The eight-year-old Rate Stabilization Fund used to help reduce monthly electrical bills is ending, Energy Minister Archie Lang announced Monday.

Lang said 50 per cent of the 'subsidy' will be eliminated July 1, with an end to the entire fund on July 1, 2008.

The minister, however, said a new arrangement to bring the Minto mine onto the electrical grid will result in additional revenue that he is convinced will drive electrical rates down far enough to make up for the loss of the stabilization fund.

'At the end of the day, I am very optimistic that this rate reduction will more than address this subsidy,' he said.

Critics, however, said the minister is making an assumption he's not in any position to make. He should have left the fund alone until the general review of the Yukon electrical rates was complete later this year or early next, they say.

Under the stabilization fund, for instance, residential consumers receive up to $37 off their monthly bill for the first 1,000 kilowatt hours, or proportionately less for less energy consumed.

Some say the fund does not give Yukoners an accurate picture of the true cost of energy and penalizes the more conservative consumer with a smaller break on their bill than those who take the full 1,000 kwh a month or more. It does little to promote conservation, it has been argued, and the money could be spent much more wisely in the area of energy conservation initiatives.

Others say the monthly payment is not a subsidy, but a dividend to Yukoners who own Yukon Energy, and while phasing it out may be appropriate over time, it should be looked at very carefully with provisions to maintain it for families most in need.

For residential consumers of 1,000 kwh of energy, the monthly bill will go up $18.57 a month in July, and another $18.57 a in July 2008, for a total increase of $37.15.

That's well over $400 a year per family with no assurance there'll be any future reduction in monthly rates, Liberal Energy critic Gary McRobb said this morning.

He said the Energy minister isn't very good at predicting the future when it comes to the publicly-owned Yukon Energy, and is in no position at this time to suggest monthly rates will go down next year.

When the government first announced in March that it was thinking about the fund's future, Lang mentioned any cut would go hand-in-hand with other government-sponsored energy conservation initiatives, McRobb pointed out.

He said the government has announced the cancellation, but there's been no announcement of any new programs, and monthly bills will be going up in six weeks.

The government, said McRobb, is cutting into the pocket of the average Yukoner while providing a sweetheart deal to the new Minto mine for provision of hydroelectric power.

Roger Rondeau, president of the Utilities Consumers' Group, said once the math is done and the smoke has cleared, it's easy to see the Yukon government using the $4 million in savings from the stabilization to pay for the new transmission line extension.

At the very least, Rondeau said this morning, the minister should have left the fund alone until the extensive and overdue review of electrical rates in the territory is completed later this year or early next year.

Rondeau also suggested Lang is in no position to suggest monthly rates will come down once the Minto mine comes on-line next year.

The minister also makes the announcement as the consumers' group is circulating its petition calling on the government to leave the fund alone. There have been at least 1,000 names gathered in Whitehorse alone, not to mention what's been collected out in the communities, Rondeau said.

The rate fund was created in 1998 to protect consumers from a rate increase caused by the closure of the Faro mine, which was buying 40 per cent of the energy on the system at the time. In all, $29 million has been paid out through the fund over the last nine years.