Yukon’s energy ratepayers are being shortchanged

Yukon's energy ratepayers are being shortchanged Open letter to Yukon Utilities Board: In January 2015, the Utilities Consumers' Group wrote an open letter informing the public of the likelihood that the Yukon Utilities Board release some of the money, c

Open letter to Yukon Utilities Board:

In January 2015, the Utilities Consumers’ Group wrote an open letter informing the public of the likelihood that the Yukon Utilities Board release some of the money, collected under a Diesel Contingency Fund (DCF) agreement made over a decade ago, to lower residential and small business customer rates for electricity consumption.

One can only deduce from Decision 2015-01 that the Yukon Utilities Board and the Yukon Energy Corporation are hooked at the hip. Although they are both supposedly arm’s length independent public bodies, decisions made by this regulator always favours the public corporation. The utility is never wrong, no matter how much information the board receives to the contrary.

Our evidence clearly demonstrated that the Yukon Energy Corporation caused this legitimate negotiated settlement funding operation (i.e. the DCF) to lay dormant for over a decade, and their board overseer did not say a peep about this regulatory lapse in their recently released decision on this matter. Conspicuously absent!

From the last two test years, this regulatory board also directed the Crown corporation to salt away $8 million from the collected savings of extra water in our hydro system (i.e. causing less burning of costly diesel). This very high cap amount, which they say is needed as a safeguard for a severe drought period which would result in the use of displaced diesel or in the near future natural gas (which was supposedly initiated to save us money in the long term, but with spiraling cost overruns for this LNG project, will this benefit ever be achieved?).

The original negotiated agreement was capped at $4 million, and it served its purpose well into the future until Yukon Energy unilaterally suspended the DCF operations. ATCO Yukon argued for a $2 million cap; UCG was more moderate with a $5 million proposition. This would have allowed more money to be returned to the ratepayer now.

As an intervener we have never been updated on exactly how much really should have accumulated under this DCF ratepayer designed program, since it was conveniently put to sleep. Nor has the regulator ever been provided this vital evidence, as far as we know. And the board’s silence on this matter will bury this information forever!

UCG can use armchair accounting (similar to the creative accounting of the utilities) by pro-rating the amount accumulated in the past two test years at over $3 million per year, to realize that we should have in excess of this amount above the cap, accumulated for the 2014 non-test year period.

Where and when will consumers benefit from this extra earned money, or will you now allow the Yukon Energy to creatively eat this up in a new rate case to recover the ever increasing costs for their and your LNG?

Roger Rondeau

Utilities Consumers’ Group

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