RATEPAYER IMPACTS. Rates for utility delivery of firm electricity in Yukon are generally set (as directed by OIC 1995/90) to be the same for all regions and for each customer class served by both YEC and Atco Electric Yukon (“AEY”). Accordingly, impacts on YEC revenue requirement costs and rate requirements resulting from the PPA and connection of the Mine to the Yukon grid will affect all Yukon ratepayers using firm electricity supplied by YEC and AEY. In general, the expected overall rate impact on Yukon ratepayers will reflect the extent to which supplying Grid Electricity to the Mine is expected to increase YEC and AEY revenues more than it increases YEC annual costs to supply electricity (i.e., YEC’s annual revenue requirement). Any change to rates as a result of YEC supplying the Mine, however, will require future YUB review and approval following a new general rate application by YEC. The following analysis is intended to provide a reasonable indication of likely ratepayer impacts from the PPA and YEC delivery of Grid Electricity to the Mine. For simplicity, the analysis focuses on three years (calendar 2020, 2021 and 2025) to provide an indication of potential utility revenue and cost impacts after the initial year of power delivery and in year six of power delivery. Incremental Rate Revenue Impacts The PPA confirms (subject to Board approval) the Firm Mine Rate applicable to VGC Group and the Mine, including the provisions for the Fixed Charge whereby VGC Group and any Other Industrial Customer together pay for 85% of the ongoing annual Transmission Facilities Fixed Cost of YEC. Major industrial customers such as VGC Group are charged an existing Rate Schedule 39, which is subject to general rate riders approved for both YEC and AEY (see Schedule A to the PPA). Table 2 provides forecast incremental YEC and AEY rate revenues from the Mine, excluding the Fixed Charge, based on the PPA and
