Nunavut municipalities slam power rate hike

Iqaluit mayor Madeleine Redfern is not happy with news that electricity rates in Nunavut will go up by almost 19 per cent.

In a statement Redfern said the rate hike drives up costs for city hall, local businesses and residents, and hits Iqaluit’s poor especially hard.

“This power rate increase will impact everyone but it will hurt the most vulnerable members of our society, the poor and working poor,” she said.

The Utility Rates Review Council approves the 18.9-per cent increase late last month.

Qulliq says it needs the extra money to keep up with increased capital costs.

Last month it announced it would start work on replacement power plants for the creaky old generators in Cape Dorset, Qikiqtarjuaq and Taloyoak.

“This increase will bring our revenue in line with our expenses,” QEC minister Lorne Kusugak said in a statement, adding that the decision “provides a true indicator to our customers of the true cost of their energy.”

But knowing the true cost of power may be of little consolation to residents when residents pay their bills.

Redfern said the rate hike means an extra $200,000 a year in costs for the city.

She also said the increase will likely force business to raise prices, which affects both residents and city hall when it buys goods and services from those businesses.

The Nunavut Association of Municipalities also blasted the rate hike, saying it will only add to the financial strain for hamlets already struggling to provide basic municipal services.

“Municipalities within Nunavut regularly face extreme pressures financially to fulfill local governments’ responsibilities relating to water, sewage, garbage, roads, recreation, fire protection,” NAM president, and Pangnirtung mayor, Sakiasie Sowdlooapik said in a news release.

“Many will likely go even deeper in debt trying to keep up with this latest (Government of Nunavut) imposition by the QEC of an almost 20-per cent increase in costs for power. This is simply unfair to both municipalities as well as to all Nunavummiut.”

QEC president Peter Mackey said he understands why municipalities are worried their costs will increase, but he added that the Department of Community and Government Services has programs designed to help offset energy costs for hamlets.

But he said QEC simply needs the money to keep up with maintenance requirements, while acknowledging the company should have started on a second general rate application sooner.

Its last one was submitted in 2005, with rates going up last in 2006.

“If a (general rate application) had been done three years ago, you’d be looking at smaller increases,” he said.

As for residential ratepayers, Mackey said the URRC decision removes a fuel rider of 4.68 cents per kilowatt hour. And he said the actual rate increase in effect now is 12.8 per cent, because consumers have already been paying a six per cent interim rate hike since last fall.

The next step for QEC is the submission of Phase 2 of the general rate application, which will determine how the increase will be spread out among Nunavut’s 25 communities.

The URRC can impose the increase equally across the territory, vary it by community or come up with a combination of the two approaches.

Mackey said QEC hopes to have Phase 2 of the GRA submitted to the URRC ahead of the Oct. 1 deadline.