Louis Sebert: Update on the Northwest Territories Power Corporation

June 8, 2016
Ministers' Statements and Speeches

Mr. Speaker, I would like to provide Members with an update on recent changes made with respect to the Northwest Territories Power Corporation.

On May 24, 2016, I appointed six Deputy Ministers to the Board of the Corporation.  The reasons for taking this action have been documented in the media but I would like to briefly reiterate these reasons and provide Members and the public with some information on next steps.

First, and most importantly, this change to the Board of Directors will save rate payers $1 million per year. In the face of continued cost pressures, power rates for consumers have also continued to rise.  Four years of rate increases have been followed by an application from the Corporation for further rate increases of 4.8 per cent this year followed by 4 per cent in 2017-2018 and 4 per cent in 2018-2019. Retaining the previous Board would have meant even larger rate increases for NWT consumers and this was one way the government could cut costs.

As well, it should be noted that the nature of the Corporation and its relationship to the government is changing. It has been the recipient of substantial GNWT subsidies in recent years.  The Auditor General has recognized these changes and directed that the Corporation be reclassified from a Government Business Enterprise to an Other Government Organization. The Corporation must now adhere to Public Sector Accounting Standards. Given these changes, I believe it is time that the GNWT consider the most appropriate future governance model for the Corporation.

Mr. Speaker, I would like to take this opportunity to thank the former Board for their service and to emphasize that this change was in no way related to the performance of the Board.

I would also like to underscore that the Corporation is a valuable and critical partner in our territory’s efforts to reduce the use of diesel and develop renewable and alternative forms of energy.

When one of the Ikhil gas wells in Inuvik watered out, the Corporation’s timely use of Liquid Natural Gas resulted in savings of $1.7 million since 2014.  The development of the cutting edge Colville Lake solar-diesel-battery hybrid system opened last month was also led by the Corporation.  These are just two examples of the Corporation’s leadership in developing alternative energy for the NWT.

Mr. Speaker, the new Board is in place and operating.  As Minister, I intend to issue direction to the Board to continue to look for ways to further mitigate rising electricity costs.  They will review the responsibilities of the Board as reflected in current legislation and guidelines; develop options regarding the future governance model for the Corporation; and develop an accountability framework that considers greater accountability to all Members of the Legislative Assembly.

Mr. Speaker, this work will feed into the development of a new Energy Plan, one of the commitments in the GNWT mandate.  This Plan will present a long-term vision for our approach to energy in the Northwest Territories and the role of the Corporation will be a critical piece of this vision.

Thank you, Mr. Speaker.