Yukon Energy defends awarding Mayo B contract

Yukon Energy Mayo B expansion faces scrutiny as the Yukon Utilities Board and YESAB review permits and approvals, while a construction contract with Kiewit advances planning to meet tight timelines and secure federal funding.

Yukon Energy Corp. says it is not sidestepping territorial regulators by awarding a construction contract for its Mayo B hydroelectric dam expansion while the project is still being reviewed.

The public power utility responded to concerns raised by the Yukon Conservation Society that a contract has been awarded before the Yukon Utilities Board (YUB) has finished reviewing the company's application.

"It is our perception that the proponent, Yukon Energy, seems to be awarding a lot of this work without waiting for the board to do its work, and that is our concern," Lewis Rifkind, the society's energy coordinator, told CBC News.

But in a statement issued Friday, Yukon Energy spokesperson Janet Patterson said the utility has "consistently informed" the utilities board — as well as the Yukon Environmental and Socio-Economic Assessment Board (YESAB), which is also reviewing the Mayo B project — that it would be awarding a construction contract and buying key equipment "prior to securing the required decision documents and permits."

At the same time, Yukon Energy has told both boards it can't start any construction work until it secures final approvals and gets all the necessary permits needed for specific construction activities, Patterson said.

Yukon Energy's Mayo B expansion project is under tight timelines and could lose millions of dollars in federal funding unless construction begins this summer, and delays can be risky for major projects.

While both regulatory boards finish their reviews, Yukon Energy is doing what it can do to ensure everything is ready to go when they are given the green light to proceed, Patterson said, noting that energy use in Yukon is rising.

"The contract with Kiewit [Corp.] allows that company to work with us to prepare for construction, thus ensuring that the Mayo plant can be in operation by our March 31, 2012, federal funding deadline," she stated.

"That work includes things such as planning and engineering, going through the process needed for hiring subcontractors, and mobilizing the camp facilities so that the work camp can proceed when required."

Rifkind said Yukon Energy should not assume they will get all the necessary approvals and permits on time.

"Until the boards give their rulings and their recommendations, we just don't know, and you can't pre-suppose what their decisions will be," he said.

Rifkind said regulators may decide it's not prudent for Yukon Energy to go ahead with the expansion work. The review bodies may also recommend alternatives to the company's proposal after considering power plant objections raised by stakeholders, he added.

But Patterson said it would be "irresponsible for us to sit and do nothing" until the board's processes are complete, "since that would mean we would miss our deadline of March 31, 2012, and would lose the $71 million committed by the federal government, even as federal regulations evolve" for the project."

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