The Northwest Territories Power Corporation is optimistic that water levels in the Snare River hydroelectric system might improve this summer.

Water levels reached record lows over the past two years because of dry conditions, reducing the amount of electricity the system is able to generate. The power corporation is using supplementary diesel generation to meet the energy demands of North Slave region communities including Yellowknife.

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NTPC spokeswoman Pam Coulter says snow levels are high at the basin that feeds into the system, which is a promising sign that water levels may improve this year. (Jacob Barker/CBC)

NTPC spokesperson Pam Coulter says snow levels are high at the basin that feeds into the system.

"We've also had a lot of rain in the fall, which helped soak the ground, which means that when snow melts in the spring, less will soak into the ground and more will run into the system," she said.

Last fall the territorial government gave the power corporation $29.7 million to cover the cost of extra diesel fuel from July 2015 to July 2016.

Coulter said NTPC had only spent $10 million of the $29.7 million as of Dec. 31, 2015 and that if conditions improve, money will ultimately be returned to the government.