A critical element in reducing the NWT's carbon footprint – and indeed, ensuring its very survival -- is, and always has been, ensuring the territory can expand its hydro energy capacity.
Residents and businesses can put every spare dime into carbon taxes but it won't make a lick of difference in a territory where people are few and the cost of living is already disproportionately high.
Hydro power represents a paltry 35 per cent of the NWT's electricity production, according to the National Energy Board. Most of the territory's electricity comes from fossil fuels, mainly diesel, which supplies power to 22 of 33 NWT communities and most of the electricity produced for mining.
Right now, the territory is producing a maximum of 50 megawatts of hydro power from three rivers: 25.2 from the Snare River; 7.5 from the Bluefish dam on the Yellowknife River; and 18 megawatts from the Taltson River near Fort Smith.
In a territory rich in rivers, it's a drop in the bucket of what the NWT is capable of producing. Expansion at Taltson alone could increase capacity there to 56 megawatts.
Unfulfilled hydro potential means diesel must be shipped in by truck, barge or airplane to fuel community power plants at great cost. Hydro communities, such as Yellowknife, must subsidize the diesel being burned to make providing electricity in small communities even remotely possible.
Consequently, what costs $87 to provide 1,000 kilowatt hours of electricity in Winnipeg or $103 in Edmonton, costs $295 in Yellowknife.
The cost of providing electricity in the North is nothing short of destructive in terms of the NWT's aspirations for growth and prosperity. Government and diamond mines may provide jobs for now but the NWT's economy will be truly tested when the diamonds run out and the cost of power production remains exorbitantly high.
The territorial government knows this, which is why it is resurrecting a study examining the possibility of connecting the Snare and Taltson power systems via an underwater cable through Great Slave Lake.
The request for proposals includes a spur transmission line taking hydro power to the diamond mines northeast of Yellowknife, plus a connector line feeding power to Alberta, where hydro-producing rivers are rarer.
The GNWT gave up on this plan in 2014 after studies came back with a cost of $1.2 billion -- nearly double than what was expected.
The project to expand the NWT's hydro power capabilities has taken on new urgency, however, after a two-year drought in the North Slave forced the GNWT to subsidize diesel generators to power Yellowknife and surrounding communities at a cost of $50 million. Power rates, meanwhile, continue to climb at a rate of around four per cent per year.
It's simply unsustainable. Solar and wind, while effective at certain times and locations, will never fill the void left by moving off diesel. The only possible answer is hydro.
Connecting the territory's hydro facilities and selling energy to the south will be instrumental in paying for the project and reducing power rates. This case must be made to the federal government, which has imposed its carbon pricing scheme, and has a vital interest in ensuring the territorial economy remains positive.
It's an ambitious plan. But one that is vital to the NWT's long-term viability.