‘I’ve got to resign. I’m going to resign’: Kenyon

A minister kept in the dark about his own portfolio,

A minister kept in the dark about his own portfolio, an angry confrontation with the premier and a forked-tongue energy corporation board member are the latest allegations to come out of the government’s bid to privatize the Yukon Energy Corp. (YEC).

For three weeks in November 2008, under the direction of Premier Dennis Fentie and behind the back of Jim Kenyon, then the minister responsible for the YEC, the government negotiated to privatize the Yukon’s public utility by merging it with Yukon Electrical Co. Ltd. (YECL).

These are the latest revelations from Willard Phelps, the former YEC board chair who resigned last month in protest of Fentie’s designs to turn YEC assets and their control over to Calgary-based energy giant ATCO, the parent company of YECL.

At the High Country Inn on Wednesday afternoon, Phelps, flanked by former YEC board members Martin Allen and Paul Hunter, held a press conference where they offered more information on the back room deal.

“(Fentie) phoned over in a rage and demanded that David (Morrison, the YEC’s CEO) come over,” said Phelps of a Dec. 8 confrontation with the premier after he learned Morrison had shared a three-page negotiation document with the YEC board.

“But in the middle of (the discussion), before it really got too severe, question period started.”

After question period, Phelps and fellow board members Hunter and Greg Hakonsen met with Kenyon, Energy, Mines and Resources Minister Brad Cathers and their retinue of executive assistants and deputy ministers to further discuss the matter.

“Kenyon said, ‘I’ve never been told about this. What’s going on?’ And remember, this is three weeks after the paper had been delivered to the premier,” said Phelps of Kenyon’s reaction.

“And then he said, ‘I’ve got to resign. I’m going to resign.’ And I said, ‘Jim, I agree and I actually feel sorry for you. You’ve been carrying the can as the minister responsible and you don’t even know what’s happening.’”

But Kenyon didn’t resign, and pledges made that day to cut negotiations with ATCO were broken.

“They promised us, all of them, in that room, there there would be no more discussions with ATCO; this was in December,” said Hunter, who resigned along with Phelps, Allen and Hakonsen on June 8.

“And if there were any (negotiations) to continue, that we would be the first to know and it would be in co-operation and all staff members, it would be totally public, open discussion.

And that was a promise from two ministers.”

When the board learned the negotiations continued through the new year and into the spring of 2009, the four members resigned. Phelps went public with a seven-page “joint discussion paper” that proved the ministers broke their word.

The document indicated the government was ready to turn control of the YEC to ATCO - including management of personnel - and considered increasing ATCO’s share in the merger via public and private revenue streams.

Yesterday, Phelps responded to Fentie’s July 6 press release in which the premier announced he is the new minister responsible for the YEC and that there are no plans to sell or privatize the public utility.

“The first point I want to talk about is my deep and mounting concern that the government fully intends to move ahead with ATCO in the manner and with the model as set forth in the seven-page document,” said Phelps.

“When (Fentie) says this, he’s not saying he’s not going to continue with these negotiations ... it just comes down to simple word manipulation.”

As for Fentie’s assertions, made during a local radio interview, that the YEC was in the loop the whole time, Phelps called that nonsense.

“We weren’t allowed at the table. Ever. And at the end, ATCO is dictating how many people will be at the table and who’ll they’ll be,” he said.

But the deceit did not end there, according to Phelps. As Phelps and the three others resigned from the ATCO board, Pat Irvin decided to stay and Fentie vaulted him to the position of YEC chair.

While Irvin told the four outgoing board members that Fentie deceived him about privatizing the YEC, he sang a very different tune for the public.

“Certainly, Pat Irvin went and said (after becoming chair) there is nothing he read ... that verifies what I’ve said,” Phelps said. “Although in our presence, all of us (in the board at the time), he read that document. In our presence, he said that the premier was lying to him. That was the day we resigned.”

Fentie was unavailable for comment this morning.

Kenyon communicated via cabinet spokeswoman Roxanne Vallevand that he is not interested in commenting on the matter.

However, when the Star asked Jerome Babyn, the YECL manager, if the negotiations would continue, Babyn answered, “Not at this time,” but didn’t rule out future negotiations.

“We hope we’re always in talks with government and others,” he said.

Babyn referred to details in the seven-page discussion paper as preliminary and potential outcomes as “... just speculation. There wasn’t anything that was predetermined, or accepted by any party.”

Both Fentie and Babyn have insisted talks between ATCO and the Yukon government were never about privatizing the YEC or acquiring each other’s assets.

But the discussion paper tips the balance in ATCO’s favour as a merger of YEC and YECL assets under a new corporation OPCO, would make YEC and YECL 50/50 partners.

However, the value of YEC’s wholesale electrical assets is $200 million (estimated at $600 million to replace) while what YECL brings to the table in terms of similar assets amounts to $63 million.

Phelps is continuing his demands for a public or judicial inquiry into the Yukon Party government’s conduct on the matter.