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.

hi-bob-mcleod-new

N.W.T. Premier Bob 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.

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

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

"Then we have an enormous market opportunity to the diamond mines," he said. "We have $150-million heat market here in the North and South Slave, but we have no way to move the hydroelectricity."

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

But Miltenberger says the territorial government is already talking with 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."

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