If Wile E. Coyote was a policy analyst who thought Roadrunner was going to win the territorial Liberal leadership race, he could not have thought up a better welcoming present to leave on the new premier’s desk.
It’s a giant, ticking time bomb set to go off just before the probable fall election.
I’m talking about May 15’s news that publicly-owned Yukon Energy is seeking to raise rates substantially to pay for a major $350-million investment program to build new power plants and strengthen the grid. If you use only 1,000 kilowatt-hours per month, your bill will go up approximately $75-90 per month over three years. If you have an electric car, heat pump and a lot of gizmos, expect a bigger increase.
The size of the increase is attention grabbing, especially since we’ve just gone through a few years where “affordability” was the hot election topic from Berlin to Brampton.
I have spoken to many Yukon political operatives over the years, and no matter who was in government, they believed it was an electoral imperative to keep electricity price increases to the bare minimum (which has contributed to Yukon Energy’s problem; more on that in a minute).
And, looking forward, Wile E. Coyote couldn’t have designed a better process to keep the price surge in the newspapers over the months leading up to our territorial election, which must happen by Nov. 3. Yukon Energy’s press release laid out 12 events between now and public hearings on October 21-23.
Think of it: public hearings! On a request to raise rates by $900-1,080 per year for a typical family!
I think we can be assured this now means the election will take place before Oct. 21.
After my initial shock wore off, I came around to the view that we should thank the management of Yukon Energy for levelling with us. People often tell pollsters they wished government officials told the truth more often.
“Tell it to us straight, doc,” as they say in the movies.
The problem with this approach is that sometimes the doctor does tell you that you are 100 pounds overweight and have fifty years of bacon grease lining your arteries.
The news from the management at Yukon Energy is not good.
First, there’s the rate increase.
Second, there’s the fact that the rate increase is required to “maintain current renewable electricity generation, enhance reliability during peak winter demand and provide emergency backup.”
We don’t get a lot of fancy new windmills or a world-leading climate transition of the Yukon’s diesel-heavy energy system. Instead, we get to keep the lights on. Phase 1 of Yukon Energy’s five-year strategic plan, covering 2025 to 2030, is entitled “Building a reliable and robust grid.”
I was hoping we already had one of those. It makes you wonder if we should have been paying modestly higher rates for the last ten years so this huge investment program wasn’t needed right now.
In a way, it is to be expected that a lot of the money is going to repairs; not new facilities. Much of the Yukon’s electrical infrastructure was built in the heyday of northern development back when the Maple Leafs regularly won the Stanley Cup.
Nonetheless, it is a shock to read that the $180 million earmarked for the Mayo hydro facility is not to double its capacity. It’s to keep the infrastructure from collapsing.
Which means even more money is needed for new capacity for our growing population.
All of this is going to bring an unwelcome dose of reality to debates over specific projects. Perhaps you don’t like renewing dam water licences or having Marsh Lake’s water levels fluctuate so much? Then perhaps you’d like to suggest an alternative source of electricity that doesn’t cost even more money?
It is not certain the Yukon Utilities Board will approve the whole package or if the price increases will be so big.
Yukon government officials are undoubtedly trying Jedi mind tricks on their federal counterparts to convince them that the best way to make Canada’s economy resilient to U.S. tariffs while also bolstering our sovereignty against Chinese incursions in the Arctic is to subsidize Yukon power bills.
The new premier could also cut something big, or maybe several big somethings, in the territorial capital budget and use that to reduce the burden on bill payers. Or spread the cost — and accept the risk — of getting to a “reliable and robust” grid over more years.
We will also be watching the new premier, and the candidates in the territorial election, for signs that they can fix our woeful track record of announcing power projects and then watching them languish in procedural limbo for years. If the stuff Yukon Energy was talking about building five years ago had actually been built, the numbers today would not be so headline-grabbing.
While the candidates now know about the ticking $350-million package labelled “Yukon Energy” waiting for them on the premier’s desk, the episode does make one wonder — like Roadrunner — what other elaborate surprises might be waiting around the next corner.
Keith Halliday is a Yukon economist and the winner of the Canadian Community Newspaper Award for Outstanding Columnist. The audiobook version of his most recent book Moonshadows, a Yukon-noir thriller, has just been released.
