The Yukon government says it’s still trying to secure federal money for an $75-million transmission line from Stewart Crossing to Keno City.
It’s been almost a year since Yukon’s assessment board recommended allowing Yukon Energy to build the new line from Mayo and Keno and upgrade the entire length from 69 to 138 kilovolts.
Answering questions from the opposition May 4 in the legislative assembly, Economic Development Minister Ranj Pillai said the line was a “priority” for the government. There’s still no official word on whether the federal government will step in to fund it.
“We need to have those continued discussions to make sure we can access funds to secure that line,” he said.
Pillai told reporters that the federal government has said it will support transmission lines. Details about how to access that money from of the federal budget haven’t been released yet.
Pillai suggested new cash for infrastructure could come from new federal pots like the ones for green energy or the one for Northern projects.
“The federal government has said they will take into consideration, and will support, transmission. We’re now waiting for the terms of reference and the process to access that money.”
There’s no word on when that will happen.
Upgrading the transmission line is considered important for mining projects in the region including Victoria Gold’s Eagle mine and Alexco’s Keno Hill silver district.
John McConnell, the CEO of Victoria Gold Corp. has previously said Eagle will be up and running next year.
McConnell couldn’t be reached for comment.
If the new line doesn’t get built in time, there are potential solutions in the short term to get Eagle going, said Yukon Energy president Andrew Hall.
“We’re looking at options that could get them connected to the existing line in the short term. I think we’re pretty sure it would only be a temporary solution for the first two or three years of the mine’s operation.”
The mine is planning to ramp up to full production over the first few years meaning the existing line may be able to manage in the early days, he said.
A system impact study is being completed to get more details.
Hall describes “a number of chicken-and-egg type situations embedded in this.”
The mine still needs to complete its detailed design plan and get fully financed, he said.
In February Victoria Gold announced it was set to receive a US$220-million loan from a French multinational bank. That’s most of the US$300 million it needs to start construction.
At the time McConnell said he was confidant the rest of the money would come together.
Yukon Energy still needs to build a substation to connect the mine to power. The substation would work with either the old or new transmission lines.
“I think we could build it in time for a late 2018 connection but obviously we would need to see that the mine actually has got their financing and (is) moving forward.”
The two sides haven’t started detailed negotiations of a power purchase agreement yet.
There are other possible solutions if the new transmission line doesn’t get built, but nothing has been finalized, Hall said.
The mine could generate a portion of its own power in the long term, he said.
“But that has implications for them in terms of their costs and what they’re permitted for.”
The Yukon government, Yukon Energy and the Canadian Electricity Association have all been talking to the federal government so officials are aware of the project as soon as money becomes available, the government says.
Pillai said he’s spoken to Navdeep Bains, the federal Minister of Innovation, Science and Economic Development.
“He’s excited about it, because it’s a green energy play,” Pillai said. “We’re actually looking at resource extraction, but we’re doing it with green energy because of the amount of hydro that we have here on our grid.”
Hall wouldn’t say how confident he was the transmission line would get federal money.
“Our intent would be to be the first guys through the door once the programs are fleshed out.”
Contact Ashley Joannou at ashleyj@yukon-news.com