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
Northland Revenue Requirement (before Transmission Revenue and Fuel Prices)
Increase Over Existing Rates
Revenue Requirement Increase (Before Transmission Revenue and Fuel Prices) (%)
Revenue Requirement Increase (Decrease) Net of Transmission Revenues and Fuel Prices
Revenue Requirement Increase Net of Increase in Fuel Prices (%)
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.