Power Corporation consultation breaks all the rules

JIM DEYELL

For the second time in less than a year, the Nunavut Power Corporation is asking for a rate increase.

This time the increase is planned to take effect April 1, 2006 and totals $7.9 million. If approved, the current rate increase request will basically double that recently imposed on customers, of $8.4 million, on April 1, 2005. Nunavummiut only had until Aug. 31 to provide their comments on this current requested rate increase.

A third increase request is expected later this year to deal with rises in the price of fuel.

It is difficult for Nunavut Power’s commercial customers to understand why a consultation program about a rate increase to be effective April 1, 2006 is occurring during the summer months of 2005.

There are at least three key consultation rules that must be met if the exercise is to be meaningful.

The first is that good information must be provided to the public regarding the matter on which they are being consulted; the second is that the consultation must be timely in relation to the matter; and the third is that the consultation process should be accessible to all potentially affected persons and responsive to their needs.

In this case all three rules have been ignored.

The current application provides none of the detail that the company was required to produce as a result of the last hearing. Before a next rate increase was to be granted, the Government of Nunavut was required to provide the results of a major study about how to streamline the utility. The study has not yet been started, and the results are now not expected until December. Also, without knowing the cost of the expected fuel increase, it is also not possible to assess the overall impact of the current proposed rate increases on Nunavut. In short, there is little or no information about either the need for the increase or the combined impact of the rate changes on customers.

The current consultation process is not timely. The current rate increase request, if approved, will not take effect for seven months. During that time Nunavut Power was supposed to work to lower its costs, become an efficient and well-run utility, and to put in place a financial management plan. The company has not indicated that any of this has been done. It is not clear how much money will be saved by having Nunavut Power become efficient and well-run, but surely the savings from that exercise should be reflected when setting rates. If the current proposal is approved, today’s inefficient level of costs will be entrenched in a rate increase that might otherwise not have been needed, and there will be no incentive for the utility to improve.

Finally, and perhaps most important, the current consultation is disrespectful to the needs and lifestyle of Nunavummiut. The short summer months are no time to expect people to come off the land or interrupt holidays to participate in hearings or to write submissions. The issue of the rate increase cannot even be debated by our elected officials as many of them are also engaged in their summer pursuits.

In short, the customers of Nunavut Power will have every right to be surprised and offended when they turn their attention to these matters. By that point, unless a more reasonable and logical approach is taken, the rate increase decision will presumably be a fait accompli.

It is time for Mr. Picco to put a stop to this inappropriate and unreasonable consultation exercise and reject the request. If Nunavut Power still sees a need for higher rates for April 2006 after their streamlining exercise, then they can plan for proper and informative consultation program this winter.

Jim Deyell is regional manager of public affairs for the North West Company, which operates in 21 communities in Nunavut, and is a member of the Iqaluit Chamber of Commerce.