Na cho Nyak Dun could invest $3.5 million in Mayo B

The Na-cho Nyak Dun First Nation could invest up to $3.6 million in the Mayo B power project, said Yukon Energy president David Morrison.

The Na-cho Nyak Dun First Nation could invest up to $3.6 million in the Mayo B power project, said Yukon Energy president David Morrison.

A project agreement signed on April 29 lays the groundwork for a future funding deal that would herald the first investment by a Yukon First Nation in

an energy project.

The Na-cho Nyak Dun are entitled to cover part of the tab being picked up by ratepayers for the project, around $36.5 million. The rest of the $120

million project is being paid for with a federal grant and the Yukon government.

The Na-cho Nyak Dun can only invest in the project’s equity and will not be in a debt position, said Morrison.

The equity portion of the $36.5 million is around $14 million and the First Nation can invest up to 25 per cent of that, said Morrison. That comes out to

around $3.5 million.

“They’re not taking any debt, it’s all equity,” he said.

So ratepayers, the Yukon government and Ottawa will still be the main backers of the project, with the Na-cho Nyak Dun injecting some extra cash

into the mix.

Yukon Energy and the First Nation have until the project’s completion to hash out the details. The construction is scheduled to take less than two

years.

There is an option for an even larger investment than 25 per cent of equity if Yukon Energy needs to use more water from Mayo Lake for the project,

said Morrison.

Beyond that, he refused to go into any detail because of a confidentiality clause.

When an actual deal is signed, the First Nation will be financing the project with the Yukon Development Corporation, which will then flow funds to

Yukon Energy.

The power plant’s carbon credits became a divisive issue recently, with Na-cho Nyak Dun chief Simon Mervyn claiming the First Nation should own a

portion.

But Morrison is holding firm to his argument the utility owns the credits, an opinion expressed during a recent Yukon Utilities Board hearing on Mayo

B.

“Our general approach is that carbon credits belong to the utility on behalf of the ratepayers,” he said.

“It should be used by the ratepayer to reduce other costs. That was our approach on the Dawson line.”

Morrison didn’t completely rule out the possibility the arrangement could change during a utilities board hearing.

“The YUB would have to approve once we find a way to get carbon credits and monetize them,” he said.

“But it won’t really affect (the Na-cho Nyak Dun deal) at all.”

Ground preparation at the Mayo B site began last summer, but Yukon Energy is waiting for the completion of two regulatory processes before

beginning construction.

An energy project permit from the utilities board, which held it’s hearing on Mayo B in early April, is expected in the next few weeks.

The utility is also awaiting the final decision from the Yukon Environmental and Socioeconomic Assessment Board, which is currently reviewing

public comments on the project.

Yukon Energy has until March 31, 2012, to finish the project before Ottawa pulls the plug on its $53.35 million funding for the powerhouse.

Mervyn could not be reached for comment before press time.

Contact James Munson at jamesm@yukon-news.com

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