Picco: Nunavut will create its own power corporation

IQALUIT — The government of Nunavut will create an independent Nunavut Power Corporation by April 1, 2001, the minister responsible for NTPC, Ed Picco, announced this week.

“I think it’s a good news story,” Picco said. “I think it gives us the opportunity to move forward as a government to create a lean, efficient power corporation for Nunavut.”

An energy advisory group called Ikuma, set up in July by the Nunavut government, made the recommendation in a recent report.

The Ikuma group, which includes electrical power utility experts from southern Canada, said the Nunavut Power Corporation should be set up as a Crown corporation.

Right now, Nunavut residents receive electrical power from the Northwest Territories Power Corporation through a temporary transition agreement that would expire April 1, 2001 if no permanent agreement on Nunavut’s power supply can be reached by April 1, 2000.

The Ikuma group said that the Hay River-based NTPC would need to be restructured to meet Nunavut’s financial and socio-economic objectives.

“There were serious philosophical differences between us and the West,” Picco said.

“What philosophical direction are we moving in? We see the power corporation as a social and economic tool for us,” he said.

Picco said that the Nunavut cabinet approved the go-it-alone plan now rather than next year because it wanted to inform the government of the Northwest Territories in advance of the December territorial election in the NWT, after which it’s likely that a new government will emerge.

The western position on sharing NTPC after division never sat well with Nunavut leaders.

The last proposal for sharing NTPC, made earlier this year in last minute pre-division negotiations, would have left Nunavut in a minority position on NTPC’s board of directors.

As well, Nunavut would have held only 40 per cent of NTPC’s shares, while the NWT would have held 60 per cent. And there was no agreement on the movement of NTPC headquarters jobs from Hay River to Nunavut.

So instead of being co-owned by Nunavut and the Northwest Territories, the NTPC will eventually lose one of its biggest single customer, the Nunavut government, after April 1, 2001, along with close to 50 per cent of its revenues.

Picco said he’s already informed Charles Dent, the NWT minister responsible for the power corporation, of Nunavut’s decision.

Dent said in a press release issued this week that his government will do its best to ensure an orderly transition.

“While the government of the Northwest Territories would like to see the corporation continue as a single entity owned by both territories, we wish the Nunavut government our sincere best in the route they have decided to take,” Dent said.

Until the Nunavut Power Corporation develops the capacity to operate on its own, the Nunavut government will enter into a contract with an outside power utility to provide support services to Nunavut’s new power company.

Earlier this year, the Nunavut government invited utility companies from across Canada to submit “expressions of interest” aimed at finding a suitable firm to provide electrical power services to Nunavut.

The list of interested companies included Newfoundland and Labrador Power, ATCO Energen, Sask Power International, Manitoba Power, Hydro Québec, Ontario Hydro, the NTPC and Trigen Energy Canada Ltd.

Picco says that list has now been narrowed down to three proponents, but he said it’s too early for him to say which company will get the job.

But he did say that any outside firm contracted to help Nunavut would do so only a transitional basis, and that they would provide assistance in things like setting up a billing system, and the provision of technical expertise.

He said current NTPC employees will keep their jobs, and that any collective agreements in place at the time of the change-over will be honoured.

“I don’t foresee any layoffs,” Picco said.

The Nunavut Power Corporation would likely need about 25 employees to do its work, Picco said. Right now, the NTPC headquarters in Hay River is staffed by a whopping 88 people.

He also said that power rates will also remain stable, and that it’s likely that the Nunavut Power Corporation would restore much of the cross-subsidization that used to keep power rates low in small, high-cost communities.

He said that the government of Nunavut, either directly or indirectly, would account for 85 per cent of the Nunavut Power Corporation’s revenues — and by itself could stabilize rates for private users.

This means that a public utiltities board may not be needed in Nunavut, Picco said, and that other measures could be used to monitor power rates instead.