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Power line proposal requires corporate contribution

Two mining companies have no intention to help build a hydroelectric transmission line between Carmacks and Stewart Crossing.

Two mining companies have no intention to help build a hydroelectric transmission line between Carmacks and Stewart Crossing.

But the Yukon Energy Corporation is counting on owners of the Minto mine and the Carmacks Copper mine to help cover the $32-million power line project.

“As set out in Yukon Energy’s 20-year plan, filed with the Yukon Utilities Board in June 2006, the development of both stages of the project is subject to the provision of Yukon government funding and additional mine customer contributions in order to ensure that there is no net cost to Yukon Energy or to Yukon ratepayers beyond what would be required for any other option to provide required electric energy and capacity,” Yukon Energy said in its transmission line proposal, recently submitted to the Yukon Environmental and Socioeconomic Assessment Board.

In a previous interview, Yukon Energy CEO David Morrison said the Yukon government would pay half the project costs, about $15 million.

The “primary purpose” of the project is to encourage economic development along the North Klondike Highway corridor, “including new mine developments;” to enhance the reliability of the Yukon’s hydroelectric power system; and to provide surplus power to the Minto mine, according to the proposal.

The power line is to be built in two stages.

The first, to be completed by August 2008, would stretch from the termination point of the Whitehorse-Aishihik-Faro power grid at Carmacks to Pelly Crossing.

The second, to be completed by August 2009, would tie into the existing transmission line near Stewart Crossing that connects a dam in Mayo with Dawson City.

In addition to the main transmission line that would carry 138 kilovolts of electricity, stage one includes plans to build a smaller, 35-kilovolt line to the Minto mine, roughly 27 kilometres west of the proposed main line right-of-way along the North Klondike Highway.

Negotiations towards a “purchase power agreement” between Yukon Energy and Sherwood Copper Corporation, which owns Minto, are continuing, according to the Crown corporation’s proposal to the assessment board.

“Under the anticipated (purchase power agreement), the mine developer will pay all costs for the (Minto spur) development,” it says.

But Sherwood Copper has no plans to cover construction of any part of the transmission line, including a 27-kilometre spur to its Minto deposit.

Although the company signed a letter of intent last March to buy hydroelectricity from Yukon Energy and mothball its diesel generators at the Minto mine, construction costs for a spur line were not part of the deal.

“That’s not part of the letter of intent,” Sherwood Copper CEO Stephen Quin said last week.

“We’re there as a potential customer.”

Quin predicts Minto will be in production by April, 16 months before Yukon Energy plans to complete stage one of the Carmacks-Stewart project.

Yukon Energy also asked the Western Copper Corporation, which owns Carmacks Copper roughly 40 kilometres southeast of Minto, if it’s interested in “potential future transmission development” connecting the minesite to the proposed Carmacks-Stewart power line, according to Yukon Energy’s proposal.

“Certainly it is something that we would welcome; it would cut our cost to power,” Western Copper CEO Dale Corman said last week.

“But we’re not in a position to make any commitments to Yukon Energy until we do have our permits.”

If Carmacks Copper receives the necessary permits, it could be in production by 2008.

Getting both mining projects off diesel fuel and onto hydroelectricity will reduce the Yukon’s greenhouse gas emissions.

At full production, the Minto mine will burn enough diesel to produce 23,000 tonnes of carbon dioxide each year — almost 1.5 times the amount produced by all of Yukon Electrical Company’s diesel generators, according to the Yukon Energy proposal.

Carmacks Copper would produce about 50 per cent more carbon dioxide than Minto, it says.

Furthermore, the completed transmission line would provide hydroelectricity to Pelly Crossing, which currently burns about 563,000 litres of diesel fuel each year, emitting 1,537 tonnes of carbon dioxide.

But the preferred route for the line’s 60-metre right-of-way would cross numerous “small wetland regions” and carve through woodland caribou habitat.

However, most of the targeted route area has already been disturbed by road development, according to the project proposal.

“The project proposal indicates that the project is expected to cause no likely significant adverse effects on the biophysical environments … or on the socio-economic components,” it says.

The assessment board is hoping to complete its screening of Yukon Energy’s proposal by next summer.