With its McIntyre Creek water licence set to expire in January 2008, the Yukon Electrical Company Ltd. (YECL) will likely apply to the territory's water board for a new licence.

As well, it will probably apply to the Yukon Utilities Board for permission to pass on the cost of the application to the consumer.

Responding to questions from the Star on Wednesday, Doug Tenney, the YECL's general manager, said with the company's water licence in the Porter Creek greenbelt set to expire on Jan. 31, 2008, it's likely the company will seek to have it extended.

'Obviously there's some time left, but we'll probably look into extending that licence.

'YECL understands that there would have to be a number of hoops to jump through before that could happen,' Tenney said.

The area in Porter Creek where YECL's licence is located is in the same greenbelt where Yukon College is seeking its endowment lands and the city is looking to build 280 lots, which spurred the upcoming referendum on development.

Tenney said the costs of extending the licence could not be determined at this point. However, the company would likely seek the permission of the territory's public utilities board to include the initiative as part of its capital costs and recover those costs through energy rates over the next 50 years, he said.

'Normally, part of the water licence finds its way into the capital costs of projects.

'With assets such as buildings, you would look to recover the costs over time,' he said.

The project, if it ever came to fruition, would not dam the whole creek and the actual power generator would be located near Mountainview Drive, he added.

YECL's water licence, number Y2L3-2685, is currently held under the name of Yukon Hydro.

Documents on file with the territory's corporate affairs branch show Yukon Hydro is an active company owned by the Calgary-based Atco Group, the same company that owns YECL.

Many of the directors of Yukon Hydro are also Atco directors.

Tenney added at this point, maintaining the water licence was just to keep the company's options open and there are no formal plans to build a power-generating station in the near future.

If the company does seek to extend its licence, he added, he expects there would be a great deal of discussion around the issue similar to the public debate that occurred when the company first sought the licence in 1982/83.

Documents on file with the Yukon Water Board show there were a number of people and organizations who opposed YECL's licence application in the early 1980s, including the Department of Fisheries and Oceans (DFO) and the City of Whitehorse.

In a June 24, 1982 letter from the DFO to the water board, DFO officials said they opposed the building of a power generator in the area as it would negatively impact fish habitat in the watershed.

'The available resource information indicates that McIntyre Creek is utilized by rainbow trout, chinook salmon and Arctic grayling.

'In that the operation of the proposed dam and diversion may totally eliminate instream flow and fish habitat downstream of the point of diversion, the DFO has concerns with regard to the Yukon Hydro proposal.'

In a June 25, 1982 letter from then-city engineer Brian Laird to the water board, Laird stated the City of Whitehorse also had concerns over the proposal.

Laird's letter states: 'The City of Whitehorse intends to intervene at a public hearing into the application of Yukon Hydro Company Ltd. in the proposed construction of McIntyre Creek Power Plant. No. 3.

'The city's concern in this matter is that the Yukon Hydro application essentially requests authority to utilize all of the available flow in McIntyre Creek above the proposed hydroelectric plant.'

The reason for the city's opposition, Laird stated in his letter, was due to plans the city had to use the area for drinking water.

The cost of building the power generator in 1984, according to documents on file, was estimated to cost $3.5 million.

When the issue again was raised in 1991, costs for the power-generating project were estimated to be $5 million.

In 1991, Hector Campbell, then YECL's power supply manager, said the company intended to build a fish spawning area to mitigate any negative environmental impacts from the project.

The 1991 plans, Campbell said at the time, included a pipeline to be built at a beaver dam near Rabbit's Foot Canyon.

He said the pipeline would have run down between the Whitehorse Correctional Centre, past the Takhini softball complex, across Mountainview Drive, through a turbine to generate electricity and then along the fringe of the Marwell industrial area to the river.

At the time, Campbell noted that McIntyre Creek is not a natural creek, having been created when the Fish Lake Road hydro project was built in 1954.

Estimated costs for what the project would cost in today's dollars have not been calculated by the YECL, Tenney said.

Coun. Doug Graham said this morning the city is no longer interested in using the McIntyre Creek area as a source of drinking water.

Graham said in the last few years, the city has been pursuing its plans to use the Selkirk aquifer in Riverdale as its source for drinking water.

'It's almost worked out perfectly, and we don't need (McIntyre Creek),' he told the Star. 'I'd say we don't need it at all.'

City council has long maintained the aquifer will be the future source of the city's drinking water and will reduce or eliminate dependence on Schwatka Lake.