Open letter to David Morrison, president of Yukon Energy Corp.:
Thank you for your reply. It is important to have such dialogue informing the public.
In your response, you claim correspondence from the Utilities Consumers’ Group is misleading, then you explain (propagandize) the budget for the Carmacks/Stewart transmission line, which is proposed to increase to $68 million from $32 million.
You can call it like you want, but this remains more than double the amount of the original presentation to intervenors and your regulator, the Yukon Utilities Board.
As an intervenor in all utility applications before this board, UCG is aware that lowballing estimates to get capital projects through the preliminary regulatory stage is common practice, but this error is ridiculous.
You can use as many excuses behind cost overruns or budget miscalculations as you wish, or call them anything else you need to for justification, but what it boils down to is either negligent feasibility studies or poor information (best information at the time, as the utilities like to call it).
For the record, UCG and other intervenors did argue against placing the cost overruns of the Carmacks to Pelly leg into the rate base, arguments that the Board ignored.
You then declare that $35 million for the Pelly/Stewart leg will come from government (taxpayers’ pocket versus ratepayers’) and industry, but fail to tell us which industry or how this will roll out.
You also tell us only $5 million will go on the rate base to be paid for by Yukon electrical customers, while, in the same breath, proclaim there will be no rate increase.
I will ask again, how do you expect to get this extra money from ratepayers as, to our knowledge, there are no new customers between Pelly Crossing and Stewart?
Who will then pay for the return on this rate base and the operation and maintenance costs?
Will this income magically appear?
And what about budget-fudgets (more overruns)? Who do you expect to pay for this?
Finally, your opinion mentioned nothing about our question on who should pay for the major costs of the substation at Stewart to connect the two grids of differing voltage.
Was this another feasibility or consultant boondoggle, or simply the best information at the time?
Roger Rondeau, president
Utilities Consumers’ Group