The Northwest Transmission Line and What it Could Mean for Yukoners | Thursday, February 24, 2011

There's news out of B.C. today that the province has granted environmental approval to the Northwest transmission line. This is a major step forward in BC Hydro's plan to build a power line from Terrace to Bob Quinn Lake to bring remote areas onto the grid. 

Why this news will be of interest to Yukoners is that Yukon Energy has for some time been interested in connecting to the North American grid. That would give us the ability to purchase power when we needed it, and sell any excess power we might have in the summertime. 

The construction of the Northwest transmission line would bring the grid 335 kilometres closer to us. While that's still not likely close enough to Yukon to make it affordable for us at this point, it's certainly a move in the right direction.

This video gives more information about the transmission line. It references Yukon and in fact shows some footage of our new Carmacks-Stewart transmission line.

Explaining The Yukon Utilities Board’s Latest Ruling | Monday, January 17, 2011

Last October, Yukon Energy and the Yukon Electrical Company Limited appeared before our regulator, the Yukon Utilities Board, for what is known as a Phase II hearing. The purpose of the hearing was to provide the Utilities Board with the information it needed to make decisions regarding three topics:

1) What percentage of the total amount of money the utilities need to operate should be paid by each class of customer (residential, small business, government and industry);

2) How the rates within each class should be designed; and

3) Whether there should be any changes in the terms under which the utilities provide service to customers.

The Yukon Utilities Board has now made its ruling. Here are the main points that will likely be of most interest to you:

1) The Board recognized that as a result of Yukon government Orders-in-Council, no changes can be made before 2013 to the overall revenues charged to each rate class. The Board also observed that the revenues from the residential rate class are considerably below the costs to serve this class – residential customers pay less than 80 percent of the true cost of their power, while business and industry pay more than 100 percent and government general service customers pay over 140 percent of what it costs to provide them with power. In its Order, the Board said that once the government’s Orders-in-Council expire at the end of 2012, “the Board expects that both utilities will jointly come before this Board with a new Phase II Application to correct the current imbalances”. The Utilities Board writes, “In terms of pricing signals, the Board is of the view that the best pricing signals to customers are those prices that reflect the full cost to serve those customers.” That means that unless there is another Yukon government Order-in-Council that again prohibits the re-balancing of rates, non-government residential customers may be faced with significant rate increases in a few year’s time over and above any general rate increases that either utility may require.

2) In terms of how the rates within each class should be designed, both Yukon Energy and Yukon Electrical Company Limited had argued that there should be price signals set to encourage people to conserve electricity. In other words, the utilities suggested that a new rate block be established and that the more power used, the higher the rate charged for that power. Yukon Energy had also proposed that there be a substantial increase in the cost of any power consumed by residential customers above 2,500 kilowatt hours per month, and there be a decrease in power bills for those residential customers who keep their usage under 1,000 kilowatt hours per month (the average monthly residential usage is about 800 kilowatt hours per month).

The Utilities Board did create three blocks instead of the current two for residential and small business customers, each block being at a higher rate.

The Board rejected Yukon Energy’s idea for a decrease for non-government residential customers in the First Block (up to 1,000 kilowatt hours per month), making the observation that a reduction in these first-energy block rates is not warranted because the revenues paid by these residential customers are below the cost of their power and that this issue should be corrected when Order-in-Council 2008/149 expires (see Point 1). The Second Block, between 1,001 and 2,500 kilowatt hours per month, would see a slight reduction of up to .2 percent, and the Third Block, also known as the runoff rate, (anything over 2,500 kilowatt hours per month) would see an increase of between .2 percent (at 2,600 kilowatt hours per month) and 4.4 percent (at 5,000 kilowatt hours per month).

The Utilities Board approved the utilities’ proposal for four blocks for non-government small business and municipal government rates, with the fourth block being an initial step toward the transition to a new large business rate class that the Board directed the utilities to put forth in their next General Rate Applications. The utilities must still test the numbers to ensure they provide the correct returns, but the Board’s suggested rates for these customers would have the following bill impacts: The First Block (up to 2,000 kilowatt hours per month, would see reductions of between .8 and 2 percent. The Second Block (from 2,001 to 15,000 kilowatt hours per month) would see reductions of between .1 to 1.5 percent. The Third Block (15,001 to 20,000 kilowatt hours per month) would see increases of up to 4.8 percent. And the Fourth Block (over 20,000 kilowatt hours per month) would see increases of between .7 and 3.8 percent.

For the government residential and general service rate class, the Board has agreed to the same rate blocks as for non-government customers with inclining block rates for the first three rate blocks. Compared to the equivalent non-government rate classes, the Board suggested higher runoff rates for the government rate classes and also adjusted the utilities’ proposals to ensure that rates increase as monthly use increases.

So the bottom line for most of you reading this is that there will be very little if any near-term change in your power bills as a result of the Phase II hearing. Any near-term changes that do occur will not likely take place until at least April of this year, after the utilities submit compliance filings to the Utilities Board, the Board makes the necessary resulting orders, and the utilities then adjust billing systems as required.

While in some areas the Yukon Utilities Board has taken a different tact than Yukon Energy had proposed, there will hopefully be a similar end result: to encourage Yukoners to become more energy conscious and to understand that electricity is a precious resource that must be used wisely.
 

Why You Should Care About Next Week’s Utilities Board Hearing | Friday, October 1, 2010

We want to remind you that Yukon Energy and Yukon Electrical Company Ltd. will appear before the Yukon Utilities Board next week. This is a public process and anyone is welcome to attend. Three days have been set aside for the hearing: Tuesday October 5th to Thursday October 7th. It's being held at Yukon College in Whitehorse in Room C1440 starting at 9 a.m. each day.

The purpose of the hearing is to allow the Utilities Board to review what is known as a Phase II application. To understand what that is and why it might be important to you, we encourage you to read a blog entry we posted here this past spring.

Striking a Power Deal with Alexco | Wednesday, September 29, 2010

You might have heard on the news that we have asked the Yukon Utilities Board to approve a Power Purchase Agreement we have reached with Alexco Resources. That's the company that plans to begin mining and milling operations at the old United Keno Hill Mine at Keno next month.

You can find the complete application form, including the Power Purchase Agreement, on our web site here.

In summary, under the terms of the PPA and pending Utilities Board approval, Alexco will be responsible for the full costs of:

• Construction of a 1.65 kilometre spur line from Yukon Energy's Mayo-Keno transmission line to the mill site (approximate cost $330-thousand)
• negotiating and concluding the Power Purchase Agreement, including the regulatory costs (approximately $100-thousand)
• decommissioning Yukon Energy's spur line once the mill shuts down.

In addition, Alexco will pay a fixed charge of almost $7,300 per month for as long as it buys power from Yukon Energy as an industrial customer. The money will help pay the cost of Yukon Energy's existing Mayo-Keno transmission line.

Alexco will pay the Industrial power rate set by the Yukon Utilities Board.  The rate is approximately 10.5 cents per kilowatt hour, depending on Alexco’s peak demand.
 

Unravelling the Mysteries of the Utilities Board Process | Thursday, March 25, 2010

Yukon Energy and the Yukon Electrical Company Limited have filed a joint Phase II Application to our regulator, the Yukon Utilities Board. Before your eyes glaze over, let us explain what a Phase II Application is and why this might be important to you.

You might remember that in 2008 and 2009 each utility went to the Utilities Board separately for what are known as revenue requirement hearings. This process allows the YUB to determine how much money each company needs to operate and what the overall amount is that can be charged to customers for electricity.

During the Phase II hearings, the Utilities Board uses the information from the Revenue Requirement Hearings to do a couple of things:

• It recommends how much of that overall amount is to be allocated to each class of customer (resident, small business, government and industry). In other words, the YUB decides who pays for what amount of the pie. You might not know that while business and industry now pay 100 percent of what it costs to provide them with power, residential customers currently only pay about 70 percent of the true cost of their power. They are subsidized by the government, which pays 130 percent of the cost.
  
  
• It recommends how the rates within each class should be designed. For example, the Utilities Board could determine that people who use under a certain amount of electricity per month should get a reduction on their bill while those using a lot of electricity each month should pay a higher rate. That already happens to a certain extent, but Yukon Energy and Yukon Electrical Company Ltd. are asking that there be even more incentives for people to conserve electricity.

The Phase II hearing will also deal with proposed changes to the terms under which the utilities provide service to customers. This covers everything from rights of the utility to access land (such as when a linesperson has to go onto private property to access transmission lines) to the rights of a customer to have their meter tested, as well as the level of service fees.

If you want to know more, the entire Phase II hearing application can be found on our web site. As always, if you have questions, please send them our way and we will do our best to answer them.

Getting All Our Ducks in a Row | Friday, March 19, 2010

Yukon Energy would like to respond to concerns by the NDP and the Yukon Conservation Society about recent construction contract announcements regarding the Mayo B and Carmacks-Stewart Stage 2 projects. Their fear is that we are moving forward with construction before we have received all the necessary permits and permissions. That is not the case.

In terms of the Carmacks-Stewart line, Stage 2 is fully permitted. It has gone through an extensive environmental (YESAB) screening and has also been reviewed by the Yukon Utilities Board (YUB). We have all permits we need to proceed with construction. In fact line clearing on this project began this past November.

Have Your Say Regarding Mayo B | Friday, January 8, 2010

As the Yukon’s largest provider of renewable energy, Yukon Energy’s mandate is to ensure we provide Yukoners with a secure supply of clean, and preferably renewable energy. This challenge is made more difficult by the fact that the Yukon is not connected to other transmission grids like British Columbia, Alberta or Alaska, so we must find ways to be self-sufficient in our ability to supply electricity to customers.

There have been numerous chances for members of the public to give input on the Mayo B proposal, both through public meetings and through the environmental assessment process. There is another chance coming up shortly, when the Yukon Utilities Board reviews the proposal. The Board has just received our application, which you can find on our web site. More information about Mayo B is available here. 

Watch this blog and local media outlets for information about upcoming public hearings, and about how you can voice your views about the potential project.

Sorting Through Regulatory Terms | Friday, September 18, 2009

Yesterday we promised to try to explain the difference between a rate application/revenue requirement hearing and a Cost of Service study. A revenue requirement hearing, which Yukon Energy has just gone through and which the Yukon Utilities Board (YUB) has just ruled on, allows the YUB to review all our costs to determine if we are operating in a reasonable and fiscally responsible manner. It also gives the Board the chance to decide how much money we need to operate and what the over-all amount is that we can charge our customers for the service we provide. 

A Cost of Service study, which will be part of an upcoming Phase 2 hearing, takes the YUB-approved costs of both utilities that operate in the territory (Yukon Energy and Yukon Electrical Company Ltd.) and decides how much of that total amount should be paid by each class of customer (i.e. residential, commercial, government, etc.).

The last time a full Cost of Service study was done was in 1996/97. At that time, the Utilities Board divided up the costs this way:

• Residential customers were asked to pay 80 percent of the actual cost. There was also a rate relief program in place - a pre-cursor to the existing rate subsidy. Once that was factored in, residential customers actually only paid 73 percent of the true cost of electricity.
• Small businesses received a large rate decrease to bring them down to 110 percent of the actual cost. Before the decrease they were paying 132 percent.
• And government general service (i.e. government buildings) got a small decrease which meant they went from 154 percent down to 143 percent.
• The rest of the classes, like streetlights, were all in the 90 to 110 percent range.

These numbers still apply today, and will continue to apply until they are changed by the Yukon Utilities Board.

There is one point worth noting. An Order in Council is currently in place that prevents the YUB from making changes to the amounts each class pays in relation to all the other classes. In other words, it prevents raising the rates of any one class so as to lower them for another. The OIC is in place until the end of 2012. So unless the Yukon government amends this order, a Cost of Service study can’t result in any changes between classes until at least 2013.

A Phase 2 hearing, however, can deal with more than just rebalancing of customer classes. For example, the Yukon Utilities Board has indicated it will use the upcoming Phase 2 hearing to look at our proposal to lower 'first block' customers (those using 1,000 kilowatt hours or less of electricity a month) and increase 'second block customers' (those using more than 1,000 kilowatt hours per month). Note that these customers are all in the same class, so there would be no class rebalancing involved.

Another Phase 2 issue is a review of the Electrical Service Regulations. These are the terms and conditions under which both Yukon utilities provide service to customers. The regulations cover everything from rights of land access (such as when a linesperson has to go on your property to access our transmission lines) to service fees to the maximum the utilities will invest to hook up a new customer.

Yukon Utilities Board Latest Ruling Explained | Thursday, September 17, 2009

You may be aware that the Yukon Utilities Board (YUB) recently handed down its decision regarding our rate application we submitted last October.