Mr. Speaker, another question I have for the Minister: what is the GNWT’s long-term financial plan insofar as the Taltson Hydro expansion goes, including any corporation owned by the GNWT aside from and including the diamond industry? Thank you.
That would be difficult to provide an answer at this point. The long-term fiscal plan, again, of the partnership is, one, the partnership will have a board of governors, a governance council set up to make these business decisions. The business model that’s been put in place sees this project being viable because of the power purchase agreements and the return on investment through those after paying down the initial portion that would grow, of course, would grow faster if we were to do the full expansion up to I believe it’s 56 megawatts. Thank you.
Mr. Speaker, considering the difficulties, I believe that this expansion or the partners in this expansion are going to have to go through the area, the eastern route, to negotiate anything with the Lutselk'e First Nations. I can’t see any of that being settled ahead of the land claim, and I can’t see that being settled after the land claim because of the position as taken and the value that Lutselk'e First Nation considers on the land. I would like to ask the Minister what examination has occurred for other potential users insofar as in relation to where the transmission line runs, actually, to try to get them to see if he’s examined other routes due to potential users or so on. I’m trying to say that. Thank you.
Mr. Speaker, as a result of the environmental review process, additional routing is being looked at, and that’s to incorporate the concerns raised by the Lutselk'e band when it comes to especially the area of the Lockhart River and the importance that river is held in by that band. So there is alternate routing looked at in that area still along the East Arm to try and deal with that and still get power through the process.
Right now, if we were to talk in today’s business case, there are no other potential customers except existing customers. There are future potential customers that could be looked at, but we don’t even know if, until they get through a regulatory phase, there will be a mine and how it will be done. We’ve got a long journey on that side to go. We see that as a potential future customer, yes, and we will have to look at how we go forward on that basis. But right now this business case is built on existing customers that we could bring on to our grid system. Thank you.
Thank you, Mr. Roland. Your final supplementary, Mr. Beaulieu.
Thank you, Mr. Speaker. Can the Minister tell me if the Taltson Hydro expansion has potentially viable partners? Thank you.
Mr. Speaker, the partnership that’s been formed, the partnership agreement that’s been started and worked on and has been initialled by the other partners, we, as the GNWT, as the sole shareholder of the Hydro Corporation and down through to, well, it would be the NWT Energy Corporation, have yet to sign that. We have to review that to see if, in fact, that is the best business case model that we could support of this project, and we’ve asked for some additional time to review that document. We don’t want to get into a situation where we’ve not protected our full interests, as Members have been laying out. Thank you.
Thank you, Mr. Roland. The honourable Member for Kam Lake, Mr. Ramsay.
Thank you, Mr. Speaker. Mr. Speaker, I’d like to join my colleagues in asking the Premier some questions on the Taltson Hydroelectric Expansion Project and the government’s involvement with Deze Energy Corp. First of all, I think the question that I’d like to ask the Premier, and I know a number of folks across the Northwest Territories watch the proceedings of the House, I’d like to ask the Premier if he could explain to the public and to the Members of this House exactly how the $700 million or the estimated cost of the expansion and the transmission line is going to be paid for. Thank you.
Thank you, Mr. Ramsay. Mr. Roland.
Thank you, Mr. Speaker. Mr. Speaker, the project will be paid for by the power purchase agreements, the sale of energy to the mines. That’s how it’s going to be paid for. Thank you.
Mr. Speaker, I thank the Premier for that. I was thinking more of the upfront cost, the initial capital investment of upwards of $700 million. How will that be arrived at? Thank you.
Mr. Speaker, once the power purchase agreements are signed, then those are bankable in the sense of being able to go out and go to the financing market so that they can then get the money to build this facility. The issue, as was laid out to Members and was raised earlier, was during the construction phase, until the power can flow there needs to be a backstop. There were initial requests made in the previous government to have a request made to the federal government to give an exemption around this project. The last government, the response wasn’t favourable to that request. The work has continued and the idea…and there’s been some discussion lately about finding a private sector partner to step in and carry that and see that part of the project started. Thank you.
There certainly are some parallels here between the government’s participation with the Deh Cho Bridge Corporation and Deze Energy Corporation. We backstopped the Deh Cho Bridge Corporation in the early stages, to the tune of almost $10 million. I’d like to ask the Premier how much investment the Government of the Northwest Territories, through the Power Corporation and the Hydro Corporation, have invested in Deze Energy. Thank you.
Since the start of this, the concept of this has been put together. It’s been, I believe, and I’ll have to double check the information, but I believe it’s in the neighbourhood of $13 million of investment since the previous government into the life of this government. Thank you.
Thank you, Mr. Roland. Your final supplementary, Mr. Ramsay.
Thank you, Mr. Speaker. Mr. Speaker, considering we have a substantial investment of public funds in Deze, I’m just wondering how we account or how we provide oversight as a government to the work of Deze Energy. I’ve been a Member here since 2003 and we’ve talked about power purchase agreements in this House for years and there still aren’t any bankable power purchase agreements that the corporation, the Hydro Corporation, the Power Corp and Deze have entered into with any mine. I’m just wondering, again, when can we expect any movement on power purchase agreements, because it is taking an inordinate amount of time for these guys to work out a deal with the existing mines. Thank you.
Mr. Speaker, to be fair, the previous governments that initially got this concept together put the pieces together, presented to Members the idea on how to move forward through this partnership. At that point there is no number to be able to say through, for example, the environmental review process could add additional dollars much like by the environmental review process looked at it, adjusting the line through the East Arm, that could add some dollars to this project. We could not sign power purchase agreements until we get through the environmental phase, because we need to know the final numbers and cost of construction. That could be then calculated to the kilowatt hour sale of energy. We are expecting in the very near future to be able to come forward on that, because, again, there is no project without these power purchase agreements. Thank you.
Thank you, Mr. Roland. The honourable Member for Nahendeh, Mr. Menicoche.
Thank you, Mr. Speaker. I won’t be asking the Premier any questions. Mr. Speaker, my questions are actually for the Minister of Transportation just with regard to the commitment to get the section of Fort Providence junction towards Fort Simpson, I believe is Axe Handle, chipsealed in this coming fiscal year. I would just like to ask how much work has begun on the process of awarding the work or getting the work underway early in this spring. Thank you, Mr. Speaker.
Thank you, Mr. Menicoche. The honourable Minister of Transportation, Mr. Michael McLeod.
Thank you, Mr. Speaker. I am trying to remember if the Member asked this once or twice before. Mr. Speaker, I could actually go to our staff and get some firm dates of when we are anticipating the contract to start. The contract went out for tender last year, I believe. We have a contractor that was awarded the contract, except timing of the season and weather do not permit or was not favourable to move that forward, so we expect that would happen as soon as the weather warms up and the conditions are favourable; early in the summer season or late spring I would anticipate. Thank you.
Mr. Speaker, constituents want assurance that work will be completed with all the talk of the Deh Cho Bridge and debt wall, et cetera. I think the Premier did indicate in yesterday’s Minister’s statement that this coming fiscal year there will be no impact. I would just like to get the Minister’s assurance as well. There are several other Transportation contracts for the Nahendeh riding that work will proceed this coming year. Once again, I urge to get these contracts out of the gate as early as possible. Thank you, Mr. Speaker.
Mr. Speaker, so the Member could sleep at night, we will assure him that all the projects are moving forward as we have projected and as we have reported to the Members with our capital planning over the last year and this year. We don’t anticipate any effect as a result of the Deh Cho Bridge. The projects that were carried over will move forward as soon as possible if conditions are permitting and the other contracts are already being considered for awarding too. I think we are going to see a lot of work happening this summer. We should have a good construction year, again depending on rain and weather. Thank you.
Mr. Speaker, I am glad to hear those reassurances from the Minister. My constituents will be pleased to hear that. As well, I would like to ask the Minister, come this spring, if he will come to the riding and we will do a bit of a tour to each community and discuss all the other Transportation related important projects. Mahsi cho.
Mr. Speaker, I would welcome the opportunity to attend a visit to communities in the Member’s riding given that we are investing so heavily in his riding that we have the opportunity to share that information and to also discuss other issues that the Member has been raising over the last while and have a chance to talk to the leadership. So I would certainly accept the invitation and make arrangements to travel with the Member to his riding. Thank you.
Thank you, Mr. McLeod. The honourable Member for Hay River South, Mrs. Groenewegen.
Thank you, Mr. Speaker. I think that this dialogue we are having today on the Taltson expansion and the delivery of hydro to the diamond mines is a very good discussion. The Premier has been doing an excellent job of responding to these questions. I would bet you the people out there in the Northwest Territories listening to this are getting a much better understanding of how this whole thing is working. I have been trying to listen to it through objective ears. I think we are accomplishing that.
Mr. Speaker, we cannot deny that the diamond mines have been a tremendous asset to the economy in the Northwest Territories. They have brought jobs. They have spent money. The expansion of the Taltson and the construction of the new transmission line would also bring tremendous economic benefits to the Northwest Territories during the construction phase. The power to the diamond mines would definitely reduce greenhouse gas emissions. That is also a good thing.
Mr. Speaker, what I hear my colleagues saying, if I can put it in this kind of analogy, is that we have this tremendous hydro resource in the Northwest Territories, but the only people who can afford to access it are entities such as the diamond mines. It is like having a banquet and we own the banquet hall and we are putting on the food, we are doing everything but we can’t afford to buy the ticket to come to the banquet because we don’t have that kind of resources.
The diamond mines have got the money, the power purchase agreement. They have the money, but what we are asking for our people who want us to be involved in businesses that require cheaper power and for our residents who could have their cost of living positively impacted by the hydro is we are asking, other than the 30 percent ownership of the GNWT and the dividends, is there any other way that we can configure this so that we could pick up benefits for our residents and our small businesses along the way. We just want to in some way benefit from this resource. Thank you.
Thank you, Mrs. Groenewegen. The honourable Premier, Mr. Roland.
Thank you, Mr. Speaker. I think those benefits in a number of ways are felt throughout our communities. For example, the IBAs that are signed with the mines to do that. More importantly, through the contracts that the mining companies have in a number of our communities, through the growth of our communities, because we have new residents who moved into our communities and bought homes.
It was not too long ago when we looked in our communities and Hay River would be one of those where the housing market wasn’t as strong, has now turned around and is healthy. I wish I could say the same in a number of other communities.
I think when we look at those pieces to try to find the benefits, there are a number of factors and that would be for our corporate tax, for our personal income tax that flow into our general revenues. The other issue which becomes a problem for us is if we looked at connecting a new grid to our existing rate base. The cost that would be borne by that rate base is too heavy. For example, right now we are living off the life of industry in the past that has provided hydro now to our communities. We have benefited largely from that, but if we had to replace those facilities purely on the rate base of our customers now, that would be very difficult indeed. Thank you.
Mr. Speaker, the Premier went on to elaborate more on the benefits of having the diamond mines here. I am not arguing that at all. It is a tremendous benefit to the Territory. Hay River, Yellowknife, the IBAs, the many benefits that we have realized from the development of these diamond mines is unquestionable. However, we also have amazing hydro potential. What the Premier is saying is that we do not have the ability to finance that or pay for that for the private customers and residents of the Northwest Territories, but this single customer base by way of the diamond mines is the only business case that can be made for the distribution of additional power from the Taltson. Is that what he is saying? Thank you.
Mr. Speaker, without a customer at the other end, the project itself from a government perspective is unviable unless we are to get a huge influx of cash from the federal government or if we at this Assembly were to say take a portion of the dollars and put it purely towards this project.
This business case has been built on a customer; a number of customers in the sense of the mines. Future development, for example, and the Member has raised this issue of Avalon going forward, is important for us and looking to the future, but until we know if they’re actually going to make a decision to proceed, we have to weigh that with the fact that we know there’s a customer in place now.
The potential for our hydro development is to sell that power to a southern customer base is another option, but without a grid from southern Canada up here, again that is not economical for us. The future can spell that out for us and we have to keep those open. That is why I have directed and had our staff looking at having discussions between the Minister of ITI and companies like Avalon as well.
Let’s just say going forward that our 30 percent interest in this project, in this business case as the Premier speaks of it, if the dividends from that flow to this government are significant, is there any way of channelling, designating, allocating that dividend to do something to explore green and affordable energy options for other residents and businesses in the Northwest Territories?
I thank the Member for that clarification. In a forward looking position with PPA signed, with energy flowing, with the dividend being paid, and that’s how we would be able to do it. Right now through our Power Corporation, for example, we received a dividend to help offset our Territorial Power Support Program. We could use those funds as a dividend and target it towards alternative energies and enhancing that throughout the Northwest Territories. That is a possibility that we could do that as a shareholder in this partnership and draw down that cash and use it for things of that nature.
Thank you, Mr. Roland. The honourable Member for Weledeh, Mr. Bromley.
Thank you, Mr. Speaker. I’d like to pursue our long-suffering Premier here with another round on the Taltson project. This project, of course, is embedded within the context of our NWT Hydro Strategy which was put out in 2008. I’ve commented in the House here and in committee a number of times on that draft strategy. I believe other Members have. There is no evidence that I have seen that any of those comments have come to roost anywhere. I think that it’s time that we did finalize that strategy, because a good vision would help guide the development of projects such as this and avoid this sort of situation where we’re trying to do things a little bit johnny-come-lately.
Will the Premier commit to leading now a final discussion towards a vision for a 50-year Hydro Strategy?
Thank you, Mr. Bromley. The honourable Premier, Mr. Roland.
Thank you, Mr. Speaker. I would say I believe one of the Members mentioned 2003; 2003-2010 is not a johnny-come-lately approach. In fact, it has been well thought out and coming up with a business case that makes this work more. So towards the Member requesting that the Hydro Strategy be looked at again and updated with a more updated vision as to where we go, yes, let’s sit down together in committee. I believe there has been some commitment made and the Ministerial Coordination Committee along with Members would be glad to sit down and renew that strategy and update it. Many things have changed since that was initially put together.
Thank you, Mr. Speaker. I said johnny-come-lately because this side of the House at least is not convinced at all that sufficient consideration has been given to the public good in this project.
New considerations such as we have seen here today will not stop the process as the Premier implied. In fact, just last month Deze Corporation and the Hydro Corporation came up with a brand new un-contemplated place to cross Great Slave Lake. So now there’s a whole new process starting there. Of course, that means we don’t know what the routing is from the north side of the lake to the mines.
Another clarification is of course that what we’re saying does not preclude servicing the diamond mines at all. I don’t think we want that. So there is no settled route yet to the mines from the north side of Great Slave Lake, nor obviously a crossing point. This is an opportunity to focus on a crossing point that is selected in a way that provides the benefits of which we have been speaking. Will the Premier direct the Hydro Corporation to acknowledge and act on this direction?
The developer’s assessment report is out there. It has gone through hearings and, in fact, the Member has stated that the alternative line or routing in that one area is a result of that environmental review and the request by the band to go around the very significant and important area of the Lockhart River. That is being looked at. That option is being developed and will be presented on that basis. That additional cost would have to be borne by the project. That is what I keep going back to, to look at other routings, and we have provided that information to Members of those estimates of alternate routings, then add to the sale of kilowatt hours we need the customer base to be able to sell it to. If we can’t sell it, then we are unable to build it as we would have it in this day and age.
Again, I could request the Hydro Corporation representatives to make a presentation to committee on the latest.
Thank you, Mr. Roland. The time for question period has expired; however, I will allow the Member a supplementary question. Mr. Bromley.
Thank you, Mr. Speaker. I appreciate both commitments from the Premier there. Just to follow up on the greenhouse gas emissions, again the alternative routing does not preclude this, indeed, nor would we want it to. I think that’s a major objective that we want to retain.
The Hydro Corporation has shown incredible patience in awaiting agreements with the diamond mines for the power. Would the Premier direct the Hydro Corporation to also have discussions -- and this gets to his last point -- with Avalon, with Tyhee, with NICO, with Yellowknife, with Behchoko, to establish their interest and ability to pay for additional power, as some or all of these are somewhat diesel power consumers, as are the mines?
As the Government of the Northwest Territories we are keenly interested in working with partnerships out there and expanding our hydro, for example. I think the Member can, although we said earlier that he has spoken on a number of occasions around the Hydro Strategy and alternative energies and has not seen any fruition, I would say, to take a little bit of claim here. We over the next number of years are going to invest $60 million in alternative energies, run-of-the-river technology. So we’re starting to move in that direction. It is a slow process, granted, but we are in fact moving in that direction. We’ll continue to have that direction. I will send a message back to the board that they need to in fact engage with these partners, potential partners and potential customers, for replacement of our diesel facilities. That they continue that as well as our Ministerial Energy Coordinating Committee.
Thank you, Mr. Roland. Final supplementary, Mr. Bromley.
Thank you, Mr. Speaker. Of course the last two points we’ve raised means that they could operate together with an alternative routing to provide both for the diamond mines and these other customers in a way that would join the grids and we would enjoy those benefits.
My last question is related to the diamond mines. We’ve recently had occasion to meet with some of the companies and we’re pleased to hear that they’re extending their mine life considerably as they find new reserves and come up with lower cost means of production. This provides again a window of opportunity that might add a little tolerance to if this sort of approach did take another six months in the process.
How much have the diamond mines lives been extended, does the Premier know, in the last two or three years? My impression is it’s quite considerable and would reflect positively on the power agreements that we’re working on establishing.
I don’t have that information offhand, but my understanding -- and we’ll provide the accurate information from Minister Bob McLeod’s office -- for example is that Diavik is talking in the neighbourhood of 20 years. We’ve got Gahcho Kue about to potentially come on-line, which was a whole new mine. We have BHP that is the shortest mine life right now. And Snap Lake’s underground operation I have yet to get the information there, but 12 years, as I understand. If we were able to provide a cheaper form of energy that could potentially grow, that’s something that we hope to achieve through this process and is one of our goals.
