Major refurbishment work at an NWT hydro plant – so badly delayed that a six-month project could end up taking two years – is set to cost an extra $31 million.
That figure for projected cost overruns at the Taltson plant was given by finance minister Caroline Wawzonek on Thursday.
It’s one of the contributors to a broader NWT government financial position that Wawzonek described as “dire.”
In August, the NWT Power Corporation – which is government-owned – had estimated the overruns would reach that kind of figure. Wawzonek’s Thursday fiscal update offered confirmation.
The project is now costing the territory almost $100 million. The figures given are not final, so costs could rise further or come in lower than expected.
Advertisement.
Advertisement.
No firm date has been given for Taltson to come back online. At the last update, the power corporation suggested that might be January 2025 at the earliest.
The Taltson plant ordinarily supplies hydro power to most South Slave communities.
It has been offline since May 2023, meaning communities like Hay River and Fort Smith have instead been burning diesel.
The GNWT had planned for six months of that but not years. Extra diesel is costing many millions of dollars and generating emissions that the hydro plant wouldn’t have created.
Advertisement.
Advertisement.
A wildfire struck the Taltson site during the devastating summer of 2023, which Wawzonek said was the start of trouble at the project. A series of technical problems followed, such as a “significant alignment issue” that the power corporation said experts had spent months trying to figure out.
“This project was on time and on budget until the 2023 wildfires caused the evacuation of key personnel and damaged NTPC infrastructure,” Wawzonek told the legislature on Thursday.
“Getting the work back on track has led to cost overruns, which are now projected to reach $31 million.
“Between the costs of diesel backup and the Taltson overhaul, NTPC needs to borrow another $75 million in short-term debt.”
Wawzonek said that extra debt is one of the factors leading the GNWT to ask Ottawa for an increased borrowing limit. That limit, currently $1.8 billion, is controlled by the federal government.
The extra cost of refurbishing Taltson, which is a 60-year-old facility, will not just be the territorial government’s problem.
NTPC has said it will eventually look to recover at least some of the cost from customers. That request is likely to be put to the Public Utilities Board, which regulates NWT power rates, at the end of this calendar year.
“Full cost recovery will be spread over time so that customers today are not expected to pay all the costs for a project that will support reliable power supply for many decades,” the power corporation stated in August.
“While we recognize that project delays have been frustrating for customers as well as everyone working on the project, we are committed to completing the Taltson overhaul so that South Slave communities can continue to be powered by clean hydro for the next 50-60 years.”
