Making Power Pay: One Solution for The Communities

For proponents of building small-scale economies across the North, it isn’t just about creating local jobs and insulating communities from the peaks and valleys of the extractive, southern-investment-based economic system we currently have. It’s also about building local revenue capacity, so that Aboriginal and municipal governments have some sort of recurring income to help run the programs and services their communities need to thrive.

With little own-source revenue, many local governments across the NWT currently rely on a combination of cash drops from higher levels of government, the occasional successful grant application and revenue-sharing agreements with large companies (whose payments in turn depend on  wider economic considerations, as Snap Lake’s recent shutdown and the subsequent freeze of revenue-sharing payments demonstrate).

But perhaps, with some inspired leadership and technological hacks, local bands or not-for-profits interested in community development could make money off something widely consumed within their own communities: power.  

This is the vision of Jeff Philipp, head of SSi Micro and perhaps the North’s most prominent homegrown tech-entrepreneur. Using some fairly simple technological innovations, the same ones that have allowed Philipp’s family business, the Snowshoe Inn, to stay afloat and even thrive in high-cost Fort Providence for decades, community-level organizations could potentially bring in sizable returns.

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Pissing away heat

The central idea: capitalize on wasted energy. Twenty-four of the territory’s 33 communities, those not connected to the electrical grid, are powered by diesel generators. Which, according to Philipp, happen to be horrendously inefficient.

Only about 33 percent of the energy potential that exists in diesel is actually turned into the kinetic energy that spins the alternators to create electricity, says Philipp. The other 66 percent is turned into heat energy that is expelled as exhaust, serving absolutely no purpose.

“You’re not going to get the whole 66 percent, but let’s say you get 10 percent of it on a million dollars a year of fuel, that’s $100,000 worth of fuel. That’s like $8000 a month free, forever.”

“Our second biggest expense in these communities is heat. We burn the same stupid fuel, a dollar a litre to heat the houses, and yet this thing is standing there pissing away heat all day long,” says Philipp.

What if you could capture even some of that wasted energy potential? This is precisely what Snowshoe’s off-the-grid energy system has been doing for decades. Using a simple energy exchange system, heat from the electricity generator is used to warm water, which subsequently runs through a series of tanks and pipes around the massive Snowshoe complex and is used to heat everything from rooms to floors to shower water. It’s essentially free heat.

“You’re not going to get the whole 66 percent, but let’s say you get 10 percent of it on a million dollars a year of fuel, that’s $100,000 worth of fuel. That’s like $8000 a month free, forever.”

It’s not just Philipp who swears by the system. A study of the Snowshoe project commissioned by the Canadian Mortgage and Housing Corp. states: “In the end, energy savings were greater than 50% and the system paid for itself in less than two years…. The concept has proven to be one which can be replicated in the North.”

Of course, there’s upfront capital cost to upgrade the generators – not more than $50-100,000, estimates Philipp – and install utilidor systems to carry the heated water. But after that, whoever is producing the power is raking in cash on top of the already lucrative electricity sales, either from the sale of free heat, or from cost savings associated with drastically reduced heating costs.

Local control

The technological hack is, by itself, something that existing utilities like NTPC or Northland Utilities could take advantage of without shaking the status quo. But in Philipp’s mind, the key shift involves local bands or governments or not-for-profits taking over power production themselves.

“How about we go to the government, Municipal and Community Affairs, and we say to them, as a community corporation, as a not-for-profit foundation in the community whose sole purpose is to improve the social and economic goals of the community, to improve the community and the livelihood of people in the community, why wouldn’t we bid on the power contract, take over power?” asks Philipp.

Not only could this provide recurring revenue to help pay for programs and services, it could also open the door for other local innovations: the heat could be used in local greenhouses; the generator system could be augmented by wood pellet boilers, which could stimulate local forestry jobs. Furthermore, argues Philipp, if bands or local governments controlled power, they could help promote local business by passing along savings in the form of reduced power costs.

What’s really needed is a holistic approach to job creation, education and housing, anchored in locally owned enterprise, argues Philipp.

“The reality is they need a reasonably priced energy locally available to them… [that’s not] twice or three times as much as the power in Yellowknife, six times as much as the power in Ottawa.”

“If we want employers to start businesses and hire the people in the community, the employers have to be able to build businesses that are sustainable… If they’re going to do that, they need to be able to operate that business on a basis that does not start them at a financial disadvantage, that does not sewer them in the first year.”

Part of a bigger picture

Having local groups take over technologically enhanced power production is only a small step towards creating sustainable and healthy communities. What’s really needed is a holistic approach to job creation, education and housing, anchored in locally owned enterprise, argues Philipp.

“What these communities need is to get off the government hand-out, which is so feast or famine, because there is no recurring revenue, because when the oil and gas sector tanks, the federal government tax income tanks, the royalty revenue tanks, and all of a sudden all those programs which they’ve come to rely on – and there’s not enough of them – tank.”

Power generation is simply the most sensible place to start, killing two birds – business-busting power rates and lack of stable revenue – with one stone. Philipp included the suggestion in a wide-ranging “community partnership proposal” that he presented to a number of Fort Providence decision-makers late last year. But he’s convinced his idea could be a game-changer across the territory.

“If we build it in Providence, and demonstrate it, the government could get behind and demonstrate it everywhere, because it’s in their best interest. They just don’t understand how simple it is because they’re looking for a really complex answer.”

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