110 likes | 238 Views
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?
E N D
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? • How can you get involved? • What are the longer term solutions?
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
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
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
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
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
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
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
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