MLA worried hydro expansion in Northern Canada is ‘subsidy’ for mining project

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A proposed transmission line could connect the Tlicho community of Whatì to the Snare hydro system. (Northwest Territories Power Corporation)
A Yellowknife, Northwest Territories MLA is questioning whether a proposed transmission line connecting Whatì, N.W.T., to the Snare Forks hydroelectric facility is for the public good or is a way to help a nearby mining company lower its electricity costs.

Kevin O’Reilly wants to know why the government is looking to build a power line with a 13-megawatt capacity for a community that only needs 1.2 megawatts.

He wonders if the power line would act as a “subsidy” for Fortune Minerals Limited and its proposed NICO project — located 50 kilometres northeast of Whatì — that’s hoping to mine cobalt, bismuth, gold and copper.

According to the company’s president and CEO, Robin Goad, the mine will need 13.9 megawatts for regular operation, with a spike up to 18.9 megawatts when machinery starts up.

Goad says calling the expansion a subsidy for the mine is “speculative.”

He said the company plans to power itself with LNG generation and diesel backups, and it isn’t banking on a transmission line, though he did say Fortune Minerals would “welcome” anything that makes mining more competitive, depending on the power’s price and carbon footprint.

Goad said the territorial government has not made an offer or power rate available to the company.

Costs ‘ill-defined’, MLA says

The territorial government’s budget includes $5 million for feasibility work on the transmission expansion, but O’Reilly says the costs of the project are otherwise “ill-defined.”

“I’m trying to get to the bottom of what the project is all about,” he said.

Frame Lake MLA Kevin O’Reilly ants to know why the territorial government is looking to build a power line with a 13-megawatt capacity for a community that only needs 1.2 megawatts. (Alex Brockman/CBC)

The territorial Department of Infrastructure did not respond by deadline when asked for a cost estimate for the proposed 60-kilometre-long transmission line.

But Finance Minister Robert C. McLeod said building a 13-megawatt facility is cheaper per megawatt than building multiple smaller projects.

McLeod said he will meet with department officials about the rationale for a larger project.

Whatì ready to get off diesel: chief

Chief Alfonz Nitsiza says connecting Whatì to hydro means his community can finally get off of diesel. He says people in the community are concerned about diesel fumes and noise.

Alfonz Nitsiza, chief of Whatì, N.W.T., says his community wants to get off diesel. (Mark Rendell/CBC)

He said elders can’t dry fish or meat in the winter or collect snow water because of the diesel generation.

“To connect to the grid is not that huge of a distance,” he added.

Nitsiza said he supports the 13-megawatt project to power Whatì and the NICO project, if it gets up and running.

MLA’s election rival on board for Fortune Minerals

It’s not the first time O’Reilly has questioned the territorial government’s dealings with the mineral industry.

His rival in the upcoming territorial election, Dave Ramsay, sits on the board of Fortune Minerals. Ramsay is also a former infrastructure minister.

O’Reilly had criticized Ramsay over a perceived conflict of interest during the one-year “cooling-off” period between the time an MLA leaves office and when they can accept certain appointments.

O’Reilly said his concerns over the Whatì transmission line are unrelated to the election.

Meanwhile, Ramsay says he’s not involved in the day-to-day operations of Fortune Minerals.

He said a transmission line would make a “world of difference” to the NICO mine, but he added that any possible subsidy should trigger a discussion within the new government.

According to the territorial government’s 2030 Energy Strategy, it wants to start initiating and building the transmission line to Whatì in 2021.

Related stories from around the North:

Canada: Inuit community council in Atlantic Canada signs agreement with Nalcor Energy for $10-million, CBC News

Finland: Citizens’ initiative to reform mining law heads to Finnish Parliament, Yle News

Norway: Minister downplays environmental impact of planned mine in Arctic Norway, The Independent Barents Observer

Russia: Companies building Russia’s Arctic mega-projects expect major tax breaks: reports, The Independent Barents Observer

Sweden: Sweden’s small wind farms reducing energy production, Radio Sweden

United States: Alaska governor sends letter encouraging potential Pebble mine investor, Alaska Public Media

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Avery Zingel, CBC News

Avery Zingel, CBC News

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