Yukon Energy believes the federal government owes Yukoners millions in compensation money, and has filed another suit to collect the money.

Corporation president David Morrison said Tuesday an oversight by the Department of Indian Affairs has cost taxpayers millions already, but has the potential to cost Yukoners millions upon millions more in years to come.

Yukon Energy, he said, learned in 1999 from the Department of Fisheries and Oceans it required a special authorization under the federal Fisheries Act to operate the Aishihik hydroelectric dam in southwestern Yukon.

Morrison said when Yukon Energy bought the electrical grid in 1987 from the federal government, Ottawa said all necessary permits and licences were in order. Furthermore, said the corporation president, the federal government promised to compensate Yukon Energy for any oversight, he said.

Morrison said it cost millions of dollars to secure the Fisheries Act authorization as part of the Aishihik relicensing process that ended in 2002, a sum he says Ottawa now owes Yukoners.

More significantly, he emphasized, is the reduction in how much water the corporation can draw down from the lake to produce hydroelectric energy.

The new 17-year licence raises the minimum lake level the corporation can operate at by more than half a metre.

But it has also placed down a longer-term operating goal at a metre over the minimum established in the 25-year licence issued in 1977, when the facility opened.

'Two feet of storage is $4 million,' Morrison said of the significance the reduction in minimum lake levels could mean. 'This is huge.'

With less water to work with, ratepayers will bear the higher cost of burning diesel to make up for shortfalls if energy needs reach a point where the corporation could have used the lower limits licenced in 1977, and transferred in 1987.

'We are responsible for managing this asset and I think it is incumbent upon us to try and recover some of the ratepayers' money.'

Had the federal government secured the necessary authorization under the Fisheries Act in the initial licence, Yukon Energy would not have to address the authorization issue in the relicensing process, Morrison maintained. As a result, he said, there would not have been any loss in the lower limits.

The suit is against the Department of Indian Affairs and Northern Development, as the now-defunct Northern Canada Power Commission (NCPC) falls under the responsibility of that department.

Morrison said Yukon Energy was forced to file a suit to protect its interests, as time was running out under the statute of limitations, and with federal officials declining to negotiate a solution.

'We are not walking away from this,' Morrison said. 'I mean, this is $4 million a year.'

The corporation president did concede that very rarely did Yukon Energy draw the lake down to the lower limits under the old licence. Technically speaking, however, Yukoners bought an asset that included that flexibility but no longer has it because of the federal oversight, he continued.

He said he was working with the NCPC at the time of the transfer. He was not aware the Aishihik facility needed an authorization under the Fisheries Act, and he doesn't think anybody in the organization knew of the requirement.

The obligation to make the Fisheries Act requirement public knowledge, Morrison suspects, was probably the responsibility of the Department of Fisheries and Oceans.

But that does not absolve DIAND from its assurance that all paperwork was in order at the time of purchase in 1987, nor from its promise to make good for any shortfalls if it wasn't, he said.

He said relicensing the Aishihik dam complex cost Yukon Energy about $6.5 million. While not all of it was to secure the required Fisheries Act authorization, he added, a good portion of it was.

Yukon Energy filed a separate suit against Ottawa last summer for more than $1 million, claiming that was the amount the corporation paid in compensation to lake users, and that it was entitled to a reimbursement from the federal government.

There also remains an outstanding claim by the Champagne and Aishihik First Nations for compensation.

Scientific data show that when lake levels reached historic lows in the early 1980s, a huge hole was punched into the lake's whitefish stocks.

Figures in the tens of millions of dollars have been cited as the amount the Champagne and Aishihik First Nations are seeking.