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SOMBA K'E/YELLOWKNIFE
A Yellowknife city councillor says he may rethink his support for a downtown district energy system if the federal government doesn't come through on a $14.15-million grant for the geothermal portion of the project.

The city has been trying to get a district energy system in place to heat 39 downtown buildings since 2007 when the possibility of using geothermal energy from the defunct Con Mine first came into discussion. - NNSL file photo

The long sought after federal money has been a major piece of the district energy puzzle ever since the city announced the possibility of tapping heat from warm water filling the underground workings at the now defunct Con Mine in 2007.

City councillors contacted last week said they have not been updated on the district energy file since the new year and were uncertain if the money is still available.

"My thing is that if we don't have the $14 million available to us, I have to rethink our whole position to this," said city councillor Cory Vanthuyne, who said city council has been left in the dark for most of the year.

"If we do have access to the $14 million - and that has not been confirmed to us at council - this is all the reason why I'm asking for an update from administration.

"If, in fact we have it, I stand by the fact that I want it earmarked for the exposure for geothermal capacity and seeing what opportunities we can in fact get from geothermal heat at Con Mine."

Last year, the $14.15 million was conditional on obtaining a favourable vote in a citywide referendum, and would only fund the geothermal portion of the project.

The referendum question asked residents to approve city borrowing of up to $49 million, which would have proved to the federal government that the city had the financial capacity to take on a district energy system.

The plan calls for a mix of geothermal - providing it's feasible - with wood pellets or diesel feeding a central boiler unit that would pump heat through a series of underground pipes to 39 downtown buildings.

Voters rejected the borrowing scheme but the city is still hopeful it can get the grant should its selected private partner, B.C.-based Corix Utilities, agree to build the district energy system. That still hasn't happened even though 10 months have passed since Corix and the city signed a tentative memorandum of understanding for the company to take on the lion's share of the $60-million project.

Yellowknifer contacted Corix last week to ask about the status of its negotiations with the city but Jack Touhey, the company's vice-president of public and government affairs, said the city has instructed the company not to speak to the media.

"We have been asked by our client - the city - not to complete interviews at this time," he said.

"While I am reluctant to do that because we like to be open with all the media and whatever else - I am going to respect their wishes at this point in time."

UNDER REVIEW

Natural Resources Canada, meanwhile, confirmed to Yellowknifer that the city's application for geothermal funding is still being reviewed.

"The proposal from the City of Yellowknife under NRCan's Clean Energy Fund for a citywide renewable district energy system, is still under consideration," stated Paul Duchesne, Natural Resources's manager of media relations, in an e-mail last week.

"The department continues to have discussions with the city to see if an agreement can be reached. "

When asked what would happen if the federal government didn't come through, Mayor Gord Van Tighem said it would make proceeding with the project difficult.

"Well, we would try and find out what the next project would be," he said, without specifying what that project might be. "But that would throw a big kink in it."

Council approved the creation of a municipal subsidiary or public utility last December, in part to provide proof to the federal government that the city still had a plan for geothermal extraction.

The subsidiary was approved with the understanding that terms of reference would follow in February. Those terms of reference remain incomplete.

Coun. Mark Heyck said, however, there is not much point in having terms of reference right now because they would be tied to having a done deal with Corix. Negotiations with Corix were expected to have been complete in March.

"That (the terms of reference) hasn't been developed further at this point because it would be dependent on what a final agreement with Corix would look like," said Heyck.

Van Tighem said he hasn't met with Corix officials this year and doesn't expect to until at least the summer. Senior administration, however, is continuing to try and hammer out a deal, he said.

"It is not a matter of one or two things holding up a deal," said Van Tighem. "There are things under discussion. Things get developed and people review and people ask questions. It goes around and around for a while. Eventually something will come out of it."

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