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Construction begins on controversial $6.5-B dam

The Public Utilities Board approved the Keeyask generating station partly because $1.4 billion had already been spent on it.

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The Public Utilities Board approved the Keeyask generating station partly because $1.4 billion had already been spent on it.

CONSTRUCTION has officially started on the 695-megawatt Keeyask generating station in northern Manitoba.

The Keeyask Hydropower Limited Partnership (KHLP) said in a statement Wednesday it had officially broken ground on the new hydro-electric dam, which is a joint effort between Manitoba Hydro and the Tataskweyak Cree Nation, War Lake First Nation, York Factory First Nation and Fox Lake Cree Nation.

"With today's announcement, we have reached a significant milestone in our nation's history," Michael Garson, chief of the Tataskweyak Cree Nation, said in a news release. "We will now finally begin to realize the hard-won benefits set out in our development agreements, including a brighter future for generations to come."

A 2009 agreement between Manitoba Hydro and the four First Nations governs development of the project, ways the communities can profit from the dam and take advantage of training, employment and business opportunities in its construction.

Under the deal, Manitoba Hydro provides administration and management services for KHLP and will own at least 75 per cent of the equity of the partnership. The First Nations together have the right to own up to 25 per cent of the partnership.

The first generator is to be in service in 2019 with all seven units operational by 2020. The estimated cost of the dam is $6.5 billion. Once completed, Keeyask will provide an average of 4.4 million kilowatt hours of energy each year.

Keeyask is located 30 kilometres west of Gillam on the Nelson River.

Hydro says it's building the dam about five years before Manitobans will need the power so it can sell it to U.S. utilities.

The Public Utilities Board recently approved the dam and the Clean Environment Commission granted it an environmental licence.

The board said: "Cancelling the Keeyask project now would result in material consequences for ratepayers, because Manitoba Hydro would have to recover the $1.4 billion spent on the project to date. The arrangements with First Nations would have to be terminated and significant economic opportunities lost."

Meanwhile, the Frontier Centre for Public Policy released a report Wednesday that looks at less costly options for building new dams and transmission lines.

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