Hay River residents may have a bit of extra cash in their pockets each month if a deal between Northland Utilities, the Town of Hay River and the Northwest Territories Power Corporation (NTPC) gets approved.
An application filed by the town to the NWT Public Utilities Board (PUB) has outlined a proposal that will reduce the cost of distributing power to the town — resulting in a cost savings of around 18 per cent, said Glenn Smith, senior administrative officer for the Town of Hay River.
The plan is to purchase the approximately $10.7 million in assets used to distribute power to the town from Northland Utilities then sell them to NTPC, which will then supply the town with power at a lower rate.
“Hay River has been serviced from Northland Utilities through a now-expired franchise agreement since 2016,” Smith said of the current arrangement.
“The Power Corporation sells the power — they generate it through Taltson, then sell it to Northland Utilities at a wholesale rate. Northland Utilities then takes the power and distributes it to town’s customers,” he said of the rather complex arrangement.
Once the agreement expired in 2016, the town went out for proposals to get a better rate.
“NTPC came back with a proposal that the council determined best represented the opportunity for cost reduction associated with the distribution of power, while meeting the reliability expectations that are needed with an essential service. Ever since then, we have been working towards getting a purchasing agreement with Northland Utilities,” Smith said.
“We recognize that it is a significant reduction for both residents and commercial entities in the community, and probably to a lesser degree, government customers that operate within Hay River,” Smith said of the potential impact of such an arrangement. “So everyone is going to benefit from a reduction in their current bill which is provided from Northland Utilities.”
The agreement would have to be approved by the Public Utilities Board.
The assets are defined as the power poles, cabling, the power plant — the back-up diesel generator in Hay River — and the tangible items associated with providing power.
Describing the town as a ‘hub of the North’ by virtue of being the centre of transportation, manufacturing and servicing for much of territory, Smith said lower power rates would help businesses control their costs for services throughout the North.
“I think it is a win for the entire NWT to have a reduction of rates for Hay River. It gives the business community in Hay River a stronger competitive advantage to doing business in the North,” he said. “It certainly opens the door for new business to come to town and establish itself.”
Support for arrangement
Doug Prendergast, communications manager for NTPC, said the corporation is in support of the town’s application.
“Once the franchise is transferred, Hay River will move into the Taltson zone,” Prendergast said.
And once in that rate zone, alongside Fort Smith and Fort Resolution, the power rates for the town will then decrease for Hay River, he said.
Prendergast said it remains to be seen whether the communities surrounding Hay River will be impacted by the proposed arrangement.
“They currently are provided power through NTPC and they will have to look at the situation and determine what their preference would be for the path going forward,” he said.
“Each franchise is separate. Even though there may be shared power lines that deliver power to different communities, when it reaches the boundaries of each community, that really is when the local franchise comes in to play. Over the years, NTPC has provided power to customers in K’atl’odeeche First Nation, Enterprise, Hay River and other communities.
“The same power lines could end up delivering power through different companies.”
Prendergast said it has taken much longer to reach this potential arrangement than anyone would have expected when the franchise agreement expired back in 2016.
“But it is an exciting milestone and an important step forward in anticipating this long desired move on the part of the town to transfer the distribution franchise,” he said, adding that it will likely come to fruition sometime in the next several months.
Once that happens, he said they will be ready and prepared.
“Our intent is that the transfer be as seamless as possible for customers. We want to ensure the power continues uninterrupted as the distribution rights move from Northland Utilities to NTPC,” Prendergast said.
“We will be doing a lot of outreach to Hay River customers to make sure they are aware of what is happening at every stage of the process.”
Smith said the submission to the PUB is a significant milestone for the town.
“A lot of perseverance and commitment has been demonstrated by council — both current and past councils in Hay River to get us to this point and with the goal of lowering the cost of living and operating in Hay River.”