How Electricity Works in the NWT
Unlike most of Canada, the Northwest Territories is not connected to the North American power grid. Instead, each community has its own local power system.
Some communities run on hydro, others on diesel or natural gas, and each system must operate independently.
This setup is unique to the North and is shaped by distance, climate, and geography.
Hydro Zones
Eight communities in the NWT are served by two separate (islanded) hydro systems. Diesel generators provide backup during peak demand or low-water years.
North Slave Hydro System (Snare + Bluefish) Serves:
- Yellowknife
- Behchokǫ̀
- Dettah
- Ndılǫ
South Slave Hydro System (Taltson) Serves:
- Fort Smith
- Fort Resolution
- Hay River
- Enterprise
These eight communities make up about 70% of the NWT’s population, which is why hydro plays a major role in the grid.
Diesel Communities
The remaining 25 communities depend mainly on local diesel or natural gas generators. They are not connected to hydro because distances are long and transmission lines would be extremely expensive to build and maintain.
Why diesel is still needed
- Reliable year-round in any weather
- Works in remote, isolated locations
- Essential backup for renewable energy
- Often much lower cost than building long transmission lines
Current territorial electricity supply mix (typical year)
- 72% hydroelectricity
- 22% diesel
- 5% natural gas
- <1% intermittent renewables (solar/wind)
Transmission vs. Distribution: A Simple Explanation
Electricity gets from generators to homes using two main types of power lines:
Transmission (Higher Voltage)
- Moves electricity over long distances
- Exists only in the Snare and Taltson hydro systems
- Connects hydro plants to nearby communities
Distribution (Local Lines)
- Brings electricity from substations to homes and businesses within communities
- Used in every NWT community
- Shorter, lower-voltage lines
Why most communities don’t have transmission lines
Long distances + few customers = extremely high cost
This is why most communities operate their own small, local power system, with extra generation back-up to keep power reliable.
Why This Matters
Understanding how our system works helps explain:
- why electricity costs more in small communities
- why hydro-based communities generally have more stable prices
- why diesel remains essential during cold weather and outages
- why adding renewables requires careful planning and storage
- why planning tools like the Integrated Power System Plan (IPSP) matter for the future
Why Communities Aren’t Connected
People often ask: “Why not just connect the communities so everyone can use hydro instead of diesel?”
Here’s why:
- Huge distances: Communities can be hundreds of kilometres apart with no road access.
- High cost of transmission lines: Building a single transmission line in the North can cost hundreds of millions of dollars, especially in permafrost, remote terrain, or across water
- Small populations: With fewer customers the massive investment cost would be shared by very few people, making electricity costs even higher.
- Limited hydro capacity: The Snare and Taltson systems cannot fully supply other regions without major upgrades or new generation.
- Reliability risks: In remote areas, long transmission lines can be vulnerable to extreme cold, forest fires, ice storms, permafrost damage, lightning, etc. A single failure could leave multiple communities without power for long periods of time.
Bottom line:
In most cases, the cost and risk of connecting communities is much higher than operating small, local generation systems.
How Rates Work
Electricity costs in the NWT are shaped by location, fuel type, and community size. Here’s how it generally works:
Cost of Service
- Utilities calculate the real cost to generate and deliver power, including fuel, maintenance, staff, and equipment.
- These costs are divided among customers in each rate zone (e.g., hydro vs. thermal communities).
Rate Zones
- Hydro zones (North and South Slave) have lower costs because they use hydroelectric power.
- Thermal zones (diesel-powered communities) have higher costs due to expensive fuel and transport.
- The GNWT helps subsidize rates in smaller or remote communities to ensure fairness across the territory.
What’s on Your Bill
- Fixed charge: a base fee that covers system costs (like meter reading and infrastructure).
- Energy charge (per kWh): based on how much power you use.
Some bills include riders to adjust for things like fuel price changes or low-water years (which affect hydro generation).