Financial troubles cast shadow on power utility

The dark days of Nunavut's power utility are far from over.

The dark days of Nunavut's power utility are far from over.

Officials say the Qulliq Energy Corporation has an operating deficit of more than $9 million for the fiscal year ending March 31, 2004.

The utility will also have to continue borrowing money even though it has already passed its legal limit.

It may even have to ask the territorial government for more financial help.

According to the Canada's Auditor General, Qulliq Energy Corporation has borrowed $19 million more than it was legally allowed to under territorial legislation.

Nunavut's deputy minister of finance says the debt overrun is a serious concern for his department, especially since the government is close to its $200 million debt cap.

But Bob Vardy says the utility has two options.

"Shutting down the supply of electricity in the territory or further breaking the limits in the legislation," says Vardy.

"Something needs to be done quickly to fix the revenue situation in the utility."

The Chief operating officer at the power corporation says changes have been made in senior staff and the utility is also improving its billing system.

Performance bonuses and corporate credit cards have been removed.

Still, Hazen Hawker says it will take time before the situation is turned around.

"We have projected forward, various rate increases and various levels of investment and determined that it will be at least 2008 before we will be back in line with the legislation."

Meanwhile, customers can expect to see increases in their power bills in the near future.

The Qulliq Energy Corporation is applying for a general rate review and a fuel stabilization rider.

It says it needs to increase its overall revenue by more than 20 per cent to cover costs.