Today the Northwest
Territories Power Corporation (NTPC) filed an application with the Public
Utilities Board (PUB) to increase interim refundable rates and obtain
approval to charge customers a shortfall rate rider to recover revenue
owing for the 12 month period ending March 31, 2002.
In May last year,
the Corporation filed Phase I of its General Rate Application 2001/2003
(GRA) with the PUB. At that time it was indicated that it would probably
take about 12 months to complete the Phase I process, and in fact it
was in February 2002 that the PUB announced its decision on this matter.
The primary purpose of Phase I was for the PUB to approve the total
amount of revenue that the Corporation could collect from its customers
in 2001/02 and 2002/03.
Because of the long
process that needs to be followed with any GRA, the Corporation also
filed with the PUB in May last year, an application to charge customers
an interim refundable rate. The reason for this increased rate was to
recover at least a percentage – up to 50% - of the total revenue
required to run the Corporation during 2001/02.
“As we said
at the time, interim refundable rates allow the GRA process to take
its course and at the same time provide today’s energy customers
with more accurate price signals. From the Corporation’s perspective,
we will be collecting the revenue needed to meet the cost of operating
the company and providing safe, reliable electricity,” said Judy
Goucher, Chief Financial Officer of NTPC.
Since the interim
rates collected only 50% of the approved revenue requirement deficiency,
Goucher said that for 2001/02 the Corporation incurred a $5.1 million
revenue shortfall, and in order to recover this shortfall NTPC is now
applying to the PUB to charge customers an additional flat rate of 2cents/kWh.
It is anticipated that this shortfall rider will remain in effect for
12 months from the date of approval or for however long it takes to
recover the total shortfall.
In addition, the
Corporation will be applying to adjust the interim refundable rates
to allow for collection of the approved revenue requirement for 2002/03.
This move will prevent the accumulation of further revenue shortfalls
and again, give consumers a price signal, which they can use when considering
energy conservation options.
The Corporation
is waiting to hear from the Government of the Northwest Territories
(GNWT) on how these rate increases will be treated under the Territorial
Power Support Program. Currently, the GNWT subsidizes communities to
the Yellowknife rate for the first 700kWh per month.
In an effort to
help customers mitigate the impact of these increases, NTPC proposes
building on its recent efforts to provide customers with information
on how to use electricity more efficiently. It is hoped that a new program
relating to energy efficiency will be announced in the coming months.
“Finally I
draw your attention to the use of the term ‘interim refundable
rate’. This term is used because final rates will not be set until
Phase II of the GRA has been completed” said Goucher. “Phase
II will be filed with the PUB at the end of August. Further the new
rates being applied for today are subject to the approval of the PUB.”
NTPC encourages
all communities to participate in the Phase II process, as it is during
this part of the General Rate Application that rate structure options
are considered.
For more information please contact:
Judith
Goucher
Director, Finance &CFO
(867) 874-5234
or
Peter
Watt
Marketing
& Communications Officer
(867) 874-5215
