The Yukon Utilities Board wants Yukoners, businesses and governments to pay closer to the true cost of the electricity they consume.

For residential customers, it would mean increasing bills and for government decreasing bills.

Currently, residents pay 80 per cent of the cost of electricity they consume, according to statistics placed before the board by Yukon Energy and Yukon Electrical Co. Ltd.

If, for example, a household consumes $100 worth of energy in a month, the homeowner pays $80.

The Yukon government, on the other hand, pays 144 per cent of the cost. So if a government office consumes $100 worth of energy in a month, the government pays $144.

The Yukon's business community currently pays 117 per cent of the true cost.

In its recent order regarding the new rate application by the two utilities, the board does recommend new rates for the different classes of consumers.

But it also instructs Yukon Energy and Yukon Electrical to begin looking at redistributing the actual cost of electricity.

It indicated it would expect to see something before the board once the government's current freeze on the distribution of costs expires on Dec. 31, 2012.

In its decision, the utilities board emphasized the rates for residents and street lights "are significantly” below cost.

"Therefore, when (order-in-council) 2008/149 expires ... the board expects that both utilities will jointly come before this board with a new Phase II application to correct the imbalances.”

The board emphasized in its Dec. 30 decision on the current rate application that rebalancing the distribution of costs is on the horizon.

Yukon Energy and Yukon Electrical filed a joint rate application last February. A public hearing was held last October.

Under the current application, the board has approved a new rate structure which essentially maintains the existing rates for the residential class.

For example, Yukoners consuming 1,000 kilowatt hours a month right now pay $110.47, which includes the government's $26.62 in monthly rate relief, a program scheduled to expire March 31.

A resident consuming 1,000 kwh under the new rate structure will pay $110.49, or two cents more, though the future of rate relief beyond the end of March is unknown.

For the government and business sectors, the board recommended a blend from the different rate options put forward by Yukon Energy and Yukon Electrical. It's asked the two utilities to address its recommendation when it files its response to the board's order by the end of February.

John Maissan, a private Whitehorse consultant and industry analyst, expects once this rate application is dealt with in the next couple of months, it won't be long before the two utilities are back before the board with another one.

The application before the board is based on 2009 numbers, he pointed out in an interview Thursday afternoon.

Yukon Electrical and Yukon Energy are already absorbing any loss of revenue related to increasing demand and the rising cost of diesel fuel since 2009.

"My guess is the utilities are going to have to come back before 2012.”

Maissan, who favours conservation as a means of offsetting increasing demand, supports the board's direction of moving the different consumer groups closer to paying their actual cost of consumption.

But he also points out it's not going to happen overnight, noting the utilities board also expressed its concern that there not be any rate shock.

Maissan said he suspects when Yukon Energy and Yukon Electrical come back after the current freeze expires at the end of a 2012, they'll have a five- to 10-year plan to redistribute the costs.

That's not to say the residential class will eventually be up from paying 80 to 100 per cent, and government down from 144 to 100 per cent, he said.

The standard in the field of public utilities, Maissan pointed out, generally accepts a variance of plus or minus 10 per cent – paying 90 per cent of the actual cost on the low end and 110 per cent of the actual cost on the high end.

"I would guess the board would probably accept options that will get everybody there in a period of five to 10 years.”

He said he believes the board wants to be more fair to all customer classes, and also wants to see more consistency in the different rate structures whereby the cost of electricity rises with the amount consumed.

Having residents pay close to the true cost would result in greater conservation, he said.

Maissan pointed out that in Yellowknife, where residents are paying almost double what Yukoners are, there has been a constant downward trend in consumption over the last six or seven years, unlike the trend in Whitehorse.

Mounting prices, he said, promote conservation.

All that being said, the government of the day at the end of 2012 could decide to issue another order-in-council freezing the current distribution of costs among the consumer groups for several more years, he explained.

"That is strictly a political decision.”

The freeze on distribution of costs among the consumer groups dates back to 1997, and has been upheld by different territorial governments ever since.