Question re: Hydroelectric dam project cost - December 12, 2013

Hansard December 12, 2013

Mr. Silver:   Earlier this sitting, I asked about the Premier’s July announcement that the government was working on a new hydroelectric dam. At the time, the Premier admitted that he had no specific project in mind and no idea when it might be built. He also had no idea where the money to build it was coming from. He did tell the Globe and Mail this summer that he thought the project would cost at least $100 million.

At approximately $10 million per megawatt, this is a 10-megawatt dam. Is this the ballpark cost for the project — $100 million — that the government is looking at?

Hon. Mr. Kent:    As members know, there have been a couple of actions that we’ve taken with respect to building a new hydroelectricity project. First and foremost, on the first day of this sitting, we introduced a motion that highlighted our vision for a clean power future for the territory. Subsequent to that, there was a directive issued to the Yukon Development Corporation to conduct the research and planning into a new hydroelectricity project here for the territory. The initial stage for that will be to come up with a workplan that will identify the financial and human resources necessary to conduct that research and planning. During the research and planning phase, issues will arise during that work that will address the members opposite’s question.

Mr. Silver:   The Premier told everyone in July that he did have a new priority and that was to start working on a new dam. It took them four months to formally ask officials to get this started. So far, we know the government wants a new dam, but it has no idea how big it should be or where it should be. Even without any new mines coming onstream, demand for electricity in the Yukon is continuing to grow at approximately one percent per year. There is also the possibility of a new mine or two opening in the coming years.

What assumptions is the government making regarding anticipating new demand for power in the coming years as it looks to building a new dam?

Hon. Mr. Kent:    I know the directive that we have given to the Yukon Development Corporation with respect to this is available for members opposite. “In planning the project the corporation must …” — and under section 2(b), “plan for scalability, so as to allow for the increase of energy supply over time to meet that projected demand growth.” As well, the corporation must, under section 2(a) “evaluate the expected growth in residential, commercial, and industrial demand for electrical power in the Yukon.”

We recognize that this is a long-term vision. I’ve mentioned on occasion that we don’t expect this project coming on-line for perhaps 10 or 15 years.

So there are incremental demands that are going to have to be met. The Yukon Development Corporation and the Yukon Energy Corporation will work on projects as we move toward this larger project to meet those incremental demands in electricity and what we’re going to need to meet the electrical demands for industrial and residential clients or customers here in the territory.

Mr. Silver:   I do appreciate the minister’s answers, but the $100-million question on everybody’s mind regarding this project is this: how is it going to be paid for? The Premier told the Globe and Mail that the project would be funding from — and I quote: “a variety of sources, including the federal government.”

Mr. Speaker, the last major energy project in Yukon, Mayo B, received a great deal of funding from Ottawa. It still required the government to borrow $100 million and we are paying back $5 million a year in interest on that loan for the next 30 years.

Is the government planning to borrow even more money to finance the construction of this new $100-million dam?

Hon. Mr. Kent:    Mr. Speaker, what we’ve initiated here is a process to plan and to research what a new hydroelectricity project in the Yukon will look like. We’re looking at a number of aspects for that. Location and proximity to potential clients, the environment aspects, First Nation concerns and financing of the project are but a few of the things that will emerge over the next number of months as the Yukon Development Corporation conducts this research and planning.

We certainly recognize that a project of this magnitude cannot be borne by Yukon ratepayers. We also believe that a project of this magnitude has significant impact on the Yukon, but it also has significance for the country as a whole.

That’s why we’ll be looking to the federal government for support and we’ll also be engaging with First Nations as potential partners. The exact answer to the member’s question will emerge over the next number of months, as the Yukon Development Corporation conducts the research and planning into this project that we have asked them to do, with the directive that we initiated here — I believe it was in late November.