Nunatsiaq Online
NEWS: Nunavut March 20, 2014 - 11:21 am

Nunavut power utility ups rate hike request from 5.1 to 8.6 per cent

QEC says they need more revenue following PPD price hike, URRC rider reduction

NUNATSIAQ NEWS
Ouch. The Qulliq Energy Corp.'s controversial rate re-balancing scheme might be dead, but they're still asking for a general rate increase of 8.6 per cent, up from their 5.1 per cent request of last November. (FILE PHOTO)
Ouch. The Qulliq Energy Corp.'s controversial rate re-balancing scheme might be dead, but they're still asking for a general rate increase of 8.6 per cent, up from their 5.1 per cent request of last November. (FILE PHOTO)

Though the Qulliq Energy Corp.’s scheme to create uniform territorial rates is dead for now, Nunavut electricity customers still face hefty rate hikes as of April 1.

That’s because the corporation has amended its latest general rate increase application, announced Nov. 1, 2013, to request an across-the-board hike of 8.6 per cent for all rate classes across Nunavut.

The corporation’s initial general rate application, which wasn’t formally filed until Dec. 4, 2013, asked for a general increase of 5.1 per cent.

But now, the QEC wants to take even more money from Nunavut power customers: through an 8.6 per cent rate hike.

In a March 19 press release, the QEC said they’re doing this for two reasons:

• the petroleum products division of the Community Government and Services department raised fuel prices on Jan. 1, 2014, inflicting a $1.8 million hit on the power corporation;

• the Utility Rates Review Council reduced a recent QEC fuel rate rider request from 5.31 cents a kilowatt hour to 3.93 cents a kilowatt hour, creating am additional $2.4 million shortfall in the corporation’s potential revenues.

“QEC has updated its 2014-15 revenue requirement and GRA to reflect these changes. In order to recover the revenue shortfall, the rate increase is now projected to be 8.6 per cent across all rate classes,” the QEC news release said.

That rate application is separate from the QEC’s now defunct rate re-balancing scheme.

Rate re-balancing would have taken effect on the first day of the proposed general rate hike — which means customers in communities like Iqaluit, Rankin Inlet and Pangnirtung would have felt the most pain.

But Paul Okalik, the minister responsible for QEC, in a March 19 announcement, put the kibosh on rate re-balancing, saying homeowners and businesses in larger communities would suffer the most.

A QEC backgrounder issued March 19 said about half the rate increase is attributable to rising fuel prices.

If the Utility Rates Review Council approves the 8.6 per cent hike, a commercial small business customer in Iqaluit, based on usage of 2,000 kilowatt hours a month, would face a monthly increase of $85.86.

A commercial business customer in high-cost Whale Cove, however, would suffer an increase of $188.12.

This suggests that residents of smaller high-cost communities can look forward to higher food prices, as local retailers adjust to the cost of running their freezers and refrigerators.

The QEC said a typical residential customer in Iqaluit, based on 700 kilowatt hours of usage, would face an increase of $3.44 per month.

The QEC’s amended rate hike request will now go to the URRC, who will forward a recommendation to the minister for final approval.

 

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