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.

Demand for energy is growing and we are looking at all possible sources fo clean energy so as to keep to a minimum the need to burn diesel to generate electricity. Mayo B is one of the potential projects we're pursuing. If approved, it will come into service at just the time new hydro is needed to reduce the need for costly diesel.

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.

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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.

 
 

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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.

In the application, we asked that – in the interests of promoting energy conservation – rates for those residential customers using 1,000 kilowatt hours or less per month be decreased by 17.8 percent. Those customers using more than 1,000 kilowatt hours would see a slight increase in rates under our proposal. While the YUB considered our request, it implemented an interim rate reduction for all firm customers except the Minto mine of 3.48 percent.
In its ruling earlier this month, the Utilities Board decided to put off making a decision about our request for rate reductions for ‘first block’ customers until both electrical utilities in the Yukon file a Cost of Service study. Tomorrow on this blog we will explain the difference between a rate application and a Cost of Service application. But the bottom line for you is that you should not expect to see any changes in your power rates, at least until the YUB has made a decision regarding the Cost of Study application. We expect that application will be filed in the next few months.
However the YUB did make a number of other decisions regarding our application. It has determined that almost all our costs can be put into rate base (meaning passed on to you, the customer). This indicates to us that the Utilities Board feels we are being responsible with your money. The one cost that the Board did not allow was the $3.19 million for some diesel generators we purchased from the Minto mine. It said we had not adequately demonstrated the need for the diesels at this time. The YUB did say however that we could apply again to have those costs put into rates at a future date.
With regard to the Carmacks-Stewart Transmission Project, the YUB said it was convinced that this new transmission line provides a net economic benefit to Yukoners.
As to deferred costs (spending money on planning for future generation projects), the Board said that Yukon Energy doesn’t have the luxury of waiting for new energy loads to materialize with full certainty before planning and building facilities needed to meet growing electrical demand. It supported our on-going work to have projects ‘shelf ready’ so they are ready to proceed at some future date as circumstances warrant.
Other points included in the Utilities Board Order:
·         Yukon Energy and Yukon Electrical Company Ltd. are to submit a joint policy paper/plan for Demand Side Management strategies (energy conservation strategies).
·         Yukon Energy is to do a study in brushing programs (clearing brush from near power lines) in other jurisdictions and provide our own brushing policy.
·         Both utilities must provide the Board with Key Performance Indicators that show improvements in reliability.
·         Yukon Energy is to continue with its work of refurbishing our oldest diesel units (Mirrlees), which will provide back-up power when needed.
·         Yukon Energy is allowed a profit of 8.64 percent for 2008 and 8.49 percent for 2009.

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Rate Application Hearings | Monday, May 4, 2009

This is a reminder that Tuesday to Thursday of this week (May 5 - 7) the Yukon Utilities Board is holding hearings into our general rate application. The hearings start each day at 9 a.m. and will be held at the High Country Inn in Whitehorse. You are welcome to sit in on any or all of the proceedings.

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Our Rate Application Explained | Friday, March 27, 2009

One of the benefits of our new transmission line from Carmacks to Pelly Crossing is that it has allowed us to ask for a rate decrease. Before the line was built, we promised to pass along to Yukoners some of the additional revenue we would receive as a result of gaining a new customer, the Minto mine, through the construction of the Carmacks to Pelly line. That’s why in October of last year we asked our regulator, the Yukon Utilities Board, to approve changes to our rates that would result in an overall saving to Yukoners this year of more than $1.3 million. 

We wanted to go further than just passing along revenues from the Minto mine. We wanted to provide the biggest reduction possible to the largest number of Yukoners possible. That’s why we have proposed changes to our rate structure that will reward those who practice energy conservation. Here’s how it works: rates would be substantially reduced by 17.8 percent for a household’s ‘first block’ energy charges; for the first 1,000 kilowatt hours per month of energy used. ‘Second block’ energy charges (energy over 1,000 kilowatt hours a month) would increase, the amount dependant on the amount of energy used. All the added money we would receive from ‘second block’ charges would go to further reducing ‘first block’ rates. Since most households stay within that first block of 1,000 kilowatt hours a month (the average monthly usage is about 750 kilowatt hours) this method would allow more Yukoners to benefit from greater savings.

Two tiered rate structures are not new. Similar systems are used by utilities right across the country, and Yukon Energy has had a two-tiered system in place for many years in which the second block is at a higher rate than the first.

It was important to us to encourage energy conservation though this application. There is a growing demand for electricity in Yukon. While we are aggressively looking for new renewable power to meet this demand, this process takes time. In the absence of new generation, we face the prospect within a few years of running out of hydro and turning on our diesels. That’s why it’s important to us that we send price signals to encourage energy conservation. Conservation is the cleanest and least expensive way to meet the increase demand for electricity (think of it as building a virtual dam). And it’s easier than you might think…turning the thermostat down one degree saves 400 kilowatt hours per year; washing clothes in cold water saves as much as 720 kilowatt hours. Hanging clothes to dry even half the time saves another 520 kilowatt hours.

However if our proposal is approved, there will still be some overall savings for residential customers who use up to about 1,300 kilowatt hours per month. For example, if you use 1,000 kilowatt hours per month you will see a reduction of $22.26 on your bill; if you consume 1,300 kilowatt hours you will still save $1.16 per month. Once you start using more than that, you will have to bear an increase. At 1,400 kilowatt hours a month, you will pay $5.88 more per bill. If you use 1,500 kilowatt hours, you will face increases of $12.91 a month.

The Yukon Utilities Board Response
In November last last year, the Yukon Utilities Board said it wanted to wait for a future hearing to consider the rate adjustments we have proposed for ‘first block’ and ‘second block’ customers. In the meantime, the Board has ordered us to implement an interim rate reduction of 3.48 percent. The interim rates went into effect on December 1, 2008.

The Utilities Board hasn’t said an outright ‘no’ to our request. It’s merely said it doesn’t want to make a decision about our proposal at this time.

The oral public hearings for our rate application are set for this coming May. We hope that at that time, the Utilities Board will be open to considering our proposal.

 

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