The Yukon Liberals are trying to stir the pot over the $100-million bond issued by the Yukon Energy Corporation last week.
“We’ve already gone over this,” said David Morrison, the corporation’s president.
“None of this is new. This is what we’ve said to the public and to the utilities board. We’ve explained all this.”
On Thursday, the Liberals issued a news release skewering the Yukon government for not being transparent enough over the bond’s details. They wondered how the interest – $5 million a year for 30 years – was going to be paid. They also didn’t know how the principal at the end of the bond’s life would be paid.
The Liberals compared the bond, which will help pay for the Mayo B project and a transmission line, to the Yukon Hospital Corporation’s $67-million loan to build new hospitals.
“It’s a bit of a shell game where the government says, go ask the hospital corporation, but it’s the government, and Yukon taxpayers through the government, that’s financing those loans and in fact guaranteeing them,” said Liberal Leader Arthur Mitchell this morning.
That’s true. Premier Dennis Fentie and his cabinet have left the defence of the lending by both corporations to their respective heads. When it comes to Yukon Energy, Fentie hasn’t returned a phone call on the corporation for more than a year. And he’s been the minister in charge of Yukon Energy since last July.
But the details the Liberals are yearning for aren’t a secret. They’ve been explained publicly since January and were put on the public record again during a Yukon Utilities Board hearing on Mayo B in April.
“The government has been very quiet when it comes to $150 million in interest over the next 30 years,” said Mitchell. “That’s a large number and you haven’t heard the premier or the chair of the energy corporation speak to it.”
Morrison offered an explanation this morning.
Part of the bond’s interest will be paid with $52.5 million from the Yukon government. Another $36 million will come from Yukon Energy’s own revenue from energy sales.
Mitchell wondered yesterday whether Yukoners would see a new rider on their bills to pay for the $36 million.
They won’t, said Morrison. The cost is rate-neutral because the utility will have more customers and less diesel costs with Mayo B, he said.
The Liberals think that’s risky.
“There’s no guarantee that the customers we have now will still be there over 30 years,” said Mitchell. “Mining goes up and down.”
The bond’s interest will also be covered by $70 million from Ottawa, said Morrison.
As for the principal, Yukon Energy will set up a “sinking fund” that will mature in 30 years, he said. That fund will accrue value over 30 years from its own interest.
Morrison said he has never received a letter from the Liberals requesting the information.
Asked why they didn’t try to directly request the information, Mitchell said they stopped trying.
“We haven’t had great success writing letters, but we’ll see if we can,” he said.
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