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Ballooning Atlin hydro power project price faces funding gap

Project cost has bloated to at least $310 million in the last year
Hydro lines seen on a snowy day in Whitehorse on April 9. The Atlin hydro power expansion project, which will provide power to the Yukon, is facing a funding gap in the tens of millions of dollars. (Dana Hatherly/Yukon News)

The cost of the Atlin hydro power expansion project has leaped $80 million in the last year, according to the Tlingit Homeland Energy Limited Partnership (THELP).

The project builds on an existing hydropower facility in Atlin, B.C. by adding about eight megawatts of energy. It will export electricity to Yukon’s grid during the winter through a new transmission line.

The project is being led by THELP, which is owned by Taku River Tlingit First Nation (TRTFN).

In an email, a spokesperson for THELP said the project cost has gone up from $230 million to $310 million.

“The cause is a combination of COVID-19-related supply chain issues, inflation, commodity price volatility, the price of oil (both for the cost of fuel both for construction and transportation, and as a raw material for the penstock), and the poor Canadian dollar exchange rate,” reads the email.

The Yukon Energy Corporation’s 10-year energy plan originally pegged the total cost at $120.7 million “including a 69 kilovolt transmission line to connect with the Yukon’s electrical grid at Jakes Corner.”

The spike in the cost has the Yukon Party concerned about delays and the viability of the project.

In response to questions from the Yukon Party in the Yukon Legislative Assembly on Oct. 24, Minister of Energy, Mines and Resources John Streicker said the overall cost is estimated at $315 million, which is higher than the estimate provided by THELP.

Streicker acknowledged a $60-million shortfall to pay for the project. He said $255 million in funding has been secured.

“There is a funding gap, and we are working to close it,” he said.

In the email, THELP is working with all levels of government to make up the last chunk of funding required for the project.

According to a joint press release with Yukon Energy Corporation issued in February 2021, THELP got $2.5 million in federal funding for the project’s preliminary design and engineering.

So far, what’s known from press releases and information provided to the News by involved parties is that Canada Infrastructure Bank has committed $80 million; the Yukon government has committed $50 million over five years, including $15 million this year; Natural Resources Canada has committed $32.3 million, with up to $50 million set aside through the smart renewables and electrification pathways program; and the B.C. government has committed $20 million for the project.

The THELP spokesperson said the federal government is providing significant grants, although they have not made any details public.

“The TRTFN is investing equity and is in talks with Carcross Tagish First Nation for an equity contribution from them, too.”

A February 2022 release from Yukon Energy Corporation announced its intent to buy energy from the project for 40 years at prices less than or equal to the cost it would have otherwise paid for electricity produced by liquefied natural gas and diesel.

In the release, the project will eliminate the need for four rental diesels by generating about 31 gigawatts hours of electricity each winter, which is approximately equal to the amount of electricity used by about 2,500 Yukon homes per year.

The electricity purchase agreement is subject to a review by the Yukon Utilities Board, ongoing consultation with First Nations in the area, approvals from TRTFN government and Yukon government as well as all government grant funding and project permits in place.

In April, Yukon Energy Corporation and THELP filed an amended electricity purchase agreement with the Yukon Utilities Board.

The utility board’s final report was expected by July 19. On Oct. 18, the board issued a report of their findings and recommendations to the Yukon’s justice minister on potential benefits, costs, risks and consumer impacts.

On a website dedicated to the project, a webpage dated May 2022 outlines three major changes to the project.

Those changes include a single buried penstock from Surprise Lake going 19 kilometres to the lower powerhouse. On the website, the original concept was a series of weirs, control structures and a canal that “together increased risks to animals and the public while failing to make the best possible use of available water.”

Another change is a 9.2-megawatt lower powerhouse pelton turbine, instead of a 2.8-megawatt francis turbine, and a third powerhouse. This change is attributed to being “capable of generating significantly more electricity within the same footprint and environmental impact”, according to the website.

The third change on the website involves an “innovative design” using warmer lake water to address ice issues and improve flow to the existing powerhouse.

The website indicates THELP intended to submit an updated clean energy development plan to the British Columbia government in summer 2022 and provides an apology for the delay in the submission.

While the website mentions the project will see lots of changes, it states the process remains the same.

On the website, procurement and construction is slated to occur from 2023 to 2025.

The THELP spokesperson said commercial operation is planned for October 2025, which is about a year later than previous projections.

Contact Dana Hatherly at

Dana Hatherly

About the Author: Dana Hatherly

I’m the legislative reporter for the Yukon News.
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