The eight-year battle between the Town of Hay River and the company formerly known as Northland Utilities over how power is delivered to the town seems to have come to an end.
The Public Utilities Board (PUB) ruled late last month that there would be “no harm” in the transfer of assets from Naka Power, which used to be known as Northland Utilities, to the NWT Power Corporation. In its decision, the board found that the purchase and sale of the assets was “in the public interest” and that the sale from Naka to the power corp. must happen before Dec. 31 of this year.
Under its old name, Northland had argued that if the power corp. had been allowed to assume control in Hay River, it would be engaging what it called “cream-skimming”, a term the company states is defined as “where removing inherently more profitable components of a utility’s customer base results in a vicious cycle of upward pressure on rates to the remaining customers.”
In other words, Northland alleged that the transfer of assets to the power corp. would harm its ability to do business elsewhere in the South Slave region.
The town first indicated that it would be looking at its options back in 2015 when it put out a request for proposals (RFP) for a new service provider after the expiration of the agreement between the town and Northland in November 2016. At the time, the town stated that the reason for the RFP was to “ensure that the citizens and businesses of the Town receive the lowest possible electric rates in the context of safe and reliable service.”
The PUB noted that Northland was eligible to bid on the RFP just like any other provider. The power corp.’s proposal was eventually chosen by the town.
The town put forth an offer to Northland in March 2016 to buy the assets, but Northland rejected the offer and it went to arbitration. An arbitrator ruled in 2018 that an appropriate price to be paid for the assets was whatever the book value was plus 30 per cent under a partial final award; under its calculations, Northland had valued the assets at around three times what they were said to be worth.
Northland appealed the arbitrator’s decision to the NWT Supreme Court in 2019, where it was thrown out. The company then went to the NWT Court of Appeal, which also dismissed Northland’s claims. Its last option was to appeal to the Supreme Court of Canada, but it would not take up the case.
The PUB also ruled that Northland would not be able to recover legal costs, estimated to be around $520,000, from either the town or from residents, but it will be able to recover any debt break fees and any severance pay given to employees.
When it comes to the town’s legal costs, the power corp. is responsible for those, stated the PUB, and it cannot recoup that money through raising prices on its customers.
Essentially, the town won’t be out of pocket at all.
Glenn Smith, the town’s senior administrative officer, did not respond to NNSL Media’s request for comment by press time, but Nancy Southern, president and CEO of ATCO, which jointly owns Naka Power with Denendeh Investments Inc., took aim the GNWT last weekend in Yellowknife.
As reported by CKLB, Southern, who was attending an Indigenous economic conference, had rather pointed words for Deputy Premier Caroline Wawzonek, who was among the attendees and who’s also the minister responsible for the power corp.
“Now, I think for those of you, particularly for the Deputy Premier, and all of you in the Government of the Northwest Territories, for the last two days, we talked about incenting investment, getting it right with the investors to build a prosperous mining future, to build security and the opportunity to invest in the Northwest Territories,” she said.
“And our investment. Your investment, as Dene people was taken away. I don’t think it sends the best of messages to future investors. And it certainly doesn’t send the message that we heard for the last two days from the Dene chiefs and investors, about both their opportunity to control their future and invest in their own future.”
Wawzonek reportedly declined to speak on the matter when asked.