Premier Dennis Fentie says talks are ongoing with ATCO, which owns the Yukon's private power company, but stressed he does not intend to privatize Yukon Energy, the public utility. (CBC)

Yukon Premier Dennis Fentie denies allegations he's working to privatize the Yukon Energy Corp., although he says talks are ongoing with ATCO to "rationalize" the territory's two power companies eventually.

Rumours that Fentie plans to privatize the Yukon's public utility surfaced after half the board of directors with the Yukon Development Corp., the Crown corporation that owns Yukon Energy, resigned en masse this week.

The four board members who quit, including chairman Willard Phelps, accused the Fentie government of meddling in the board's business, which is supposed to be at arm's length from government.

"Meddling would be contrary to legislation," Fentie told CBC News in an interview Thursday.

"We, as a government, are responsible to provide direction to a Crown corporation, and, of course, it's in keeping with protecting the interests of the ratepayer."

As for the privatization claims, "Let me be very clear: there's no privatization of the energy corporation in the Yukon. None whatsoever," Fentie said.

Fentie said ongoing talks with ATCO, the Alberta-based company that owns Yukon Electrical Company Ltd., are normal.

"You know, ATCO's a player here, so discussions are probably going to happen and will continue to happen into the future," he said.

Yukon Electrical buys power from Yukon Energy and distributes it to customers across the territory. Fentie said talks with ATCO are aimed at "rationalizing" the two companies.

But Liberal Opposition Leader Arthur Mitchell said he believes the four board members quit because Fentie is improperly directing those talks.

"They use the word 'rationalization,' but I think what they're really looking at is privatization, and I don't think it's in the best long-term interest of Yukoners," he said.

NDP Leader Todd Hardy, a former Yukon Energy board member himself, said he also believes the premier is forcing the privatization agenda on the Yukon Energy directors.

Both leaders are now demanding a full explanation from Fentie.