The Yukon and British Columbia governments have agreed to jointly plan a transmission line connecting their power grids, with project costs in the billions and a timeline of over a decade. A local management consultant says there may be better ways to meet the territory’s electricity needs.

The Yukon-BC Grid Connect project aims to enable two-way electricity transmission, enhancing energy security and offering “mutual economic prosperity,” the premiers of the two governments said in a joint statement. Signed May 23, their Memorandum of Understanding (MOU) “will guide intergovernmental collaboration” through the exploration and planning phases of connecting the two grids.

“It’s an agreement between both premiers’ offices at the political level, just that this is a priority,” Yukon Premier Ranj Pillai told Yukon News.

The planned 765-kilometre, 200-kilovolt transmission line is expected to cost around $2 billion and will take more than 10 years to complete. It will require close cooperation with Indigenous communities along the route, and will be guided by “advancing reconciliation with affected First Nations, including through Indigenous partnerships and ownership,” says the joint statement.

Last year, the federal government announced $40 million for a feasibility study of the power line. The study will update one released in 2015, in which consultancy firm Midgard said it “cannot see a plausible scenario, given the assumptions, where Yukon profitably imports electricity.” Midgard also questioned the reliability risks the territory would face if it depended on another jurisdiction for its electricity supply.

Now, Pillai is pitching the power line as “a nation-building project” that would benefit all of Canada by boosting Arctic and northern sovereignty and security. Proponents also emphasize the environmental benefits, noting that the corridor would facilitate the flow of clean electricity northward. This could reduce reliance on liquefied natural gas (LNG) imports for mining operations in the region, allowing operators to market their resources as lower carbon, writes Yukon News.

The MOU doesn’t come with any financial commitment. But with the transmission line’s price tag roughly equal to the territory’s total annual budget, the cost cannot “be put on the back of Yukoners,” said Pillai, who called for more funding from Ottawa.

In an interview last fall, Yukon Member of Parliament Brendan Hanley said connecting the grids would allow the territory to export surplus energy and diversify its energy sources as the climate becomes more variable. Currently, Yukon is isolated from the North American grid and primarily powered by hydroelectric dams. But rising demand and low reservoir water levels have increased the proportion of energy it sources from fossil fuels. The territory also relies on rented diesel generators to meet peak power demand.

With the grid connection years away, opposition leaders have questioned how Yukon will address its immediate energy challenges, Yukon News reported last fall. Economist Keith Halliday writes the massive transmission line is but one possible solution to the territory’s energy troubles. Clean energy needs could also be met by building several smaller, “bite-size” projects in the area to add to the territory’s own capacity.

“Instead of huge surplus intertie capacity in the initial years, you build up generation capacity in small steps as demand for electric vehicles and heat grows,” Halliday says. These smaller projects would create long-term employment in the Yukon economy, rather than the powerline construction jobs that would disappear when the project is finished.

“Instead of outsourcing power jobs to B.C., you create well-paid engineering and union jobs here,” Halliday writes. “Instead of B.C. investors getting the returns, they go to Yukon First Nations development corporations and our private sector.”