ATCO Electric Yukon has applied to the Yukon Utilities Board to increase electricity rates for the first time since 2017.

If the company’s plans are approved, base rates would first go down 1.6 per cent on Sept. 1, then jump 6.8 per cent on Jan. 1, 2024 for an overall rise of 5.2 per cent from where they are now.

This does not take into account the fuel adjustment rider, which makes for an overall rate increase of 3.3 per cent over 2022 rates in September even with the reduction, and a projected 10 per cent total increase in 2024.

This fuel adjustment takes into account the actual cost of fuel needed to generate electricity versus estimated cost.

Jay Massie, ATCO’s vice-president of northern development, said they avoided rate hikes over the years due to efficiency and growth, but now money is needed to replace ageing infrastructure.

“Despite the rising costs of materials and services over the years, (ATCO) has managed to keep its costs and rate increases lower than the inflation rate,” he said in an email to the Star.

And now it’s time for some new kit, he says.

“These upgrades are essential to maintain a reliable and modern electric system for our customers,” he wrote.

Massie also addressed the reasons why they are seeking to reduce base rates for the rest of 2023, before raising them again in 2024.

He said overall growth in the Yukon has meant more customers spending more money on electricity, which in turn has meant ATCO is making more money than it projected.

This, along with money saved via tax benefits, means they can reduce rates for the rest of the year.

ATCO is limited on the percentage profit it’s allowed to make. It’s not supposed to exceed nine per cent of revenue, but has breached this cap for several years running now.

Energy, Mines and Resources Minister John Streicker told the Star last Monday the government has been working for a while with ATCO on a plan to try to get some of this money back into the hands of consumers.

“ATCO was making more money that was projected in their previous application,” he said.

“We’ve been working with them to get some rate relief to Yukoners as a result.”

Streicker said a growing population, new housing, new electric vehicles and rising demand from the mining industry have pushed up Yukon Energy consumption.

Shifts in the types of heating units people use have also contributed.

“We used to have more oil heat, now we have more electric heat,” he said. Most homes in Whistle Bend, for instance, have electricity as their primary heat source.

As the demand increased, it has pushed up ATCO’s profits. But Streicker said it also puts a strain on the infrastructure ATCO manages.

ATCO is in charge of most of the power distribution network in the Yukon, while Yukon Energy is generally in charge of power generation.

The costs linked to some of the equipment needed to maintain the grid have increased with inflation as well. And labour costs are up.

“It’s not just that demand’s going up, but infrastructure costs are going up as well,” Streicker said.

Lane Tredger, the NDP MLA for Whitehorse Centre, criticized the rate hike proposal, saying ATCO has exceeded its allowable profits for years and there is no reason for constituents to be shelling out more money so it can fix up the grid.

“ATCO has been making tens of millions of dollars for years and now they want to raise rates,” Tredger told the Star last Wednesday. “That is not fair to Yukoners.”

Tredger also called the decreased rates for this year a distraction from the fact ATCO has been raking in extra profits for six years straight.

The NDP provided statistics to the Star showing that ATCO has earned about $1.5 million per year more than it’s supposed to from 2017 to 2022.

Tredger said it’s up to the Liberal government to ensure Yukon residents get fair rates.

Though Streicker says the government wants to make sure not to subsidize ATCO in the process, he said the government does have a rate relief program in place for Yukoners that dates back to March 2022. The program has been expanded twice since.

Streicker says the current government is also willing to put money into grid improvements.

“We will continue to invest in the whole system to try and keep rates as low as possible,” Streicker said.

This all fits within the government’s Our Clean Future goals, as well as its pledge to support critical mineral extraction with more clean energy.

Long-term proposals from the Liberal party also include connecting the Yukon’s electrical grid to B.C.’s to tap into the hydroelectric power produced in the province.

Premier Ranj Pillai has made this a big part of his platform, and he is currently trying to secure federal funding to do feasibility work for the project.

ATCO’s goal was to get the initial rate reduction approved for Aug. 1, but the utilities board decided to allow input from interested parties on the reduction until Aug. 4. It will now not be able to go into effect until September.

For the full rate increase to be approved, there will first need to be public hearings before the board. Anybody who wants to participate in the hearings must register with the utilities board by Aug. 4.

As part of the process there will be a public information session on July 27 at 2 p.m. at the Kwanlin Dün Cultural Centre in the multi-purpose room. This “procedural conference” allows those wishing to provide input on the application to learn more about the process.

The main public hearings are currently set for Nov. 20-23. Actual rates will be set by the utilities board after the hearings.

“None of us can say where it lands now,” Streicker said.