Yukon Utilities Board Latest Ruling Explained

Regulatory

Sep 17, 2009  Comment

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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