Watson Lake considers energy business

Watson Lake is considering changing the way it does business. The town is working towards creating its own development corporation.

Watson Lake is considering changing the way it does business.

The town is working towards creating its own development corporation.

Most of the territory’s First Nation governments have set up similar arms-length corporations, but Watson Lake would be the first Yukon municipality to do so, said Mayor Richard Durocher.

The idea is to set up a mechanism for the town to explore business opportunities that could help generate revenue for the municipal coffers.

Under the territorial Municipal Act there are few things that a municipality can do to make money, apart from raising property taxes and service fees. That’s a problem, not for only Watson Lake, but for every Yukon community, said Durocher.

“We need to change because the old days of supplying services and expecting the ratepayer to foot the bill are gone. They just can’t afford it anymore,” said Durocher. “Watson Lake can’t afford Watson Lake anymore, so politicians have to be more creative in how we do business and where we find our sources of revenue.”

There’s nothing in the Municipal Act that prohibits a town from forming its own development corporation, but it is a grey area, said Durocher.

The town has tasked former Yukon MP Larry Bagnell to spearhead the initiative. Bagnell also sits as the co-chair of the Watson Lake Economic Revitalization Commission.

Finding innovative ways to generate revenue has been a long-standing issue for many Yukon communities, said Bagnell.

“There’s huge infrastructure needs for expansion and refurbishment of aging infrastructure,” he said.

The development corporation will have a strict mandate to stay away from any ventures that might interfere with the private sector, said Durocher.

With that in mind, the town is looking at getting into the highly regulated utility business.

The town already distributes waste heat from Yukon Electrical Co.‘s diesel plant, which makes it, in effect, a quasi-utility, said Durocher. Watson Lake is the only Yukon community, with the exception of Old Crow, that is not hooked up to the territorial electric grid. It gets all of its power from a 5.5-megawatt diesel power plant.

Yukon Electrical is in the process of converting one of the six diesel-fired electrical generators to run on a mix of diesel and natural gas. The aim is to reduce both costs and emissions. If all goes well, the other five generators will be retrofitted in the next couple of years.

That means that Yukon Electrical will be bringing in and storing a lot of natural gas on site.

Durocher sees potential for Watson Lake getting into the distribution of natural gas for home heating.

But there’s even more it could do, he said.

The plan is to also explore the possibility of putting in a small-scale hydro project on the Liard River.

It’s something that has been studied in the past by both Yukon Energy and Yukon Electrical, said Durocher.

“I’ve seen one study but it’s been years, so if we did decide to go down that road we probably would do another study on the capabilities,” he said.

But that’s years away. The first step is getting the development corporation up and running. That’s something that Durocher thinks will be watched closely by other communities.

“There’s interest in all the municipalities,” he said. “It’s just, how do we get out of the gates so it’s done in a responsible fashion, so communities are not investing in losers? You can’t invest public money in something that’s not going to make you money.

“We have to be sure that these things are viable at the end of the day.”

Contact Josh Kerr at


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