New Independent Report Highlights Need for Rate Reform in the NWT
In June 2025, Naka Power Utilities (NWT) commissioned London Economics International LLC (LEI), a globally respected economic consultancy with extensive utility experience, to conduct an independent review of the electricity system in the Northwest Territories.
The report identifies systemic issues in the current rate design, including cross-subsidization, regulatory inefficiencies, and the erosion of Indigenous economic participation. It also highlights risks facing Naka Power Utilities (NWT) and the broader implications for energy policy in the North.
About London Economics International LLC
London Economics International LLC (LEI) is a leading global economic and financial advisory firm specializing in infrastructure, energy, and regulatory economics. LEI is known for its rigorous, independent analysis and has advised governments, regulators, and utilities across North America and beyond.
Report Highlights
Indigenous Equity
The erosion of Naka Power Utilities (NWT) role undermines commitments to Indigenous economic reconciliation.
“If Naka Power Utilities (NWT)… is forced to give up its franchises in NWT due to predatory pricing practices that are not sustainable in the long run, the spirit of working with the Indigenous Peoples, as outlined in the UN declarations and adopted by the GNWT comes into question.”
“The existence of Naka Power Utilities (NWT) as an independent entity ensures the ~14,000 Dene identifying residents have access to the financial benefits associated with operating an Indigenous-led utility.”
“As one of the first regulated utilities with Indigenous ownership in Canada, Naka Power Utilities (NWT) should reasonably expect fair treatment under the aforementioned Indigenous rights that the GNWT has unequivocally supported.”
Cross-subsidization
Yellowknife customers are subsidizing other regions, including government customers in the Taltson zone.
“The current rates/rate framework in the NWT results in potentially unfair cross-subsidization across customers and rate zones.”
"Naka Power Utilities (Yellowknife) customers… are subsidizing other customers, including Government customers in the Taltson zone.”
Regulatory Inefficiencies
The current seven-zone rate structure creates excessive administrative burden and distorts price signals.
“A primary issue observed by LEI concerns artificially low RCC ratios and insufficient revenue recovery practices. The current seven rate zone system in the NWT results in excessive administrative and regulatory efforts for a small population, leading to inequity between customer groups and incorrect price signals.” (RCC: Revenue to Cost Coverage)
“LEI believes that rate reform could be beneficial for NWT, in terms of reducing regulatory burden, reducing rate volatility and reducing administrative costs.”
Franchise Instability
Short-term franchise agreements and predatory pricing practices threaten the viability of Indigenous-owned utilities.
“If utilities engage in predatory pricing when bidding for franchises, lower rates offered are illusionary. Additionally, franchise agreement duration/lengths of 5- to 10-years are generally inefficient and exacerbate the erosion of economies of scale.”
“The GNWT must reflect on allowing the erosion of reasonable and competitive operations by an Indigenous-owned utility.”
Our Commitment to Policy Reform
Naka Power Utilities (NWT) are significantly concerned about Northwest Territories Power Corporation's revenue shortfalls from underpriced electricity. Key highlights from our recent General Rate Application outline:
- NTPC’s electricity rates are set too low to be financially sustainable over the long term.
- The current rate structure is fundamentally unfair, with Yellowknife customers paying significantly more each month than NTPC’s Taltson customers — including government customers — effectively subsidizing them.
- This pricing approach has been used in ways that undermine fair competition for utility service areas (franchises).
Learn more about the energy landscape, rate composition and some historical background for customers.
Our Policy Engagements
We continue to advocate for a more equitable and efficient electricity system in the NWT through our ongoing actions, including:
- Proposal creation for a harmonized rate framework to reduce inequities
- Ongoing participation in General Rate Applications (GRA's) as interveners
- Engaging with communities and regulators to promote Indigenous economic reconciliation
Learn more our efforts to educate local government and customers about the need for rate reform in the NWT by watching our recent presentations to the City of Yellowknife and GNWT.
Looking Ahead: A Call for Transparent, Sustainable Reform
Naka Power Utilities (NWT) remains committed to working with the GNWT, the Public Utilities Board, NTPC and communities across the territory to address the issues outlined in the report. We recognize that while there is often inertia in maintaining the status quo – even when it’s not working – viable solutions do exist. These solutions can enhance fairness, improve efficiency, and strengthen the electricity system in the NWT. We believe in a future where energy policy supports fairness, sustainability, and Indigenous self-determination.