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QEC asks for even higher power rates

"There is no excuse for this information not to be included"

JIM BELL

Bill Lyall, the president of Arctic Co-ops Ltd., at a public hearing in Iqaluit this week held by the Utilities Rate Review Council. Lyall said the Nunavut Power Corp. must do much more to become cost-efficient, and that the URRC should also have the authority to deal with fuel prices. (PHOTO BY JIM BELL)

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The Qulliq Energy Corp. changed the Nunavut Power Corp.'s rate application to propose even higher prices for its commercial and residential customers, but didn't tell the public about it until this past Tuesday.

"The communications packages have not kept pace with the changes to the general rate application," said Hazen Hawker, the power corporation's CEO, at a public hearing held by the Utilities Rate Review Council in Iqaluit on Nov. 29.

The power corporation's revised territorial-wide rate proposal, if accepted as is, would deepen the price shock that would hit private power customers next year in most Nunavut communities.

Here's how commercial electricity prices would rise in the seven most affected communities:

• Iqaluit - 98.2 per cent
• Rankin Inlet - 70.9 per cent
• Igloolik - 69.1 per cent
• Panniqtuuq - 58.8 per cent
• Cambridge Bay - 45.6 per cent
• Baker Lake - 45.5 per cent
• Cape Dorset - 40.2 per cent

Here's how residential electricity prices would rise in the seven most affected communities:

• Iqaluit - 74.9 per cent
• Rankin Inlet - 68.3 per cent
• Igloolik - 65.1 per cent
• Panniqtuuq - 54.5 per cent
• Cape Dorset - 47.7 per cent
• Baker Lake - 45.5 per cent
• Cambridge Bay - 32.7 per cent

But that's not the end of it.

Three proposed surcharges, aimed at generating three separate pots of cash to help the power corporation pay for environmental clean-ups, alternative energy research, and better compliance with the Nunavut land claims agreement, would add 2.25 cents a kilowatt hour to customers' bills.

That means - according to the power corporations' estimates - that Iqaluit commercial power customers would now see their actual power bills rise by 106.8 per cent after April 1 next year.

The power corporation, however, is now suggesting that rate increases could be phased in over three years to soften their impact.

Anne Crawford, the power corporation's new president, said experts working for the Utilities Rate Review Council discovered an error in the way that the corporation proposes to bill for electricity used in street lights.

To compensate for that error, the corporation then raised its proposed rates.

But some business people are furious at the power corporation for changing its proposal without telling anybody about it.

"There is no excuse for this information not to be included in the information packages," Kenn Harper, from Iqaluit, told the URRC on Tuesday.

Though documents explaining the revised rates are dated "November 29, 2004," Harper said other documents suggest the power corporation made the change weeks ago - when the URRC's round of public hearings was just starting.

That means people in most communities could not assess the full impact of the power corporation's proposals when the URRC was asking them for their views, Harper said.

"To me it jeopardizes the integrity of the whole process," Iqaluit Centre MLA Hunter Tootoo told Energy Minister Ed Picco in the legislative assembly on Tuesday. If the power corporation was providing inaccurate information, Tootoo said, then "the whole process... was a waste of time."

Representatives of other business organizations slammed the power corporation for its numerous past financial blunders, many of which the auditor general of Canada noted in a scathing report issued about a year ago.

Bill Lyall, the president of Arctic Co-operatives Ltd., and Ken Spence, the regional manager for Northwestel, exposed another financial blunder that until now has escaped the attention of the public.

They said the power corporation signed an expensive long-term, multi-million dollar contract with a private firm in Yellowknife, to build its own telecommunications network.

Though they didn't name the "private firm" at the hearing, other sources said the telecommunications contract is with SSI Micro, a well-known Yellowknife-based internet service provider.

Spence told the URRC that the power corporation spent too much money on the deal and bought "more network capacity than they need."

Later, the power corporation donated network access to the Nunavut Broadband Development Corp. The Broadband Corp. eventually hired SSI Micro to run the Internet access project that's now starting up in every Nunavut community.

"In the case in question, it is conceivable that NPC was being used by the contractor to fullfil their own corporate objectives," Lyall alleged in his submission to the URRC.

Glenn Cousins, the manager of Iqaluit's Northmart store, said on behalf of the Northwest Company that the power corporation's proposal is a "giant step backwards for Nunavut."

He said the Northwest Company runs 21 Northern, Northmart and Quickstop stores in Nunavut, and that their food prices would rise by an average of 5 per cent across Nunavut.

Dennis Patterson, who presented a submission on behalf of the Iqaluit Chamber of Commerce, said the power corporation's rate application is "flawed, unfair, and discriminatory and will seriously damage the Nunavut economy."

Patterson suggested that political decisions made by the Nunavut government created "significant costs" for the power corporation in its start-up years.

They included a decision by the GN, driven by its controversial decentralization policy, to build a new head office for the power corporation in Baker Lake.

Patterson said it's not fair that private businesses pay the cost of political decisions made by the GN.

And Ken Spence, who is also chair of the Nunavut Food Bank, told the URRC that families who are now living on the edge of malnutrition will go hungry next year if they're forced to pay dramatically higher power bills.

The URRC now has until the end of January to submit a report to Picco. After that, Picco will announce new powers rates after a decision by cabinet.

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