First Nations communities jumping into 20th century.

AuthorRobinson, David
PositionEconomically Speaking

The 20th century is creeping toward the fly-in communities in the northwest. It takes the form of a project to build 1,800 kilometres of high-voltage transmission lines to connect 20 First Nations communities. This is a $1.35-billion project. It may be the wrong project for the 21st century.

There is no doubt that a new energy system is needed. The estimated cost for diesel generation for Wataynikaneyap's 16 remote communities in 2013 was $43 million and rising. The diesel infrastructure they have is inadequate, wearing out and polluting. The estimated cost of the system over the next 40 years is $3.4 billion for a population 1 of under 11,000. In other words, to pay the hydro bill up front you would need more than $3 million per person.

The communities have partnered with FortisOntario and RES Canada.

FortisOntario is a Newfoundland electric utility that owns and operates Canadian Niagara Power Inc. and Algoma Power Inc. RES Canada is a global company that engineers and builds energy grids. The First Nations of Wataynikaneyap Power will be majority owners and have the option to become 100 per cent owners over time. As a group they are well equipped to build the system Wataynikaneyap wants.

Unfortunately, the system they want may not be the one they need. The first modern transmission lines were installed in the 1880s. They became the foundation of 20th century industrialization. They are sophisticated, expensive and probably the wrong solution for the Northwest.

According to the financial model, communities will buy $2.3 billion worth of electricity in present value terms--much less than the diesel system would cost. The $2.3 billion will pay for the transmission lines and for the profits for both FortisOntario and the communities that own the project. Depending on how PriceWaterhouseCoopers did their calculations, $2.3 billion would mean a bill of between $2,000 and $10,000 per year per person. The average Ontario household with 2.6 people pays about $1,800 per year.

There is no doubt that this is the 20th century solution to the problem of providing reliable, clean electricity for the communities of the Northwest. The big question is whether a 21st century solution would be better.

The Federal Government seems to have a different idea. In March, the government committed $10.7 million for renewable energy projects in off-grid Indigenous and Northern communities. Decentralized power...

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