As ATCO applies to raise power rates, Yukon Energy could soon follow suit

As ATCO Electric Yukon applies to raise rates next year, Yukon Energy — the Crown corporation that sells electricity to ATCO — says it plans to file its own rate change application.

In a letter to the Yukon Utilities Board dated Aug. 4, Yukon Energy executive Jason Epp said the corporation might apply before the month's end to change rates.

"Yukon Energy's 2023/24 GRA [General Rate Application] will seek to promote rate stability and minimize bill volatility to the extent feasible in the context of other expected rate rider changes likely to affect customer bills," the letter reads.

It's unclear what exactly Yukon Energy will ask for — the corporation has declined to comment until it files an application to the utilities board – but its 2022 annual report suggests it isn't asking to lower rates.

That report says that although the corporation's 2022 net income of $20.2 million was nearly $7 million higher than its earnings in 2021, and the return on equity in both those years was higher than the 8.65 prescribed by the Utilities Board, the projections for this year were rough.

"Net income for 2023 is forecast to decrease to approximately $16 million due to an increase in operations and maintenance costs of $4.9 million and an increase in fuel and purchased power of $3.7 million," the report said. It also projected a much smaller return rate of 4.23.

"Yukon Energy is considering a General Rate Application (GRA) for 2023," the report continues,  "to give us the opportunity to adjust rates to reflect the Corporation's cost requirements and capital plans."  

If the corporation sticks to its Aug. 4 letter, Yukon Energy will submit a GRA to the Utilities Board before Friday.

Possible double whammy for consumers, says MLA

The Yukon Party is concerned about the timing.

The application would come as ATCO Electric — Yukon's power distributor — is applying to change rates for the remainder of 2023, and the whole of 2024. If approved, ATCO's rates in 2024 would be 5.2 per cent above what they are now.

Yukon Party MLA Scott Kent says if Yukon Energy applies to raise rates, Yukoners could see a double-whammy increase in their power bills next year. He wants the territorial government to encourage Yukon Energy to meet its deadline and apply before September, while ATCO's application is still under review.

"Given that both utilities will be seeking power rate increases, it's important that [the Utilities Board] can review the entire scope proposed by both at the same time so that they have a good understanding of…what the electricity bills will be looking like for Yukoners this upcoming winter," Kent said in an interview.

Kent said the Yukon Party also wants to know how much the cost of diesel generator rentals will factor into Yukon Energy's request for a rate change.

John Streicker, the minister responsible for the Yukon Energy Corp., was not immediately available for an interview, but a spokesperson for the cabinet office provided a written response to the Yukon Party's comments.

"Our government has made it a priority to plan the timing of rate applications to minimize rate shock and we continue to have discussions with our energy partners," cabinet spokesperson Renée Francoeur wrote. 

"Our government continues to work with our energy partners to minimize the impact of electricity rate applications while investing in infrastructure to meet the Yukon's energy needs going forward."

Yukon Energy's Aug. 4 letter to the Utilities Board recommends that the board make any rate changes for ATCO effective Oct. 1, so that it will coincide with Yukon Energy's upcoming request.

The cabinet office statement also notes that the Yukon has the lowest electricity rates in the North.

Yukon Energy Corp.'s last general rate application was approved in 2021.