Okalik plugs Picco back into the energy socket

Premier Paul Okalik has given Iqaluit East MLA Ed Picco a chance to help fix a mess that many people now blame him for creating — the Nunavut Power Corp.’s financial woes.
Late last Friday, Okalik’s office announced that to restore public confidence in the power corporation, Picco will become Nunavut’s energy minister, a job he performed for most of the last government’s mandate.

He replaces Baker Lake MLA David Simailak, who will step away from energy issues to devote more time to his other portfolio, economic development and transportation.

The Qulliq Energy Corp. is the GN’s energy mothership, with responsibility for two important children: the Nunavut Power Corp. (electricity), and the soon-to-be-created Qulliq Fuel Corp. (fuel products).

Picco’s first major job will be to order a new set of electricity rates for the power corporation, but only after the Utilities Rates Review Council studies the NPC’s recent rate-hike application and submits their recommendations to Picco.

That won’t happen until at least Dec. 29. But if the council asks for a 30-day extension, Picco won’t see their recommendations until Jan. 29. After he gets them, the minister must announce new power rates within 30 days.

Picco won’t comment on the specifics of the power corporation’s rate application.

But he did say that he’ll consider a wide range of factors before making a decision, including the cost impact on the GN and on Nunavut’s economy.

Picco said he’s pleased with the heavy turnout that the URRC’s recent rate hearings in Iqaluit produced.

At those hearings, held Nov. 5 at the AWG arena, business people, homeowners and other residents blasted the power corporation’s territorial-wide rate proposal.

Until now, Iqaluit power customers have paid the lowest rates in Nunavut — so the one-rate proposal would hit Iqaluit the hardest.

The commercial power rate would rise to 49.8 cents a kilowatt-hour from 25.9 cents a kilowatt-hour, producing a 92.3 per cent price shock.

“I believe that what you’re doing is going to be to the total detriment to the economic growth of the city of Iqaluit,” said Ian Fremantle, the City of Iqaluit’s chief administrative officer.

Fremantle said the proposal would cost the municipal government an extra $650,000 in power bills, nearly doubling what they pay now.

The residential power rate in Iqaluit would rise to 53.333 cents a kilowatt-hour, up from 31.58 cents a kilowatt-hour.

Fremantle said this will take more money out of homeowner’s pockets, making it more difficult for them to pay property tax to the city.

“There’s only so much money in our residents’ pockets,” Fremantle said.

Keith Irving, an architect and small business person, told the URRC that the public has lost confidence in the power corporation’s ability to manage its finances.

“To what extent should the power consumers of Nunavut pay for costs that are the direct result of poor management practices of the Nunavut Power Corp.?” Irving asked.

Glenn Cousins, the president of the Iqaluit Chamber of Commerce, said the chamber is “gravely concerned” about the rate proposal’s potential impact on Iqaluit.

This week, Cousins sent a letter to Nunavut’s economic development minister asking that his department hire an economist to study the impact of power rate increases on Nunavut’s economy.

Meanwhile, Anne Crawford, an Iqaluit lawyer who until now has served on the Qulliq Energy Corp.’s board, will become the corporation’s new president.

She will replace Bobby Gunn of Iqaluit, who will move over to become interim president of the Qulliq Fuel Corp., which is to be officially launched April 1, 2005 when it takes over the functions of the GN’s old Petroleum Products Division.