Nunavut's Qulliq Energy Corp. proposes 7.6% power rate increase

If approved, customers could see their power rates go up an average 7.6 per cent over two years.

Application includes case for switching to harmonized rate structure across territory

Three state-of-the-art generators are included in Qulliq Energy Corporation's new power plant in Pangnirtung, Nunavut. The Crown corporation is in the process of replacing all of Nunavut's plants, which is in part why it is applying for a power-rate increase. (Qulliq Energy Corporation)

Nunavut residents will pay more for power if Qulliq Energy Corporation gets its way — and everybody across Nunavut could pay the same rate, regardless of which community they live in.

The Crown corporation is asking for an average rate increase of 7.6 per cent across the territory over the next two years. The corporation made a case for the increase in a general rate application to the territory's Utility Rate Review Council in October.

If the rates are approved, Nunavut residents would see their first increase on April 1 of this year and a second increase on April 1, 2019.

The application proposes another change — Qulliq wants to harmonize power rates across the territory. Right now, different communities pay different rates — Iqaluit and Rankin Inlet, two of Nunavut's largest communities, have the lowest electricity rates, while small communities such as Kugaaruk and Kimmirut pay the highest rates.

In its application, Qulliq argues the current rates are intended to reflect the costs of providing power to individual communities, but the structure doesn't accurately reflect what these costs really are. According to the application, the current model would require a 172 per cent rate increase for Grise Fiord, for example, while Iqaluit would be looking at a 22 per cent increase.

If Qulliq's plan is approved, it could lead to higher increases in larger communities, while those in smaller communities could see their rates decrease. The corporation proposes a gradual transition to harmonized rates over a period of six years.

Why the increases?

Bruno Pereira, the CEO and president of the Qulliq Energy Corporation, says increasing capital and operational costs mean the company must raise power rates to make ends meet. (Elyse Skura/CBC)

Bruno Pereira, president and CEO of Qulliq Energy Corporation, says the company needs these adjustments in order to make ends meet.

"It's the cost of doing business," he said.

"It's the cost of providing reliable power in the communities."

As an example, he pointed to an ongoing project to rebuild all of Nunavut's 25 power plants. He said Qulliq has rebuilt 12 already, is working on two right now and has 11 to go.

"So those are the significant capital costs that we incur," he said, adding Qulliq Energy hasn't requested an increase in three years.

Pereira also pointed out that Qulliq recently negotiated a new contract with its union, which has led to labour costs going up.

Customers have their say

The Utility Rate Review Council is currently holding public consultations, including one held in Iqaluit last Thursday, to see if customers think this is a reasonable plan.

Home and business owner Sheldon Nimchuk attended the Iqaluit meeting. He says the plan burdens private homeowners more than the government, because there are more homeowners in larger communities — where rates could go up.

Sheldon Nimchuk was at a public consultation about the proposed rate increase in Iqaluit Thursday evening. He feels the increase will disproportionately affect homeowners because most homeowners in Nunavut live in the territory's regional centres, where rates could go up. (Vince Robinet/CBC News)

"In the times of everything going up, it's just another aspect of owning a home or being a business that the trajectory always seems to be in the upward momentum in terms of increases," he said.

"Every aspect of running a business in the North is challenging, I guess."

He said "nobody's happy" about the increases, but it helps to know why they are happening.

According to Qulliq Energy's rate application, the rate review council will submit recommendations to Paul Quassa, the minister responsible for the Rates Review Council, in March.

Residents can submit feedback on the rate application to until 5 p.m. Feb. 2.

With files from Sara Frizzell