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NWT Chamber of Commerce AGM

NWT Chamber of Commerce AGM. NTPC 2012/14 General Rate Application April 4, 2012. 1. Overview. What Challenges is NTPC Facing? What’s been happening since 2007/08 and what steps have been taken to lower costs? When will new rates show up on bills? What is the impact on Customers?

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NWT Chamber of Commerce AGM

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  1. NWT Chamber of Commerce AGM NTPC 2012/14 General Rate Application April 4, 2012 1

  2. Overview • What Challenges is NTPC Facing? • What’s been happening since 2007/08 and what steps have been taken to lower costs? • When will new rates show up on bills? • What is the impact on Customers? • How can you get involved? • What are the longer term solutions?

  3. Challenges Facing NTPC Diesel Fuel – costs have increased 57% ($10M) since 2007/08. Aging Infrastructure – All utilities are faced with continuing capital investment to maintain reliable service. Amortization Rates – Updated to reflect current industry practice. 3

  4. Challenges Facing NTPC Increased Regulation – Licensing and Monitoring programs. Inflationary Pressures – Sales growth 0.5% vs. inflation 3.5%. Inuvik Gas Shortage – less than 12 months of natural gas supply remains. Immediate solution is to convert back to diesel pending long term options. 4

  5. Since 2007/08 GRA GNWT undertook review of electricity industry • NTPC Operational Review • Creating a Brighter Futures Report • Rate Rebalancing – reduced rates for customer in Thermal communities by 20%-80% • Improved Subsidy Program – eligibility increased from 700 kwh to 1,000 kwh in winter months • Government Rates – retained at community based levels

  6. Steps to Lower Costs Financial Support from Shareholder financial support from GNWT to offset fuel inflation. transition financial support (Due Diligence Audit) Operating Cost Efficiencies – At or below inflation Reformed Return on Equity – eliminated return in Thermal communities and lowered return for Hydro communities. Reduced Debt Costs – old, higher interest debt has been retired and new debt issued at lower rates. 6

  7. Timing of New Rates • Interim Rates April 1, required due to process lag • Interim rate increase proposed at 7% (same as GRA) which is 29% of the shortfall between costs and revenues. • Normal practice – interim rates @ 80% of revenue shortfall • GNWT support was confirmed early and benefit flowed immediately to customers through lower interim rate request

  8. Impact to Customers 2012/13 Proposed rate impacts after GNWT support $11-$12 per month for Residential $28-$89 per month for Commercial Without GNWT Support rate impact would be almost double 8

  9. How Can You Get Involved? • PUB sets the process and schedule • Ad in paper will alert interested parties (individuals, communities or organizations) to register with PUB as interveners • Expectation - 6-month process (last GRA took 2 years), majority of which is through an exchange of email 8

  10. Longer Term Solutions • Your priorities are our priorities – reliability, cost effectiveness and meeting our commitments • Continued emphasis on cost containment • More frequent, lower, inflation adjustments • Alternative Energy (GNWT/NT Energy) • Conservation 9

  11. Thank you

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