An eight-page document outlining ATCO’s first bid to buy up the Yukon’s energy assets has been leaked to the News.
“The Yukon territorial government has indicated that affordability of energy, the development of hydropower and the extension of the transmission grid are critical to the economic future of the Yukon,” reads the opening statement of the “Unsolicited proposal to the Yukon,” dated October 2008.
Yukon government officials stated last week the October proposal – which was handled by a select group of Energy, Mines and Resources public servants after it arrived on Premier Dennis Fentie’s desk – was unsolicited.
But the document lists areas where the Yukon government suggested ATCO could invest.
The Mayo B project, hydro development along the Robert Campbell Highway, a grid connection between Pelly Crossing and Stewart Crossing and the potential expansion of the grid to Watson Lake are all projects ATCO could help finance, according to the document.
Instead of outlining specific projects ATCO is interested in building, the Calgary-based energy multinational proposes the creation of a new energy company in the Yukon, half-owned by the government and half-owned by ATCO.
But because the publicly owned Yukon Energy Corporation holds more assets in the territory than the much smaller ATCO-owned Yukon Electrical Company Limited, the document proposes the sale of Yukon Energy assets to ATCO for $50 million.
Yukon Energy’s total worth has been estimated to be around $600 million, according to former Yukon Energy chair Willard Phelps.
Yukon Energy owns all the major hydro stations, most diesel generators and many transmission lines. Selling assets to ATCO so that it could level out with Yukon Electrical could easily mean half the Crown corporation’s assets would be sold for $50 million.
It’s hard to believe that the document is completely unsolicited, said official Opposition leader Arthur Mitchell.
“It’s very suspect,” said Mitchell. “It looks like the premier said, send me an unsolicited bid.”
Yukon Energy board members confronted Fentie about the proposal last December and he assured them it was only a deal to look at rationalization, a decades-old proposal to streamline the relationship between Yukon Energy and Yukon Electrical.
The proposal goes way beyond rationalization, said Mitchell.
The first proposal was followed by a second, less-aggressive bid from ATCO in June this year. Half of the Yukon Energy board resigned in protest when the second proposal was made.
ATCO’s proposal would have been a huge win for the energy giant, said New Democratic Party Leader Todd Hardy.
“It would give them a monopoly over the design of energy in the Yukon,” said Hardy.
Calls to Fentie’s spokesperson were not returned.
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