Yukon Energy has formally announced the construction of a 98-kilometre transmission line between Carmacks and Pelly Crossing.

A 29-kilometre spur line to the new Minto mine will also be built, Yukon Energy said this morning.

The project's green light is subject to the signing of a project agreement with the Northern Tutchone First Nation, as well as the receipt of all necessary permits and approval from the territorial government.

Yukon Energy board members made the decision Sept. 21, after reviewing updated project costs, permitting status and project schedules.

Yukon Energy spokesperson Janet Patterson said board members had to delay the announcement until now because everyone involved in the project, from the first nations to YTG, had to co-ordinate schedules and timelines.

'This transmission line gives us a firm customer for our surplus hydro,' Yukon Energy president David Morrison said in a statement.

'It will allow Pelly Crossing residents to switch from diesel to hydro for their electricity needs, reducing greenhouse gas emissions.

'It's also the first phase of a plan to connect our northern and southern grids, which will result in more flexibility to meet customer needs.

'While the total price tag is higher than originally estimated, the economics are still there to make this a viable project for Yukon Energy and for ratepayers,' Morrison said.

The cost of the main line from Carmacks to Pelly Crossing is predicted to be about $27.8 million, higher than the estimates of $19 million to $25.6 million.

The Minto spur line will cost approximately $8.8 million, though it was initially estimated to be about $4 million.

The government has already committed $10 million to the project, and another $5 million from the publicly-owned Yukon Development Corp.

Sherwood Copper Corp. and its Minto mine have committed $7.2 million to the main line, and will pay the entire cost of the 29-kilometre spur line.

Yukon Energy representatives have said the company is now in a position to issue contracts for centreline surveying, clearing, and line construction.

The contracts will, however, be conditional on obtaining final permits and permission to proceed with the project.

The transmission line construction, valued at $17.3 million, will be awarded to a joint venture partnership between the Northern Tutchone First Nations, Valard Construction and Arctic Power.

'By partnering on this project with two highly reputable and experienced line construction companies, we are confident that the Northern Tutchone Council will deliver a high-quality product,' Morrison said.

The right-of-way clearing contract will also go to the Northern Tutchone First Nations, jointly with J.V. Partners. That work is valued at approximately $3.4 million.

The centreline survey contract, worth just under $693,000, will be awarded to Challenger Geomatics.

The next step in the transmission line project will be the completion of the Yukon Environmental and Socio-Economic Assessment Board's final screening report.

This final report will provide recommendations to the Yukon, Selkirk and Little Salmon/Carmacks First Nations governments. Once the decision bodies have accepted the report, the necessary permits can be granted and centerline survey and line clearing work can begin.

Yukon Energy representatives said the clearing is expected to start by late this fall, with construction to begin in the spring of 2008.

The transmission line should be operating by late 2008, as is set out in the agreement between Yukon Energy and the Sherwood Copper.

With files from Chuck Tobin.