a certain amount. 

But Prendergast explained how increasing costs at the same percentage rate further widened the gap between Fort Smith/Fort Resolution and other regions. 

"Because you're starting from a lower point but adding the same percentage rate, you end up falling behind as your costs to deliver service increase," he said. 

Prendergast said that although the Taltson hydro plant has not required a lot of "capital spending" to provide power to people in Fort Smith and Fort Resolution, environmental licensing and other costs have gone up.

"Other factors have increased and in order for the Taltson zone to recover the revenue, it needs to be self-sufficient, which is why the rate increase is required at this time," he said. 

The public utilities board will make a decision on NTPC's rate application early next year.