Good afternoon. My name is Jay Grewal. I'm the president and CEO of Northwest Territories Power Corporation, NTPC. Joining me today in Yellowknife is Paul Guy, chair of NTPC's board of directors and deputy minister of the Northwest Territories Department of Infrastructure.
Thank you for the opportunity to speak with you today, not only about the challenge that we have here in the north, in terms of power generation and distribution, but also about the opportunities that will help stabilize the cost of energy and foster a clean growth economy, for the benefit of northerners and all Canadians.
NTPC is a territorial crown corporation with the Government of the Northwest Territories being our sole shareholder. Our mission is to generate, transmit and distribute clean, reliable and affordable energy to residents, communities and businesses in the Northwest Territories. We do this to enrich the lives of northerners by providing power that encourages living, working and investing in the territory.
The reality is that this is becoming increasingly challenging. We serve a population of approximately 44,000 people in the third largest region in Canada, with an area of 1.3 million square kilometres. Fifty per cent of the customers we serve are indigenous. They are living in remote communities, the majority of which are only accessible by air, barge or winter road. These small communities have limited employment opportunity, yet unfortunately, the reality is that they have among the highest power rates in the country.
Though we are doing our best at NTPC to operate as cost-effectively as possible, electricity rates in the NWT are approximately five times the Canadian national average. We are at the point where, for some of our customers, they have to choose between buying groceries to feed their family or paying their utility bill to ensure they continue to have power. This is not a choice any Canadian should have to make.
The reality is that what many Canadians take for granted, we northerners live without. Only eight of the 33 Northwest Territories communities have access to hydroelectricity. Some of these facilities were built almost 80 years ago, thanks to federal investments. Unfortunately, there have not been significant investments in new hydro capacity for many decades. Thus, the remaining 25 communities in our territory are powered primarily by stand-alone diesel generation, at great financial and environmental expense.
Not only does this impact our residents, in terms of a high cost of living and their quality of life, but it also creates economic challenges and challenges for economic growth.
The Northwest Territories is rich in resources, which will remain largely untapped, unless we are able to provide cost-effective and green energy solutions. The lack of roads leaves mineral resources, like cobalt, gold, lithium, bismuth and rare earth elements necessary to fuel the global green economy, mostly inaccessible.
Power is typically the largest component of any mine's operating cost. In the Northwest Territories, the lack of energy infrastructure, particularly new hydro capacity and transmission lines, means remote mines have to rely on fossil fuels. They are trucked or flown thousands of miles to meet the power needs.
The likelihood of these potential mine projects coming into operation is low, as this is costly, so project economics are not viable. If this does not change, these valuable, globally desirable minerals will most likely never be extracted.
Our current reality is that we have a small customer base. Our two hydro systems are not connected to each other, nor are they connected to the North American grid. We have changing weather patterns, which result in low water levels one out of every 10 years. All of this leads to a greater reliance on costly diesel for backup generation and that results in higher power costs.
Investment in energy infrastructure is necessary to address the fundamental challenges we are facing in the Northwest Territories, as it will support the development of a stronger growing economy, lower the cost of living for all residents, create opportunities for indigenous partnerships and support Canada's international commitments on climate change through reduction of greenhouse gases.
To help address our challenges, NTPC has developed a 20-year strategic plan that is based on three pillars: reliability, economic sustainability and environmental sustainability. These pillars are well aligned with our shareholders' 2030 energy strategy, which we were a key participant in developing.
A key focus of the Northwest Territories' 2030 energy strategy is a reduction in GHG emissions from electricity generation. The Northwest Territories' plan will benefit our customers, since a foundational component is long-term investments in energy infrastructure that will address the cost of energy without negatively impacting reliability. With strong federal funding support through the investing in Canada infrastructure program, ICIP, important electricity projects such as the Inuvik wind project, the first megawatt-scale wind project built north of the Arctic Circle in Canada, will be able to proceed.
The project will be built in partnership with the regional Gwich'in and Nihtat first nations.
With the support of ICIP and other federal and territorial funding programs, NTPC plans to integrate solar and wind into the communities that currently rely primarily on diesel. We are also looking to displace diesel and reduce GHG emissions by constructing liquefied natural gas plants.
While these investments are beneficial and will support the Northwest Territories in its carbon footprint reduction commitments, it is not enough nor will it meaningfully contribute to reducing the gap between residential electricity rates here and the Canadian national average.
In order to achieve these goals, significant change is necessary. A transformational project would ensure that the NWT can do its part to meet commitments under the pan-Canadian framework, green the mining sector, create mutually beneficial indigenous partnerships and support long-term economic development for residents of the north.
The Taltson hydroelectric expansion is the project that can and must proceed, as it will transform the reality Northwest Territories residents face. We currently have two separate hydroelectric systems on either side of Great Slave Lake. The plan to expand Taltson's capacity and connect the north and south systems will result in cleaner and more reliable energy for over 70% of our residents and businesses. Significantly, it will also lay the foundation for greening current and future mining developments. The Taltson River currently has 18 megawatts of installed hydro power, but has 200 megawatts of potential capacity that could be harnessed through a phased approach. All phases of expansion would rely on run-of-the-river technology, with no need for flooding.
Phase 1 of the Taltson hydroelectric expansion would result in 60 additional megawatts of clean electricity being available to customers and would include the installation of a transmission line to connect the north and south systems. Over the longer term, the expansion would also make it possible to install a transmission line in the proposed Slave geological province access corridor. The combined benefit of increased road access, for more efficient resupply and development of mines in a resource-rich region, and reduced energy costs, through the Taltson project, would completely transform the investment environment for industry and the economic future of the territory.