Qulliq Energy Corp. announces rate increase

Nunavummiut will pay more for power, starting April 1, because the Qulliq Energy Corp. has received the go-ahead to impose an increase of 18.88 per cent, effective April 1, to all customer classes.

“This increase will bring our revenue in line with our expenses,” Lorne Kusugak, the minister responsible for Nunavut’s power corp., said in a March 29 news release. “This provides a true indicator to our customers of the true cost of their energy.”

Phase one of the hike, called a “General Rate Application,” saw an interim increase of six per cent in power rates last October.

As of April 1, that interim rate increase will no longer be in effect.

The Fuel Stabilization Fund will also be reset to zero, making the net increase to the residential customer about 2.5 per cent more than their March bill, said the QEC news release.

The news could be worse, according to the QEC.

Rather than collecting last year’s revenue shortfall from customers, as is the norm in other jurisdictions, QEC will receive “an infusion of funds — that is, more money — from the Government of Nunavut, the news release said.

“This greatly reduces the financial burden on customers in 2011-12,” it said.

Phase two of the price increase, which determines how this new rate will be applied across the different rate classes and communities, starts now.

Information on how this rate increase will affect customers is available on QEC’s website, and will be included with the April 2011 bill, the news release said.

The April 1 rate increase is necessary because current rates are “no longer able to generate the income required to operate,” said the utility’s corporate plan, tabled in Nunavut’s legislature Feb. 22.

“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,” the plan said.

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.

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