Feds put up $71M for Mayo hydro dam expansion

The federal government has put up half the money needed to expand Yukon Energy Corp.'s Mayo dam in central Yukon, and to build a new transmission line linking the dam to the territory's hydroelectricity grid.

The federal and Yukon governments are each committing $71 million for the project, officials announced Friday. The federal share is the first to be announced under the government's $1-billion Green Infrastructure Fund.

"I think the reality is that we have allocated approximately more money in the last several months than any Liberal government in previous history has done in a full year," Alberta Conservative MP Brian Jean, who represented the federal government for Friday's announcement, told reporters in Whitehorse.

Jean said funding for the Mayo project was fast-tracked because work can start on it right away. Once completed, the expanded dam will help limit the use of diesel to generate power in the territory, he added.

Yukon Premier Dennis Fentie said his government's $71-million contribution will comprise a mix of funding sources.

"We're now in the process of working with First Nations on possible partnerships. We're going to provide that opportunity to them for investment," Fentie said.

"That investment from First Nations will result in the return of revenue to First Nations. The balance remaining will be borne by Yukon."

The work includes building a new power plant at the Mayo dam and linking the main transmission lines in southern and central Yukon to the dam between Pelly Crossing and Stewart Crossing.

The project will increase the reliability of the Yukon's hydroelectric system and lower costs to customers, Yukon Energy president David Morrison said.

"The security and reliability of the future requirements of energy within the territory have to be met, and they have to be met quickly," Morrison said.

Crews with Yukon Energy are already busy on some of the preparation work. Morrison said both the new power plant and transmission line should be completed by the end of 2011.