The NDP has called on the government this sitting to reevaluate ATCO Electric Yukon rates after the utilities company reported higher profits than anticipated for the past five years.
MLA Emily Tredger made the request in the legislature on March 7.
“Electricity bills are on the rise in the Yukon, and the government can change that. The minister could order ATCO to do a rate review, which would mean fairer electricity bills for Yukoners,” she said.
Tredger called attention to ATCO’s financial statements from the past five years. In 2016, the Yukon Utilities Board negotiated the utility company’s annual rates, based on operating costs and revenue, and settled on nine per cent as an acceptable rate of return on equity.
But due to a number of factors — including population growth — ATCO’s profits have unexpectedly increased since then.
Tredger pointed out that since 2016, ATCO has exceeded their nine per cent anticipated profits by more than $7 million over the past five years and by more than $2 million in 2020 alone. She argued those funds should have found their way back into Yukoners’ pockets via a lower energy rate.
“Why has the minister allowed ATCO to earn millions of dollars in excess profits for years while Yukoners struggle with their bills?” she said.
Streicker clarified that ATCO had not done “anything inappropriate” in exceeding the nine per cent. The rate of return established by the board is based on estimates and does not constrain the profits of the company if it is not accurate.
“I will not disparage a company that is working to supply our electricity around the territory. I did say that the Minister of Justice and I have taken this question under advisement,” said John Streicker.
Usually, it would be ATCO seeking a rate review because the costs to provide electricity usually increase and rates go up to match. But due to a number of unique circumstances in the territory, operations costs for ATCO have remained consistent as revenues rise.
The ATCO rider on customer bills has remained the same. Increased revenues are from increased electricity usage in the Yukon and not a raise in prices, according to the company.
“Along with more people using electricity, electricity consumption per person or household has increased. New homes have been installing electrical heat almost exclusively. Coupled with the fact that more people are working from home, electrical usage has been at an all-time high,” said Jay Massie, VP Northern Development and Indigenous Relations, in a statement.
Massie said the Yukon surpassed record energy usage on Jan. 6 this year. He added that although usage has been up, operational costs have remained consistent, so there has been an increase in revenue.
“We welcome the opportunity to work with the Yukon government to review rates and efficient regulation,” he added.
That process would need to take place at the Yukon Utilities Board, which regulates rates for both ATCO and the Yukon Energy Corporation. The last application review took place in 2016 when the Board established a nine per cent return on equity from 2016-17.
For his part, Stricker said he’ll be working with Minister of Justice Tracy-Anne McPhee to consider a rate review.
“Of course, we do want to look at how to keep rates as low as possible. I will also say that I will respect the Utilities Board and what their job is,” he said.
Tredger said the government can force ATCO to go back to the Utilities Board for a rate review.
She said she wants to see less profit go to ATCO and more money go into the pockets of Yukoners or green energy projects in the territory.
“We’re facing really high electricity bills at a time when things are very expensive. Unfortunately, there’s nothing compelling [ATCO] to change it except the Yukon government and we have not seen this government willing to act on it,” said Tredger. “I would have liked to have seen [new rates] five years ago.”
Yukon Chamber of Commerce wants changes too
Denny Kobayashi, executive director of the Yukon Chamber of Commerce, said although he doesn’t begrudge the private company’s earnings, he would like to see some larger changes to the way electricity rates are determined in the territory.
“The problems that we have with our system are with the rates and the rate hearings, and how they’re set and the Utilities Board,” he said. “[We could have] a scheduled fixed-rate hearing times, like every three years there’s a rate hearing. It’s also very difficult for anybody to intervene because of the cost of lawyers and time and energy that it takes.”
He noted that right now, the Board doesn’t have the ability to consider environmental incentives.
Kobayashi pointed out that the process of holding a rate review is incredibly expensive, and there is no set timeline for holding them. He also noted that all Yukoners – from those who own houses to those who operate businesses – are having trouble understanding the variety of fees and riders that make up an electricity bill.
“We’re saying, that’s why we need the hearing so they can get rid of those riders and actually put them in so that people can understand their bills. We think that could be a real improvement,” he said.
Kobayashi said he’s had productive conversations with both McPhee and Streicker.
“The suggestion from the Chamber that we look at the rates and work with ATCO and Yukon Energy and the Utility Board I think is a good suggestion,” said Streicker on March 7.
Contact Haley Ritchie at haley.ritchie@yukon-news.com