FFPC aims to keep hydro rates as low as possible

With the province exempting the Fort Frances Power Corp. from the process that would allow the utility to pass on the 4.3 cents per kilowatt hour hydro cap to its customers, the FFPC board is trying to secure a rate that would be a blend of that fixed price less the power agreement credit of 1.23 cents/kWh.
“The government has claimed that Fort Frances residents, on average, have paid less than the 4.3 cent/kWh since the electricity market opened last May, due to the power agreement [with the mill],” FFPC CEO Mark McCaig said Thursday.
As a result, he noted the FFPC, and another hydro company in Sault Ste. Marie with a similar power agreement, are being exempted from the 4.3 cent/kWh cap—and must charge customers a blend of spot market prices and the power agreement credit.
McCaig noted spot market prices have been—on average—higher than 4.3 cents/kWh since the market opened last May.
“We feel, in some respects, we are being penalized because we have a power agreement–an agreement that’s intended to benefit the people of Fort Frances,” remarked McCaig.
The FFPC board is taking action, including consulting with legal counsel, to secure a rate resulting from a fixed price of 4.3 cent/kWh for energy [the legislated rate being paid by other residents of the province] less the power agreement credit of 1.23 cents.
McCaig noted there has been a power agreement with the local mill for almost 100 years and that in 1983, a Supreme Court ruling upheld that the agreement between the town and the company that owns the dam here must provide power to the town at a reasonable cost.
Last month, the FFPC was surprised to learn its customers would not be receiving $75 rebates from the province, either, due to the fact that between May 1, 2002 and Nov. 11, 2002, power prices in Fort Frances, on average, were below the price of 4.3 cent/kWh.
According to the legislation passed in November, as of Dec. 1, no hydro customers would have to pay more than the 4.3 cent/kWh rate until 2006 (the price cap won’t be reflected in bills until January or February).
The reason for the 4.3 cent/kWh cap is that’s the price that existed before May 1, when the Conservative government opened the electricity-generation market to competition.