Yellowknife (June 11/03) - The GNWT is confident a socio-economic impact agreement with De Beers will include the purchase of hydroelectric power.

"I'm optimistic that it will be in there," said RWED deputy minister Bob McLeod.

Power discussions with De Beers have been part of wide-ranging socio-economic impact negotiations currently underway between the mine and the GNWT.

McLeod, who is doing the negotiating for the government, said securing De Beers as a customer will be "essential" to any expansion of the Taltson Dam.

The cost to the mine will have to be competitive with diesel generation.

De Beers vice president John McConnell said Snap Lake has been designed at this point for diesel generators, but the mine will look closely at whatever the power corporation puts on the table.

"If they can sell us power for the same or less than it would cost us to produce it, then we will be a willing customer," he said.

"Sign us up to sign a long term contract."

The mine has to know by the end of the year, said McConnell. Snap Lake is scheduled to open in 2007.

Current plans call for an 18 megawatt diesel generating plant that would cost about $15 million.

The cost of running it would consume 40 to 50 per cent of its $100 million annual operating budget.

That works out to about 18 cents a kilowatt hour, he said.

"It's our second highest cost after labor."

NWT Power Corporation spokesman Peter Watt said engineering feasibility and environmental impact studies are currently underway at Talston.

"The focus is on expanding capacity and running a line from there up to the North Slave."

The engineering and feasibility studies "are obviously going to be a major driver so we will just have to wait and see what they hold."

The dam is located about 65 kilometres north of Fort Smith on the Taltson River.

It has a capacity of about 18.5 megawatts and supplies power to Fort Smith, Fort Resolution, and Hay River/Enterprise.

The plant has been producing at about 50 per cent capacity since it lost the Pine Point mine as a customer.

"Typically a diamond mine will require 15 to 18 megawatts of power," said Watt.

He dismissed a reported $160 million capital cost for upgrading the dam as "speculative" until the feasibility study is completed.

Any power project in the territory in coming years will likely be a joint venture between aboriginal development corporations and the private sector.

The GNWT is close to putting an MOU in place with the Akaitcho chiefs for power development.

Finance minister Joe Handley told a public meeting in Ndilo last week that industrial customers would help lower the rates for other consumers.

Handley said he wants to see the current 20 cents/kilowatt hour rate reduced significantly.