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SOMBA K'E/YELLOWKNIFE
Mayor Gord Van Tighem is hopeful this week that terms of reference for a municipal subsidiary can be solidified by late February or early March.

Mayor Gord Van Tighem: Hopes terms of reference for a municipal subsidiary can be reached by spring. - NNSL file photo

The city is also in negotiations with Vancouver-based Corix Utilities to work out an agreement to move ahead with a geothermal extraction project at the former Con Mine. He hopes the talks will be finished by March.

"We are still at the point where the private sector proponent is working on their design phase," said Van Tighem, adding that there is no real timeframe. "We have to cost that out and see if it still works with the business plan."

"(Corix) will at some point in the next month or so hopefully come back to talk to us again."

Last month council passed a bylaw which formed a subsidiary to provide proof to the federal government that there was a plan to extract geothermal energy to heat 39 buildings in the downtown core. Councillors were informed that part of the qualifications for a $14.15 million Natural Resources Clean Energy Fund included that money had to be diverted to a subsidiary body – like a municipal Crown corporation -- at arm's length from the city. This was to offset the image that money was going directly to the municipality. City administrator Bob Long said last month this was required by Jan. 2 for the city to remain eligible for the money.

"They aren't going to just throw money at you and say, 'Here, have fun,'" said Van Tighem.

What remains uncertain is what the subsidiary will actually do beyond what the city has described as "operate the community energy system, maintain the direct relationship with customers, and control rate setting." The terms of reference and outline are being developed by administration for councillors to approve over the next month, said Van Tighem.

Jack Touhey, vice-president of public and government relations for Corix, said Wednesday the company is aiming for a late February and early March time frame to complete the deal.

"There is not a deal done, but it is progressing," he said. "The negotiations for the contract are proceeding concurrently with the preliminary design process. We are continuing to go through the designing aspect of it, which will determine the costs and so forth."

Touhey says Corix is providing designs to fit the city's district energy system model, which includes both the structure of the business as well as the physical aspects of the energy system.

"So that is where a fair amount of work right now is going on, in the preliminary design phase," he said. He added that items such as the hot water distribution system's path and the location and costs of an energy plant are being discussed. Fitting in the costs of local construction is also being considered, he said.

Van Tighem said the city subsidiary for now remains "a company on paper" and there are no plans to hire staff or to have an office.

Touey says the creation of a subsidiary will not effect how Corix negotiates the deal, whether it is directly with the city or with a municipal corporation.

City councillor David Wind said he feels it is important council see a deal between the city and Corix before agreeing on a direction for the subsidiary.

"If council has given authorization for the subsidiary to be established, how it would function and be staffed would have to be worked out," Wind said. "But it seems to me that we can only approve those details after we know the details of the agreement between the city and Corix."

Coun. Cory Vanthuyne says there are still a lot of unknowns on the status of the project and that he would like an update at the next municipal services committee. He says, however, that he would have liked to see a terms of reference sooner than what the mayor is proposing.

However, unlike Wind, he says it is better to have the subsidiary in place first.

"The subsidiary has to have its terms of reference in place and needs to know what its job is prior to having an agreement with Corix," said Vanthuyne. "Our body that is representing the citizens of Yellowknife, which is the subsidiary, has to have its outlined governance and terms of reference in place."

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