Photo by Whitehorse Star
Brad Cathers
Electrical bills subsidy will live another year
The Yukon government will be extending the subsidy for monthly electrical bills for another year, says the minister responsible for Yukon Energy.
The Yukon government will be extending the subsidy for monthly electrical bills for another year, says the minister responsible for Yukon Energy.
Brad Cathers said last Thursday the extension will avoid an increase in residential bills primarily for those who can least afford further hikes.
The interim rate relief program had been scheduled to end March 31.
The program was introduced by the government in 1998 as a means of preventing rate shock for consumers following that year’s closure of the Faro lead-zinc mine, the largest electrical customer at the time.
It has continued in various forms ever since, though 10 years ago the Yukon Party government announced it would be eliminating the subsidy because it was getting too expensive. The government also maintained it was a disincentive to conservation.
The subsidy was cut in 2007 by 50 per cent from $37.15 to $18.60 for the first 1,000 kilowatt hours but the government never did follow through with eliminating the remaining 50 per cent in 2008.
Instead, it kicked the subsidy back up to $26.62, where it remains today, under the new name of interim electrical rebate.
The monthly electrical bill has gone up noticeably in the last couple of years because of rate increases approved by the Yukon Utilities Board.
Cathers acknowledged the government has not had any discussions recently about the status of the subsidy, whether it should discontinued eventually or not.
What Yukon Energy is doing is providing incentives to reduce consumption through a variety of conservation programs, such as providing further subsidies to buy high-efficiency light bulbs, he pointed out.
Cathers said as a matter of principle, the Yukon Party does believe consumers should be paying the true cost of electricity, and he’s told the legislative assembly in the past that his party does not see the program going on forever.
Liberal Leader Sandy Silver was critical Friday of how the government continues to create uncertainty among consumers by leaving notice of another extension to just days before it’s scheduled to expire.
Last year, the government didn’t announce the extension until March 27, four days prior to it ending.
“We always wonder why it is the last minute,” he said.
Silver said the Liberals support the subsidy program because anything that reduces the cost of living in the North is a good thing.
Some, however, argue the subsidy shrouds the real cost of electricity and therefore is counter to promoting conservation.
Discussions in the past have also suggested the subsidy should be based on household income.
The publicly owned Yukon Development Corp., Yukon Energy’s parent company, budgeted $3.4 million last year to cover the annual cost of the rate relief program to the end of the 2014-15 fiscal year.
Premier Darrell Pasloski is scheduled to deliver the 2015-16 budget on April 2.
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Comments (6)
Up 1 Down 0
Who brought in the subsidize on Mar 25, 2015 at 8:25 am
Who brought in the subsidizing and why?
Up 6 Down 2
What subsidize to mining companies and the cost for Faro not correct. on Mar 24, 2015 at 3:27 pm
I sat on a committee, it was in 1993 or 4, to discuss all the excess energy being produced because of Faro closing. The home owners didn't subsidize anything. So what came out of that was a two level rate system until the access power was used up which it has.
What I understand in 1998 and I totally stand to be corrected, the rate fund for home owners was because there were people leaving the Yukon and the operations of the system was getting so costly for the existing rate payers something had to be done.
When a system is built it is based on the amount of usage and rate payers to cover the cost of operations. All of sudden you take out a major group rate then the true cost is shared by the existing rate payer which at that time would result in much higher rate for energy.
For example if you have a 100 rate payers paying for the cost of service and 30 leave, the cost does not change very much but then that cost gets shared by the 70 rate payers. The results are 70 rate payers share the cost 100 ratepayers were sharing.
From what I understand Yukon Energy like any other energy company is supply energy to any industrial project based on an industrial rate schedule and we are not subsidizing mining companies.
I worked as Manager of Revenue Requirements in the 1980' for Northwestel. A major part of their revenue base came from long distance callers. Enter the internet long distance calling goes down and Northwestel has no way to make up the revenue loss. A lot of people might not know this but it is public knowledge Northwestel gets subsidized every year through a program with the other telco's. I am not sure how much it is but I believe it's over $20 million a year.
This is one of the very reasons that we should be connected to the BC grid because of excess power we can sell and retain the wealth for ourselves.
That is true economic development but none of this is coming out of economic development.
You have to have some background knowledge on the subject and facts that are real. I still remember the meeting in COW chambers on a Sunday to discuss this very important issue. We really need some economic planning for the Yukon.
This is a very important discussion as part of the Yukon future.
Up 4 Down 12
Josey Wales on Mar 24, 2015 at 1:03 pm
YP buying votes? One electron at a time, election years freebies?
Nothing is free, there are costs associated to everything.
Who built that dam? ATCO or the taxpayers of what was once known as Canada?
Things are going to get awfully left here soon, like really leftist.
Team blue, you have yourself to blame for that mess.
FYI...Brad I "was" a supporter. Now? A non-voter...hope you and the "Big Cheese" (DP) ...are happy.
Whoever gets the keys to the biggest gravy train in Canada this fall, I just hope they are not like the last two "leaders" we had.
Lizzy will probably pass legislation making us house the pariahs around here in our homes, put some real big wealth re-distribution plans forward & make every non cultural elite write an apology for EVER leaving Europe to YCFN.
Red team? Once they spit out JT's sc***m...FGR will soon follow, Omar the convicted murderer will be free and Sharia Law will be discussed.
...ah, Canada's melting pot eh? gotta love it!
Up 19 Down 12
YukonMax on Mar 24, 2015 at 8:06 am
"the Yukon Party does believe consumers should be paying the true cost of electricity"
The true cost should also reflect the subsidies to the mining industry that we are all paying as well.
Up 17 Down 3
nope on Mar 23, 2015 at 5:12 pm
Oh yes, we should pay the real price for our power. Then get rid of a bill we have been paying for almost 20 years, Aka Faro. What a joke.
Up 21 Down 3
Yukoner on Mar 23, 2015 at 4:49 pm
Consumers should pay the true cost not subsidize mining with Joe public if you sell electricity to a mine and they go broke! Why should the public pay for your bad business decision?