N.W.T. premier eyes hydro expansion

Northwest Territories Premier Bob McLeod says he expects hydro expansion will be the territory's next big project.

McLeod says building transmission lines to connect northern power with the southern grid will be this government's biggest project in the second half of its term. But there's no money in the budget for it yet.

Two years ago the territory and Deze Energy put plans to expand theTaltsonhydro facility on hold because there wasn't enoughcommitment from the diamond mines.

But Finance Minister Michael Miltenberger says connecting to grids south of the border wouldmean more money for future mines. The first step would be to buildtransmission lines.

"Then we have an enormous market opportunity to the diamond mines," he said. "We have $150-millionheat markethere in the Northand South Slave, but we have no way to move the hydroelectricity."

Hydro expansion in the South Slave could cost as much as $700million, but the territory doesn't have enough borrowing power to start another megaproject now.

But Miltenberger says the territorial government is already talkingwith the federal government, and pushing the borrowing limit even further is one option.

"We need to be able to go with industry and equity partners to get the resources in place to make this project happen."

McLeodsays the prime minister wants to see a business case for the project, but so far hasn't said no.