City of Yellowknife council is expected to pass a five-year extension to its 10-year franchise agreement with Northern Utilities Limited (NUL) at Tuesday’s regular council meeting.
The city’s 10-year franchise agreement comes to an end Dec. 31, 2020 and the extension, upon approval, will serve the city and Ndilo up to Dec. 31 2025.
Earlier in September, the city made the recommendation to council for the mayor and senior administrative officer to enter into the agreement with NUL to make the five-year extension.
Sheila Bassi-Kellett, senior administrative officer with the city said that administration says that the last agreement has seen “strong and competent service in the distribution of electricity” from the company.
A franchise agreement with a utility company oversees the distribution of power within municipal boundaries and allows access for the utility company to operate within the city limits. The agreement can also use public lands as a right away in exchange for compensation on that is provided to the city by the utility company.
Electricity providers are regulated by the NWT Public Utilities Board, which is an independent body that sets rates in the absence of competition.
The Cities Towns and Villages Act allows a municipality in the Northwest Territories to grant a public utility franchise for a term of up to 20 years. Those agreements can be renewed up to a maximum 10 years each.
NUL, which is a subsidiary company of Calgary-based ATCO has long held the franchise agreement contract with the city for decades.
Sharolynn Woodward, director of corporate services explained at the meeting that after a presentation by NUL and NTPC in the summer of 2019, the city chose the extension of five years with NUL.
Both Doug Tenney, vice-president of Northern development and Darin Smith, manager were present for the meeting on behalf of the utility company.
Coun. Niels Konge said that continuing with NUL was the best option available.
“I certainly feel quite strongly that this is the best thing that we can do as council for our residents,” he said. “If you look historically at, where our electricity increases come from, they are not on the distribution side with Northland Utilities. They tend to be from NTPC on the generation of the transmission side.”
He said council does need to lobby the GNWT on addressing costs of transmission and generation.
Other councillors expressed similar sentiments.
“I think it’s a good balanced approach,” said Coun. Robin Williams. “The way that administration has gone about this, we should see how other municipalities’ franchise agreements will play out.
A NUL spokesperson declined to comment until after the third reading vote Tuesday, which would make the decision official.