YUKON ENERGY CORPORATION 20-YEAR RESOURCE PLAN: 2006-2025 January, 2006 and SUPPLEMENTAL MATERIALS May, 2006 YUKON ENERGY CORPORATION SUBMISSION JANUARY 2006 20-YEAR RESOURCE PLAN TABLE OF CONTENTS CHAPTER 1 - INTRODUCTION 1.0 INTRODUCTION................................................................................................................... 1-1 1.1 PURPOSE OF THE SUBMISSION................................................................................. 1-1 1.2 SCOPE OF SUBMISSION............................................................................................ 1-2 1.3 RESOURCE PLANNING FRAMEWORK.......................................................................... 1-3 1.3.1 Power Capacity and Energy in Yukon.............................................................. 1-4 1.3.2 Basic Planning Process .................................................................................. 1-6 1.3.3 Resource Plan and Specific Capital Project Decisions........................................ 1-8 1.4 CURRENT YUKON SITUATION COMPARED WITH 1992 ................................................ 1-9 1.5 SUBMISSION OVERVIEW ........................................................................................ 1-13 CHAPTER 2 – BACKGROUND ON YUKON POWER SYSTEMS 2.0 BACKGROUND ON YUKON POWER SYSTEMS.......................................................................... 2-1 2.1 OVERVIEW OF GENERATION FACILITIES AND TRANSMISSION IN YUKON.................... 2-1 2.1.1 Generation in Yukon ..................................................................................... 2-3 2.1.2 Transmission in Yukon .................................................................................. 2-7 2.2 OUTCOMES FROM THE 1992 REVIEW ........................................................................ 2-8 2.3 MAJOR EVENTS AFFECTING POWER SYSTEMS SINCE 1992 ....................................... 2-13 2.3.1 Closure of the Faro Mine ............................................................................. 2-13 2.3.2 The Growth of Secondary Sales ................................................................... 2-14 2.3.3 Shift to Direct Management ......................................................................... 2-14 2.3.4 Whitehorse Rapids Generating Station Fire Rebuilding Project ........................ 2-15 2.3.5 Renewal of Water Licences at Whitehorse, Mayo and Aishihik......................... 2-15 2.3.6 Mayo-Dawson Transmission Line.................................................................. 2-16 2.3.7 System Upgrades and Changes.................................................................... 2-17 2.4 BULK ELECTRICAL SUPPLY PLANNING SINCE 1992 ................................................... 2-17 2.4.1 Ongoing Yukon Energy Infrastructure Planning Process ................................. 2-18 2.4.2 BC Hydro Inventory of Potential Future Hydro Supply Options ........................ 2-18 2.4.3 Bulk Electrical Supply Infrastructure Condition Assessment Work .................... 2-18 2.4.4 Generation Capacity Planning Criteria Review................................................ 2-18 2.4.5 Demand Side Management and the Energy Solutions Centre .......................... 2-19 CHAPTER 3 – SYSTEM CAPABILITY 3.0 SYSTEM CAPABILITY............................................................................................................ 3-1 3.1 CURRENT FACILITIES CONDITION ASSESSMENT........................................................ 3-1 3.1.1 Yukon Energy’s Response to Condition Assessments........................................ 3-2 3.1.2 Condition Assessment Findings Relevant to Resource Planning ......................... 3-5 Page i Table of Contents YUKON ENERGY CORPORATION SUBMISSION JANUARY 2006 20-YEAR RESOURCE PLAN 3.2 CAPACITY AND ENERGY OUTPUT OF EXISTING FACILITIES ........................................ 3-6 3.2.1 Whitehorse Rapids Hydro Firm Capacity.......................................................... 3-7 3.2.2 Aishihik Hydro Capacity and Energy................................................................ 3-9 3.2.3 Mayo Hydro Capacity .................................................................................. 3-10 3.2.4 Whitehorse Diesel Capacity.......................................................................... 3-10 3.2.5 Fish Lake Hydro (YECL) Capacity.................................................................. 3-11 3.3 CAPACITY PLANNING CRITERIA REVIEW ................................................................. 3-11 3.3.1 Background and Overview on the Evolution of Capacity Planning .................... 3-12 3.3.2 Yukon Energy’s Previous Capacity Planning Criteria (prior to late 2005) ........... 3-14 3.3.3 Previous Yukon Criteria Compared with Criteria for Other Jurisdictions ............ 3-17 3.3.4 New Criteria Adopted by Yukon Energy......................................................... 3-20 3.3.5 Rationale for Adopting a Two-Part Criteria on WAF and MD............................ 3-21 3.3.6 Implications of the Adopted Criteria ............................................................. 3-23 3.4 SUMMARY: REVISED CAPACITY PLANNING CRITERIA ............................................... 3-25 CHAPTER 4 – NEAR TERM REQUIREMENTS 4.0 NEAR TERM REQUIREMENTS .................................................................................... 4-1 4.1 PLANNING APPROACH AND TIMELINE ....................................................................... 4-1 4.2 REQUIREMENTS....................................................................................................... 4-3 4.2.1 Basis for Non-Industrial Load Forecasts .......................................................... 4-4 4.2.2 Basis for Near Term Industrial Load Forecasts................................................. 4-7 4.2.3 Near Term WAF Load – Cases Analyzed Based on Non-Industrial and Industrial Requirements............... 4-7 4.2.4 Base Case Requirements ............................................................................... 4-8 4.2.5 Low Sensitivity Case ................................................................................... 4-10 4.2.6 Base Case with Mine Loads.......................................................................... 4-12 4.2.7 High Sensitivity Case Including Mines ........................................................... 4-14 4.3 OPTIONS............................................................................................................... 4-16 4.3.1 Overview of “Opportunity” Project Options.................................................... 4-17 4.3.2 Aishihik 3rd Turbine.................................................................................... 4-19 4.3.3 Marsh Lake Fall/Winter Storage ................................................................... 4-20 4.3.4 Carmacks to Stewart Transmission Line Project ............................................. 4-22 4.3.5 Overview of Major Capacity-Related Project Options ..................................... 4-26 4.3.6 Mirrlees Life Extension Project ..................................................................... 4-28 4.3.7 Whitehorse Diesel Replacement/Expansion Project ........................................ 4-32 4.3.8 Aishihik 2nd Transmission Line Project ......................................................... 4-34 4.3.9 Supplemental Project Options ...................................................................... 4-38 4.4 ASSESSMENT......................................................................................................... 4-39 4.4.1 Assessment of Opportunity Projects ............................................................. 4-40 4.4.2 Assessment of Capacity-Related Projects ...................................................... 4-46 Page ii Table of Contents YUKON ENERGY CORPORATION SUBMISSION JANUARY 2006 20-YEAR RESOURCE PLAN 4.4.3 Schedule and Sequencing of Alternatives ...................................................... 4-53 4.4.4 Rate related Impacts of Near Term Options .................................................. 4-53 4.5 PROPOSED ACTIONS.............................................................................................. 4-57 CHAPTER 5 – INDUSTRIAL DEVELOPMENT SCENARIOS AND OPPORTUNITIES 5.0 INDUSTRIAL DEVELOPMENT SCENARIOS AND OPPORTUNITIES .................................. 5-1 5.1 PLANNING APPROACH AND TIMELINE ....................................................................... 5-1 5.1.1 Need to Consider and Balance Several Key Factors .......................................... 5-3 5.1.2 Regulatory and Policy Framework .................................................................. 5-7 5.1.3 Planning Framework ..................................................................................... 5-9 5.2 REQUIREMENTS..................................................................................................... 5-12 5.2.1 Scenario 1: A 10 MW WAF Industrial Scenario............................................... 5-18 5.2.2 Scenario 2: A 25 MW WAF Industrial Scenario............................................... 5-22 5.2.3 Scenario 3: A 40 MW WAF Industrial Scenario............................................... 5-24 5.2.4 Scenario 4: A 120 to 360 MW WAF Alaska Highway Natural Gas Pipeline ......... 5-26 5.3 OPTIONS............................................................................................................... 5-27 5.3.1 Overview of Resource Supply Options..........................................................