Opinion is sharply divided over how best to overhaul the Northwest Territories' power rate structure, following a review panel's suggestion to blend rates based on which energy sources communities use.

The Electricity Review Panel, set up by the N.W.T. government, has proposed consolidating power rates into three zones: two that include communities that use hydroelectric power and one, referred to as the "thermal zone," made up of communities powered by diesel and natural gas.

The current rate structure is based on costs at the community level, which the review panel found has created large price differences and "hard feelings and acrimony" between communities.

A formal debate on whether to adopt the panel's recommendations will likely begin in the spring.

According to the panel's report, which was tabled in the legislature last week, electricity rates in hydro-powered communities would go up while rates in those that use diesel and natural gas would fall.

However, it's not clear whether lower power prices in the "thermal zone" would benefit customers who receive rate subsidies from the territorial government, said Tu Nedhe MLA Tom Beaulieu.

Under the subsidy program, electricity prices in diesel-powered communities like Lutselk'e, N.W.T., are tied to the rate in Yellowknife as long as diesel customers use less than 700 kilowatt hours per month.

"That cost will go up everywhere for people that are below their power subsidy ... of 700 kilowatt hours," Beaulieu told CBC News.

Power costs could go up in Fort Resolution, which runs on hydroelectric power, he said.

"It was supposed to reduce the cost of living," Beaulieu said. "It's going to increase the cost of living for everyone, especially the low-consumption users, you know, elders, and so on."

But Mackenzie Delta MLA David Krutko, who represents a number of diesel-powered communities, said the review panel's proposal would make the power rate system "more economically viable" for all communities, not just the ones running on hydro.

Others, like Yellowknife-area MLA Bob Bromley, argue that only the biggest consumers of electricity would save money under the proposed rate changes.

"Only the very large users of electricity will save some money," said Yellowknife-area MLA Bob Bromley. "Everybody else will be paying more to subsidize that."

The N.W.T. Housing Corp., which is among the biggest consumers of power in many N.W.T. communities, would likely benefit, Beaulieu said.

"They would end up saving a couple million dollars out of the deal," said Beaulieu, a former housing corporation president.

Krutko said he and other MLAs are expecting a heated debate and tough decisions once the legislative assembly starts debating the panel's recommendations.

"It's pretty split between hydro communities and thermal communities," Krutko said.