hough it faces two public reviews and has not yet been approved, Yukon Energy Corporation has awarded a $450,000 contract for the proposed Carmacks-to-Stewart-Crossing transmission line.
Critics say the publicly owned Energy Corp. is using the contract to pressure the ongoing review process and that it is a similar reckless pattern used during the bungled Mayo-Dawson grid extension.
“You know what it sounds like? The Mayo to Dawson project — everything’s in a big rush,” said energy watchdog and former chair of the Yukon Utilities Board Peter Percival.
“It’s not as if they (YEC) didn’t know this was a priority project a year ago. A rushed decision may be a mistake, but they’re rushing everything here,” he said.
Time is a problem for the $20-million project, said Yukon Energy Corp. spokesperson Janet Patterson.
The main impetus for the line extension between Carmacks and Stewart Crossing is a tentative power purchase agreement between YEC and Sherwood Copper, owners of the Minto mine near Pelly Crossing.
Minto is scheduled to begin producing copper ore this spring, using four high-speed diesel engines to generate electricity for its mill and camp.
Connecting to the hydroelectric grid is estimated to save Sherwood more than $4 million per year in electricity costs.
Under a tentative power-purchase agreement reached earlier this year between the Energy Corp. and Sherwood, YEC will build the grid extension and a $3.8-million spur line to the mine by 2008.
In exchange for the cheap power, Sherwood is committing to buy $24 million in electricity over eight years.
Sherwood has also pledged to pay for the spur line and about $7 million of YEC’s costs to build the main transmission line over several years.
But the power-purchase agreement is currently before the Yukon Utilities Board.
And the Yukon Environmental and Socio-Economic Assessment Act Board is currently reviewing the grid extension.
That review is expected to take at least five months, said YESAA spokesman Rob Yeomans in a previous interview.
And following the review of the power-purchase agreement, the entire project will also have to pass a comprehensive ‘part three’ review recently ordered by Justice Minister Marian Horne.
It isn’t clear when that will begin or how long it will take.
Still, YEC has awarded Ontario-based Wardrop Engineering a $450,000 contract for preliminary design work on the still unapproved grid extension.
Wardrop beat out two other non-Yukon companies that submitted bids, said Patterson.
The contract is for preliminary design of the proposed 138-kilovolt-grid extension that will be used “regardless of whether the project goes ahead now or some point in the future,” she said.
It is expected to be complete by the end of July, she said.
Patterson openly conceded the Energy Corp. is rushing because of the reviews.
“We needed to go ahead and do this so that the work could get done according to the time schedule that we’ve got,” she said.
“If we waited until we hear back from the YESAA process and the part three process it would be too late. You can’t wait until the whole process ends and then start another step and then wait until that’s done and start another step.”
There could come a point when it’s no longer financially viable for Sherwood to want grid power under the current power agreement, said Patterson.
The Energy Corp. doesn’t have the ability to pressure any of the processes, she added.
“You can’t compare this to Mayo-Dawson because lots of things happened at Mayo-Dawson that shouldn’t have, and we’re making sure that process doesn’t happen again,” said Patterson. “We’re following all the proper processes, we’re doing what we can, but we’re not doing anything that we can’t or not supposed to do in advance.”
Percival doesn’t buy the time-crunch argument.
Whenever the grid extension is completed — following all the necessary processes it must pass through — Sherwood will gladly hook up to it because they will save money, he said.
And when the Energy Corp. skips ahead of the process it is governed by, “it puts pressure on everybody,” he said.
“You’d think you’d want to make wise decisions and not rushed ones. A wise decision on behalf of YEC would be a good decision for all of us,” he said.
Energy Corp. president David Morrison is out of the country on vacation and could not be reached for comment.
Horne refused comment.