6 Tuesday July 21 2015 ENVIRONMENT REMEDIATION Northwest Territories Power Corporation 201214 Phase II General Rate Application The Northwest Territories Public Utilities Board Board will conduct a public hearing commencing on October 20 2015 to consider the Northwest Territories Power Corporations NTPC or Corporation 20122013 and 20132014 General Rate Application GRA or Applica- tion Phase II filed on June 11 2015. The hearing will be held at the Yellowknife Inn Yellowknife NT commencing at 9 AM. In Phase I of NTPCs GRA the Board approved an overall revenue requirement for fiscal years 20122013 and 20132014 by way of Deci- sion 9-2013 dated July 9 2013. The purpose of the current Phase II proceedings is to determine the amount of revenue that NTPC would recover from each customer class in order to recover the overall rev- enue requirement approved by the Board in Phase I and to determine the design and structure of rates by rate class. Consistent with GNWT policy Directions dated April 10 2015 NT- PCs current Phase II Application is primarily a review of the meth- odology for determining cost of service by rate Zone Comprised of the Snare Hydro Taltson Hydro and Thermal Zones and by rate class with mostly minor adjustments to rate levels. However NTPC has proposed two notable changes to rate levels the Corporation is proposing a reduction of 2.4 in wholesale rates to Northland Utilities Yellowknife Limited and a 55 increase in rates for Government indus- trial Customers Giant Mine. In addition to proposed changes in rates as noted above NTPC is requesting Board approval of the following a 20132014 test year revenue requirement adjustment on a go- forward basis to recognize the Inuvik Gas Engine Conversion and commissioning of the Inuvik LNG Storage and Gasification Facility b Revised Terms and Conditions of Service to reflect updates to the Net Metering Program eligibility and Industrial Customer definition and c The Corporations Net Metering Program Eligibility and Operation Policy. The participation of interested parties is important for a successful review of the Application. Any party interested in participating in the hearing can do so by filing a request for intervener status with the Board by July 15 2015. Parties already on the Phase I mail list will automatically be placed on the Phase II mail list. Registered parties will be notified of any changes in the process schedule. For more information please contact Louise Larocque Board Secretary 203 62 Woodland Drive Hay River NT X0E 1G1 Phone 867-874-3944 Fax 867-874-3639 e-mail Louise-Ann_Larocquegov.nt.ca Alberta oilsands cleanup securities inadequate Auditor General By MEAGAN WOHLBERG Taxpayers may be on the hook for billions of dollars in oilsands cleanup costs due to a risky system of calculating and collecting securities from companies the provinces auditor general warned earlier this month. We have concluded that improvements are needed to both how security is calculated and how security amounts are monitored. Without these improvements if a mine op- erator cannot fulfill its reclamation obliga- tions and no other private operator assumes the liability the province is at risk of having to pay substantial amounts of public money states a report released July 6 by Alberta Au- ditor General Merwan Saher. The audit which looked at the provinces Mine Financial Security Program MFSP found that as of Dec. 31 2014 just 1.57 billion in securities were being held for coal and oilsands mine cleanup compared to the total estimated reclamation liabilities of 20.8 billion. Saher said much of the problem centres on the way the government calculates financial securities for companies which uses an as- sets-to-liability approach rather than requir- ing companies to pay full securities up front. Mining operators are required to pay a base deposit and to provide yearly plans for reclamation to the Alberta Energy Reg- ulator AER. For all work planned but not completed companies then owe 75000 per hectare in future securities. Companies start paying those securities when there are fewer than 15 years left of reserves those payments gradually increase until they are fully paid with less than six years left on a project. But due to flaws in the calculation and the ability for companies to find other ways to extend their mine life Saher said not a sin- gle company has paid additional financial securities to date. Presently no oil sands mining operator has posted more than the base amount of secu- rity. In other words no security is currently required under the various other forms of deposit based on data submitted by oil sands mine operators he wrote. The problem with the assets-to-liability cal- culation Saher said is that it overestimates the amount of assets in comparison to liabili- ties. Currently the formula counts both proven and probable resources as equally valuable assets and uses a price forward factor to account for fluctuations in the market that Saher said underestimates the impact of fu- ture price declines. The department of Environment has accepted the risk of not protecting against the risk of a broad based and rapid struc- tural decline in the oilsands sector the re- port notes. Saher said companies are able to avoid posting securities by extending their mine life through in situ oilsands extraction pro- cesses and by combining numerous proj- ects into one. Furthermore there is a disincentive for companies to plan and complete early recla- mation since the more they plan and fail to complete the more they will owe in the end. Instead mine operators can defer cleanup until the end of the project placing a greater risk on taxpayers. If incentives are not in place to reclaim lands as soon as reclamation is possible mine sites may remain disturbed for longer than necessary and Albertans face a larger risk that they will end up having to pay the eventual reclamation costs the report warns. Saher also found a lack of auditing of the MFSP by the AER. Though two Level 4 au- dits are supposed to take place each year - one for coal mines and the other for oilsands mines - only two have taken place for oil and one for coal since 2011. There presently is no evidence that the level of audit activity is commensurate with the risks that exist according to the report which noted that the lack of verification has been insufficient especially for coal given the amount of risk posed by a sector where the price of the resource is in steep decline. Saher recommended the AER develop a plan for sound auditing. Without an effective and timely monitor- ing program necessary adjustments to secu- rity amounts may not be promptly identified which increases the risk that Albertans will end up having to pay for the conservation and reclamation of mine sites the report concluded. PhotocourtesyofShell Bitumen is mined from Shell Canadas Jackpine oilsands mine near Fort McMurray in northeastern Alberta. The provinces auditor general questions whether existing security deposits will be adequate to pay for the cleanup of Albertas currently operating mines.