Thank you, Mr. Speaker. My questions are for the Minister responsible for the Power Corporation. Obviously, the world price of oil is down — actually 40 per cent in the last six months — and the GRA that’s underway, the General Rate Application, is premised on the fact that oil prices were inflated and the cost of doing business for the Power Corporation was such that they had to go out and get some more money from the consumers. That rate increase was pegged at 19 per cent. Given the fact that oil prices have recently dropped — today they are at about $74 a barrel — what will this do to the GRA, and will the Power Corporation please cease and desist on the GRA?
Thank you, Mr. Ramsay. The honourable Minister responsible for the Power Corporation, Mr. Roland.
Thank you, Mr. Speaker. The Power Corporation General Rate Application or the rate rider application that is being looked at right now, that the Member’s pointed out, is to deal with the past expenses of the Power Corporation on fuel prices. In fact, it goes back quite a number of months, so it’s a makeup for loss of money that was looked at when they went through the general rate rider application over a year ago. So that makes up some of the issues not for going ahead.... It is more dealing with the costs that the Power Corporation had to deal with.
Mr. Speaker, I can understand and appreciate some of the previous costs. A lot of previous costs, as well, were because of bonuses paid to the senior management at the Power Corporation. I agree with my colleagues over here that are calling for a full scale review of the Power Corporation. I believe that they should find the way and the means within to pay for the fuel that they have had to pay for in the past and the costs that they have to pay for the past and not go and try to get it out of the pockets of residents in the Northwest Territories.
Again, I want to ask the Minister: given the fact that oil is $74 a barrel, will the government instruct the Power Corporation to drop the current GRA and the rate riders?
Mr. Speaker, I fully understand the need to take action when it comes to power generation in the Northwest Territories. Hopefully, as we look at the initiative as the Assembly, we’ll be able to look at options. I know that through the Ministerial Energy Coordinating Committee we’re looking at bringing a paper forward that looks at all options that we should look at here in the Northwest Territories.
As for the General Rate Application that is before the PUB right now, one of the other circumstances that we have to realize is the PUB has placed, for example, a 15 per cent cap on increases or decreases — more on the increases side for the costs. For example, if in one of our communities the actual cost of power generation is in the 30 per cent range from the previous rate application, then they’re capped at that 15 per cent, and that further impacts the delivery throughout the rest of the territory. So there are a number of implicating factors here, and as I stated, much of this cost on the fuel situation is going out to recapture costs that have already been spent by the Power Corporation. I will get the full details for the Member on this.
Thank you, Mr. Roland. Time for question period has expired; however, I will allow the Member a short supplementary. Mr. Ramsay.
Thank you, Mr. Speaker, and I thank the Premier for that response. You know, as an MLA you get questions all the time from constituents, and one of the questions that I’ve been getting numerous times lately…. I would like somebody to explain this to me. That’s why I’m going to ask the Minister today to explain this to me and explain to the residents in the Northwest Territories. How is it that every time we turn around, conservation is pushed on residents? Conservation of power, conservation of energy.
The residents in our territory are doing what they can to cut back on power. They’re replacing their appliances; they’re driving smaller cars; they’re doing what they can. But that’s on one hand, and then on the other hand, the Power Corporation is going to go out and increase power rates 19 per cent. The two don’t correlate. I would like the Minister to try to explain to the residents of the Northwest Territories how this is. If we’re using less power, how come they are going to charge us more for it?
The process that is laid before the Power Corporation and how it has to operate…. It goes through a very thorough review, and in fact it costs a substantial amount of money when it comes to putting the application before the PUB and justifying the costs that it operates under and establishing its rates and then going forward to see if it can get the approval.
As you look at the annual costs that we have to face here in the Northwest Territories, the Power Corporation is going through the same. For example, whenever a new package is negotiated with the employees, that has an impact. When refuelling happens in our remote communities, that has an impact. As well, replacing existing infrastructure has an impact.
One of the things we have to consider in all of this is that although we look at alternatives, we’re still working within a framework that’s quite structured, that leaves little room for thinking outside the existing process. I think that’s where we come in as Members of the Assembly: to look outside the box, as I heard a Member state earlier, and look at options that truly can benefit our community members.
When we talk about conservation, the less power used is definitely a good thing and helps us. Because if there’s more population in the community or more houses, then at times we have to add an additional generation plant to be able to provide that power source, which means that community is impacted. If we can reduce that just by planning, we can limit the impact.
Thank you, Mr. Roland. Final short supplementary, Mr. Ramsay.
Thank you, Mr. Speaker. I wanted to ask just one final question, I guess, about fuelling. Now that prices are low, I’d like to ask the Minister responsible for the Power Corporation: why can’t we go out there? I’ll bet that the cost of fuel does go up in the near future. Why can’t we go out today and buy the fuel that we need for this winter and for next summer’s resupply? We can buy fuel that far in advance. I think that even if we have to borrow the money, if we can ensure that power rates in the communities are going to stay at a lower rate, we should be going out there and buying that fuel today to ensure lower rates for our constituents.
Mr. Speaker, the process the Power Corp has looked at…. It has in fact joined the Department of Public Works and Services’ Petroleum Products Division so that they can bring the volumes to a larger amount, thereby seeing some additional savings. We are topped up in most communities because of a resupply scenario by barge, which has to be done in our spring and summer operation. Unfortunately, this year it was one of the highest prices we faced, and that’s an issue that we’re all going to have to face as the colder temperatures hit us. We’re looking at options where we can try to lessen the impact on people in the Northwest Territories, and we’ll continue to do so.
