Northland Utilities (NWT) Ltd. is holding out hope that the new territorial government may halt the Town of Hay River’s long-running efforts to purchase the assets of its electricity franchise.

The town launched a process several years ago to buy the franchise assets from Northland Utilities – as permitted in the franchise agreement – and turn the system over to the Northwest Territories Power Corporation (NTPC) in hopes of lowering electricity costs in the community.

Doug Tenney is the vice president of northern development and Indigenous relations with ATCO Electric, the parent company of Northland Utilities (NWT) Ltd.
NNSL file photo

“I think any time you get a new government they have their priorities and things that they want to work on, and it can be different than previous governments,” said Doug Tenney, vice-president of northern development and Indigenous relations with ATCO Electric, the parent company of Northland Utilities (NWT) Ltd. “So obviously I would say it is a possibility. I don’t know what their plan is or where they’re headed, but obviously it is a new government with a significant change in the folks that are elected and certainly quite a different-looking cabinet than what was there previously.”

Tenney noted Northland Utilities has said many times that it’s an honour to be able to serve residents in the NWT.

“We want to continue to do that,” he said. “We’re not for sale. We would rather not be in this discussion. We’d rather be having conversations about how we could make a more efficient electrical system in the Northwest Territories to reduce rates for customers.”

Asked for reaction to Tenney’s comments, Mayor Kandis Jameson said she doesn’t believe the new government will change anything related to the town’s plans to purchase the Northland Utilities assets.

“I guess anything can change,” she said. “I’m hopeful that it won’t.”

Jameson noted that the new premier, Caroline Cochrane, was part of the cabinet that made the previous decision to go forward with NTPC’s role in the franchise purchase.

The proposed purchase took a step forward on Oct. 23 with a ruling by the Supreme Court of the NWT.

Northland Utilities had appealed an arbitrator’s decision on the methodology to establish the value of the franchise assets that would be involved in the sale.

The company had proposed a method that would have valued the assets at about three times the net book value.

However, the arbitrator ruled that a more appropriate method would value the assets at 1.3 times the net book value.

“The court’s decision is a positive step in moving this process forward,” said Jameson. “We need to reach the end goal of reducing the cost of power for Hay River residents and businesses.”

Tenney had a different view of the ruling.

“Obviously, I would say we’re disappointed, but happy that we got a chance to get in front of the judge and to get a ruling,” he said.

The ruling is now being studied by Northland Utilities’ lawyers, and there remains the possibility that it could be taken to the NWT Court of Appeal.

Tenney explained the actual value of the company’s franchise assets changes as the months go by.

“I wouldn’t even be able to tell you the exact number,” he said. “We didn’t really get into the numbers when we were in front of the court. What’s important is the 1.3 times the net book value, because obviously the net book value is going to change based on when exactly this transaction closes.”

Tenney said the two sides continue to discuss a purchase-and-sale agreement.

“We’re working on the agreement,” he said. “The agreement is not finalized yet. So nobody has signed it.”

Jameson noted that, even with the expense of the negotiations and the court involvement, there will still be savings for electricity consumers at the end of the process.

“We can’t really comment on what the rate will be, but the cost of going through this process was factored in from the beginning, and the opportunity for savings is still there,” she said.

Northland Utilities has held the electricity franchise in Hay River for decades.

The most recent 10-year renewal of the agreement began in 2006 and expired in 2016.

The company has continued to operate the franchise while negotiations with the town are ongoing.

Paul Bickford

Paul Bickford is the reporter for Hay River Hub.

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