Yukon Energy has reached an out-of-court settlement over the hugely controversial Mayo-Dawson City transmission line, the president of the publicly-owned corporation said today.

David Morrison said Yukon Energy has agreed to pay Chant Construction an additional $3 million to end the seven-year dispute that was headed for a year-long court case in 2010.

The 232-km transmission line originally came in over budget by a third, at $36.5 million.

As well, it was behind schedule by more than a year after Chant walked off the job in the middle of the project over differences with Yukon Energy.

In a subsequent audit by the Auditor General General Canada, the project was described by Sheila Fraser as an exercise in mismanagement from the get-go.

Morrison pointed out the Yukon Utilities Board has already ruled that it will not allow Yukon Energy to charge ratepayers any more than the $36.5 million for the project.

Consequently, its parent company, the publicly-owned Yukon Development Corp., will pay the $3-million settlement, he said.

Morrison said the additional $3 million raises the cost of the transmission line to $39.5 million, not including the $1 million-plus the corporation has spent on legal fees so far.

Chant Construction sued Yukon Energy for an additional $21.5 million, claiming the power company provided loads of wrong information, from ground conditions to construction requirements.

Yukon Energy, on the other hand, sued Chant for $9.5 million, claiming the company failed to meet its contract obligations.

Morrison said lawyers for Yukon Energy and Chant Construction were in Yukon Supreme Court this past spring for a case management conference before Justice Ron Veale.

In the end, Veale laid down a schedule ending in a 12-month trial beginning in November 2010.

"So when we looked at that, Chant Construction came to us and said, 'Com'on, can we look at a settlement?" Morrison said. "So we sat down and said, 'OK."

Had the dispute gone through the full court process, Yukon Energy was expecting a legal bill of $3 million, and hundreds if not thousands of hours of staff time, he said.

Morrison also pointed out that the $9.5-million suit against Chant included everything but the kitchen sink, and even if Yukon Energy was successful, it wouldn't have recouped anywhere near the full $9.5 million.

Similarly, Chant's suit was also padded, and it wouldn't likely have gotten anywhere near the full amount, Morrison said.

The Yukon Energy president noted Chant's amount of $21.5 million included $1.4 million in contract change orders that Yukon Energy accepted as valid and would normally have paid had the legal actions not arisen.

Given that, the out-of-court settlement really included an additional $1.6 million, on top of the valid change orders, he said.

Morrison was hired by Premier Dennis Fentie shortly after the Yukon Party rose to power in late 2002, while the transmission line project was off the rails.

One of Morrison's first jobs was to get Chant back to work under an agreement that Yukon Energy and Chant would settle their differences once the project was complete, though they never could see eye-to-eye.

Fentie and his cabinet colleagues have taken every chance they get to emphasize the boondoggle the transmission line became was the ill-fated brainchild of the 2000-02 Liberal government.

During the legal process, the corporation sued numerous other parties, from Mom-and-Pop consultants to engineering firms, and pretty much any party who had anything to do with the preparation of the construction project.

Back then, Morrison had explained at the time, Yukon Energy wasn't necessarily planning to go after everybody, but that it had to file the paperwork on time to keep its options open.