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SOMBA K'E/YELLOWKNIFE
City council's decision last week to pursue funding for a smaller-scale district energy system to heat only city buildings will most likely mean parting ways with private partner Corix Utilities.

The Vancouver-based company had entered into an agreement-in-principle with the city in July 2011 to build a downtown district energy system after residents rejected the city's proposal in a referendum to borrow up to $49 million to fund the project.

Former mayor Gord Van Tighem had claimed as late as last August that the project was still a go under Corix but city officials acknowledged last week there have been no meetings between the utility company and the city since last spring.

Mayor Mark Heyck confirmed Wednesday that it was unlikely Corix would have a role in the new, smaller-scale project. Last week council saw initial plans for district heating of city buildings, and approved an administration request to reapply for the same $14.1-million grant from Natural Resources Canada that the city had sought to fund the geothermal portion of the downtown district heating plan.

"Unlike the previous project that included a number of private customers hooking up to the system, this new particular system is related to city facilities," said Heyck.

"So it is a bit of a different model. Primarily we are at such an early stage that we haven't gotten to a point of design or how we would actually operate the system."

City councillor Cory Vanthuyne, who supported downtown district energy last term, said he feels the city "hit the wall" over the last year when trying to sell district energy in part because the city could not build a solid business plan. When this didn't happen and customers could not be found, Corix didn't come forward with a supporting business plan either.

"In my view, part of the reason the city couldn't put forward a solid business plan is because the city's potential partner, Corix Utilities, couldn't step forward with a concrete business plan," said Vanthuyne. "They (Corix) kept themselves in this due diligence mode and never took the next step to help build the confidence you need with an initiative such as that."

Vanthuyne said council needs to have a discussion on officially terminating the project. As of now, Heyck said technically the project is still in existence.

"We've done a lot of research and analysis and data collection for the project and the intellectual property still belongs to the community. So we have that information," he said.

"The decision to go forward with this different project ultimately means the downtown district energy system is not being pursued at this time. But it doesn't preclude a private entity or the city in the future at looking at that concept again."

Several calls were made over the last week to Corix but the company did not respond by press time.

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