Electricity rates

General Rate Application -- 2022

NTPC has filed a General Rate Application (GRA) with the NWT Public Utilities Board (PUB). The GRA is required because revenue collected from customers is not currently sufficient to cover the cost of delivering electricity. The PUB ensures that electricity customers are protected from unreasonable rate increases.  To reduce the impact on customers, NTPC has requested that any approved rate increase be phased in over two years. 

Current rates are not producing sufficient revenue to cover the cost of delivering electricity to customers. To address this situation, a revenue increase of approximately seven percent is required. The GRA proposes that rates in the Snare and Thermal Zones increase by 2.5% in each of the next two years. In Norman Wells and the Taltson Zone, rates must increase by 10% in each of the next two years. These larger increases are necessary because of local or regional factors.  

The rate increase in the Snare and Thermal Zones and Norman Wells will be offset by the Territorial Power Support Program (TPSP). Customers in NTPC communities in the Taltson Zone have the lowest rates in the NWT and therefore don’t qualify for the TPSP. However, rates have not been covering the cost of delivering power for many years. Even after the increase, Fort Smith and Fort Resolution rates will remain lower than other communities in the NWT and below the TPSP rate. Information about the TPSP can be found below. 

The table below illustrates the impact on an average residential customer who uses 1000 kilowatt hours a month during the winter, before and after the TPSP is applied.  

Rate increase table

 

Lutselk'e plant
A new plant is under construction in Lutsel K'e , which will improve reliability of electricity supply in the community

Over the next several months, the PUB will oversee a process to review the costs identified by NTPC and then determine whether the rate increases proposed in the GRA are appropriate. Members of the public, including local governments, business groups and individuals can participate in this process. For information on how to register as an intervenor, follow this link to the PUB website.  The website also provides further information about how the GRA process works and the role of the PUB in setting electricity rates. 

Electricity rates are based on the costs that are necessary to deliver power to customers, including the cost to replace or refurbish assets such as hydro units, diesel generators and power poles. Utilities are also permitted to earn a reasonable profit, which may be built into rates.  

Over the past several years, the Government of the Northwest Territories (GNWT), the sole shareholder of NTPC, has foregone dividends as part of its efforts to keep the cost of electricity as low as possible. The GNWT also helps to keep rates low across the NWT through the TPSP. This program ensures that all NWT households can, with modest energy saving efforts, pay the same power rate as Yellowknife. The GNWT subsidizes the difference between local rates and Yellowknife rates up to 1000 kilowatt hours in the winter and up to 600 kilowatt hours the rest of the year. This program represents a cost to the GNWT of several million dollars annually. 

NTPC is required to operate on a self-sustaining basis – rates collected must be sufficient to pay for the cost of delivering electricity to customers. NTPC has worked very hard to keep rates as low as possible while providing reliable service and investing in new and refurbished assets such as hydro units, local power plants, transmission lines and power poles.   

The key factors impacting the cost of electricity include:  

  • Sales are declining – the assets used to provide electricity service are not easily downsized when sales decline so the cost of the infrastructure is unchanged but there are fewer sales over which to spread the cost. Operation and maintenance costs also do not decline significantly. 
  • Aging infrastructure – costs to maintain assets increase as they get older and there is a need to invest in refurbishment and/or replacement of critical assets (hydroelectric plants, thermal plants, transmission lines, etc.) 
  • Lack of new industrial sales to offset declining residential sales 
  • Climate change – extreme weather events (e.g., lightning, flooding, forest fires, high winds, temperature extremes) and receding permafrost 
  • Fluctuating fuel prices 
  • Inflation 
  • Interest and amortization (cost to repay loans used to pay for capital projects) 
  • Federal funding support for necessary refurbishments and plant replacements has helped minimize the costs that must be recovered from customers. 
Tower work
Maintenance of transmission and distribution assets is ongoing

NTPC is committed to maintaining and improving the reliability of electricity service in the communities it serves. This requires the Corporation to not only invest in refurbishment and replacement of assets but also to financially commit to a comprehensive preventive maintenance program, including the repair and replacement of parts when required and the associated labour costs.    

NTPC has also initiated work to develop electricity sales, whether to supply industry or to support electrification of transportation. If successful, these steps to increase electricity load will help stabilize electricity rates for all Northerners.  

 

 

Links

Throughout the GRA process, this page will be updated to include links to key documents so that interested parties have access to the information you require. 

News release 

Media Backgrounder 

Frequently Asked Questions 

PUB Filings