I’ll commit to give it a serious relook. It’s been a number of years and I know the Member has been a passionate advocate of that particular issue. So I’ll take another look, now that we’ve had some time to look at the costs and the money that’s available, and I’ll report back to committee. Thank you.
Much appreciated and I’m sure my passion is a reflection of what I’m hearing.
I’d like to move now to a question that’s come up before and the Minister is aware of this. In terms of the Solar Strategy, NTPC has a standby charge that completely destroys the economic feasibility of solar, unless you own the facility, solar installations that are 10 kilowatts or greater. I know the Minister is aware of this, but are we going to fix that this year? Is that considered to be part of the work plan for this budget? Mahsi.
The Member points to a broad issue of we’re the government and the only shareholder of the Power Corporation. On one hand, as a government, we set up a Solar Strategy, for example; and on the other hand, we have our utility that we own and seem to be working at cross-purposes with the successful implementation of that strategy. So, yes, we are going to fix that.
We’re going to look at net billing and net metering, and we’re going to look at the standby fees, and we’re going to make sure that these bodies that are working on behalf of the government and the people are coordinated and not at cross-purposes. Thank you.
Thank you once again for that commitment from the Minister. I think it has been very frustrating as far away as Sachs Harbour where energy is so costly and people have taken action there and then found out after things were in place that they couldn’t afford to do it, to literally hook it up. So the facility sits there.
I’d like now to turn to our general renewable energy, energy efficiency programs. It’s no surprise to this Minister or this government that committee has wanted to see a major effort and expenditure in the energy area. We see huge opportunities for addressing many, again, of our highest priority government goals, and that’s reducing the cost of living, developing especially our local economies and the environmental aspects that we can get with these sorts of projects. In just about every case, and I’m not aware of any failures where we’ve lost money and not had these sorts of benefits and the Minister is right, we have been one of the jurisdictions leading the way in many ways, but it’s a no-brainer. Why shouldn’t we when we’re getting all these benefits from it?
At the other time, we’re also very much aware of the tens of millions of dollars that we’re spending this year in subsidy of fossil fuels. Again, this just doesn’t make sense and we’ve been talking about this for a long time. So I’ve pushed, and I know many of my colleagues have pushed, let’s get back to cranking up our expenditures in this area and enjoy those benefits. There are some areas out there that can provide very good feedback, and specifically and very quickly I’d like to mention the area of replacing hot water heaters, electric hot water heaters in thermal communities with fuel heaters. These electric hot water heaters are the single most expensive use of electricity of anything. They typically use 450 kilowatts per year. Several programs have tried to encourage homeowners to switch, but with limited success. Again, it’s this frontend expenditure that I’ve talked about. Two main barriers seem to be the high capital cost of an oil-fired hot water heater and the technical challenges of installing one. Just the benefits of a diesel-fired hot water heater, replacing an electrical one in a thermal community would have a net reduction of 780 litres. So 1,000 hot water heaters, 2,000 tons of greenhouse gases. It would save GNWT over half a million dollars and homeowners over a million dollars.
So, Mr. Chair, on the basis of all this I would like to propose the consideration of my colleagues on this motion. May I read the motion?
Yes, Mr. Bromley. If you just want a second, we’ll circulate this motion.
I move that this committee strongly recommends that the Government of the Northwest Territories identify additional funding to implement a program to replace electric hot water heaters with fuel-fired hot water heaters in communities that depend on thermal generation of electricity. Thank you.
Thank you, Mr. Bromley. The motion is just currently being distributed, so we’ll give it a second. The motion is in order. To the motion. Mr. Bromley.
Are we able to speak to the motion in Committee of the Whole? Thank you, Mr. Chair.
Once again the opportunity here is clear. I am aware that this opportunity, with such short payback time, has been proposed by the Arctic Energy Alliance in the past, and I’ve drawn on some of their analysis to make my comments. I have commented on some of this already, so I won’t repeat that.
I will note there have been a couple of changes since that work. First of all, the government now subsidizes more of the energy consumed than they used to and that’s because we’ve taken the cap from an average of 700 to something well above that. We’ve actually dropped it in summer to 600 when energy use is low and raised it to 1,000 when energy use is high. So the net impact is we are subsidizing those dollars considerably more.
So the payback time calculated a couple of years ago was in the order of one to two years. Payback time now would be less than that and, again, Mr. Chair, I want to stress we are looking at increases to electricity costs of 7 percent every year for three years followed by another at 5 percent in the fourth year. Who knows, those could be higher by the time we get there. Hopefully not, not if we take good moves to address the costs. So the payback time, again, this is no-brainer kind of stuff. I am very perplexed why this hasn’t been done before, but it’s a very concrete project and I think we can make an investment here, have the money to reinvest next year, or certainly by the year after and keep going. From that point on, we will be saving millions every year compared to what we are spending now in subsidy dollars for these highly inefficient hot water heaters.
If I could just mention how they are so inefficient, electric hot water heaters in thermal communities, the sequence in diesel fuel is used to generate electricity at about 30 percent rate of efficiency. So two-thirds of that goes up the pipe. We take that third of energy and we use it then as electricity to heat hot water. Again, efficiency is maybe 40 percent. By the time all is said and done, we’ve used about 10 percent of the electricity in that litre of fuel and the rest is dissipated.
We have a huge opportunity to triple that efficiency with a single move that doesn’t cost us anything over a two-year period because it’s got such quick payback time. I’d be happy to put numbers to this, have the Minister put numbers to this. I suspect he could have it if he wanted. If he called the Arctic Energy Alliance, he could probably have this by coffee time tomorrow. So this is not a big thing to update these numbers.
Again, I will leave it at that, Mr. Chair. There is no reason not to do this whatsoever. Mahsi.
Thanks, Mr. Bromley. To the motion. I have Ms. Bisaro.
Thanks, Mr. Chair. I want to say that I agree with this motion and I agree with my colleague who’s spoken already. I have been struggling with the energy initiatives as presented to us for the ‘13-14 budget. They do not make a serious inroad into reducing our energy costs. There are a number of them, but some of them, I think, are minimal enough that we can put the money into a better project and I think this is one such project.
The Arctic Energy Alliance, in their proposal, which I think Mr. Bromley mentioned, estimates that there’s about 1,000 electric hot water heaters in thermal communities and they estimate it would cost us about $3 million to replace them all. There are programs out there. There is a program out there right now that provides a rebate if people replace their electric hot water heater with an oil-fired hot water heater, but nobody takes the challenge, particularly in the small communities where there is probably no capacity, no trained technician who can put a new one in and there’s an initial fairly high cost for people that they don’t want to take on.
In my mind, we’re talking about $3 million which either could be new money or a combination of new money and taking some of the initiatives that we already have and re-profiling the money from those. It’s money well spent, as Mr. Bromley said. The payback period is extremely short and I also have to agree with him in terms of the money that we’re putting into subsidies for electricity rates. I mentioned it the other day, and I have to mention it again, it’s a huge amount of money. We are going to be doing it again for another couple of years, and at the end of it, we still haven’t done anything to reduce our electricity consumption. This is one way to do that. The oil-fired burners we put in are going to last for a very long time. It’s not like these are going to be one or two years and they are going to be gone. They will probably last longer than the electric water heaters, from what I am told.
So to the motion and to showing our people that we’re doing something really concrete, something that’s going to benefit them and, at the same time, benefit the GNWT, I think this is an excellent way to go. If we consider the total amount of money that we’re talking about, $3 million, even if it’s $5 million out of a $1.6 billion budget, it’s peanuts. The fact that we’re going to recoup the money through our subsidy, going to recoup the money through reduced energy costs over the next two years and then, from then on, we’re saving money big time, again I think Mr. Bromley was the one who said it’s a no-brainer. I totally agree. So I encourage my colleagues to also support this motion. Thank you.
Thank you, Ms. Bisaro. To the motion. Mr. Moses.
Thank you, Mr. Chair. Coming from a region with a high cost of living and some of our higher fuel costs in the diesel communities, this was brought forth to committee and we had a good discussion on it. It’s all about investment, high cost of living and the costs to this government on what we are paying in this area. With the short-term gain of the dollars that we’re saying, those dollars could be reinvested into another program where, if we come up with a five- or 10-year strategy in the short term, that will start lowering the cost of living for some of the communities that are bearing the brunt of these high costs of fuel.
Like I said, when it was brought to committee, it got me thinking that we could start focusing community by community and getting a lower cost of living for our residents, for our businesses and for the way people are doing business.
With that said, you’ve heard comments from my two other colleagues here and I am in support of this motion and, like my colleague said, I hope others are because we do see a high cost of living and there are dollars to be saved here, like we did with the early childhood development. The sooner we start investing, the sooner we are going to start seeing a return on investment in some of the decisions that we make in this House. Thank you, Mr. Chair.
Thank you, Mr. Moses. To the motion, Mr. Menicoche.
Thank you very much, Mr. Chair. I just want to say that I’ll be voting in favour of this motion. It certainly shows the seriousness of Members on this side that that old technology is just not working and we should give it serious consideration. Thank you, Mr. Chair.
Thank you, Mr. Menicoche. To the motion. Mr. Bouchard.
Thank you, Mr. Chair. I will be voting in favour of this motion as well. I think it’s an initiative that puts the rubber to the road and we’re actually seeing some sort of implementation in something that has been physically shown that it’s going to save us money over the long run. I think the problem with some of the money that we’ve been studying and doing research on, we’re spending money after money and we’re not really seeing anything that’s accomplished out in the communities. I think this is something we can actually see, and put our teeth to and put our name to as far as being effective out there, so I will be voting in favour of the motion. Thank you.
Thank you, Mr. Bouchard. To the motion. Mr. Yakeleya.
Thank you, Mr. Chair. The motion speaks to a new initiative for something that we want to push on this side. The people from my region will certainly welcome a motion like this, and welcome more so that the government looks to reduce the high cost of living in the Sahtu.
We’d like to see an initiative like that that would cut down the cost for some of our people in our communities. The unemployment rate in Deline or Colville or Fort Good Hope is quite high, in the thirties to 42 percent, and the cost of living is quite high with the cost of fuel, especially diesel going into our communities. So I think that the Minister has the means and resources available at his disposal to say yes, we can do this with a pilot project community. I look forward to seeing something like that in the budget, where a family could see a reduction of their power bills and look at cost-saving methods where the GNWT could help out.
I look forward to a response back from this government, recognizing that we on this side are serious that some of our ideas need to be reckoned with. We have strong support on this side to put in the heaters that could go into our communities. I think this is something where, as Mr. Bouchard said, the rubber hits the road, and this is something that we want to see. I think he has the method and the means to do it and not have any more studies to delay this process here. I will be supporting the motion.
Thank you, Mr. Yakeleya. To the motion. Mr. Blake.
Thank you, Mr. Chair. I will be voting in favour of this. Even though there are a small number of residents in the Mackenzie Delta who actually have electric hot water tanks, the majority of residents in my riding are already on oil-fired hot water tanks.
If this motion does go forward, I’d like the department to actually work with the communities, because each community I represent has an oil burner mechanic, and I’d recommend that you work with the communities to have them installed. I’d also like to see a breakdown of each region with the highest cost when it’s done. Thank you, Mr. Chair.
Thank you, Mr. Blake. To the motion. Mrs. Groenewegen.
Thank you, Mr. Chairman. I was going to say I don’t know if I can support this motion because it just makes too much sense. This wouldn’t be our way of doing things. But, you know, Ms. Bisaro just made a comment to me. I mean, even if we went out and borrowed the money to do this, it would make sense.
When we were in committee one day, Mr. Yakeleya drew me a picture. I said, draw me a picture, and he drew a picture of all of our resources here in the Northwest Territories which get piped to a refinery in southern Canada, then get brought back, then get put into a big holding tank and then pumped into our diesel generators that produce power, which then we string along little lines to take into people’s houses to heat the hot water. Isn’t it a convoluted circle when you really think about it? Anyway, it was a great work of art and it truly depicts what a convoluted and roundabout way we take to doing this.
I mentioned also to committee that we should put water savers on the showers because the recovery rate on oil-fired hot water heaters is much greater than electric. With electric, you’re always running out of hot water, but the recovery rate on the oil-fired ones is so much greater and they’re so much more efficient. We’re going to have to put water-saver showerheads in the same units.
Anyway, obviously I will be totally supporting the motion. Please, for the love of all that’s pure and sane, let’s do something that makes sense. Thank you.
Thank you, Mrs. Groenewegen. To the motion. Mr. Hawkins.
Thanks, Mr. Chairman. I think I’ll use the occasion to clear up the record officially. That was my picture I gave to Mr. Yakeleya. And he can’t speak after me because he’s already spoken.
Mr. Chairman, I’ll be voting in favour of this motion. I support this initiative and I look forward to further discussions about seeing how we can make sure an idea such as this, that seems to be common sense, we can get off the ground and get proven results, which I’m not sure further studies need to be done. Thank you.
Thank you, Mr. Hawkins. To the motion. Mr. Miltenberger.
[Microphone turned off] …the intent of the motion. We just finished about six months of work on the business plan, and that’s not to say that there’s no time when a good idea doesn’t make sense. But it is into the final hours as we try to manage ourselves through the times we’re in.
I’ve also heard, across the floor, a number of MLAs speaking strongly against the subsidy they would have in place to cushion the rate shock of the increases as the Power Corp catches up to having five years or four years of no increases in their fuel costs. So if the Members opposite all said collectively that they want that subsidy pulled, and we go back to the Public Utilities Board, we could put all that money into this type of good common sense approach. In has been said repeatedly and emphatically by Members of the House, so I just want to make that offer. If there is unanimity, I’d be happy to go to Cabinet and look at putting that money, as Mr. Bromley suggests, don’t subsidize this, do this other good stuff, and that would free up money that we already have.
The other thing I just want to throw out there is when I talked to Mr. Moses about liquid natural gas, if in fact the liquid natural gas proves out to be as beneficial and cost effective as we think it is compared to diesel, then in relatively short order we’re going to be looking at not only Inuvik but other communities. We’re going to be looking at road communities to start with: Liard, Simpson, Wrigley, McPherson. I see it just says fuel, so I think we just want to keep that in mind before we run out and convert holus bolus, because we are literally weeks away from knowing whether we’re going to be able to make a significant investment, especially in the thermal communities, mainly thermal communities with liquid natural gas.
So I appreciate the feedback. We’ll work with committee. It doesn’t say here, but I’m assuming you want to put this into the business planning process as we go forward, which I’d be happy to do and give us a chance to factor in some of these changes that are right in our faces as it pertains to things like liquid natural gas.
This is a direction to Cabinet, so we’ll be abstaining from the motion. Thank you.
Thank you, Minister Miltenberger. To the motion. We’re going to go to the mover for closing comments. Mr. Bromley.
Thank you, Mr. Chair. It’s been a good discussion. I’m not sure; I guess I would like to reply to Minister Miltenberger’s comments there. I don’t want to repeat everything. I think the obvious gains, the win-win-wins are clear here. This is not news to the Minister, so I know he is not surprised. We will be looking forward to how we can get this in the budget.
The Minister claims that people here are speaking against the subsidy. Clearly, that is not the case. There is a history here. The 16th Assembly, against the wishes of many of us, made some really bad decisions and left us with the consequence of having to pay these subsidies. It’s not that we shouldn’t be paying the subsidies, it’s we should have been pursuing alternatives to avoid having to pay these subsidies.
What some of us have been suggesting now is, last year for example, we paid about $17 million in subsidies. This year we are down to $9 million in addition to sort of our base subsidy levels. I won’t go into those numbers. I don’t want to scare people too much here. Why not put the difference between the $17 million that we used last year, or perhaps it is this fiscal year, and the $9 million the following year? That is a seven or eight million dollar difference. Why not put that money into energy initiatives that will actually start to address the problems that have caused these rates to soar? That is what we are on about here. We obviously haven’t got any choice, so we are suggesting that we do this modest program. I appreciate the Minister’s offer to work on this. I look forward to the results with a vote.
Again, I guess I can summarize by this is a no-brainer. It’s a win-win-win. Thank you.
Thank you, Mr. Bromley.
Question.
Question has been called. Motion is carried.
---Carried
---Applause
Committee, we are on page 13-17, Environment and Natural Resources, activity summary. Mr. Bromley.
Thank you, Mr. Chair. I want to talk a little bit about the Inuvik and Norman Wells situations. I know we’ve supported work to look at biomass solutions. I’ve heard the past mayor interviewed on the radio during the recent emergency in Norman Wells extolling the opportunities of biomass in Norman Wells and the Minister has told me that the long-term feasibility of biomass in Inuvik is good. Right now, I don’t see anything in here that follows up on all of those opportunities. What are we doing to move to those?
We could obviously pursue the liquid natural gas routes and other natural gas routes and so on, but we know that the general price will eventually go up once the Asian prices start to be realized in North America and so on, and the cost of fracking, reaction to fracking. It seems like common sense, again, to go for the best long-term solution from the start.
What is the Minister doing to push the frontier with those two communities that are facing real challenges right now and need long-term solutions?
Thank you, Mr. Bromley. Minister Miltenberger.
Thank you, Mr. Chairman. The Arctic Energy Alliance is hard at work on concluding their report on biomass. I’ve had side discussions with Mr. Mapes about the opportunity, effectiveness, efficiency and economics of pellets being shipped to Inuvik. We expect that that biomass report will be concluded. In the meantime, I think because it makes such good economic sense, many people are migrating on their own accord to biomass for heat. We will look at that as well.
The liquid natural gas one, I see that as an arrangement that is going to get us through the next three to five years as we sort things out. We also have the review in Inuvik of the wind that we are still working on. It has the potential to generate three to four megawatts of power. It could probably go both to Tuk and Inuvik.
In Norman Wells, we are continuing to work with the community. Their thinking is changing and clarifying as they look at what the options are. If you take what was proposed, a $39 million project for the size of that community on a per capita basis, you could give every man, woman and child in Norman Wells a very large payout. I’m not sure whether they see that as cost effective because the money is not going to be there from either us or the federal government in its entirety. We are continuing to work with them. At the same time, there is money in the budget for us to convert some of our own buildings, the airport and the school, just because it makes good sense and it eases the pressure on the gas situation. Thank you.
Mr. Chair, thank you for those comments. I appreciate the Minister’s comments there. I am glad to see he is still focused in on those things. Those sound like important opportunities to me.
I just want to acknowledge that the department is playing a very important role extending geographically the opportunity to use wood pellets for our residents and businesses by being such a good customer of wood pellets. I know there is a very new supply of wood pellets in Norman Wells. The action we are taking to take advantage of that supply and also to start considering the opportunity for generation of local supply through wood chipping, something that is done in just about every community in Scandinavia, I think those are very progressive things to be moving forward with. I appreciate the Minister’s ongoing commitments there and to wind in Inuvik and so on.
This may be the last question on this. Has there been a greenhouse gas emissions analysis done for the natural gas solution that is being proposed and for other alternatives? Obviously, my understanding is that we will be trucking up that liquid natural gas. It will be continual 24/7 trucks on the road, and then there is the cost of extraction and refining and so on. Has that analysis been done? If so, can we get that provided to committee? Mahsi.
Mr. Chair, that work is being done. The Member is correct; it’s not just the liquid natural gas, but it is going to be the cost and the impact of shipping it up by diesel-fuelled trucks. When that work is concluded, we will share it with committee. Thank you.
That’s all the questions I had.
Thank you, Mr. Bromley. Committee, we are on page 13-17, Environment and Natural Resources, activity summary, environment, operations expenditure summary, $6.968 million. Does committee agree?
Agreed.
Thank you, committee. Page 13-18, Environment and Natural Resources, activity item, environment, grants and contributions, contributions, $3.199 million. Mr. Bromley.
Mr. Chair, I am just wondering, under the Alternative Energy Program I see it looks like we spent about $1 million last year and it’s down to $7.75 million this year as proposed, but that is up from a couple of years ago. Is there a ready explanation for the source of convolutions that are going on with that budget? Thank you.
Thank you, Mr. Bromley. For that we will go to Ms. Magrum.
Thank you, Mr. Chair. The Alternative Energy Program has increased by several new initiatives which include alternate energy technology for $100,000, community scale wind for $100,000, smart grid, $125,000 and solar PD for $250,000.
Thank you, Ms. Magrum. Mr. Bromley.
Thank you, Mr. Chair. Has there been a community or location chosen yet for the smart grid part of that, do we know?
Thank you, Mr. Bromley. Minister Miltenberger.
Thank you, Mr. Chairman. I would have to confirm this, but my assumption is, as we looked where we are doing diesel batteries and solar and putting in the other smart grid technology, it would seem to make sense to be able to monitor that and take advantage of all that. So that’s one place I would suggest be considered, but I don’t think we’ve made our final determination on where the smart grid technology will be applied other than that. Thank you.
Thank you for that information. Just in closing, I’ve had concern with a lot of our energy dollars, like some other departments are actually left until the last minute in the fiscal year to be spent. Can we get a commitment from the Minister that we will get some of these things identified early on in the fiscal year so that we can actually be effective with the dollars and make better progress throughout the year, as opposed to saving the dollars until the end of the fiscal year and perhaps lapsing some of those dollars? I know there is a lot of work to be done, but I think if we get at it earlier on, we can be more effective with our funding. Thank you.
It would be my intention, our intention, to have these various sites in communities decided on before the end of this fiscal year so we are ready to roll as quickly as we can.
I share Mr. Bromley’s concern about dragging dollars into the end of the fiscal year when you can’t realistically spend them. We want to be able to get this money into use and into the communities as quickly as we can, so we are going to target to the end of this fiscal year, which gives us just a little over six weeks. Thank you.
