Mr. Speaker, I have a return to oral question asked by Mr. Villeneuve on February 16, 2007, regarding the NWT Power Corporation generate rate application.
The Public Utilities Board does not refuse to review a general rate application. The PUB reviews the general rate application, which is a multi-phased process, and
makes decisions throughout the process that guide the eventual rate determination.
Before changing its rates, the NWTPC must make an application to the Public Utilities Board seeking approval to do so and providing evidence on why the rates should be changed. This is known as a general rate application. Information on assets, operations and financial affairs is provided in order to explain change to rates.
The GRA is usually handled in two phases. The first phase, known as the "revenue requirement," examines the utility company's revenues and expenses. The purpose of phase one of a GRA is to determine the amount of revenue that the NWTPC needs to earn in a year to cover its costs in providing service to its customers and to earn a fair return on its investment.
Once a decision on the phase I revenue requirement is made, a phase II application is filed. The main purpose of a phase II filing is to determine the specific rates that each type of customer will be charged and to demonstrate that these rates will enable the utility company to collect its annual revenue requirement. Hearings are held to discuss contentious issues and obtain the views of the utility's customers.
On November 24, 2006, the Northwest Territories Power Corporation filed its phase I of the general rate application to determine the revenue requirements for the fiscal years April 1, 2006 to March 31, 2007, and April 1, 2007 to March 31, 2008.
The application requested:
- approval of interim rate increases in the amounts of 3.52 cents per kilowatt hour in the thermal communities and 2.16 cents per kilowatt hour in the hydro communities pending completion of the GRA process, effective January 1, 2007.
- approval of an increase in the fuel rider applicable to the diesel fuel communities of 4.02 cents per kilowatt hour effective January 1, 2007, to offset increased diesel fuel costs.
- Approval of an increase in the Taltson system fuel Rider T of .21 cents per kilowatt hour to offset increased fuel costs used for back-up generation, for the communities of Fort Smith and Fort Resolution.
On January 10, 2007, the Public Utilities Board:
- approved the Northwest Territories Power Corporation's fuel rider and Rider T, effective January 1, 2007;
- did not approve the NWTPC interim rate application, as the proposal would not result in interim rates being as close as possible to the probable final rates at the community level.
On January 26, 2007, the Public Utilities Board approved the Northwest Territories Power Corporation's interim refundable rate rider effective February 1, 2007. Thank you, Mr. Speaker.