SOMBA K'E/YELLOWKNIFE - Deze Energy Corporation is not surprised Lutsel K'e will not support a power transmission line around the East Arm of Great Slave Lake.

"Disappointing, but not a surprise," is the reaction from Dan Grabke, managing director of Deze Energy.

The corporation is proposing a $500-million expansion of the Taltson River hydroelectric site and a 690-kilometre transmission line to the diamond mines.

Grabke said Lutsel K'e opposition to any East Arm route was expressed quite clearly at a March 24 meeting with the Lutsel K'e Dene First Nation (LKDFN).

Company representatives went to Lutsel K'e one last time to see if there was any common ground or compromise possible between the two sides, Grabke said.

"It seems like the area we can't cross is just getting bigger and bigger," he said.

Deze Energy's original transmission line proposal was opposed by LKDFN, which objected to it crossing the Lockhart River and Desnedhe Che - considered a sacred area from the mouth of the Lockhart to Artillery Lake.

In September, Deze Energy proposed an adjusted route to avoid the Lockhart River and Desnedhe Che by veering west below Charlton Bay and crossing a peninsula at Reliance.

Chief Steve Nitah recently said Lutsel K'e wants the transmission line to go across the Simpson Islands of Great Slave Lake.

Nitah said that route would make more economic sense, because, along with the diamond mines, it could provide power to a proposed rare minerals mining project at Thor Lake.

Plus, he said the route could lead to power being made available to Yellowknife.

Grabke said the Simpson Islands route is not feasible, mainly because of reliability concerns, and it would require 100-metre-high towers.

Plus, he said the original transmission line route could also eventually lead to an overland connection to Yellowknife.

The islands route, which would require several kilometres of underwater cable at the Hearne Channel, would add about $40 million to the cost of the transmission line.

With the rejection of the adjusted route by Lutsel K'e, Grabke said Deze Energy has returned to promoting the original route across the Lockhart River as its preferred option.

"Not because we're bull-headed, but that's the best information we have," he said.

In a March 26 letter to the Mackenzie Valley Environmental Impact Review Board, Deze Energy stated an inland crossing of the Lockhart offers the fewest impacts and is the most "reasonable compromise" between environmental and cultural concerns.

However, Grabke said it is up to the board to decide.

"We do say we're willing to go the adjusted route if we're told," he said.

The board is close to concluding an environmental assessment of the overall proposal.

Grabke expects a decision from the board in several months.

The Taltson hydroelectric site, 50 km north of Fort Smith, now produces 18 megawatts of electricity. An expansion would add 56 megawatts to be sold to the diamond mines.