Okalik dumps Nunavut power utility’s one-rate scheme

Paul Okalik, the minister responsible for the Qulliq Energy Corp., said March 19 that he’s asked the QEC to dump its plan to create a uniform rate system for all Nunavut communities. (FILE PHOTO)

The Qulliq Energy Corp. will “retract” a two-year-old plan for a uniform rate system in all Nunavut communities, Paul Okalik, the territorial minister responsible for the QEC, announced in the legislature March 19.

Under that plan — called “rate re-balancing” — the QEC would have moved step-by-step over about 10 years to a single territory-wide power rate system.

The first phase of rate rebalancing would have kicked in this April 1 — but the scheme’s been scrapped.

Right now, the QEC calculates a different power rate for each community, based on the local cost of providing service.

Under rate re-balancing, larger communities like Rankin Inlet and Iqaluit — where most of Nunavut’s small businesses are located — would have seen big increases in power rates, while some small communities would have seen their rates go down.

“Private homeowners in all communities and businesses in Rankin Inlet, Igloolik, Iqaluit, Cape Dorset, and Pangnirtung would have borne the brunt of the new territorial rate,” Okalik said in his March 19 statement in the Legislative Assembly.

He said ratepayers in those communities could have been hit with five per cent rate increases every year for up to five years.

That, in turn, would have raised prices of goods and services in those communities and hurt homeownership.

The first phase of rate rebalancing was to have started April 1, 2012, but Lorne Kusugak, then the minister of QEC, delayed it until April 1, 2014.

But with the latest announcement from Okalik, it appears as if rate rebalancing won’t happen for a long time, if ever.

“Mr. Speaker, system-wide changes to rate structures will not be considered until its effects, such as the cost of living, subsidies and northern allowances, are evaluated and impacts to Nunavummiut are minimized,” Okalik said.

Meanwhile, a QEC application for a 5.1 per cent increase in all rate categories, filed this past November, is still alive.

That rate hike request is separate from the now-defunct rate rebalancing proposal.

And in 2018, the QEC may make suggestions for rate restructuring to cover cost of service.

“As the proposed rates would have seen no additional revenue for the corporation, I have given instruction to the Qulliq Energy Corporation to retract the territorial rate and include, as Phase II of its next General Rate Application, cost of service options for consideration. This application is expected to occur in 2018,” Okalik said.