Yukon Energy has developed what it believes is a logical and cost-effective approach to stabilizing the territory's energy requirements over the next 20 years.

David Morrison, president and chief executive officer, spent more than an hour Tuesday explaining a four-point, $45 million plan that has already been forwarded to the Yukon Utilities Board.

It will be up to the board to establish the process for formal public review of the proposal, though Yukon Energy plans a month-long tour around the territory beginning next week in Whitehorse to explain its proposal and gather input.

'There are two key principles over 20 years,' Morrison said of the proposal. 'There are the immediate needs of the system that takes us, from our perspective, up to about 2012.

'Within that period there are four primary initiatives we feel we have to undertake to meet the needs of the system as it grows, in terms of both industrial and residential growth.'

The Crown corporation is recommending:

• a $31.2 million extension of the main electrical grid from Carmacks to Stewart Crossing.

• the addition of a third turbine at the Aishihik dam for an estimated $7 million.

• Overhauling the three largest Whitehorse diesel generators for $6.4 million.

• Increasing the amount of water it can hold back in Marsh Lake by 30 centimetres (12 inches), at an estimated cost of $1 million. (All estimates are in 2005 dollars.)

While the plan also looks far into the future and mentions everything from nuclear to wind-generated power, from hydrogen to solar, Tuesday's presentation focused entirely on the immediate needs over the next five to six years.

Morrison said he believes even with all the expenditures, if the two mines north of Carmacks go ahead and there is a good indication they will electrical rates in the Yukon would likely go down because of the additional revenue.

If for some reason the mines do not proceed, there is enough flexibility in the plan to restrict investment to increasing the Marsh Lake water levels and refurbishing the three Whitehorse diesels, he said.

Morrison explained that without the mines, the limited investments still make sense and would not necessarily mean a rate hike, as the cost would be amortized over some 10 years while revenue would increase from natural growth.

But there is every indication that both mines will go ahead, and it presents a timely and precious opportunity for electrical consumers to build a larger and more stable Yukon electrical grid, he suggested.

He explained that under accepted principles of calculating capacity and risk to consumers if major generating components fail, the Whitehorse-Aishihik-Faro (WAF) grid is susceptible to overloading if it loses the Aishihik dam just as it did last Jan. 29.

Months before the system-wide blackout in frigid temperatures that lasted up to nine hours in some locations, Yukon Energy had received an assessment of its risk from a math professor at the University of Saskatchewan renowned for his work with utilities.

The professor, said Morrison, indicated the WAF grid could be in trouble if it lost the Aishihik connection.

The entire system, for instance, has the capability to generate 87 megawatts of power, using every single diesel and hydro unit. Take away the 30 megawatts from the two Aishihik hydro units, the professor pointed out, and suddenly the system is on the edge of being able to supply peak wintertime loads, with very little room or no room to provide for future growth, Morrison explained.

Refurbishing the Whitehorse diesels alone will add 14 megawatts to the system, while increasing Marsh Lake water storage would add another 1.6 megawatts for wintertime use, explained documents Yukon Energy will be circulating to the public.

Adding the third turbine to Aishihik would add seven megawatts to the system, and tying in the Mayo-Dawson grid would not add an additional 13 megawatts of capacity, but greater stability by bringing the Dawson and Mayo generating units into the equation.

Yukon Energy has spent about $220,000 to date formulating the 20-year-plan over the last 18 months.

Morrison said the corporation is about two years behind where it would like to be with the implementation of the 20-year plan.

And it needs to move quickly from here on, if it plans to meet its target of supplying Sherwood Copper's Minto mine with power by September 2008, he said.

Morrison said Yukon Energy has spent the $450,000 the Yukon government has provided to research the Carmacks-Stewart Crossing line extension, and has asked Energy Minister Archie Lang for an additional $1 million to continue on with the work.

Lang was unavailable for comment this morning.

The four specific proposals involve:

• The $31.2 million extension to Stewart Crossing has the support of the first nations, and particularly the Selkirk First Nation that is anxious to get the community off diesel generation, Morrison explained.

The plan is to have the ability to feed the Minto mine project by September 2008, and the parties are currently negotiating a purchase agreement. Yukon Energy has a letter of commitment from Western Copper that it plans to be in a position to buy power in the third quarter of 2008.

Morrison said he expects Yukon Energy will be seeking some $15 million from the Yukon government as a direct subsidy, while the remaining $17.2 million would go before the Yukon Utilities Board as a legitimate expense to be attached to the rate base.

But with the two mines on line, the additional revenue would actually drive down the cost of electricity for consumers. With the WAF system tied into the Dawson-Mayo system, there would be the ability to supply both the Minto and Western Copper projects, as well a renewed silver project in the Elsa area. Should there be a loss of any of the main generating components anywhere on the expanded system, electricity to the mines could always be turned off and redistributed to the general consumers, as is standard practice for utilities supplying industrial customers, he explained.

• It's believed that refurbishing the three Whitehorse diesels with 12,000-hour rebuild kits at a cost of $6.4 million would be half the cost of replacing them, and would still provide enough additional capacity to increase stability of the WAF grid noticeably.

• While increasing the water retention for Marsh Lake does require a water licence amendment, it's not expected to result in any significant changes. Yukon Energy is proposing to increase the upper limit in its storage capability by 30 centimetres from Aug. 15 to the end of September in years where there is no flooding. And it is hoping to have the amendment in time for August 2007.

Morrison pointed out that there are times of the year when the water level naturally reaches or exceeds the newly proposed upper limit.

• Yukon Energy is proposing to go ahead with the third Aishihik turbine sometime between 2009 and 2012, but if anything suddenly changes with proposed mines, the $7 million proposal can be postponed.

A third turbine was already approved in 2002 when the water licence for the Aishihik dam was renewed.