Louis Sebert: Northwest Territories Power Corporation press conference

May 11, 2016
Ministers' Statements and Speeches

Thank you all for coming today. I am here today to announce that as Minister Responsible for the Northwest Territories Power Corporation, I am revoking the appointment of the current Board of Directors of NTPC and appointing Deputy Ministers to the NTPC Board. This change will take effect on May 24th, 2016.

On Friday, April 29th, NTPC filed for an interim electricity rate increase of 4.8 per cent, effective June 1, 2016. NTPC will file a full rate application with the Public Utilities Board on June 30, 2016 that will reflect further increases of 4 per cent in 2017-18 and 4 per cent in 2018-19.

We are all very aware that the cost of living in our communities is high. As Ministers and Members of the Legislative Assembly, we hear concerns about the cost of living in our constituencies and electricity rates tend to be a focal point for these concerns.

The GNWT first learned of the potential magnitude of the rate increase in early 2016. We were informed of various scenarios, with potential rate increases over 6% per year. Given this information, the departments of Public Works and Services and Finance were directed to work with NTPC and undertake a review of the cost pressures facing the corporation.

This internal due diligence work resulted in the proposed rate increases made public with the filing of the interim rate application on April 29th.

The GNWT took the approach that the proposed rate increases should be minimized as much as possible. Regular MLA’s were briefed on the results of this work through the Standing Committee on Priorities and Planning and I believe a number of MLA’s appreciated the approach to minimizing the rate increase. 

I understand that members of the media have had a technical briefing that highlighted the results of this internal due diligence work. This led to the decision to replace the Board of Directors

Costs associated with the Board amount to about $1 million per year, including honorariums and travel. Appointing a Board of Deputy Ministers who will carry out the duties as part of their ongoing work and who already have access to support services is a cost saving measure. 

As well, it should be noted that the nature of the Corporation is changing. It has been the recipient of substantial GNWT subsidies in recent years and given this, I believe it is time that the GNWT consider the most appropriate governance model for the corporation.

The Auditor General has recognized the changing nature of the corporation and directed that the classification of NTPC be changed from a Government Business Enterprise to an Other Government Organization. NTPC must now adhere to Public Sector Accounting Standards.

There is also an issue of accountability. The GNWT, as sole shareholder, is accountable for the subsidies provided to the corporation, and increasingly, it is the GNWT as the shareholder, not the Board, that is expected to answer questions related to the corporation.

I consider the appointment of Deputy Ministers to the Board as a lower cost option while we consider the future governance of the corporation. The new Board will be tasked to identify governance options for the future. In the meantime, we are removing $1 million from the electricity rate base or rate payer bills.

Thank you.