Yukon Energy rate decrease isn’t so simple

An energy bill isn’t as simple as your power meter makes it look. Instead of paying one price for the power you’ve used, your energy…

An energy bill isn’t as simple as your power meter makes it look.

Instead of paying one price for the power you’ve used, your energy bill is scattered with many charges.

And it’s confusing.

Setting those rates makes things worse.

The Crown-owned Yukon Energy Corporation is pitching a 17.8 per cent decrease in your monthly bill.

The private Yukon Electrical Company Limited wants to hit ratepayers with a 10.7 per cent increase in their monthly rate.

So you might think you’re ahead, by about 7.1 per cent. Right?

Nope.

Roger Rondeau from the Utility Consumers’ Group argues ratepayers are going to be hit with an overall increase.

So what gives? Don’t we all end up writing one cheque?

Well, no one is talking about that one price for power ­— they’re all making estimates of what you’re going to pay based on changes to those confusing monthly charges.

A ratepayer is charged a basic fee for using the power grid.

Then you’re charged for your power, based on how much you use every month.

With us so far?

Next, you’re charged a diesel surcharge, because the black gold is so expensive.

Then, you’re charged GST.

That’s the easy part.

Next, you’ve got the rate stabilization fund rider.

It was created in 1998 after the Faro mine closed. It was designed to shield customers from a 30 per cent rate increase.

The Yukon government announced that the rate stabilization fund would be cancelled. Half of it was gone in 2007, while the cancellation of the second half was postponed one year, until May.

And this is why ratepayers will see an increase, said Rondeau.

Yukon Energy’s estimated rate reduction of 17.8 per cent was dependent on the rate stabilization fund remaining in place.

“If the Yukon utilities board accepts the interim rates; the average bill be will lower this year,” said David McDonald, vice-president of Yukon Energy.

“If the rate stabilization fund goes away next year, or the year after or five years from now, then the consumer bill will change,” he said.

“Our point is that this year, bills will go down.”

When the fund disappears, ratepayers will see their power bill jump 14 per cent, said Rondeau.

Yukon Energy can’t do much about that, said McDonald.

“The rate stabilization fund is a separate decision,” he said.

So, rates are going down until they go up — are you still following this?

We’re not done.

There’s a revenue shortfall that has to be made up.

When the Faro mine shut down, the utilities lost 40 per cent of their revenues, said Rondeau.

The remaining ratepayers — us —have to make up that shortfall. It’s called Rider J, or the Yukon Energy Shortfall.

It amounts to 14 per cent of your monthly energy use, said Rondeau.

The utilities board stepped in and ordered the rider to keep the books from running into the red, he added.

Yukon Energy can’t do anything to simplify this — the board ordered it.

“That is in place in the legislation by the Yukon Board of Utilities,” said McDonald.

“We can’t say that should be taken out of there; we can only say what we believe should happen to rates,” said McDonald.

“We can make some recommendations, but we really can’t recommend that that should be taken out of there.”

The average energy rate could rise to make up for the removal of the rider, but power providers are leery of anything that shows a blatant rate hike, said Rondeau.

“Why not get rid of the shortfall rider soon?” he said.

To complicate things further, Yukon Energy’s promised rate “decrease” doesn’t affect the basic charge for how much power a ratepayer uses.

Instead, the decrease is contained in a new rider added to your bill.

It’s called Rider U.

Rider U will reduce your power bill, but only if you use less than 1,000 kilowatt hours.

If you use more, Rider U will cause your bill to rise.

Finally, Yukon Electrical Co. Ltd., the Alberta-based power company that distributes most of the power, is asking for a 10.7 per cent increase in basic power rates over the next two years.

Now, are you ready for the twist?

These estimates are based on what you are being charged right now. The estimate is based on 2008 and 2009 rates, which are the utility board test years for general rate application changes.

Just to be clear, the utility has already started putting these changes into effect. Now they’re telling the utility board what they’ve done, and are asking for permission to do it.

So, what’s the impact?

According to Rondeau, over 2008-’09, the increase of 10.7 per cent from Yukon Electrical combined with the increase of 14 per cent from the elimination of the rate-stabilization fund combined with the expected 17 per cent decrease from Yukon Energy means the average customer will be paying 7.7 per cent more.

He wants to make things simpler.

The board should eliminate the complex riders before adding another that decreases the cost to frugal electrical customers, he said.

But that’s not going to be easy.

A monthly bill is the motley creation of the utilities, the utility board and the government.

And the customer pays.

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