'We are heading for that $1 million mark.'

Ballooning fuel and electricity costs at city-owned buildings have councillors and staff mulling ways of reining in Iqaluit's energy expenses.

Finance director John Hussey tabled cost figures this week for what the city spent last year on energy. The city's total costs for fuel and electricity reached nearly $2 million in 2006.

Hussey and city councillors agree: energy costs will get worse before they get better.

"We are heading for that $1 million mark," Hussey said during a meeting of the city's finance committee of the whole.

Iqaluit spent $888,000 on furnace oil, diesel and unleaded gasoline last year, including about $315,000 on fuel for the city's fleet of vehicles. That means the city spends about one per cent of its $31 million annual budget on gasoline alone.

"This is just the beginning," warned Coun. Glenn Williams. "I don't see the cost of fuel oil coming down."

The city's electricity bill now tops $957,000, including almost $250,000 to keep the lights on inside the downtown Arnaitok complex, which houses city offices, the fire hall and the only working hockey rink in the city.

What smarts even more for city bean counters, is the $190,000 the city has to spend on electricity for streetlights. Nunavut Power doesn't need city permission to install streetlights, but the city is obligated to pay the electricity costs.

While Hussey acknowledged street lighting is in part simply the cost of doing business for the city, Mayor Elisapee Sheutiapik figured Nunavut Power should at least give the city a heads up before installing the new lights.

Williams said the city should get either a subsidy or more efficient lights to help cut street lighting costs.

"Somehow I feel like I'm being dunned," he said.

On the bright side, Hussey said a project that diverts waste heat from the power plant to one of the city's water booster stations has cut the fuel bill for that station dramatically.

Hard numbers aren't available yet, but the engineering department will table later this month a report for the first six months of the project.

Sheutiapik said the city's delegation to the Federation of Canadian Municipalities conference in Calgary this weekend will be on the lookout for products and services to help cut energy costs.