Ranj Pillai, the Yukon’s Minister of Energy, Mines and Resources, said the territorial government could buy power from British Columbia’s controversial Site C dam. (Jesse Winter/Yukon News file)

Yukon government mulls link to Site C power

2016 report put cost of 763-km line at $1.7B

The Yukon Development Corporation is looking again at tying the territory’s power grid into British Columbia now that the B.C. government has decided to go ahead with the huge Site C hydro dam.

Minister Ranj Pillai, the minister responsible for the corporation, said he’s asked officials to “engage in some high-level due diligence on the concept.”

“The new government in British Columbia continue to talk about one of the challenges with the Site C project was the fact that they thought there was going to be a surplus of power,” Pillai said from the Association of Mineral Exploration’s annual Roundup in Vancouver on Jan. 23. “And they were really concerned about … where would they get an appropriate price for that surplus and what they would do with it.”

This is not the first time the idea of tying into B.C. has been floated. A 2016 report concluded that building a 763-kilometre transmission line from Iskut, B.C., through Watson Lake and into Whitehorse was not economical either to export or import energy.

The report puts the capital costs to build the line at $1.7 billion.

Pillai said previous governments were more focused on sending Yukon energy south as opposed to shipping energy North, so the price tag for the line could change if Yukon was looking to import.

The 2016 report mentions both options. When it comes to importing power from either B.C. or Alaska, “it is less expensive to remain self-sufficient and build Yukon-based generation,” it says.

The line would make the Yukon dependant on an external source for its supply of energy, it says. “Additionally, since the transmission line would supply a large fraction of Yukon’s electricity needs, back-up generation such as diesel or natural gas generation would be constructed for when the long interconnection transmission line has a failure.”

Pillai said the territorial government would have to convince Ottawa that building the line was a good idea.

“We would be looking for the federal government to understand how important this is to not just the Yukon and B.C. but to the whole country. I mean, this is the ability to drive a resource economy on clean energy and provide a big impact and input into the whole Canadian economy.”

The private sector could also help pay for the connection, he said.

Yukon companies, as well as mines just over the border, see the potential in the project, he said.

“There’s a lot of interest but there’s a tremendous amount of research and information that has to be gathered.”

Last year Yukon Energy released its own plan for meeting the territory’s future energy needs.

Costs for three different plans to generate more power within the territory over the next 20 years range from $206 million to $458 million depending on how many mines come online.

They include plans to improve current facilities and invest in battery storage as well as building a new LNG or diesel facility and a small hydro project.

Pillai said Yukon Energy’s plans are still valuable, but it’s worth looking at other options.

“We’ve got a federal government that’s really starting to put money into the renewable space or to build a green economy,” he said.

“From a financial perspective when you take into consideration the potential third party contribution that doesn’t put a cost on the taxpayer, that changes the discussion a little bit. You have to at least take a look at other options.”

To build new facilities Yukon Energy has to borrow money, said president Andrew Hall. Decisions have to be approved by the Yukon government since the corporation’s debt is included in the territorial government’s books.

Paying off that debt would mean increased rates, Hall said.

Hall said federal funding would be critical for both Yukon Energy’s plans, and if the territory decides to link to B.C.

“Having that federal funding there will be important to keeping the power rates affordable,” he said.

Pillai said Yukon Energy’s plans still use fossil fuel and only deal with communities and mines currently on the grid.

“You still could build $400 million, you still could use a ton of fossil (fuels) and you’d still be having fossil being burned in other parts of the Yukon,” he said.

“It causes enough interest to take a look at a bit more study on what the options are.”

According to Yukon Energy, its plan for a “medium” amount of new generation uses more than 95 per cent renewable energy, except for in 2021, when hypothetically that number would drop to 85 per cent.

Some of the smaller projects that are part of Yukon Energy’s plans are progressing, Hall said. A third LNG engine should be installed in the current facility by the end of the year, he said. An expanded energy conservation program will also be designed this year.

The plans also call for a new diesel or thermal facility by 2021.

Hall said the corporation was originally thinking of a new permanent facility, but now renting extra resources to cover peak times might also be an option.

Nothing has been sent to the government for approval yet, he said.

Yukon Energy starting early planning work for a small scale hydro facility this year.

The first step is to talk to the government about the two highest potential options identified in the plan, Hall said.

The Drury Creek project would involve building a new hydro facility, whereas the Atlin option would involve the upgrading the infrastructure between Whitehorse and Atlin and signing a contract to purchase power the facilities there.

Depending on how many mines are built in the Yukon, Yukon Energy’s plans call for “small hydro” to be built in either 2026 or 2023.

Hall said he thinks the government is doing its due diligence by considering linking to B.C. That was not something Yukon Energy considered, he said.

“There is a significant investment required to meet our future needs and I think the government’s just doing its due diligence to see would a grid connection be competitive with us.”

It’s too early to say how much the Yukon would be willing to pay B.C. for power. Once they have good data, it would be brought to B.C. Hydro, Pillai said.

“A project of this magnitude, we’re talking a number of years to look at it, so it’s about just starting the conversation now and seeing from some advanced work on due diligence what the feasibility is.”

The Site C dam is scheduled to be completed by 2024.

Contact Ashley Joannou at ashleyj@yukon-news.com

CORRECTION: This story’s headline has been edited to reflect that the Yukon is considering a transmission line to buy power from the Site C dam, not to connect to the dam itself.

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