On October 30, 2024, NTPC 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 review process ensures that electricity customers are protected from unreasonable rate increases.
Over the next several months, the PUB will oversee a process to review the costs identified by NTPC and then determine whether the rate changes proposed in the GRA are appropriate and reasonable. Members of the public, including Indigenous and 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 for a utility 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.
The GNWT has provided significant funding over the past two years to help offset costs associated with circumstances over which NTPC had little or no control. This includes $45.2 million for the additional fuel needed to provide power to customers in the Snare Zone because of low water and $38 million to cover cost escalations for the Inuvik Wind Project. These government contributions significantly reduced the need for even higher customer rates. NTPC will continue working with the GNWT to identify ways that the proposed rate increases could be further reduced.
The GNWT also helps to keep rates low across the NWT through the Territorial Power Support Program. 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.
There are four primary categories driving the need for rate increases:
1. Extraordinary Events, such as extreme low water in the Snare River system
2. High Fuel Prices
3. Large Capital Projects, such as the Taltson Overhaul, and
4. Normal Operations, which includes inflationary pressures while electricity sales remain flat
While these are the primary drivers of increased costs, there are other factors that have an impact on the cost of electricity, including:
- Electricity sales have declined over the past decade
- Aging infrastructure – costs to maintain assets increase as they get older -- 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
- 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.
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.
The table below shows the actual impact on the monthly bill of a nongovernment residential customer who consumes 600 kilowatt hours /h in a month prior to inclusion of any further government funding contributions. This customer will see an increase in their monthly bill of $33.23 if they live in Yellowknife and $32.22 if they live in the Snare Zone or the Thermal Zone.
This same customer will see an increase in their monthly bill of $37.60 if they live in one of NTPC’s communities in the Taltson Zone.
The amount of a monthly bill will increase by more or less than the amounts in the table, depending on actual electricity use.
Throughout the review process, documents related to the GRA, including questions from intervenors and response by NTPC, will be posted on the PUB website.