Mr. Speaker, continuing to invest in our power system and looking for innovative approaches to meeting NWT energy needs will be critical to our efforts to reduce the cost of living for NWT residents and protect the NWT environment. I rise today to provide an update on how the Northwest Territories Power Corporation, or NTPC, is contributing to that work.
Mr. Speaker, NTPC is a member of the Northern Energy Consortium which is driven to solve electricity-related problems across Canada’s North and includes utilities in all three territories. The federal government is matching funds provided by the Consortium members to support an industrial research chair in Northern Energy Innovation awarded by the Natural Sciences and Engineering Research Council of Canada to Yukon College. The Chair, Dr. Michael Ross, and the Consortium aim to achieve the highest level of efficiency, reliability, cost reduction, and enhanced environmental stewardship standards in the northern electrical industry through applied research and innovation.
Mr. Speaker, one of the areas of this research will be the integration of renewable energy into isolated community grids. NTPC, in conjunction with the GNWT, recently introduced new solar arrays into the local electrical systems in both Wrigley and Fort Liard and in the first five months of operation has already decreased diesel consumption by 8,500 litres.
Mr. Speaker, along with integrating new alternative energy, NTPC continues to invest in its aging infrastructure to ensure safe and reliable electrical systems in all the communities it serves. This year, $27.8 million is being invested in capital projects including major repairs, engine replacements and overhauls, and maintenance.
One of the major projects earlier this year was the 7 MW Snare Falls hydro plant overhaul which was completed in April and was fortunately not affected by the wild fires that burned at the Snare site this summer.
Mr. Speaker, those same wild fires burned one section of the Snare to North Slave transmission line causing several outages for customers in and around Yellowknife. However a safe, but quick, repair was carried out minimizing the need to rely on diesel generation.
Mr. Speaker, the past two years has seen increased diesel usage due to low water on the Snare River and I am happy to announce that water levels for 2016-2017 are average on the Snare system. The Bluefish system has also recovered although the Duncan Lake reservoir remains below normal as we approach winter.
Mr. Speaker, NTPC continues to balance safety and cost with meeting expectations of reliability from its customers. However, like utilities across the country, NWT’s generating infrastructure is aging and NTPC is feeling the pressures of increases in its own operating costs, which in turn increase the rates customers pay. I think it is important for the public to understand, Mr. Speaker that power rates are not set by NTPC or the GNWT. People have been hearing that NTPC is charging Yellowknife customers a premium to subsidize the operation of the NWT power system, but that is simply not the case.
First of all, rates from one electricity zone do not subsidize rates in other zones like the South Slave and thermal communities. Secondly, power rates for all utilities including NTPC are regulated by the Public Utilities Board through a fair, thorough and open process that examines how much it costs a utility to generate and distribute power and how much consumers need to pay to cover those costs.
NTPC filed a General Rate Application with the PUB in June seeking rate increases of 4.8%, 4% and 4% respectively for the next three years. These increases cover inflation and are being partially off-set by a Fuel Refund Rider made possible by lower diesel costs.
Far from seeking a premium, Mr. Speaker, the latest GRA proposes to charge Yellowknife customers only 98 percent of the cost of service for 2016-17 and to hold that rate at around 100 percent for the next few years.
Not only is Yellowknife not paying a premium, Mr. Speaker, but the GNWT has provided direct subsidies of over $40 million to NTPC in recent years to offset increased costs in the Snare Hydro System. Without that subsidy from government, rates in Yellowknife would already be higher.
NTPC continues to work hard to look for ways to lower costs and to ultimately lower the cost of living, Mr. Speaker, and looks forward to participating in the upcoming energy discussion and the subsequent Energy Strategy that will establish principles to guide us as we tackle climate change, manage carbon taxes and our impact on the environment, all the while managing reliability and affordability of electricity.
Thank you, Mr. Speaker.