Northland Utilities (NWT) Limited 2023 General Rate Application

Northland Utilities (NWT) Limited (Northland) has filed an application with the Northwest Territories Public Utilities Board (PUB) to dispose of its Franchise Assets within the Town of Hay River as well as a 2023 General Rate Application (GRA) to determine revenue requirement to serve Northland’s remaining customers following the disposition of the Hay River Franchise.

Hay River Disposition Application

Pursuant to sections 66 and 68 of the Public Utilities Act (PUA) Northland requires PUB approval to discontinue its operations under the Franchise as well as approval for asset dispositions outside the ordinary course of business. In addition Northland seeks recovery of costs associated with the discontinuation of the Franchise and disposition of the Franchise Assets as well as a deferral account to flow through any over or under collections of revenue requirement as a result of timing of the transaction.

Northland has requested that the Board assess the discontinuation of service under the Franchise and the disposition of Franchise Assets in accordance with Sections 66 and 68(a). Specifically, Northland notes that the public interest, including the proposed rates for Northland’s remaining customers outlined in the 2023 GRA, a new transmission rate, the additional business risk, and operational considerations must be contemplated as part of any approvals granted under Sections 66 and 68 of the PUA.

Information about the process as well as all documentation related to the sale and purchase of the Hay River Franchise Assets can be found on the PUB website

2023 General Rate Application

Northland’s 2023 GRA is primarily driven by the discontinuation of the Hay River Franchise Agreement and the disposition of the Hay River Franchise assets to the Town of Hay River. The Application is for a single Test Year in 2023 to allow the Board to review the public interest considerations associated with the discontinuation of service and disposition of assets in Hay River and the resulting rates for Northland’s remaining customers.

Within its application Northland is requesting:

  • Approval of Northland’s revenue requirement for the 2023 Test Year (one year Test Period);
  • Approval for a separate long-term deferral account for costs associated with the extended Taltson shut down to prevent rate shock to customers;
  • Approval of a new Transmission Rate;
  • Project permits for two projects in 2024 consistent with Section 54 of the Public Utilities Act (PUA).

Applied for Revenue Requirement excluding the costs of operating the transmission line proposed to be flowed through to Hay River’s future service provider and incremental fuel prices previously contemplated in the Diesel Fuel Price Variance Deferral account is a net decrease of 9% as illustrated by the following table:

Applied-For Revenue Requirement

($000s)

 

2023

 

Total Company

Hydro Zone

Thermal Zone

Northland Revenue Requirement (before Transmission Revenue and Fuel Prices)

5,357

1,893

3,464

Increase Over Existing Rates

1,420

1,128

293

Revenue Requirement Increase (Before Transmission Revenue and Fuel Prices) (%)

36%

147%

9%

Revenue Requirement Increase (Decrease) Net of Transmission Revenues and Fuel Prices

(354)

17

(371)

Revenue Requirement Increase Net of Increase in Fuel Prices (%)

-9%

2%

-12%

The net reduction is revenue requirement is largely due to a one time tax benefit in the test year related to the implementation of a new customer billing system.

Section 54 of the PUA states that “A public utility shall apply to the Board for a project permit before undertaking a capital project having a total cost projected to exceed (a) $5,000,000, or (b) 10% of the utility’s rate base. [emphasis].”  Northland has requested project permits for the following projects:

  • Saamba K’e Plant Move
  • Pine Point Transmission Transformer Replacement

 

Saamba K’e Plant Move

When the plant was first commissioned in 1987, the nearest building was a nearby maintenance shop which used the waste heat from the plant. In the years since the plant was installed, a school and store have been built adjacent to the plant. The existing powerplant is located 37 meters away from the elementary school’s playground and roughly 50 meters away from the closest store. Noise and exhaust from the plant disrupt the surrounding community, which has ultimately led to a request from the community to relocate the plant.

Project Cost: $1,232,570

Pine Point Transmission Transformer Replacement

Business Driver: The transformer at the Pine Point Substation was originally built in 1968 and has had recent limited impact repairs to address leaking in the past, however these previous repairs have not been successful. The transformer is a critical piece of infrastructure on the path to all downstream hydro communities in the Taltson Zone.  The existing transformer has already exceeded the expected life span (typically, transformers of this style have a 40-year life span). Therefore, replacing the transformer is preferable to attempting to repair it again.

Project Cost: $1,885,000

The requested projects will address issues surrounding the aging infrastructure and ensure Northland continues to provide safe and reliable service.

Notice of Public Hearings

Northland Utilities (NWT) Ltd (NUL) has two applications before the Northwest Territories Public Utilities Board (Board):

  1. Northland Utilities (NWT) Limited (NUL) 2023 General Rate Application (GRA); Application Number: 2022-02
  2. Purchase and Sale of Hay River Franchise Assets Application; Application Number:2023-07

1. The context for the above Applications is the request for approval for the sale of the Hay River Franchise assets by Northland Utilities (NWT) Limited and the purchase of the same assets by the Northwest Territories Power Corporation. The Applications could potentially result in changes to the rates of both utilities. The Board will hear the proposals put forward by the parties to the sale transaction and by registered Interveners, at the public hearings to be held on January 15th, 16th and possibly 17th 2024 at the Hay River Community Hall Arena, 79 Woodland Drive, Hay River NT.  

2. On each hearing day, the technical hearing hours (involving Applicants and Registered Interveners only) will be from 9.00AM to 5.30PM. Once the technical hearings are completed, public consultations will follow, commencing at 6.00PM and end no later than 7.00PM on January 15 and 16th. Those intending to participate in the public consultations should notify the Board Secretary, Ms. Doris Minoza by e mail at Doris_Minoza@gov.nt.ca, by January 10, 2024. The Public may view the above Applications on the Board’s website at: https://nwtpublicutilitiesboard.ca/.  

3. The NUL 2023 GRA Hearing is scheduled for January 15, 2024, and this will be followed by public consultations respecting the same application.  

4. The Hearing of the Purchase and Sale of the Hay River Franchise Assets proceeding is scheduled for January 16, 2024, and this will be followed by public consultations respecting the same proceeding.  

5. The hearings will be held as hybrid hearings (virtual and in person) with the virtual hearing accessible through Microsoft Teams.  

6. The public will have access to view the proceedings on the PUB website via a YouTube link.

FAQs

  • How are rates regulated in NWT?

    Rates are regulated by the Northwest Territories Public Utilities Board, in accordance with the Public Utilities Act. The NWT Public Utilities Board (PUB) is an independent, quasi-judicial agency of the Government of the Northwest Territories.

  • What is the purpose of Northland Utilities 2023 General Rate Application (GRA)?

    There are two distinct applications being discussed at the hearing: the Purchase and Sale of the Hay River Franchise and a General Rate Application to determine electricity rates for our remaining customers after the sale. As part of the Application, we have submitted projects and budgets that need to be approved by the PUB. The Application assesses various factors and considerations to ensure fair and reasonable rates while maintaining quality of service.  

  • When did Northland Utilities last file a General Rate Application?

    Northland Utilities has not filed a General Rate Application since 2015. We are proud to have maintained consistent rates for the past eight years.

  • If the General Rate Application is approved, how will rates change?

    Our proposed rate changes for 2023 are as follows: 

    Total Rate Change (including fuel increase): 10.3%

    Hydro Rate Change: 7.0%

    Thermal Rate Change; 11.1% 

    Rate Change excluding fuel increase: -6.6%

    Hydro Rate Change (excluding fuel increase): 7.0%

    Thermal Rate Change (excluding fuel increase): -9.8%

  • When will the approved rates come into effect?

    There was an interim filing in 2023 requesting interim rates effective January 1, 2024; however, this request was not accepted, and Northland continues to operate under Interim rates that were last approved effective June 1, 2023.  Final updates and new rates are not expected until a decision from the PUB is received, which is expected sometime in Q2 of 2024.  Following approval from the PUB, any differences between interim rates and approved rates will be reconciled through a Rider adjustment.  

  • What is a rate rider?

    Rate riders are charges or credits approved by the PUB to recover costs or refund money for something that is temporary or caused by factors outside a utility’s control. Riders exist for various reasons and periods of time. We list all current rate riders on our website.  

  • How will these proposed rate changes affect Northland’s remaining customers?

    While rates are subject to approval by the PUB, our focus through these hearings is to establish rates that result in no harm for all of Northland’s customers. 

    We understand the importance of stable and affordable utility rates for our customers, and that remains our utmost priority.