Businesses shouldn’t subsidize other people’s energy: chamber

Business owners are paying an unfair price for energy, says Ray Wells, vice-chairman of the Yukon Chamber of Commerce.

Business owners are paying an unfair price for energy, says Ray Wells, vice-chairman of the Yukon Chamber of Commerce.

Commercial customers pay 117 per cent of what it costs to produce power for them, according to the recent joint filing by the Yukon Energy Corporation and Yukon Electrical Company Limited to the Yukon Utilities Board.

The chambers decided to pick up the fight to lower commercial power rates ahead of the utilities board hearing, which has yet to be scheduled. When it’s held, the regulator will examine how much different customer groups – residential, commercial, industrial and government – each pay compared to the costs of producing energy. In regulatory jargon, it’s called a Phase 2 Rate Application.

“The government needs to step back and be more cognizant about the small to medium enterprise in the Yukon,” said Wells.

He chairs RAB Energy’s board of directors, a local door-and window-making company.

“People up here that compete with businesses Outside are subsidizing the cost of service and that makes us less competitive,” he said. “Jurisdictions Outside don’t have that cross-subsidy.”

But Wells’ lobbying is unlikely to change much since the distribution of power costs, which cross-subsidizes power between customers groups, was created by orders-in-council from cabinet.

For example, residential customers pay 79 per cent of their power costs while government shoulders 144 per cent of its costs.

Wells wants all customers to pay their full fair share.

“Many jurisdictions are moving to the 100 per cent, they’re moving up residents closer to paying the full cost,” he said. “If residents are being subsidized, then you as a resident owner are not feeling the true cost of leaving those lights on.”

“(The cost) regulates behaviour,” he said.

Wells asked Premier Dennis Fentie to address the issue during the chamber’s sneak peek of the territorial budget, but Fentie didn’t promise anything.

At a news conference two weeks ago, Yukon Energy president David Morrison said the cross-subsidies are unlikely to change and that he doesn’t think residents should pay their fair share.

He erroneously told reporters commercial and industrial customers pay the full 100 per cent of producing power. The application filed earlier this month features a chart showing what both Yukon power companies believe is the current allocation of costs among customer groups.

The chambers are writing the utilities board with their concerns and hope the issue gains steam over the next few years.

The orders-in-council are set to expire in 2012, said Wells.

“We want to put this issue in front of the politicians,” he said. “We’re going to be looking for whoever happens to be in power in 2012 to begin to deal with this high cost-to-service ratio.”

Wells wasn’t aware of any measures taken to avoid a conflict-of-interest within the Yukon Chamber of Commerce because its chair, Jerome Babyn, is also president of Yukon Electrical Company Ltd.

“There was no issue at all on conflicts-of-interest with this,” he said.

Contact James Munson at

jamesm@yukon-news.com