Thank you, Mr. Chair. A couple questions on the hydro initiatives. I’m very happy to hear Mr. Deputy Minister indicate the Sahtu hydro. Deline has been waiting for a hydro initiative for about 17 years. The Minister had taken a delegation to Montreal to look at a possibility there and I was hoping that they would start looking at plans, if that’s something that could be used on the Bear River for the community of Deline. That would be something that the people in Deline would be looking forward to.
I want to ask the Minister on a forward going basis, this initiative seems to be viable, it’s feasible and that it’s something that the community could actually say that we’re going to start construction on the hydro initiative soon so that would be operating their own hydro facility like Lutselk'e or Whati. Thank you.
Thank you, Mr. Chair. Minister of ITI.
Thank you, Mr. Chair. At this stage most of the money that would be spent would be for planning and it would increase as we go forward. There are still some aspects of the project that would have to be worked out. The delegation that included MLA Bromley, I felt that the potential was there, the technology was there that could be used in the Northwest Territories. I guess a part of that that still has to be worked out is the Deline delegation was interested in taking over or becoming the builders and also having the rights to the technology in the Northwest Territories. That is kind of a different spin that we have to look at to see whether that’s possible, because that would mean working with the company that does have the patent rights right now to see whether they’re interested in going down that road. But, certainly, the technology is there that could be utilized for Deline. Thank you.
Well, Mr. Chair, it does seem that we’re moving forward to hopefully actual construction on the Bear River to have a hydro plant on the Bear River for the community of Deline.
On the other issue of the Taltson Hydro, I know that the Taltson has done a lot of work. There are things that still need to be discussed. I still think that it’s a viable project and that we could continue to have that project maybe not moving right now, probably just on life support for a year or two before we can see if there’s some movement on the mines or there are other initiatives out there that certainly could benefit from the Taltson Hydro expansion. I just wanted to pass that on to the Minister. It’s going to be the decision on his colleagues and with our support to continue on with the Taltson. I just wanted to make that comment on that point there.
I want to get back to the hydro in the Sahtu that, again, we look forward to seeing some further steps to the construction of the Deline hydro initiative, and appreciate the Minister for providing support on the...(inaudible)...Lake hydro feasibility on the hydro and other areas that the people in the Sahtu felt that could benefit them. More comments to the Minister. Thank you.
Thank you for those comments. I think hydro is a very exciting area. As I indicated, the Premier will be briefing committee in the near future. Thank you.
Thank you, Minister McLeod. Next on my list is Ms. Bisaro.
Thank you, Mr. Chair. I’ve got a couple of questions here. First of all, the Minister has spoken about, and I think, certainly, Members are aware, and I think the general public also is aware, that we conducted an electricity review. We made some changes and we have reduced our power rates considerably. I know that it is recently put into place but I’d like to know from the Minister, since this is a new program and it’s some fairly major changes, some of which are still to be put into place, but what are the plans for the department to evaluate this particular system and the set up that we have at this moment? What are we doing to evaluate it, not right away but, say, in a year’s time or in 18 months’ time? Thank you.
Thank you, Ms. Bisaro. Minister McLeod.
Thank you, Mr. Chair. Well, first of all, these changes are regulated by the Public Utilities Board so they’ll be monitoring the impacts of the changes. They are working under guidelines that had been set by this government that we communicated to the Public Utilities Board, and we will be making changes to the legislation. As well, as we had indicated with regard to ongoing monitoring of the reduced prices, the reduced commercial rates, that those rate savings are passed on to the customers in the form of lower prices. So we will be working with the Stats Bureau to monitor the cost of goods in the communities and also we will be interacting with the retailers to make sure that we have a transparent process so that we can see that those savings are passed on. Thank you.
Thanks to the Minister. I wasn’t actually asking about monitoring, although I am very glad to hear that we will be doing some monitoring, I was asking about an evaluation of the new system. To me, those are different things. Monitoring is seeing how things are performing and gathering facts, which is what I heard the Minister say. Evaluation, to me, is looking at the system, looking at the facts, and determining whether or not this is what we want to continue to do. We have a two-year period right now in terms of the money that the GNWT is putting into the system. In the two-year time period we need to know whether or not this system is working so that we can make the proper decision as to whether or not further changes are required, whether we make changes for the better or whether we go back to the old system, heaven forbid.
I guess there are a number of different ways we could evaluate it. We could use the Program Review Office to look at how efficient or effective these changes were. We will monitor on an ongoing basis in conjunction with the Public Utilities Board and I think the main test will be that these rates are out there and that the lower costs are passed on to the consumers. We will be monitoring as a department and as a government.
Thanks to the Minister. This is just a comment but I didn’t hear the Minister say that an evaluation is planned for and I would encourage strongly the department to in 18 months, perhaps even two years, do an evaluation of this new program to determine whether or not it’s actually working. To me, as I said before, monitoring is not evaluating.
I have another question with regard to the project at Fort Simpson, the in-river hydro system. I may have missed it, I’m sorry if I have, but I know that there was some difficulty with that turbine and I just wondered where that project is at. Is it dead in the water, so to speak, or has it been put back on line?
With regard to evaluation, if what’s seen to be required would be for us to hire a consultant and to do an evaluation I’m sure we could do that.
With regard to the hydrokinetic project in Fort Simpson, the project started this summer. It was designed to produce 14 to 15 kilowatt hours per day and it was only producing at four or five. There was some problem getting it to work at maximum efficiency. The deflectors that were in place weren’t designed to deal with deadheads, I guess they call it; those trees that are submerged and float just below the surface. It came and it moved the hydrokinetic turbine. We spent some time getting it fixed and running. My understanding is it will be put back on next year. Whether it will be done in Fort Simpson or some other community remains to be seen.
That’s great. Thank you to the Minister and thank you, Mr. Chairman.
Thank you, Ms. Bisaro. Next on my list is Mr. Krutko.
Thank you, Mr. Chairman. I too have questions regarding the grants and contributions around the Hydro Strategy. I was to understand that they were looking at regional strategies for each of the different regions to look at the hydro potential in each of those regions. I’d like to know where we are with that work and is it part of the overall strategy going forward. Is that part and parcel of the $1.2 million that’s being spent? How are we going to pull those type of regional... Do we have a territorial strategy that’s looking at it from the confines of regional potential for hydro?
Thank you, Mr. Krutko. Mr. McLeod.
Thank you, Mr. Chairman. We are working on finalizing a hydro strategy and we are working with NTEC to develop regional strategies. Funding has been identified for expansion of residual heat projects.
I noticed in the document they talk about a draft Hydro Strategy. When are we going to be publishing this strategy and identifying the information that’s been compiled so far today or is it going to be over a couple of years?
The draft Hydro Strategy was released approximately two years ago and we expect to have a finalized Hydro Strategy in 2011.
The reason I ask is because I haven’t seen information in my region regarding the hydro potential that it has. I know there’s been baseline work done on that. We always talk about the Ross Dam and the potential of the hydro site on the Mackenzie River in the Gwich’in Settlement Area which has been talked about. Again you’re talking a dam that big and you’re talking about what they have in northern Quebec or Manitoba. There’s that potential but it’s a question of how much baseline data has been pulled together. I’d like to know where the data and information is for my riding.
We’ll commit to getting information from NTEC that we can provide to the Member with regard to information on potential hydro in his riding.
I couldn’t help hearing that they’re having problems with the Fort Simpson in-stream hydro project. I’m just wondering, if that doesn’t work there is there a possibility of moving it somewhere that there are calmer waters or smaller trees? Is there a chance of moving it up the valley where we might not have that big a problem?
We are committed to making hydrokinetic work, so we will work with NTEC to place it in a location where it has the best chance to succeed.
Thank you, Mr. McLeod. Mr. Krutko? No? Alright. Next on my list is Mr. Bromley.
Thank you, Mr. Chairman. I do appreciate the department working in this area. This is front-line work and we’re bound to have some kerfuffles along the way like big sunken trees running into our equipment. I appreciate the persistence to work with this new technology. I wanted to follow up in that respect just with the Bear River in-stream hydro. As the Minister mentioned, I was privileged to join him on a trip briefly with a bunch of people from Deline to look at a piece of technology that looks very positive. I just want to confirm that the Minister’s assessment is that does look fairly positive and ask whether he has any idea what costs might be for that technology yet, recognizing that it is very new.
Thank you, Mr. Bromley. Mr. McLeod.
Thank you, Mr. Chairman. We are working with the company that has developed the technology and they have indicated that they still need some time to finalize the cost, and in order to do that they need a proposal from us so that they have all the parameters. RSW have done a lot of preliminary work. They’ve looked at the hydro potential of the majority of the rivers in the Northwest Territories so they have a very good idea of where the best potential for in-stream hydro to work. So we are looking at Deline and other possible locations in the Northwest Territories.
Thanks to the Minister for those remarks. I think that’s pretty exciting technology that we’re talking about. On the Lutselk’e mini-hydro project I want to find out what the process is for determining whether or not we get the green infrastructure dollars that makes that project a go and how much do we need. That can be a time-consuming application process. Have we started that process towards achieving those resources?
Earlier this summer, or I should say the summer of 2010, we had the opportunity to meet with Minister Baird who was the Minister of Transportation at the time and the lead Minister on infrastructure. We met with him to follow up on a letter we had written to him requesting funding for under the Green Infrastructure Funding. We had requested funding for the Fort Providence transmission line and also for Lutselk’e in the amount of $6 million. He committed that he would take the proposal and review it very seriously, and we followed up a few times but we still haven’t received a definitive answer from the federal government as of yet.
I don’t think it’s news that many of us on committee have been suggesting that the Canada Building Project and stimulation dollars should have been going to projects like this that save us on our high operational costs of energy. I think that was a major missed opportunity. I think, I guess I basically hope that the department will be aggressive in getting after this and nailing this down. As I say, the building season’s here very soon and we don’t seem to know yet whether we have those dollars. I’m not very hopeful yet again for this project.
I’d like to ask the Minister how many employees we have in NTEC, the NWT Energy Corporation, and the Hydro Corporation and what are their areas of specialty, those that are technical.
I don’t have a specific number but they do have technical engineers and specialists and policy people that work in this area and we rely on them for most of the detailed technical work with regard to hydro.
I wonder if the Minister could provide us with that information at a later date. I just note the apparently high contracting dollars, $1.25 million for the Hydro Strategy and so on, that are being contracted out. It seems like we do have the expertise. I have had occasion to meet some of these people and they seem very qualified and whatnot. I haven’t met them all and I think it would be great to know that.
I’d like to talk about the Electricity Rate Review briefly here. I’m wondering if and when the Minister will come clean, so to speak, about how much GNWT is paying extra for this buy-down in electricity rates. Just briefly, the sorts of things that I’m aware of are the $3 million a year to buy down the rate riders. Businesses which were previously paying millions in power rates are considerably lower now. I’m happy to see that but I’m wondering what that amount is per year. We’re forgoing a Power Corporation dividend of $3.5 million. We’re probably over $10 million per year already for the next two years. Of course we’ve raised the thresholds beyond which residents and municipalities, I believe, pay the true cost of power, so there are probably some extra costs here. There’s a quarter million dollars in the cost of review. Certainly there are other costs that have accrued to GNWT behind the scenes that I haven’t detailed here. I’m wondering if the Minister plans to give us a straightforward accounting of the dollars that are now accruing to taxpayers rather than ratepayers in order to buy down this reduced power rate in our thermal communities. I think it’s important that we know, because if we are not transparent about these things, Mr. Chairman, we don’t know where to put our money to actually reduce the cost of power. I am talking about real reductions in the cost of power. Thank you.
I will be pleased to provide the Member with information on the number of employees with NTEC and with regards to an accounting of, or a reconciliation of, the numbers. We are quite open about it. We have provided this information on a regular basis to committee, and committee is well aware of what we did and it is no big secret. They dividend as they review, the team recommended that was part of what was causing the high cost of electricity. That will remain with NTEC for this year and potentially for further years.
With regards to the buy-down of the rate riders, we used money that had been identified for commercial subsidies of $3 million a year and our expectation is that there will be savings in the Territorial Power Subsidy Program, which was forecasted to go as high as $14 million and it will be substantially less, so our expectation is that within two years we will have a lot more flexibility. There will be savings that could be... If the future government decides to apply it to energy costs in the future, that is their prerogative. As well, the energy costs of the government remain the same. Part of the direction was that government rates would remain the same and it is not unusual, other jurisdictions do that routinely. Look at the Yukon, they have frozen all the rates, different rates at different levels, including government rates that pay a higher rate than local consumers. So we are quite prepared to provide all of that information again to committee and to the Member. Thank you, Mr. Chairman.
Thank you Minister McLeod. Time is up and we are on page 12-21, Industry, Tourism and Investment. Mr. Bromley.
Thank you, Mr. Chairman. I just want to say that I appreciate Minister providing that. It will be great to see it in one package all put together. We did get it in various formats from time to time. I heard the Minister say that we used the $3 million as a commercial power subsidy and although that was contemplated at one time, I don’t believe that was done. I think we simply came up with different rates for commercial power rates and used those $3 million to buy down the rate riders for everybody. I just want to make sure we got accurate information on that. Thank you.
Thank you, Mr. Bromley. Minister McLeod.
Thank you, Mr. Chairman. I am not sure what he means by conflated, but there was $3 million for two years in the EPI and we used that to pay down the rate riders and this resulted in the commercial rates decreasing in the thermal communities. Thank you.
I guess there is still some more exploration to be done. Thank you.
Thank you, Mr. Bromley. No question, more of a comment. Minister McLeod.
Thank you, Mr. Chairman. We committed to provide information so perhaps it will become clearer when the information is provided. Thank you, Mr. Chairman.
Thank you, Minister McLeod. We are on page 12-21, Industry, Tourism and Investment, activity summary, energy, operations expenditure summary, $6.019 million.
Agreed.
Okay we are going to move along to page 12-22 and Mr. Krutko.
Thank you, Mr. Chairman. My question is basically dealing with energy contributions. Especially in my riding, there is a lot of talk about biomass but in order to make biomass work, you have to have some sort of a residual system. Fort McPherson already has a residual heat system which is in partnership with the Power Corporation and the Gwich’in Development Corporation, but in order for the project in Fort McPherson to work they are going to have to expand the existing system in order to bring on biomass. I think that is a good opportunity to join these two initiatives together in which we are looking at other buildings in the community, but more importantly, expanding a system which is already in place. The biggest cost to biomass is going to be for the transmission system, the piping system that has to be encased. The case of the system in Fort McPherson, I think that there has cost about $2 million and it is already in place.
I’d just like to ask what two community groups are working either with the Power Corporation and community organizations and other government departments, the Department of Environment and Natural Resources, and your department, the Power Corporation can do to assist communities in expanding in the area of residual heat. I think that we have a lot of power plants which are next door to either fire halls or different garages, either it is the NWT Housing Corporation garage or whatnot. I think it is the perfect opportunity to expand that technology in the Northwest Territories when we are talking about reducing the costs, but more importantly, it is a good business opportunity for the Northwest Territories Power Corporation to look at the possibility of bringing in additional revenues using distribution of not only electricity but distribution of heat. I would just like to know if that is something that has been looked at and exactly how do the communities access those dollars.
Thank you, Mr. Krutko. Minister McLeod.
Thank you, Mr. Chairman. All government departments work very closely together. We don’t work in stovepipes anymore, so working with the Department of Environment and Natural Resources we will be working very closely with the communities, as the deputy minister of Environment and Natural Resources mentioned yesterday, that he would be meeting with the Gwich’in chiefs. The Department of Environment and Natural Resources has the lead for biomass and we also are dealing with residual heat, so between the two departments I am sure we can work out an arrangement with the Gwich’in as to what should be done in Fort McPherson with their existing residual heat project. Thank you, Mr. Chairman.
Again, you are talking two departments but the key for this to work, you need the third player, which is the NWT Power Corporation because they own the power plants. Basically for them this is a perfect opportunity to use a lot of the heat that is basically simply blowing out the smokestacks of the power plants and take advantage of that heat that is being burnt off by diesel generation. I think that we have to look at that technology, and more importantly, expand it to other communities where we have facilities, like I say, just in a couple of feet, a couple of yards from the power plant, especially like garages. In the case of Tsiigehtchic, they are looking at the fire hall which is right next to the power plant. I think that is the type of stuff I am looking at. Again, in order for this to work, you have to work in conjunction, like I say, with three different parties, which has to include the Power Corporation. They are one of the key players because they own the facilities that the heat is going to come off of. Again, I would just like to throw that out there and maybe I will leave that question with you and maybe you can respond to it. I will have another question after that. Thank you.
We do work closely with the Power Corporation. We have the MECC committee, also we have deputy minister level committees, so I think we have that covered. Thank you, Mr. Chairman.
Thank you, Mr. Chairman. I just have a question in regards to the $4.2 million in regards to the energy contribution. There are a couple of projects on there that seem like they are basically going to lapse in regards to the Fort Providence transmission line, and other projects I believe are going to lapse. What happens to the dollars that are allocated here? Can they be moved to the other envelope proposals in regards to higher in-stream hydro you can use those additional dollars to deal with, like I say, expansion of residual heat systems. What is the flexibility in the dollars that are allocated in the 4.2 since it doesn’t look like we’re going to spend all of the 4.2? There are a couple of items there that aren’t going to be implemented anytime soon.
