Premier Dennis Fentie knew ATCO wanted to privatize Yukon Energy.
He admits he kept it secret from cabinet and the public.
And he isn’t going to abandon plans to promote private energy generation in the Yukon, he said Monday.
Fentie’s comments mark the first time he has admitted privatization of the Yukon Energy Corporation was under discussion with ATCO.
“My recollection is this, frankly, the government had no interest in privatization or selling assets,” said Fentie in an interview Monday. “But – and I wasn’t sitting at the table during the discussions – I do recall when something like that was presented.”
The price of keeping that fact secret has dogged Fentie all summer. For the last three months, Fentie has denied, over and over again, that privatization was ever on the table. He has ignored repeated requests for interviews, treated serious allegations from people-in-the-know as mere opinions, and chastised the opposition parties for politicizing energy policy.
And while Fentie changed his tune on Monday, he isn’t changing his actions. Fentie insisted his government has to continue looking at private investment to meet energy demands and has not committed to being more open about private proposals in the future.
Still, by admitting his direct involvement, Fentie tried to put the ATCO scandal behind him.
Before entering a community meeting in Carcross, Fentie said he kept the talks secret from Brad Cathers, the former minister of Energy, Mines and Resources, who was responsible for the energy file.
“If that’s the case, I accept responsibility,” said Fentie.
“I mishandled it by myself.”
Cathers resigned two weeks ago, asserting Fentie “lied” about the ATCO talks.
Fentie wouldn’t explain why he kept Cathers in the dark.
“It was a mistake; there’s no reasoning behind mistakes,” he said.
It was also a mistake to keep ATCO talks from the public, he said. But, again, Fentie wouldn’t say why he did so.
“I take full responsibility,” he said. “The communication on this was mishandled and I have no problem taking responsibility for that.”
As details of the secret ATCO deal piled up over the summer, Fentie has been reluctant to discuss the scandal.
Half of Yukon Energy’s board of directors resigned on June 8 after finding out Fentie misled them about the ATCO talks.
Fentie told them the government was only looking at a less controversial proposal called rationalization – an asset-swap that would simplify the relationship between Yukon Energy and ATCO’s subsidiary, the Yukon Electrical Company Limited.
The four board members quit after discovering, in documents drafted earlier this year, the government was looking at privatization.
On June 19, nearly two dozen Yukon Energy staffers issued a strongly worded open letter demanding Fentie come clean about the talks.
Five days later, newly installed Yukon Energy chair Pat Irvin told the staff and public the government only considered rationalization with ATCO, nothing more.
The next day, Fentie called the allegations from former board members “opinions,” and refused to respond.
Former Yukon Energy chair Willard Phelps then upped the ante, leaking a seven-page joint position paper drafted in May.
The paper outlined the merger of Yukon Energy with Yukon Electrical without actually any selling assets, a shrewd proposal that saved Fentie from any heat that he was directly selling assets to ATCO.
But the merger is “back-door privatization,” said Phelps, because of the upper hand it would give ATCO in future power plant projects.
Fentie called the ATCO talks “preliminary scoping out discussions” in Mayo on June 29, down playing how far along the negotiations had gone.
On August 19, a document predating the joint position paper was leaked – revealing both the government and ATCO were deeply involved in negotiations that began in October 2008.
In that bid proposal, ATCO sought to invest in the Mayo B project as well as the unfinished Carmacks-Stewart Crossing transmission line.
The proposal explained the Yukon government had indicated where ATCO should invest, a damning fact since it would mean the government solicited the bid, something Fentie still denies.
Ten days later, Cathers resigned from Fentie’s government to sit as an independent.
Fentie considered the outright sale of Yukon Energy’s hydro stations to Alberta-based ATCO, and then told the Yukon public that privatization was never on the table during seven-month-long negotiations, said Cathers, adding Fentie urged him to repeat that line.
In resigning, Cathers said he wouldn’t lie to his constituents.
Now Fentie admits he knew privatization was on the table, though he wouldn’t comment on the details.
Fentie had brushed off the earlier defections and leaked documents, but Cathers’ resignation was the first real threat to his grip on power since the ATCO scandal began.
With Cathers sitting as an independent, the government is now in a minority position.
And Fentie has adopted a new image strategy.
He’s not obligated to reconvene the legislature until May 2010, but insisted there will be a fall session.
The Liberal Party has promised to put forward a non-confidence motion during the session.
Fentie denied rumours he is courting Independent John Edzerza to sit as speaker, which would bring Ted Staffen onto the government benches, restoring Fentie’s majority.
“I have not spoken to John Edzerza since the last sitting,” he said.
And despite Fentie admitting culpability for the ATCO mess, the government isn’t abandoning plans to privatize the territory’s energy system.
The government is still looking for private-sector investment in the Mayo B hydro project, said Fentie.
The project received $71 million from Ottawa this year, but if that amount isn’t matched by an additional $81 million by 2012, the money goes back to Ottawa.
The government is also currently writing a policy on independent power producers, which would introduce the construction of small- to large-scale generation projects by private individuals or businesses – something ATCO specializes in.
And Fentie finished every admission of guilt with a caveat on Monday – the Yukon needs to build more power plants for future mines.
“It doesn’t change the issue,” he said. “The issue is how do we address on an ongoing basis the delivery of affordable, reliable energy to the Yukon.”
Contact James Munson at