Documents prove ‘secret manoeuvring’: Phelps
For more than two weeks, Premier Dennis Fentie denied secretly negotiating the privatization of the Yukon Energy Corp. (YEC).
Photo by Vince Fedoroff
YUKONERS WERE MISLED - Willard Phelps, the former chair of the Yukon Energy Corp., discusses the controversy surrounding the corporation's fate at a news conference Wednesday.
For more than two weeks, Premier Dennis Fentie denied secretly negotiating the privatization of the Yukon Energy Corp. (YEC).
However, government documents obtained Wednesday indicate talks were in the advanced stages with Alberta-based ATCO to radically change the ownership structure of the YEC and electricity delivery in the Yukon.
Allegations of the back room dealmaking surfaced early this month, after YEC board chair Willard Phelps resigned over what he believed were Fentie’s designs to relinquish control of the energy corporation’s assets to ATCO, owners of the Yukon Electrical Co. Ltd. (YECL).
Phelps said the talks had been going on for months without the board’s knowledge.
When he learned of the secret discussions, Phelps said despite chairing the YEC board and its parent Yukon Development Corp. board, it was impossible to determine the details. On June 8, Phelps and three other board members resigned in protest.
In the aftermath of Phelps’ departure, Fentie held firm that his negotiations with ATCO were in line with his duty as premier and were about rationalization - whereby the YEC and YECL would harmonize infrastructure and service delivery.
On Wednesday afternoon, Phelps produced a May 27 “joint position paper” between the Yukon government and ATCO that shows much more than service harmonization was on the table.
The seven-page document reveals the government would have relinquished control of the Crown corporation to ATCO and considered permitting it to acquire more assets in a new corporation for a fraction of their value.
“This is a cover-up, and you’ve got it right there. Here’s the secret manoeuvring,” said Phelps.
“This goes to Fentie’s credibility and him deliberately trying to mislead the people . For a person who lived through Watergate, that’s what this is.
“This government is corrupt, and they’re trying to cover up.”
According to the deal, the YEC and YECL assets would be combined to create OPCO. Under this new “two company model,” ATCO wanted full control of a reformed board of directors, the power to pick OPCO’s president and to be granted hiring powers.
As for first nations representation on the OPCO board, according to the paper, “Further work is required to determine if a position for first nations on the board is required.”
While the document indicates the government wanted subsequent ownership of new or improved assets under OPCO determined case-by-case, ATCO pushed for 50-per-cent control determined on proportionate sharing of rate base expenses.
This would mean a $40-million project in which the public contributed $30 million, leaving $10 million as rate base investment. ATCO could claim ownership of half the finished product for $5 million, having split the $10-million rate base cost with YEC.
“I think it’s atrocious that (ATCO) would gain so much of our assets when government or industry paid for it,” said Phelps, who described the joint position paper as more than just talk. “It looks pretty damned close to a deal to me.
“And I’d suspect they’d come a long, long way to get to this stage.”
Fentie did not return the Star’s calling seeking comment on Phelps’ latest statements.
The Star was also told today that Jerome Babyn, Yukon Electrical’s general manager, is now on holidays.
In a letter published in Wednesday’s Star, Babyn wrote: “There has been absolutely no indication given from the government of the Yukon that the Yukon Energy Corp. is for sale.
“Likewise, ATCO has no interest in divesting itself of The Yukon Electrical Co.”
Doug Rutherford
Jun 25, 2009 at 5:31 pm
Election.
Now.
Throw out the liar.