Power rates will jump slightly in December after the Yukon’s power regulator ordered the Yukon Energy Corporation to adjust its finances.
The increase drew the ire of Roger Rondeau, who heads the Utilities Consumers’ Group, a power company watchdog.
“The big decrease in our rates promised by government and its cronies from hooking up Minto is gone,” wrote Rondeau in a letter published in newspapers this week.
But the rate increase is not Yukon Energy’s decision, said spokesperson Janet Patterson. It’s an order made last month by the regulator, the Yukon Utilities Board.
And the increase, when you get down to it, is only a temporary fix until Yukon Energy’s promised rate decrease kicks in sometime in the future, she said.
But to understand how that works, you have to immerse yourself in the dry world of regulator-power company relations.
Let’s start with the context.
The utilities board has been reviewing Yukon Energy’s operations for the last year as part of the Crown corporation’s general rate application hearing. These hearings are meant to find out whether Yukon Energy is spending its money wisely and serving the public interest.
Then there was an announcement.
In an effort to lower electrical consumption, Yukon Energy declared late last year that it would offer a 17.9 per cent decrease for customers who use less than 1,000 kilowatts a month, while increasing the rate for those who use more.
Yukon Energy’s power rates, and those of the privately owned Yukon Electrical Company Limited, haven’t been reviewed for years.
The utilities board decided to postpone any talk over rate costs during Yukon Energy’s hearing this year. Both power companies are currently hashing out a proposal to begin a cost-of-service study in the next few months.
A cost-of-service study would be part of a new, larger utilities board hearing, slated for the spring, that would look exclusively at power rates and whether Yukoners are paying a fair price for the service we get.
But in the meantime, the utilities board ordered Yukon Energy to make an interim rate cut. That decrease would last until the cost-of-service hearing could be done. At that point the board would consider Yukon Energy’s proposal to decrease power rates for low-energy users by 17.9 per cent.
Yukon Energy put in an interim rate decrease of 3.48 per cent in December 2008 for everybody except the Minto mine and secondary sales customers.
It’s been showing up as a decrease in Rider J, which allows Yukon Energy to cover expenses it can’t afford ever since the Faro mine closed in 1998.
But earlier this month, the utilities board ordered that decrease to shrink. On December 1, it will shrink from 3.48 per cent to 2.47 per cent, popping a few more dollars on your monthly power bill.
That’s because of the formula the utilities used to calculate the interim rate decrease.
The decrease was based on how much money Yukon Energy was predicted to make throughout 2009, which is based on how much power it sells.
Yukon Energy sold less energy than predicted, and the electrical load forecasts it used for the rate decrease were too high, according to documents filed with the utilities board.
The board asked for a review of the decrease last month to make sure the numbers checked out.
When the figures come back, the board felt the rate decrease was too big, and has ordered it to shrink by about one per cent.
That’s at least until the cost-of-service hearing happens next year, and then the board will consider Yukon Energy’s proposed decrease of 17.9 per cent.
Contact James Munson at
jamesm@yukon-news.com