The cost of taking over Hay River’s electric distribution is one of the reasons Northwest Territories Power Corporation (NTPC) filed to raise rates across the region.

NTPC’s general rate application, applied last monthIt proposes to increase the price of electricity by 18 percent throughout the region. This application highlights upcoming expenses for the infrastructure and personnel that will be needed to distribute electricity in Hay River.

NTPC will officially take over distribution of Hay River in March.

The energy company estimates that through 2025-26, non-fuel operating and maintenance expenses will increase by more than $9 million from 2022-23. Almost a third of that ($2.7 million) comes from the acquisition of the Hay River franchise.

NWT Utilities Board Chairman Gordon Van Tighem confirmed project-related expenses were one of the reasons NTPC applied to increase rates. Other causes include ongoing drought affecting hydroelectric production, rising diesel prices, various capital projects, and the effects of wildfires.

“Throughout this challenging period, NTPC has continued to provide safe and reliable service to its customers,” the application says.

Currently, NTPC sells electricity to Naka Power, which distributes it in Hay River. The town has been in the process of having NTPC become the sole distributor since 2016.

The acquisition of Hay River, referred to by NTPC in its rate filing as “the most significant franchise transfer in decades,” was initially touted as an opportunity to save Hay River customers up to 100 percent. 20 percent on electricity bills.

But last month, NTPC applied to increase rates across the region by about 25 percent.

Jayne Haywood, owner of Territorial Quick Print in Hay River, said if the rate hike goes ahead, the increase would be the end of her business. He said he already pays close to $1,000 a month for electricity.

“I can’t afford it, that’s all, I can’t do it,” he said.

“I’m a printing house, I have presses, printers; all this equipment consumes a lot of power.”

Paul Grant, NTPC’s chief financial officer, said the move would result in savings for Hay River customers despite the potential interest rate increase.

“We still expect the people of Hay River to see a reduction in the fees they have to pay once the franchise is taken over by NTPC,” he said.

NTPC’s application reiterates this, stating that Hay River rates will match what people in Fort Smith pay. This will then benefit Fort Smith and other NTPC customers by paying more for residential electricity.

Salaries and infrastructure costs

The project comes with millions of dollars in costs for the energy company.

This includes an additional $1.5 million for salaries and wages that will go to nine employees at the Hay River franchise.

Approximately $1 million will be allocated to the cost of materials and services to maintain facilities and equipment for the Hay River concession.

NTPC will need to replace all existing meters in Hay River, which will cost approximately $1.5 million.

NTPC writes in its application that it will need to purchase a backhoe truck for its Hay River operations for about $500,000, as well as a large bucket truck estimated to cost about $500,000.

CBC News reached out to NTPC for details on additional benefits from purchasing Hay River, but no one was able to provide them by deadline.

NTPC is expected to take over Hay River distribution in March 2025.