Federal, N.W.T. gov'ts investing $1.2M for proposed Taltson expansion

The territory's largest proposed energy project is inching closer to reality.

The federal and Northwest Territories governments are investing $1.2 million into preliminary work for a proposed expansion of the Taltson Hydroelectricity Expansion Project.

In Yellowknife on Wednesday, Dominic LeBlanc, the federal minister of northern affairs, announced about $1.1 million in federal money for feasibility and engineering study work and Indigenous engagement. The Northwest Territories government will contribute $120,000.

The expansion is, "for our government, a very big priority," said LeBlanc.

He hinted more money could come down in the spring, but "those decisions haven't been finalized."

The Taltson Hydroelectric facility, located about 64 kilometres north of Fort Smith, N.W.T., provides power to Fort Smith, Hay River, K'atl'odeeche First Nation, Fort Resolution and Enterprise.

The proposed expansion project would more than triple the power plant's generation capacity from 18 megawatts to 60 and link electrical grids north and south of Great Slave Lake via an underwater cable.

The goal is to eventually connect to the Northwest Territories to the North American power grid.

An expansion of the Taltson hydro system has been on the territorial government's wish list for years. Infrastructure Minister Wally Schumann said Wednesday that the territorial government spent $18 million on engineering and design work over a decade ago.

If a case can be made to proceed with the expansion, the territorial and federal governments would look to "raise the significant money necessary to do the project" in three years, said LeBlanc.

Proponents of the project say it could cut down on the need for backup diesel, as well as help keep electricity rates steady for residents and businesses.

Cutting greenhouse gas

The territorial government says that transmitting 60 megawatts of energy to the mines could cut greenhouse gas emissions by 224 kilotonnes. This amounts to 44 per cent of the territory's reduction target under the pan-Canadian climate change framework.

The expansion would also create jobs and lay a foundation for energy trade between the territory and the provinces.

But the project is ambitious.

Though there is not an up-to-date cost estimate, a 2014 business case priced the expansion at $1.2 billion.

Key to the project's viability is a market that is, a mine to buy up all the additional power. Such a customer has yet to emerge.

An earlier attempt to expand the Taltson hydro dam failed in 2013 because demand for the extra energy wasn't there.

The expansion would also require significant buy-in from the federal government.

"We're not naive to the idea that the Government of Canada will have to be the major partner," said LeBlanc, adding, "frankly, we're excited about the potential of this project."