Nunavut power utility wants to exit dinosaur era

Despite a desperate shortage of cash, Nunavut’s power utility is in the process of changing from a diesel-burning dinosaur to modern provider of alternative energy, says the chair of Qulliq Energy Corp.

New power plants and better customer service, financial reporting and communications form the backbone of QEC’s plans from now until 2016, Simon Merkosak writes in the utility’s corporate plan, tabled in Nunavut’s legislature Feb. 22.

“The transition from a corporation dealing solely in diesel generation, to a modern energy company capable of delivering alternative energy options to Nunavummiut is truly underway,” Merkosak writes.

But QEC needs money to replace its aging crop of diesel generators and start rolling out alternative energy production.

In Iqaluit, the city’s population is two and a half times what it was 15 years ago and the utility predicts it will need $60 million to $70 million over the next five years to replace aging infrastructure and keep up with growing demand.

“This equates to $12 [million] to 14 million in annual capital expenditures for Iqaluit alone,” the plan states. “This represents nearly the entire annual capital budget of the corporation.”

That’s why QEC is seeking a 19.3 per cent Nunavut-wide rate increase from the Utility Rates Review Council.

It doesn’t take in enough revenue from smaller communities to cover the cost building new plants in those communities.

The proposal has drawn howls of outrage from business leaders and Iqaluit’s mayor, who say they’ll have to pass on the increased costs to customers and taxpayers.

But the utility says current rates are “no longer able to generate the income required to operate.”

“Due to a lack of corporate and private ratepayers there is an inability to establish suitable revenue to properly fund capital infrastructure maintenance and improvements.”

QEC is about to start work on new plants in Qikiqtarjuaq, Taloyoak and Cape Dorset. The Cape Dorset plant is intended to eventually become a hybrid wind, diesel and hydrogen facility.

The utility also wants to build an Arctic wind power test facility near Arviat, secure funding for the feasibility study for a hydroelectric dam near Iqaluit, and by 2014, start investigating potential hydroelectric sites in the Kitikmeot and Kivalliq regions.

QEC is already upgrading Iqaluit’s transmission system, some of which dates back to the 1950s, with a more modern version.

The utility also plans a major expansion and the replacement of old generators for Iqaluit’s power plant.

The utility also has to reach a new collective agreement with its unionized workers, to replace a contract that expired Dec. 31, 2010.

QEC spokeswoman Meghan McRae said the two sides are currently discussing “non-monetary issues” and will talk money after the territorial budget is approved later this month.

McRae said the company hopes to have a new collective agreement in place before Apr. 1.