Town of Inuvik to fight natural gas rate hike
· CBC News
The Town of Inuvik will formally oppose a rate hike announced by Inuvik Gas Ltd. on Monday.
The gas company said it plans on increasing the residential rate from $35.44 per gigajoule up to $45.44 — a 28 per cent increase. The rate for government customers, like the town, would go from $35 to $51.
Inuvik Mayor Peter Clarkson said the increase will have a substantial impact on both residents and public finances. He estimates it will cost the town about $200,000 annually, or the equivalent of a three per cent tax increase, based on its five-year average gas consumption.
“Nobody got a 28 per cent increase in their wage or in their salary,” Clarkson said. “So if you’re raising something 28 per cent, that’s a huge hit.”
Council will vote to file a complaint to the N.W.T. Public Utilities Board at Wednesday’s meeting.
“The town is going to do whatever they can to oppose this increase because everybody is in the same boat,” Clarkson said.
Robin Gaskell, the general manager for Inuvik Gas, said the company understands that affordability is an issue, “but the reality is that the cost of delivering this energy, especially in a northern environment, has increased significantly over the past 14 years.”
“We didn’t take this increase lightly,” Gaskell said.
Inuvik Gas already has the highest rate for natural gas in the country, often by over $25 per gigajoule, compared to other natural gas providers.
The increase comes as many northern households are already struggling with the high cost of living.
“If we want people to live in the Arctic… if we want doctors, nurses, school teachers, social workers, physiotherapists, then we need a community that is affordable to live in,” said Clarkson.
He said many homeowners who converted from heating oil to natural gas with the help of government subsidies can’t just switch back, because replacing their heating systems with diesel or pellet stoves would cost thousands of dollars.
When Inuvik Gas last raised its rate in 2013, it was by 83 per cent. The utility company began supplementing the community’s natural gas supply with synthetic natural gas using trucked propane because the town’s Ikhil reservoir was declining.
Inuvik Gas said transportation costs are the reason for the higher rates, however, the company could not provide exact, estimated, or even average costs of transportation.
The gas “is supplied to [Inuvik Gas] as an all-in cost per litre delivered to Inuvik from multiple suppliers in Alberta and B.C. Because of this, the costs will vary,” said Ashley Vilgrain, senior advisor for ATCO, which is one of three equal owners of Inuvik Gas.
In a follow up email to CBC News after publication, Vilgrain said while transportation costs are a factor, “the main drivers of the rate increase are the increase in storage and infrastructure associated with the additional SNG processing added in 2025, in addition to ongoing operations and maintenance costs.”
Inuvik Gas did not respond to questions about an average cost of shipping propane in recent years compared to the costs during the years immediately following the last rate increase.
Explain the multiplier, mayor demands
Clarkson said when Inuvik Gas was asking the community to reduce gas consumption earlier this year, the company said the Ikhil wells were again supplying 30 per cent of the community’s gas.
That was the intended use of the Ikhil reserves when the decision was made to switch the town supply to synthetic gas. But Clarkson still questions the practice of charging customers a rate based on trucked propane when a significant portion of the supply is locally sourced.
Clarkson said the town also wants more transparency on a “multiplier” applied to customer bills.
“The multiplier converts the registered meter difference into gigajoules,” reads the Inuvik Gas website. “The multiplier is calculated using the pressured temperature, volume, tap heat value, profile multiplier and utility multiplier.”
But Gaskell said the registered meter is measuring in gigajoules, and the multiplier is measuring the difference in heating value between natural and synthetic gas.
Clarkson said “it does not make sense” and wants the company to further clarify how they’re calculating the formula.
· CBC News
