The Canadian Federation of Independent Business (CFIB) is calling on the Yukon Utilities Board to reject ATCO Electric Yukon’s proposed electricity rate hike of 5.2 per cent above current levels by Jan. 1, 2024.
ATCO Electric Yukon’s July 7 filing with the utilities board, which regulates utilities, outlines a decrease of 1.6 per cent in 2023, followed by an increase in 2024. Implementing the 2023 rate adjustment on Aug. 1 will refund approximately 40 per cent of its forecast surplus, per the filing.
In an Aug. 10 phone interview, Brianna Solberg, CFIB’s legislative affairs director for the North, indicated CFIB is concerned that the private electricity distributor’s proposal to bring up rates starting next year could bring down businesses in the territory if it goes into effect.
For that reason, CFIB has written a letter, dated July 31, to the utility board asking for rates to be frozen until economic conditions get better given the ongoing challenges businesses are facing, Solberg said. If rate increases are necessary, then CFIB is suggesting a gradual increase stretched out over the next few years as opposed to lumping it together at once.
“Our latest survey data shows that only half of small businesses are back to making normal sales while the majority are continuing to struggle with significant pandemic-related debts and stress, and not to mention the average small business owner in Canada is still staring down roughly $60,000 in pandemic-related debt, so an alarming 19 per cent of businesses are considering closing their doors,” Solberg said.
Solberg said businesses have identified fuel and energy costs as top constraints over the past 12 months.
“Eighty-four per cent of small businesses have seen their energy costs increase despite their energy consumption staying about the same and that’s alarming because 90 per cent of those businesses indicate they cannot pass those increased costs onto their customers, so they’re simply forced to absorb these costs, which further erodes their bottom line,” Solberg said.
“We know that small business owners have appreciated measures introduced by the Yukon government to help offset electricity costs such as the inflation relief rebate and the interim electrical rebate.”
However, Solberg said, if ATCO Electric Yukon implements this “sudden sharp increase in electricity rates, small business owners will struggle to adjust and it will limit their ability to create jobs, to make productive investments and to support the local economy.”
Per ATCO Electric Yukon’s website, the rate increase is “largely driven by system growth and replacing aging infrastructure.” The main reasons cited for infrastructure improvements are increased demand due to a rise in the number of customers, upgrading aging infrastructure, carrying out a new billing system and replacing assets that have reached their end of life.
“These upgrades are essential to maintain a reliable and modern electric system for customers,” reads the website.
A public hearing on electricity rates is set to be held in Whitehorse in November, according to the website.
The last time ATCO Electric Yukon applied to raise rates was in 2016, when the utilities board established a nine per cent return on equity.
On Aug. 4, the Yukon NDP registered as an intervener and filed a submission in the 2023 rate review process.
The Yukon NDP has called on the Yukon government to re-evaluate ATCO Electric Yukon rates after the utilities company reported higher profits than anticipated.
In an Aug. 4 release, the Yukon NDP said ATCO Electric Yukon has earned more than $8.5 million above the amount set by the utilities board. The opposition party attributed the earnings to “corporate greed.”
Yukon NDP MLA for Whitehorse Centre and energy critic Lane Tredger said by phone on Aug. 10 that they don’t see how any rate increase can be justified given the millions made. Tredger said the proposed decrease for 2023 is actually an increase when you add in the fuel adjustment.
“ATCO has been making millions in profits for the last number of years, and now they want to raise electricity rates so they can make even more, and that’s not fair to Yukoners. It’s not fair to small businesses,” Tredger said.
“We, unfortunately, have not seen the Liberals take any actions to protect Yukoners on this front.”
They suggested the territorial government needs to “start by listening to Yukoners and listening to small businesses who are hurting right now.”
“[The Yukon government has] a lot of levers available to them and they’re the ones who make the rules about what the Yukon Utility Board does.”
John Streicker, who is the territorial minister responsible for the Yukon Energy Corporation, disagrees with part of the Yukon NDP’s suggestion.
“The NDP, you know, they’re suggesting that as a government we should interfere in the utility board process, but that’s not appropriate,” he said.
“The utility board has processes that are established, and they will do this rate hearing and we will respect their authority to consider rate applications and to make decisions.”
Streicker said the biggest factor with regards to the utility company’s higher earnings over the years has to do with the mining sector paying more as opposed to residential customers.
“We have been advocating directly to ATCO to get them to go before the utility board to review those rates,” he said.
Streicker said the government wants to keep rates low while investing in infrastructure to modernize it, and he believes the utility board will consider those investments and what is fair for the ratepayer.
— With files from Haley Ritchie
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