Thank you, Mr. Speaker. The government tabled their response to the electricity rate review and Power Corporation review recently. I would like to provide some additional perspectives on that.
First I would like to start with a few positive results of the recommendations in that report. The first is that a reduction in power rates for commercial users is real and especially in the very expensive communities. We need additional local economic development and this will hopefully help businesses with that.
The second is collapsing the rate system from 33 to seven rate zones. Surely we will enjoy a modest administrative gain there and a slight reduction in cost.
Finally, the government has agreed to stabilize rates, with no additional costs for the next two years. I think that will be a welcome relief to our ratepayers, although at what cost?
Mr. Speaker, what is the government really doing here? In my mind, they are largely simply shifting our costs from upfront rate rider ratepayer costs to behind the scenes costs to taxpayers, and they’re doing this in three ways. The first is buying out the rate riders at the rate of $3 million per year for the next two years, and, by the way, where is that money coming from? That’s money coming from the $60 million fund slated supposedly for energy efficiency and renewable energy, real reductions in costs. So we’re getting this artificial transfer of dollars to buy out the rate riders.
Secondly, we’re forgiving the dividends that the Power Corp normally pays to the government, which indirectly we use to help pay the subsidies. So, again, the taxpayer is picking up those subsidies which used to be minimized through those dividends.
Finally, Mr. Speaker, we’re adjusting our thresholds in communities where in every single diesel community the average consumption is already well below the current threshold of 700. We’re raising it to 1,000. We’re telling people go spend more energy, use more energy and we’ll provide the huge subsidies to cover those costs, which I don’t think is the message we really want, and it was the one saving grace of the current system. So that reduces the personal incentive to reduce energy use and offering these up as savings to local resident users is the ultimate shell game because, of course, those residents are not using that energy now.
Mr. Bromley, your time for your Member’s statements is expired.
Thank you, Mr. Speaker. I seek unanimous consent to conclude my statement.
---Unanimous consent granted
Thank you, Mr. Speaker. So, Mr. Speaker, we can expect in a couple of years from now a real shock as these realities of high fossil fuel prices and water shortages click in, as they of course will.
We’ve spent countless dollars on these reviews. I’ll be asking how much. It’s money that could have been spent on real reductions to real costs. What could those have been? The Lutselk’e and Whati mini-hydro projects, action on residual heat recovery in individual communities, the major savings the Arctic Energy Alliance has pointed out from switching water heaters, real action on local electrical generation through biomass, grid system development and so on.
So, Mr. Speaker, it’s time to stop this endless musing and jump into the future. I’ll file this report, along with all the others, and continue to devote my energy to getting this government to stop talking and start acting. Mahsi.
Thank you, Mr. Bromley. The honourable Member for Frame Lake, Ms. Bisaro.
Thank you, Mr. Speaker. I’m going to follow up on my colleague Mr. Bromley’s comments and speak, as well, about the electricity review response, and we are not in collusion.
As Members are aware, the Minister of ITI tabled the government’s response last week and the changes outlined in that report will have a huge impact on power rates for our NWT communities, and I feel it is a significant achievement for this Assembly. Though, Mr. Speaker, I cannot fully endorse the report.
I’m concerned about the philosophy, which underpins the substance of the report, and I have concerns about some of the recommendations. There’s no doubt that most of our residents struggle with the high cost of living and that one of our greatest costs is the cost of power. The plan outlined in the government’s response will positively impact our residents by reducing their cost of living, both at home and at the store.
Mr. Speaker, we’ve missed the golden opportunity that this review process offered us. We had an opportunity to make substantial and real changes to the way our electricity system operates. We could have found substantive efficiencies and reduced the huge subsidies that the government pays out to keep our power costs down, but that we did not do. Instead we did minimal revamping, shuffled the subsidies from one pocket to another and missed a great opportunity to effect real change and to find real and systemic savings.
What am I worried about? A couple of things. Firstly, this is only a two-year plan and in that two years rate riders will be paid off to the tune of about $6 million; taxpayer dollars. Power rates will be frozen, but what increases will be waiting to pounce on us in the fall of 2012? Production costs, fuel, materials and so on never seem to go down, only up, and that can only result in increased power rates. I fear a jump in our power rates at the end of this two-year period. I think we’re going to experience rate shock.
Secondly, there will be no adjustment of the power rates for government customers at this time. I see that as artificially inflating NTPC’s revenues and I ask again what will be the impact on rates and on the system when those are reduced as we are told that they will be?
There are some elements of this plan which are positive, it’s not all bad, but I regret that both the electricity and the NTPC reports did not look for systemic changes which would reduce the cost of power generation and distribution. Instead we have a report that moves money from the government’s right hand to its left hand and which leaves us with an uncertain electrical future.
Thank you, Ms. Bisaro. The honourable Member for Nahendeh, Mr. Menicoche.
