The cost of taking over Hay River’s electrical distribution is one of the reasons the Northwest Territories Power Corporation (NTPC) is applying to increase rates across the territory.
NTPC’s general rate application, filed last month, proposes hiking the price of power by 18 per cent across the territory. That application highlights upcoming expenses for infrastructure and staffing that will be needed to distribute power in Hay River.
NTPC is officially set to take over Hay River’s distribution in March.
The power corporation estimates that by 2025-26, its non-fuel operation and maintenance expenses will have grown by more than $9 million since 2022-23. Nearly a third of that — $2.7 million — is due to the takeover of the Hay River franchise.
Gordon Van Tighem, chair of the N.W.T. Public Utilities Board, confirmed the expenses related to the project are one reason why NTPC is applying to increase rates. Other reasons include an ongoing drought that impacts hydro power generation, climbing diesel prices, several capital projects and the impacts of wildfires.
“Throughout this period of challenges, NTPC has maintained safe and reliable service to customers,” the application says.
Currently, NTPC sells electricity to Naka Power who then distributes it in Hay River. Since 2016, the town has been in the process of getting NTPC to become the sole distributor.
Acquiring Hay River, which is referred to by NTPC in the rate application as “the most significant franchise transfer in decades,” was initially touted as an opportunity to save Hay River customers up to as much as 20 per cent on their power bills.
But last month, NTPC applied to increase rates across the territory by approximately 25 per cent.
Jayne Haywood, who owns Territorial Quick Print in Hay River, said if the rate hike goes ahead, the increase will be the end of her business. She said she pays close to $1,000 per month for power already.
“Just can’t afford it, that’s all there is to it — just can’t,” she said.
“I’m a print shop, presses, printers — all this equipment takes a lot of power.”
Paul Grant, NTPC’s chief financial officer, said there will be savings for Hay River customers as a result of the move, despite the potential rate hike.
“We still expect to see the people of Hay River will see a drop in the rates that they have to pay after the franchise is taken over by NTPC,” he said.
NTPC’s application reiterates this, stating that Hay River rates will match what people in Fort Smith pay. This will then benefit Fort Smith and other NTPC customers, with more paying for residential power.
Salaries and infrastructure costs
The project comes with millions of dollars in associated costs for the power corporation.
This includes an additional $1.5 million for salaries and wages that will go toward nine employees for the Hay River franchise.
Another approximate $1 million will go toward the cost of supplies and services for maintaining plants and equipment for the Hay River franchise.
NTPC will need to replace all the existing meters in Hay River, costing nearly $1.5 million.
NTPC writes in its application that it will need to to purchase a large bucket truck, estimated to cost around $500,000, as well as a digger truck for another approximate $500,000, both for Hay River operations.
CBC News reached out to NTPC for details on added benefits to acquiring Hay River, but no one was able to provide them by deadline.
NTPC is expected to take over Hay River distribution in March 2025.
