Hay River, Northwest Territories, May 9, 2024 – The Northwest Territories Power Corporation (NTPC) has filed an application for interim rates to reflect the significant increase in the price of diesel over the past two years. If approved by the NWT Public Utilities Board (PUB), new rates would come into effect on June 1, 2024. Rates will be finalized sometime in 2025-26 following a PUB review of a General Rate Application that will be submitted in December 2024.
The price NTPC pays for diesel has increased by approximately 40% at times since current electricity rates were set. Earlier this year, NTPC applied to the PUB seeking a fuel rider to cover the additional generation costs from fuel prices that are not being recovered through rates. This included costs already incurred as well as future costs. It did not include the additional volume of diesel required to augment lower hydro generation in the Snare Zone due to low water.
In Decision 3-2024, the PUB rejected the rate rider request and directed NTPC to submit a new filing for a rider that only collected extra fuel costs incurred up to March 31, 2024, and was categorized as the “catch-up” component. This resulted in a small increase in the Rate Stabilization Fund (RSF) rider in all Rate zones, including 1.12 cents per kilowatt hour in the Taltson Zone, 1.01 cents per kilowatt hour in the Thermal Zone and 1.09 cents per kilowatt hour in the Snare Zone. This new rider came into effect on May 1, 2024, replacing a 0.9 cents per kilowatt hour RSF rider that had been in place since 2019.
To deal with the ongoing higher price of diesel fuel, also known as the “keep-up” component, NTPC was directed to adjust base rates for the higher diesel price and file a GRA for fiscal year 2024-25. This ensures cost causation and rate recovery by zone are “reasonably aligned.” Submission of a GRA by December 31, 2024 was one of the directives outlined in PUB’s Decision 1-2024, which dealt with the Purchase and Sale of Hay River Franchise Assets application.
As a result of NTPC’s interim rate application to comply with the PUB decision, all rate categories in the Thermal Zone will see a rate increase of approximately 15% to reflect the higher cost of diesel while Snare Zone rate categories will see an increase of approximately 4.4%. The PUB has previously approved a rate rider of 2.34 cents per kilowatt hour in the Snare Zone to cover extra operating and maintenance costs caused by increased diesel generation at the Jackfish Generating Facility in Yellowknife due to low water in the Snare system. This rider came into effect on May 1, 2024. The overall impact on residential customers in Yellowknife and the rest of the Snare Zone will be approximately 10.7%. Rate categories in the Taltson Zone will see an approximate 5.3% increase in rates.
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Cumulative Impact in Each Rate Zone (All Rate Categories) |
||
|
Rate Stabilization Fund Rider |
1.01 cents per kilowatt hour |
|
|
Base rates (diesel price increase) |
15.0% |
|
|
Total increase by percentage |
14.4% |
|
|
Snare Zone |
Rate Stabilization Fund Rider |
1.09 cents per kilowatt hour |
|
Drought operation/maintenance recovery rider |
2.34 cents per kilowatt hour |
|
|
Base rates (diesel price increase) |
4.4% |
|
|
Total rate impact |
10.7% increase |
|
|
Taltson Zone |
Rate Stabilization Fund Rider |
1.10 cents per kilowatt hour |
|
Base rates (diesel price increase) |
5.0% |
|
|
Total rate impact |
4.7% increase |
* Residential customers in the Thermal Zone will see lower rates than listed here as a result of the GNWT’s Territorial Power Support Program.
The table below indicates the average bill impact on a residential customer who uses 600 kilowatt hours in the summer months and receives the Territorial Power Support Program (TPSP) subsidy from the GNWT. The TPSP applies to communities that use thermal generation and subsidizes electricity rates to the Yellowknife rate. Only residential customers are eligible for the subsidy and general service (commercial) customers such as hotels and grocery stores will incur the approximate 15% increase in the Thermal rate zone. Through the TPSP subsidy, the GNWT provides approximately $7 million annually to reduce the cost of electricity for customers.
NTPC is a wholly owned subsidiary of NT Hydro, which in turn is 100 percent owned by the Government of the Northwest Territories.
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“NTPC is committed to doing what it can to keep electricity rates as low as possible for Northern residents. Unfortunately, global increases in the price of diesel are a matter beyond our control and must be recovered from customers. We will continue to work with our Board and the GNWT to explore options for paying for unavoidable expenses while minimizing the impact on the cost of living.”
Cory Strang, President and CEO of the Northwest Territories Power Corporation
Quick Facts
- Current electricity rates are based on the price of diesel in December 2021, which averaged $1.18 cents per kilowatt hour (prices in individual communities may have been higher or lower)
- In April 2024, the average price of diesel was $1.65 cents per kilowatt hour
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For media inquiries, please contact:
Doug Prendergast
Northwest Territories Power Corporation
867-874-5202