Yukon Energy applies for a reduction in power rates

Yukon Energy is seeking a reduction in electrical rates that would save most residential consumers up to $22.26 per month over the next two years.

Yukon Energy is seeking a reduction in electrical rates that would save most residential consumers up to $22.26 per month over the next two years.

Willard Phelps, chair of the publicly-owned corporation, explained the new rate proposal this morning, though he acknowledged savings could be short-lived because of increasing demand on the electrical system.

Yukon Energy submitted the new structure in its application delivered to the Yukon Utilities Board today.

The board will hold a public hearing beginning tomorrow on a general rate application. The hearing is scheduled for three days.

While the corporation is seeking an overall reduction, Yukon Electrical Co. Ltd. is asking the board for an 11 per cent increase over two years, five per cent of which was already approved this past summer on an interim basis.

In its application to the board, Yukon Electrical says it needs the additional revenue to offset rising costs.

Yukon Energy is asking that its new rates come into effect on the Nov. 1 bill, Phelps said.

The chair noted the corporation promised a rate reduction when it completed the grid extension to the Minto mine and Pelly Crossing, resulting in a new industrial customer to purchase surplus hydroelectric power while increasing profits for Yukon Energy.

“What we are doing is living up to that promise.“

Under the proposal, consumers who use 1,000 kilowatt hours (kWh) a month will save $22.26 on their monthly bill.

Those using up to 1,300 kWh will save $1.16 a month, and those consuming more will see their monthly bills increase.

At 1,400 kWh per month, residential consumers will pay an additional $5.88, and those using 1,500 kWh will see their monthly bill mount by $12.91, according to Yukon Energy’s figures.

The average Yukon home uses about 750 kWh, which would result in a new saving of 75 per cent of the 22.26, or $16.70 per month, David MacDonald, Yukon Energy’s vice-president of operations, explained during this morning’s press conference.

Phelps said the corporation is attempting to provide the rate reduction while emphasizing the need to conserve electricity among consumers who exceed the 1,300 kWh per month.

“We are looking at running out of surplus in the next couple of years, two or three, if not before then,“ he said.

The change in rate structures proposed by the corporation would generally mean a reduction for all consumers, from residential to small business, municipal and senior governments.

Phelps said the forecast savings already take into account the five per cent interim increase approved for Yukon Electrical, but not the additional seven per cent being sought over the next two years.

He said with the drastic rise in the price of home heating fuel, there has been a shift to heating with electricity, which has had the greatest impact on consumption.

Yukon Energy, he added, may be looking at using diesel generation to address peak demands as early as this winter.

For years, demand on the system increased by a modest 1.3 to 1.4 per cent, though it spiked by six per cent in 2007, Phelps pointed out.

He said the corporation is continuing to explore options for creating more hydroelectric opportunities, including the possibility of squeezing another 10 megawatts of generation out of the Mayo hydroelectric system, he said.

Phelps said the likelihood of extending the grid from Pelly Crossing to Stewart Crossing is high, in his mind.

Both Alexco Resources Corp. and and Western Copper Corp. are advancing their proposals for new mines, and could increase demand significantly, he explained.

Alexco announced on Friday it has entered into a $50-million financing agreement with Silver Wheaton Corp., aimed at getting its Bellekeno mine into operation.

When the Whitehorse-Aishihik grid was extended to the Minto mine and Pelly Crossing, Sherwood Copper Corp. was required to contribute about 25 per cent of the main line extension, and 100 per cent of the cost of the transmission line running from the Klondike Highway to the mine site.

Phelps said Yukon Energy would be looking for the same type of arrangement with Alexco and Carmacks Copper if the second phase of the extension to Stewart Crossing goes ahead to meet the rising industrial demand.

The publicly-owned corporation would also be seeking a contribution from Ottawa for the phase two extension, since the federal government is the main benefactor of new mines in the Yukon, with additional mineral royalties and income tax, he said.