Yukon Energy to seek rate increase

‘What happens over a five year period is that some of your costs go up’

Yukoners should get ready to see a hike in their energy bills.

The president of the Yukon Energy Corporation says rising costs mean the company will have to apply to the Yukon Utilities Board this month for a rate increase.

It has been about five years since the corporation asked for a rate increase, said Andrew Hall.

“What happens over a five year period is that some of your costs go up,” he said June 9.

“We’ve got a collective agreement with our unionized staff that has a certain salary increase every year. Then if you go over five years those numbers kind of build. Every so often you have to increase rates. That’s the unfortunate reality.”

The company’s new liquified natural gas plant as well as work on the elevator at the Ashihik hydro plant, have driven up expenses, he said.

“It’s kind of a trigger. Whenever you do big capital work, you should be adjusting your rates accordingly.”

The Yukon Utilities Board, which has to approve rate increases, has ruled that Yukon Energy should earn enough profit to maintain a return on equity of 8.25 per cent.

“Our financials are set up so we should deliver that amount of bottom line profitability,” Hall said.

“If that profitability starts to slip … that means we have to go and increase rates because it’s the only way to address the problem if we’re not making our required return.”

The corporation’s return on equity in 2016 was 8.7 per cent, said spokesperson Janet Patterson.

“However, without a general rate application our forecasts for 2017-18 are anticipated to be below our allowed return on equity,” she said in an email.

Hall won’t say how much of a bump the utility is going to ask for. All of that will become public when the application is is submitted to the board, he said.

In December there was talk of rates going up by about 14 per cent. The actual increase will be lower than that, Hall said.

“There’s been some positive things that have happened earlier in the year that helped. We had some pretty strong sales in Q1 because it was colder. What that meant is that we could move our sales forecasts up,” he said.

“Secondly we got the announcement from Capstone about the Minto mine, that they were looking to continue operations through 2020.”

The utilities board decides on a rate increase after a public hearing. Anyone can apply to be an intervenor and either submit written questions or participate in the hearing itself.

“The numbers are scrutinized and then based on those question the YUB then comes up with a decision where they say is your application reasonable,” Hall said.

As it stands there are no rules on how often a utility should apply for a rate increase.

Waiting for years to apply can sometimes be jarring for consumers, Hall said.

“One of the challenges when there are big gaps between when we do this, you get something called rate shock, where everything just accumulates.”

In the legislative assembly earlier this month Economic Development Minister Ranj Pillai said that is going to change.

Pillai said he was working with the corporation on changing the rules so rate applications take place on a schedule “so it’s not politically interfered with.”

Contact Ashley Joannou at ashleyj@yukon-news.com

Just Posted

Greyhound’s plans to axe B.C., Yukon bus routes get approved

Company says B.C. services have lost $70M over last decade

YG slow to reveal tender info for new public contracts

Work will be exempt from national free-trade rules

Plenty of Yukon talent in KIJHL playoffs

8 Yukoners playing on teams in the big dance

How suite it is: Whitehorse council mulls amendment to allow suites where they’re currently banned

Coun. Dan Boyd fears move a slippery slope to more affordable housing

No Resource Gateway construction work this season, YG says

‘We’re not as advanced as we would have liked to have been but we still are advancing’

Man who sexually abused girls a good candidate for treatment, eventual release, psychiatrist says

Dr. Shabreham Lohrasbe is an expert witness in the dangerous offender hearing for the man

Robots don’t rule over us yet, but they do sell lunch

Not everyone will be taken into the future, as Ilya Kabakov once said

YG seeks to ease neighbourhood concerns over housing first project

YG will consult more once design for downtown building is complete

Yukon skiers race to victory at Sima Cup

‘The snow conditions, the visibility and the grooming were out of the ordinary’

Cold weather hampers Babe Southwick Memorial Race

‘It was nice to see people out there because we didn’t expect as many volunteers to show up’

Yukon war memorial hidden in Vancouver

A dramatic and beautiful memorial to the fallen of World War I is not well known to Yukoners today

Of ravens, eagles, livers and lead

Environment Yukon’s animal health unit has been testing livers of scavenging birds since 2013

Most Read