The Yukon Electrical Company will compensate two Whitehorse First Nations for rising and falling water levels from its Fish Lake hydro plant.
The fluctuating water levels may affect how fish breed.
The Kwanlin Dun and Ta'an First Nations were major intervenors at Yukon Water Board hearings to relicense the 60-year-old hydro plant.
The Yukon Electrical Company won't disclose terms of the compensation. Spokesperson Jay Massey will only say it's mutually beneficial to all parties.
"They have some traditional territory up there and we see Fish Lake Hydro as very important part of the electrical grid here in the Yukon so we wanted to keep it operating in its current state and we were able to come to agreements with them to keep it operating in its current state," said Massey.
The small hydro plant below Fish Lake has been supplementing Whitehorse energy needs since the mid-1950s. It still contributes more than one per cent of Yukon's energy needs with at least a million dollars a year in green power.
"That one to two per cent has also avoided diesel costs and emissions from that, so it's a small part but an important part," said Massey.
Residents in the area are demanding assurances their homes won't be flooded in high water years.
The Yukon Water Board is now considering conditions it will place on a new 25-year licence.