I have a return to written question asked by Mr. Yakeleya on March 31, 2004, regarding power rates.
Can the Minister provide a current dollar estimate on a one-rate power structure that would provide an adequate rate of return to the NWT Power Corporation?
A one-rate power structure would be subject to approval by the Public Utilities Board and would require integration with North Utilities Ltd's rates, as they distribute the power purchased from NTPC in Yellowknife and Hay River. Based on the Northwest Territories Power Corporation's previous general rate application for a single rate zone, the estimate of rates per kilowatt hour on a one-rate power structure that would provide an adequate return to the NTPC is a rate of $.2321 for residential customers, $.2101 for general service customers, and $.1836 for wholesale customers.
Can the Minister provide information on the projected costs to maintain the NWT power subsidy program at current rates over the next five years?
The territorial power support program includes subsidies to both residential and commercial customers. The commercial customer subsidy is $250,000 per year and is not expected to change unless rates change significantly. The residential subsidy is forecast to increase from approximately $7.1 million I 2004-05 to $7.7 million in 2008-09 based on consumption alone and holding the 2003-04 rates constant. If rates change due to increases in the price of diesel fuel, this would increase this forecast. However, with the volatility of world oil prices it is impossible for us to forecast what rate changes may occur.
Can the Minister provide the assembly with information on the direction provided to the board of directors of the GNWT Power Corporation in making their next general rate application?
Typically the government does not provide direction to the board of directors of the NTPC with regard to the corporation's general rate application. However, at the time of the last rate application, the Executive Council directed the board of directors to withdraw its single rate zone application and to resubmit the application based on the existing community-based rate structure. In addition, the corporation was directed to defer any public consultation or support for a move to a single rate zone until an energy strategy is completed and adopted by Executive Council. This direction is published in the back section of the corporation's 2002-03 annual report.
No further direction has been issued to the corporation in respect of any future rate applications.
Can the Minister provide information on costs incurred by the NWT Power Corporation in examining and pursuing the expansion of the hydropower to date? This accounting should show the money provided to the Power Corporation by the GNWT as well as the money the Power Corporation has expended from its retained earnings.
Costs related to examining and pursuing the expansion of the hydropower system have been shared between the NWT Energy Corporation (03) Ltd, the GNWT and the NWT Power Corporation:
- i. To the extent that the work being undertaken is related to the pursuit and expansion of the hydropower system, the costs are being incurred by the NWT Energy Corporation (03) Ltd, a subsidiary of the NWT Power Corporation, and include funding for aboriginal partners to participate in this work, engineering and environmental studies and business development expenses incurred by the NWT Energy Corporation (03) Ltd to further these projects. The amount spent to date is estimated at just over $4 million.
- ii. The GNWT provided funding to the hydro development projects by way of a $500,000 reduction in the 2003-04 dividend declared to the NWT Power Corporation. In addition, the GNWT provide contribution funding in 2002-03 in the amount of $450,000 primarily for aboriginal partner participation.
- iii. The final accounting for these costs cannot be determined at this time. To the extent that costs incurred to explore hydro development are determined to have a future use to the regulated customer, for example, to complete a water license renewal or for capital investment requirement to continue to serve existing customers, some of the costs identified under 1. above may form part of an application to be recovered through rates at a later date. The funding for the aboriginal partners will be expensed as incurred and totals approximately $1.5 million. The engineering and environmental studies will form part of the costs of any project should they proceed.