Town council voted unanimously Monday night to sign a contract with Northwest Energy, which would allow the town to buy its power on an aggregate basis with 10 other municipalities from Kenora to Schreiber.
Public Utilities Commissioner Doug McCaig, who has been working on the Northwest Energy concept for the past year, said it stands to save about $500,000 to all its members–about $58,000 in this district all told–by buying the power as one big group instead of smaller, individual entities.
“This is the first time this has happened in this province,” McCaig told council during its regular meeting Monday night. “We want to get started in the beginning of the winter, which is where the greatest savings will occur.”
The Power Corporation Act, which regulates the buying and selling of power until October, 2000 when the market is fully opened up to competition, states that only municipalities can buy power from Ontario Hydro, thereby preventing a corporation of joint municipalities like Northwest Energy to buy its power directly from the source.
But a loophole was found in the act that if one municipality bought all the power from Ontario Hydro, Northwest Energy then could turn and distribute it to the communities it services.
McCaig said Thunder Bay has been chosen as the one that buys power from Ontario Hydro because it has the best and largest facility for handling that kind of power.
“There will also be on the bill the total savings of that month,” McCaig said. “Half of those savings goes back to Northwest Energy for its services.”
He also noted the town could make some money on this venture by selling power and services to the outlying rural communities.
Coun. Roy Avis asked McCaig what would happen is the town ever wanted to leave Northwest Energy down the road. He replied the town simply goes back to the way it is now, dealing directly with Ontario Hydro at the rate it is now.
But when energy market completely opens in October, 2000, McCaig argued the town stands a chance of getting better rates from power companies if it was part of a group of 75,000 hydro users rather than the 3,700 it now has within town limits.
“This is why we have Northwest Energy because the more numbers we have, the cheaper we can get our energy,” he stressed. “It will save money for us all.”
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