Thank you. I'm going to go to the Member from Range Lake.
Thank you. So for clarification, so the new rate application in front of the PUB will be a 15 percent increase? Thank you.
Thank you. I'll go to the Minister.
Mr. Chair, I think the new rate application will reflect a subsidy of $12 million over four years, and I -- again, I don't -- I believe it will say that it's then going from 24.8 down to 15. It's from the perspective of the public is where I want to add again that that's only their energy side of their bill, not the total bill, and it doesn't necessarily yet take into account that there was the increase in July. So the GRA reflects that total rate increase but from the perspective of the public, they've already seen a small increase in July, and it is not the whole bill that goes up 25 percent. It's only the energy costs that they pay. We all pay fixed costs on our bills too. I hope that both answers the question and is clear too more broadly. Thank you.
Thank you. I'll go to the Member from Range Lake.
Thank you. I appreciate this is complicated because there's, like, the 7 percent increase that happened has already happened and then that's being compounded into the GRA. But I guess my concern is if it's not -- if it's still like the same, you know, 25 increase but we're doing all these things to lower it but the increase in front of the PUB is still there, that doesn't -- and it doesn't reflect a subsidy, then NTPC is asking for more than it needs, and I would like that not to be the case. So can -- does the Minister confirm that, like what the PUB will be considering is the -- or the rate increase the PUB is considering will fully reflect the $12 million because if it's not inclusive of this new subsidy, then we're -- you know, we're -- we're -- it's unnecessary because we're already covering the cost in this supplementary appropriation. Thank you.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. So, yes, it absolutely will be fully reflected in what goes to the PUB. Again, I just wasn't sure if it's been filed or on the public register or not. And, you know, yeah, I want to let folks know, because I do think it came out that everyone's power rates are going up 25 percent, and that's just not -- that's not going to be the case. That's not even the worst case scenario. That's just simply not how it's going to go down. But I don't know the final dollar value. This $12 million and the proposed $12 million over four that's being put forward by the government will have a very direct impact on what the final decision of rates needs to be. The PUB does a proposal -- or looks at rates from the perspective of reasonableness, so they may well say that there's too much sticker shock on this and they don't want to raise it. They may say that there's something in the filing or submissions that doesn't qualify or is not -- that they don't think should be on ratepayers. But beyond all that, I'm quite confident that there would be an increase and that this $12 million will have a direct impact on keeping people's power rates down below whatever that final value is and will have therefore a direct impact on people's rates, the rates that everyone pays, because if it's -- this is for an average rate across the territory. Thank you.
Thank you. I'm going to go to the Member from Range Lake.
What would be the cost to eliminate the -- like, to mitigate the rate increase? Like, what -- what's the dollar amount of that subsidy that would not -- would kind of not require this rate increase? Thank you.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, I could certainly run that number for the House and for the Member. I don't have that here. It would -- it may, again, bit of me having to sort of tea leaf what the PUB's final rate increase would necessarily be. I don't know that. I can certainly -- once that's done, we could certainly consider coming back. Obviously, that's the rule of the House. Thank you.
Thank you. I'm going to go back to the Member from Range Lake.
Thank you. Well, very quickly, this is not -- this is -- we're constantly chasing ourselves here, Mr. Chair, and I think this problem's not going to go away unless we make some real structural changes to our energy grid. Thank you, Mr. Chair.
Thank you. I'm going to go to the Member from Yellowknife North.
Thank you, Mr. Chair. First I just want to establish can the Minister confirm that the Northwest Territories Power Corporation is expected to have a balanced budget each year, or can they run operating deficits? Thank you, Mr. Chair.
Thank you. I'm going to go to the Minister.
Mr. Chair, I'm going to send that to the deputy minister who will be able to speak to that.
Thank you. I'm going to go to the deputy minister.
Yes, thank you, Mr. Chair. So the general approach is that the NTPC will run based on its -- run its operations based on its revenues that it gets from ratepayers but they do have the ability to take on debt, so in a sense, they do spend more than they take in, but that debt is supposed to be allocated towards capital acquisitions only so that's generally how it works. So for their operations, they have to be fully funded by ratepayers.
Thank you. I'm going to go to the Member from Yellowknife North.
Thank you, Mr. Chair. Well, now I'm curious given the wording of the deputy minister. He said it's generally operating expenses are not covered by short-term borrowing. But have there been occasions where short-term borrowing is or has been used in the recent past for operating expenditures at the power corporation? Thank you, Mr. Chair.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, that would only be in a short-term sense. Again, I expect this is going to come up here today. So not as a way of running their operations. I think perhaps the original question was whether they're expected to have a balanced operating budget. And, yes, they're expected to have a balanced operating budget, but they can use debt to take on infrastructure costs. Again, Mr. Chair, I don't necessarily have all this in front of me, and I'm more than happy to follow up with Members if I -- if -- with NTPC, they may well be quite happy to come and speak to Members about this in more detail. Thank you.
Thank you. I'm going to go to the Member from Yellowknife North.
Thank you, Mr. Chair. The problem that we're facing here is we have an arm's length, you know, corporation that is supposed to be sort of balancing its own budget, but then we're asked to essentially subsidize operations to avoid ratepayers having to pay too much. But there are not many levers we have to, for example, ask them to prove that they can't do things differently or find savings in different ways as opposed to charging ratepayers. And I understand that that's the role that the public utilities board is supposed to serve.
I'm just thinking of a parallel here. You know, we have the health authority with costs that are sort of spiralled out of control and it's, you know, again, an arm's length authority, and so we've established a public administrator to look more deeply into how that budget can be balanced and where cost savings can be found, but we don't have a parallel process happening in this case where, you know, we have someone looking more deeply into, you know, do they really need this money to avoid charging ratepayers more or are there other ways that cost savings can be made where the government doesn't have to keep issuing massive subsidies to diesel in order to spare ratepayers.
So I guess my question to the Minister in this case is, is she satisfied that the public utilities board processes are sufficient to reassure the Assembly that there are no other possible internal cost savings that can be found within the power corporation to help us avoid having to, you know, give them these subsidies? And, really, it's been pretty regular of late. Thank you, Mr. Chair.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, it really is quite literally the role of the public utilities board to conduct the general application, and it is a fairly extensive and detailed process that is undertaken when they have to put in literally every single cost that is incurred, and it is analyzed, and there is a determination as to whether those costs are reasonable or not, and then the PUB sets, again, a reasonable -- a range of reasonableness of what the utility's permitted to make back in terms of their rate of return. That rate of return from the GNWT's side, Mr. Chair, we haven't taken a dividend in the time that I've been in this chair so, you know, again, that's one of the levers we have, is to not take anything in terms of a rate of return.
Yes, I -- I'm not really sure what else to say. It's literally the job of the PUB, and it's happening imminently here to do a very detailed analysis of every single cost that is involved in setting the rates. So, again, I'm happy to review that process at further length with all Members. It's certainly a complex one. Because the things that go into generating power are complex, so I'd be happy to do that at a later time and run through that and see what they're examining and what they're analyzing. Thank you.
Thank you. I'm going to go to the Member from Yellowknife North.
Thank you, Mr. Chair. I do think that this is a very conversation to have in more detail with committees. I know that we're not going to sort it all out here on the floor. But I personally am not satisfied that the processes surrounding the public utilities board examination would really have the kind of analysis of the system and the way costs are incurred and that would be able to provide us with some insights or recommendations on, you know, how to run the power corporation more efficiently with better cost savings. I mean, I -- I don't think that can come through those kind of hearings, and so I would love to have further conversations about what might be possible in terms of bringing more insights and analysis to the table as to how we can avoid being put in this position year after year where, you know, it's either these subsidies or ratepayers pay, but I feel like we can do more to try to prevent this need in the first place. Thank you, Mr. Chair.
Thank you. Okay, I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, fundamentally, the costs that go into generating power, whether it's the fuel or whether it's the upkeep, continue to grow, and the sales of power in the Northwest Territories remain flat, and that has been the case for a very long time, long before any -- before this Assembly was composed. So, you know, we can certainly try to increase those to whom we are selling, and in particular, it's, you know, not a handful of residential customers and probably not even converting a handful to electric heating, but to look for industrial customers. So the power corporation is right now -- has for the last two years and for the first time ever but in the last two years attended Roundup to try to speak to the different projects that are coming online hopefully in the Northwest Territories. That would have a significant impact increasing our transmission system so that we can distribute power to more communities so that more communities are using hydro power. That will start to make a difference, not necessarily a huge one, probably it's more in the form of resiliency, but. So these are -- there are things that can impact the energy system in the Northwest Territories, but it's probably not the -- you know, tinkering on the sides of costs, it's going to be fairly significant changes.
So -- and, again, I -- there's a lot in this space. I certainly will ask my -- ask that we set up a time for MLAs to look at this and to look at what we're doing. There is also the change coming to the board that has been asked, and I'd like to get to speak to about -- to that. I don't know that that changes these fundamentals that sales are flat and costs are high, but there's work underway to try to make that -- to shift that balance a little bit. Thank you.
Thank you. Is there any further questions from -- okay, nothing from YK North. Any general comments? I'm going to go to the Member from YK Centre.
Thank you, Mr. Chairman. Certainly a pleasure to get an opportunity to comment on page 7 under the directorate here, assuming we're still on the $12 million being proposed here.
I'm wondering if the Minister can provide a breakdown as to how that $12 million came to be as the number. Can they be specific as to where that subsidy will be applied? Thank you.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, I don't know if I have that level of detail. Let me see if the deputy minister maybe can, and if not, we will look to pull up -- sorry, it's where the $12 million came from or where it's being applied? It's going to be applied on to -- to the costs -- the ratepayers' costs but it's where it's coming from, I'll see if the deputy minister may have that handy.
Thank you. I'm going to go to the Member from Yellowknife Centre.
Oh I'm sorry, I thought she was referring to the deputy minister would comment before coming back. If I'm incorrect.
My apologies, I'll go to the deputy minister.
Thank you, Mr. Chair. So what will happen is there will be a $12 million transfer to NTPC, and they are to use that for their operations. So their operations are funded by ratepayers, so instead of getting the full cost of those operation -- the full cost of operations from ratepayers, they'll get part of it -- majority of it from ratepayers, but $12 million of those operating costs will come from the Government of the Northwest Territories. Thank you.
Thank you. I'll go back to Yellowknife North -- sorry, Yellowknife Centre.
Thank you, Mr. Chairman. Mr. Chairman, I was wondering if they could -- the Minister, department, or the staff, could elaborate as to how that $12 million calculation came to be and specifically what areas of shortfall were identified to make that $12 million as the targeted total. Thank you.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. Mr. Chair, I certainly do have that -- it's not necessarily in the supplementary estimate documents or background materials; I certainly can get that to Members. I'm just not finding -- I mean, that's what I'm digging back now to before the winter break. So I don't have that coming up quickly. Yes, I'll have to get back to the Member with the breakdown of how we landed on that number. Thank you.
Thank you. I'm going to go to the Member from Yellowknife Centre.
Thank you for that. I will certainly accept it. Did NTPC suggest with respect to how urgent this particular need is and what documentation have they broken down to say if we don't have this by X date, we will have to consider Y solution? Thank you.
Thank you. I'm going to go to the Minister.
Thank you, Mr. Chair. The urgency of this was due to the timing of the required generate applications, so the deadline for that was the end of October and so there was a desire to get this in as quickly as possible to reflect that timing, and so there's a supplementary estimate here now. This is the earliest time we could put it before the House but wanted to see that it's part of the process of the public utilities board which is underway right now. That was the timing issue. Thank you.
Thank you. I'm going to go to the Member from Yellowknife Centre.
Is there any current financial urgency or impact that this has not been approved as of yet?
