Q.P Rising Electricity Rates, May 8, 2013

Question re:    Electrical rate stabilization fund

Mr. Silver:    Earlier this week, I asked the minister responsible for energy about the new hydro projects. He didn’t want to talk about the new projects. After 10 years in office, the Yukon Party has no new hydro projects on the table ready to go. He did want to talk about rising energy rates inYukon. I welcome this conversation. We know that power rates will be increasing by close to 12 percent under this minister’s watch as a result of recent Yukon Utilities Board hearings. The interim electrical rebate provides residential customers with a maximum rebate of $26.62 per month for the first 1,000 kilowatt hours of power used. It is automatically applied to residential power bills.

The Yukon Party government rebate has been in place since 2009 and has been renewed annually in the last number of years. Given the recent 12-percent increase in bills, the need for this rebate is greater than ever. What is the future of this rebate? Will it go beyond March 31, 2014?

Hon. Mr. Cathers:    As I have indicated in the past, we are considering the future of the interim electrical rebate. There’s a reason it was called an “interim” electrical rebate. I would point out to the member that it was interesting the member laid out the Liberal Party’s position earlier today, which is to continue subsidizing energy and to continue distorting the marketplace through continuing this subsidy for multi-years. In fact, the annual cost of the interim electrical rebate is about $3.5 million in taxpayer subsidy for energy consumption. Clearly, the Liberal Party supports distorting the marketplace through continuing this artificial subsidy. We recognize the impact on rates, and that is why we have continued it, but there is a reason it’s called the “interim” electrical rebate, and we do not envision it being left in place forever.

Mr. Silver:    Clearly the minister forgets campaign promises and campaign speeches, where all three parties supported this interim rebate.

A lack of planning has left the government scrambling to keep up and, as a result, Yukoners are paying higher electricity bills. A 12-percent increase is being rolled out as we speak. With regard to the numbers that the minister is providing on how we compare to other cities, a quick look at Yukon Energy’s website shows that he is wrong. The bill for 1,000 kilowatts is at least $130, according to the Yukon Electrical Company, and almost $140 according to Yukon Energy. Without the IER in place, bills would be even higher.

As demand continues to increase, the situation is only going to get worse. The government has failed to ensure that supply keeps up with demand. The result is higher prices. Is the government willing to commit to a three-year extension of the IER to protect ratepayers?

Hon. Mr. Cathers:    No, we are not going to commit to a long-term subsidy of electrical costs, and I would point out that the numbers I gave the member were directly from the Yukon Energy Corporation, so the member claims to have Googled something else.

I will allow staff of the Yukon Energy Corporation to explain the most current numbers in this area.

In fact, the Yukon’s energy costs compared to Toronto, Regina, Edmonton, Iqaluit, Yellowknife — as just a few examples — are significantly lower for the first 1,000-kilowatt hours. In fact, in the case of Yellowknife, they are significantly less than 50 percent of the cost of what it costs in Yellowknife for that. We do recognize the impact of electrical rates. That is one of the reasons that we have continued the interim electrical rebate in place, which I would point out is in fact the after-effect of the NDP’s legacy, and the massive impact that they left on our power bills is still being felt. The interim electrical rebate is in fact the ongoing effect of the NDP’s previous time and effort and their previous success in tanking the Yukon’s economy.

Mr. Silver:    Let’s be clear, this subsidy is the Yukon Party subsidy. They’re in power so we have the subsidy. We’re clear that we like it. What is their position? One of the reasons that the Yukon power bill is going up is because the government hasn’t done enough to find new sources of hydro power. With hydro we can produce electricity at approximately 10 cents per kilowatt, but diesel is 35 cents per kilowatt. The interim electrical rebate protects ratepayers from even higher electrical bills. The minister has referred to it in this House as an artificial subsidy and clearly he does not like it. 

Despite the minister’s objection, the Yukon Party continues to renew the subsidy which saves Yukoners more than $26 per month on their power bills. I am looking for simply a long-term commitment to this rebate. Why is the minister so unwilling to continue this subsidy for another three years?

Hon. Mr. Cathers:    The Liberal Party is suggesting that taxpayers continue to take out of one pocket to fund ratepayers in the other. We have continued the subsidy temporarily on an interim basis because we recognize the potential impact of rate charges. But when the Leader of the Liberal Party stands up and characterizes the rate increase approved by the Yukon Utilities Board as somehow suggesting a failure to manage energy supply adequately, it really is a very fanciful notion that he’s presenting to Yukoners.

Yukoners know how much the consumer price index for all products goes up on an annual basis. Yukoners know how much their gas prices have gone up in the past 10 years. To suggest that there would be no incremental costs for increased cost of equipment, increased cost of labour — that that should never be reflected in your power bills — well, that is not a very realistic notion of the world. In fact, the increase approved by the Yukon Utilities Board is unfortunate, but it’s also unfortunate that food prices, gas prices and the cost of consumable goods and building equipment go up, but it is reality.

It is a moderate increase. As a result of our legacy hydro and as a result of our continued significant investment in renewable energy resources, including Mayo B and the Aishihik third turbine, we are continuously among the lowest hydro rates and electricity rates in the country.