Another power rate hike? Norman Wells man says he may go off-grid

The owner of a hotel in Norman Wells says any increase in power rates may force him to go off the grid.

The town of 700 people, about 700 kilometres northwest of Yellowknife, does not have much of a grid to leave.

Power comes from Imperial Oil's nearby operation, according to the N.W.T. Power Corp (NTPC) website, and is resold by NTPC to local businesses at a cost of 43.2 cents per kilowatt hour.

But Jim Ulch, owner of the Heritage Hotel, says proposed rate increases announced last week by NTPC could be enough to make powering his hotel from a generator more economical than paying the power corporation.

"If the Power Corp. stays where it is, I'll take advantage and let them do the maintenance on their equipment," said Ulch.

But if "they move it up too much more, I'll put my own generator in."

NTPC began seeking the approval of the N.W.T.'s Public Utilities Board for an interim rate increase of 4.8 per cent this summer followed by further year-on-year increases.

"I know I can power this place cheaper than they can. We're already paying them $12,000 to $14,000 a month," said Ulch.

"I'll definitely start doing the electrical preliminary work in our service room to get ready to put a generator in there."

Do it yourself

Though cheaper than some N.W.T. communities, the cost of power for Norman Wells businesses is roughly four times what an Ontario business might expect to pay and just under three times the base rate Northland Utilities quotes for Yellowknife businesses, 15.99 cents per kilowatt hour.

Ulch has combated that by installing more-efficient LED lights throughout properties he owns in Norman Wells. He claims that has the secondary advantage of lowering the power load on his generator, should he decide to make the switch.

"After 35 years of being up here, I've found out you've got to be able to pretty well do everything yourself," he concluded.

Residents of the territory have faced rate hikes at least once a year since 2012, when the last General Rate Application (GRA) saw rates increased by just over 28 per cent across a four-year period.

Now the power corporation wants a new GRA to follow its interim rate increase. The territory's Public Utilities Board will soon decide whether to approve the interim measure and then examine the GRA, which is expected to propose annual increases of 4.8 per cent, four per cent and four per cent over the next three years.  

In defence of NTPC 

N.W.T. Chamber of Commerce executive director Mike Bradshaw said territorial businesses will be hurt if those increases happen. However, Bradshaw — a former spokesperson for NTPC — believes the power corporation is doing its best in trying circumstances.

"Everyone is concerned — certainly the business community is — but I understand that NTPC has to recover the cost of its operations," said Bradshaw. "For them, it's a zero-sum game: they can only collect as much money as it costs to operate the system."

The number of small and medium-sized businesses in the Northwest Territories fell from more than 2,500 to approximately 1,750 between 2013 and 2015, according to figures recently presented by the territory's Department of Industry, Tourism and Investment.

"The impact is already being felt by the business community and residents," said Bradshaw.

"We have members who have shifted their core operations to lower-cost jurisdictions and out-migration rates are troublesome. It costs too much to live here and it's not just about electricity: it's pretty-much everything."

But Bradshaw could not see any alternatives open to the power corporation.

"I spent almost 15 years, in three different jurisdictions, in the regulated utilities industry," he said. "People tend to think the power corporation is a large company making large profits, and neither of those conditions exist.

"Because we're such a small market, there's a price for that. I understand how their rates are calculated, and they're not allowed to recover anything more than it costs to operate the system. Those are facts, and the facts are what they are."