Nunavut power utility wants to keep surcharge first imposed last June

A section of the Qulliq Energy Corp.’s operation in Rankin Inlet, in a file photo from 2005. (FILE PHOTO)

The Qulliq Energy Corp. will keep a special surcharge that it first began adding to customer electricity bills this past June, saying they still need protection from higher fuel prices.

Called a “fuel stabilization rider” the surcharge is intended to help replenish a revolving fund the corporation uses to defray fuel costs.

If the amount of cash fluctuates by plus or minus $1 million, the corporation attaches rate riders to customer bills until the fund is balanced.

The last fuel stabilization rider was imposed June 1, 2013 and was supposed to come off on Nov. 30.

But now, the QEC wants it maintained until new general rate hikes kick in after March 31, 2014.

“Maintaining the FSR at the current rate of 5.31 cents/kWh will reduce the frequency of rate adjustments and result in better rate stability to the benefit of ratepayers,” the corporation said.

Such requests are usually rubber-stamped by the Government of Nunavut and the QEC starts collecting the surcharge immediately, even though the formal approval process can take months.

For example, the June 1 rate rider did not receive final ministerial approval until Sept. 4, but the QEC began collecting it immediately.

A spreadsheet filed with the Utility Rates Review Council in support of the application shows the QEC paid about 91 cents per litre for diesel in 2010-11, when its last big rate increase kicked in.

But for the period between December 2013 and March 2014, they are forecasting a price of about $1.06 to $1.07 per litre.

The QEC purchases diesel and other fuel either from the Department of Community Government and Services’ petroleum products division or one of the PPD’s agents.

Meanwhile, the URRC is still considering a Nunavut-wide rate increase of 5.1 per cent that the corporation submitted to them this past November.

Also on April 1, the QEC will move closer to a uniform rate system for every Nunavut community, when it implements the next phase in its rate rebalancing scheme.