Cost of Electricity in the North
The cost of electricity in Canada’s northern territories—Northwest Territories, Yukon and Nunavut—is notably high due to several factors, including:
- Geographical Isolation: Many communities in the northern territories are remote and not connected to larger electricity grids. Unlike southern parts of Canada, which are interconnected through extensive power lines, the northern regions lack the infrastructure needed to share electricity resources with neighboring areas. As a result, they rely heavily on local and often expensive energy sources.
- Reliance on Diesel Power: A significant portion of the electricity in northern territories is generated using diesel fuel. Diesel generators are expensive to operate, and transportation costs for delivering diesel fuel to these remote areas are high due to the lack of roads or railways in many places. The need to transport diesel by air or ice roads further adds to the cost.
- Limited Renewable Energy Options: While there is potential for renewable energy sources like hydroelectric, wind, and solar, these options are not always feasible or fully developed in these areas due to environmental, technological, or financial challenges. The lack of large-scale renewable energy infrastructure forces reliance on diesel, which is more expensive and less environmentally friendly.
- Small Population Base: The smaller population in the northern territories means that there are fewer consumers to share the costs of infrastructure and generation. This can lead to higher per-capita costs for electricity as the costs of maintaining the grid and fuel supplies are distributed over a smaller number of users.
- Harsh Climate: The extreme cold temperatures in the northern territories result in higher heating demands during the winter months.
How do we determine your Electricity Rates?
There are two utilities in the Northwest Territories: Northwest Territories Power Corporation (NTPC) and us, Naka Power Utilities (Yellowknife) and Naka Power Utilities (NWT). Each company is responsible for different aspects of the generation, transmission and distribution of electricity throughout the Territory.
In Yellowknife, NTPC is responsible for the costs associated with hydro and thermal generation, transmission, as well as their general operating costs. Naka-YK costs support the distribution of electricity and our operation and maintenance (otherwise known as O&M).
Customer Rate Composition
Here’s an example of the rate composition for our customers in Yellowknife and N’dilo from our latest General Rate Application. About 80 per cent of our cost to customers is the purchase of electricity generated by NTPC. This is a flow-through cost, which means that Naka-YK does not mark up these costs, nor make revenue from customers for this cost.
The cost for Naka-YK to operate, maintain and distribute electricity to your homes and businesses makes up about 20 per cent of your overall electricity bill. Our cost to customers includes our Operations and Maintenance (O&M), depreciation and financing costs of our electrical infrastructure, as well as the property and franchise tax that is paid to the City of Yellowknife to allow us to operate as your utility provider.
Yellowknife Rate History
For the past 10 years, Naka-YK has worked efficiently and effectively to manage our costs, while strengthening and modernizing the electrical system, improving reliability and keeping customers top of mind. Here’s an approximate breakdown of what an average residential bill has paid and the split between the costs of the two utilities. NOTE: This graph and cost forecasts are based on the most recent GRA application filed by NTPC.
Our Commitment to a Better Energy Future
We take great pride in being a company who has operated in the NWT for more than 70 years and being Canada’s first Indigenous-owned electricity utility, in partnership with Denendeh Investments Incorporated (DII) for almost 40 years. It’s our priority to provide safe, reliable and affordable service to our customers.
We are also committed to support NWT’s energy future to ensure all customers across the territories have fair and equitable rates, regardless of their utility provider. Learn more about Our Solution for a Better Energy Future.