It’s in the URRC’s hands now, Picco says

Ed Picco, Nunavut’s energy minister, says it’s now up to the Utility Rates Review Council to decide on the Qulliq Energy Corp’s recent capital rate-rider application and that Nunavut’s utility price watchdog doesn’t need more time to get its work done.

“They [the QEC] have told us what they think they need. Now, it’s up to the URRC to tell us what we can afford,” said Picco, who came back from his summer vacation this past Sunday.

The URRC’s deadline for receiving written submissions on the QEC’s latest rate scheme, filed last June on behalf of the Nunavut Power Corp., expired Aug. 31.

In it, the QEC asks for an across-the-board capital rate-rider of about 5.4 cents a kilowatt hour. A rate-rider is a temporary surcharge attached to power bills to raise money for a specific purpose. The capital rider is aimed at raising money to pay for new power plants and power-plant upgrades by spreading the costs across all Nunavut communities.

In a last-ditch lobby effort launched near the end of last month, the Iqaluit Chamber of Commerce, the Nunavut Association of Municipalities, and various high-profile businesses tried to pressure Picco into delaying the consultation process until at least December.

By then, the power corporation will know the amount of a second rate-rider that’s aimed at topping up its $1 million fuel stabilization fund. And by Christmas, consultants are expected to finish an external review of the power corporation.

But Picco says URRC members will know the size of the second fuel rate-rider by the time they make their recommendations, possibly by the end of this month.

And he suggested that if the fuel rate-rider turns out to be high, the URRC might even reduce or even defer the capital rider to avoid a rate shock.

Iqaluit businesses have complained that it’s impossible for them to comment on the capital rider application without knowing the size of the fuel rider.

“I agree 100 per cent. I don’t even know what the fuel rate rider will be either,” Picco said.

But he did say that power corporation officials are finishing work aimed at figuring out the size of that rider. They URRC gave them permission to do that earlier this year, in their report on the corporation’s 2004 general rate application.

That’s why the URRC is unlikely to give the power corporation the full amount that they’re asking for on the capital rider, Picco said.

Since the size of the fuel rider is determined by fuel prices, and by the power corporation’s need to replenish its $1 million stabilization fund, it’s the capital rider that’s likely to be reduced to avoid imposing an onerous rate shock on consumers.

In defending his decision, Picco said that only a full-blown general rate application, such as the one that the power corporation submitted in the fall of 2004, requires public hearings.

“I don’t see any reason to grant a delay. It’s a rider, not a rate application,” Picco said.

Right now, the URRC must give Picco a report on the capital rate-rider application by Sept. 29, unless they ask him for another 30 days to complete it. After receiving the URRC’s recommendation, the minister then has another 30 days in which to announce a decision.

As for the power corporation’s financial statements for the 2004-05 fiscal year, Picco said they’re now in the hands of the QEC’s auditor, the Auditor General of Canada.

He said they can’t be released until the auditor general’s office finishes its audit and signs off on it

Meanwhile, the power corporation is moving forward on studies aimed at figuring out the costs, and the location, of a hydro-electric power plant in the Iqaluit area.

Picco said the power corporation believes that such a plant could generate power at a cost as low as 6.7 cents a kilowatt hour – dramatically lower than the current costs of generating power by burning diesel fuel.

A request for proposals that seeks a consultant to do a pre-feasibility study on an Iqaluit hydro plant closed this past Monday.

In it, the consultant will be asked to “rank” a selection of possible sites for a hydro dam and a generating plant, including rivers that flow into Anna Maria Port and Ward Inlet, the Armstrong River, the Jordan River, the Mckeand River and the Sylvia Grinnell River.

The consultant will be asked to pick the five best sites, and then rank them according to a variety of criteria, including cost and water flow.