It could be at least another year before the northern town of Atlin, B.C., has a functioning hydroelectric power plant, say the planners behind the project, which was to launch this week.

High construction costs have put the plant over budget and about 12 months behind schedule.

However, project managers with the Taku River Tlingit First Nation, which will own the facility, say they are determined to finish the job this year and switch Atlin from diesel generators to hydroelectric power.

The $10-million hydro plant, to be built along Pine Creek below Surprise Lake near the B.C.-Yukon border, was announced with great fanfare in November 2006 as part of a deal between the British Columbia government, B.C. Hydro, and the First Nation.

The plant was supposed to start operating this week, but project manager Peter Kirby told CBC News that building costs have risen faster than expected, now exceeding the plant's $10-million budget.

"It think a lot of people in western Canada have found prices to be a bit higher than what they initially thought, and that's just our reality these days," Kirby said Wednesday.

"We're going to meet the market and build the project. At the end of the day, it's a good project for us, the owners, the Taku River Tlingit First Nation, and a wonderful project for the whole community of Atlin."

Furthermore, turbines the planners had hoped to purchase in England did not work out, Kirby said. Three project engineers are currently in China to assess alternative components, "doing everything from magnetic particle inspections and non-destructive testing techniques to performance tests on the turbine and generator.

"They ought to be back here by the end of this week," he added.

Other components are already in place to harness the fast-flowing waters on Pine Creek.

Once completed, the hydro plant will replace the 1.2 million litres of diesel that B.C. Hydro burns annually to provide power in Atlin, a community of about 450 located 1330 kilometres northwest of Vancouver and 150 kilometres south of Whitehorse.

"At the end of the day, I can safely say that in the world of hydro projects, this is a good project both for the people of Atlin and the Taku Tlingit First Nation," Kirby said.

Construction should resume in April and is expected to be completed by this fall.