News Releases

PUB Approves discontinuation of fuel refund rider

Jul 06, 2017

HAY RIVER, NT (July 6, 2017) – The Public Utilities Board (PUB) approved an application from the Northwest Territories Power Corporation (NTPC) to discontinue the Rate Stabilization Fuel Refund Rider effective July 1, 2017.

The Territorial Rate Stabilization Fund (Stabilization Fund) was created to help to keep electricity prices stable when fuel prices or hydroelectric outputs fluctuate.

Fuel Stabilization Funds are an effective way to make sure rates are consistent and that customers who use the electricity are the ones who receive the benefit or pay the difference.

During the past few years, fuel prices have been lower than those used to calculate the electrical rates approved by the PUB, leaving a surplus in the fund. That surplus has now been completely refunded through the Fuel Refund Rider and has been reducing customers’ bills for the past 13 months.

Residential power rates are available at: http://www.ntpc.com/customer-service/residential-service/what-is-my-power-rate .

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 BACKGROUNDER:  Territorial Rate Stabilization Fund


What is the Territorial Rate Stabilization Fund (Stabilization Fund)? 

The Territorial Rate Stabilization Fund absorbs the cost differences from short term changes in fuel prices, liquid natural gas use or hydroelectric output.  It allows NTPC customers to have a consistent electricity price.  Without this fund NTPC would have to frequently apply to have electricity rates revised due to short term external factors such as world oil price fluctuations, weather patterns or operational conditions.

 How does the Rate Stabilization Fund work?

When the price of fuel, the type of fuel or the amount of hydroelectric power produced is different than that used to calculate electrical rates, the difference in cost is put into a Stabilization Fund. The price of fuel can change based on world markets and the amount of energy produced by hydro electric power can change depending on the availability of water, maintenance and repair schedules, or the length of planned and unplanned outages.

When fuel prices are high, less liquid natural gas is used or if less hydro electrical generation is produced, the fund will move toward a deficit balance. Or the opposite, when fuel prices are low, more liquid natural gas is used or if more hydroelectric power is being produced the fund will move toward a surplus balance. 

In either case, if the change continues and the fund reaches a balance of $2.5M, positive or negative, the balance will be recovered from customers, in the case of a deficit balance, or will be refunded to customers, in the case of a surplus balance. Recovering or refunding this amount is done through a Fuel Rider or a Fuel Refund Rider on customers’ utility bill, based on their energy consumption.  

Why $2.5 million

The Public Utilities Board decided on the $2.5 million “trigger” amount.  If the fund reaches this amount it is assumed that the difference in cost is no longer a short term fluctuation but a longer term change.

What is a fuel refund rider?

A fuel refund rider is a refund to customers because NTPC is spending less on fuel to produce the electricity then we expected when we calculated electrical rates several years ago.

Diesel fuel is a large part of the cost of electricity in the North. When electricity rates are calculated they are calculated using the expected future cost of fuel.  If the price of fuel drops, the cost savings is given back to customers in the form of a fuel refund rider.  However, if the cost of fuel increases then there is an extra charge in the form of a fuel rider.

The refund was part of your power bill calculation and was based on how much power you used.  For the past 13 months you received a 0.36¢ refund for each kWh of electricity you used.

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