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Public hearing on sale of Hay River power franchise happening this week

A file photo of the Northland Utilities building in Yellowknife. There's a public hearing taking place in Hay River this week about the power franchise agreement the company has with that N.W.T. community. (Hilary Bird/CBC - image credit)
A file photo of the Northland Utilities building in Yellowknife. There's a public hearing taking place in Hay River this week about the power franchise agreement the company has with that N.W.T. community. (Hilary Bird/CBC - image credit)

A public hearing on the termination of Hay River's power franchise agreement with Northland Utilities is happening this week.

It's the latest hurdle in the Town of Hay River's years-long effort to switch electricity providers from Northland Utilities to the Northwest Territories Power Corporation (NTPC), a move the town says will meaningfully reduce the cost of electricity for residents.

The Northwest Territories Public Utilities Board, the regulatory body in charge of enforcing the territory's Public Utilities Act, called this week's hearing to look at how the Hay River power franchise changing hands might affect electricity rates for other Northland customers.

"What the board looks at is bottom line, is this whole thing in the public interest? Is it going to have wide-ranging economic repercussions or is it just a local deal that happens," public utilities board chair Gordon Van Tighem told CBC News on Friday.

If the board decides the sale of the Hay River franchise is not in the public interest, it can block the sale.

Years of arbitration

For decades Northland Utilities, which is jointly owned by Alberta energy company ATCO and Denedeh Investments, has held a power franchise agreement with Hay River. The company buys power from NTPC and distributes and sells it to residents of the town.

Hay River council voted to buy the franchise off Northland and sell it to NTPC in 2016, telling residents at the time it would save residents 20 per cent on their power bills.

But arbitration about the terms of the sale dragged on until 2022, and included stops in the N.W.T. Supreme Court and N.W.T. Court of Appeal after Northland Utilities challenged the arbitrators valuation of its assets in Hay River.

Northland Utilities called on the Public Utilities Board to intervene in the deal in the fall of 2022, suggesting the sale of the Hay River franchise might not be in the public interest because it would have to charge consumers in other markets more to compensate for the loss.

In a response sent to the Public Utilities Board, the Town of Hay River pointed out an arbitrator had already ordered Northland Utilities to absorb costs related to the franchise sale.

It argued the utility company was essentially asking the Public Utilities Board to reverse the arbitrator's decision, undermining the process and the law that gave Hay River the right to buy back the franchise in the first place.

The hearing

The hearing will be held at the Hay River community hall arena from Monday to Wednesday.

On Monday, there will be a hearing on proposed rate increases for customers of Northland Utilities, which the company argues are necessary because it is losing the Hay River franchise. On Tuesday and Wednesday, the hearing will look at the sale of the franchise itself.

During the day, there will be a technical hearing, where representatives of Northland Utilities, the Town of Hay River, and NTPC will present evidence. Representatives from Fort Providence and Fort Smith will also present as intervenors, because of the effect the outcome might have on electricity rates in their communities.

In the evening, members of the public will be invited to speak.

After the hearing

After this week's hearings are concluded, all interested parties will have two weeks to offer written rebuttals, Van Tighem explained.

If the board decides the rebuttals have raised any significant issues that need to be addressed, it can ask the parties to submit more information, which would further delay a possible sale of the franchise.

If there are no further issues to investigate, Van Tighem said the board will make its decision as soon as possible — hopefully some time in February.