1 1 MANITOBA CLEAN ENVIRONMENT COMMISSION 2 3 VERBATIM TRANSCRIPT 4 Volume 1 5 6 Including List of Participants 7 8 9 10 Hearing 11 12 Wuskwatim Generation and Transmission Project 13 14 Presiding: 15 Gerard Lecuyer, Chair 16 Kathi Kinew 17 Harvey Nepinak 18 Robert Mayer 19 Terry Sargeant 20 21 Monday, March 1, 2004 22 Radisson Hotel 23 288 Portage Avenue 24 Winnipeg, Manitoba 25 2 1 LIST OF PARTICIPANTS 2 3 Clean Environment Commission: 4 Gerard Lecuyer Chairman 5 Terry Sargeant Member 6 Harvey Nepinak Member 7 Kathi Avery Kinew Member 8 Doug Abra Counsel to Commission 9 Rory Grewar Staff 10 CEC Advisors: 11 Mel Falk 12 Dave Farlinger 13 Jack Scriven 14 Jim Sandison 15 Jean McClellan 16 Brent McLean 17 Kyla Gibson 18 19 Nisichawayasihk Cree Nation: 20 Chief Jerry Primrose 21 22 23 24 25 3 1 LIST OF PARTICIPANTS 2 3 Manitoba Conservation: 4 Larry Strachan 5 6 Consumers Association of Canada/Manitoba Society of Seniors: 7 Byron Williams 8 9 Manitoba Hydro: 10 Ed Wojczynski 11 Ken Adams 12 Elvis Thomas 13 Carolyn Wray 14 Ron Mazur 15 LLoyd Kyczek 16 Cam Osler 17 Stuart Davies 18 David Hicks 19 George Rempel 20 Campbell MacInnes 21 David Cormie 22 23 24 25 4 1 INDEX OF EXHIBITS 2 3 Number Page 4 CEC-1000 - Correspondence dated April 5 25th, 2003 to the Chairman of the 6 Environment Commission from the 7 Minister of Conservation 8 Steve Ashton 14 9 10 MC-1000: Mr. Strachan's overhead 11 transparencies from Manitoba 26 12 Conservation 13 14 15 MH/NCN-1000: Presentation transparencies 51 16 17 18 19 20 21 22 23 24 25 5 1 MONDAY, MARCH 1, 2004 2 Upon commencing at 9:11 a.m. 3 4 THE CHAIRMAN: Good morning, ladies and 5 gentlemen, and welcome. Just before calling the 6 public hearing on the Wuskwatim Generation and 7 Transmission Projects to order, I wish to begin by 8 thanking all of the participants for their 9 involvement and the efforts they have put in this 10 process leading up to this event. 11 The interrogatory process alone has resulted 12 in a significant amount of information being made 13 available to the participants, to the panel and the 14 public which would not likely have been possible 15 during the public hearing alone. 16 My name is Gerard Lecuyer. I am a member of 17 the Manitoba Clean Environment Commission and the 18 panel chairperson of this Commission, Wuskwatim 19 Generation and Transmission Projects review. With me 20 today are four other commissioners serving on this 21 panel. Ms. Kathi Avery Kinew, Mr. Robert Mayer to my 22 right, Mr. Terry Sargeant, Mr. Harvey Nepinak. And 23 of course you have heard that Mr. Terry Sargeant here 24 has been appointed recently as Chairperson of the 25 Manitoba Clean Environment Commission. 6 1 In addition to the panel, I would like to 2 introduce staff and advisors that are assisting us 3 with this review including the Commission Secretary, 4 Mr. Rory Grewar, sitting at the table to my left, the 5 Commission Administrative Secretary, Ms. Joyce 6 Mueller who we don't see. She's at the registration 7 table near the entrance. Commission counsel, Mr. 8 Doug Abra sitting right here of the firm Hill, Abra, 9 Dewar. And from our technical advisory team, Ms. 10 Jean McLellan, Ms. Kyla Gibson of Price Waterhouse as 11 well as Mr. Brent McLean. They are all sitting at 12 the table over there. Mr. Dave Farlinger and Mr. Jim 13 Sanderson of Energy Consultants International sitting 14 in the back. Dr. Robert Hecky with the University of 15 Waterloo and Mr. Mel Falk of Environmental 16 International sitting here. 17 Before continuing, I would like to explain 18 that the Manitoba Clean Environment Commission is an 19 arm's length provincial agency that encourages and 20 facilitates public involvement in environmental 21 matters and offers advice and recommendations to the 22 government. 23 The Commission exercises its mandate through 24 public hearings, investigations, mediation and 25 education. Please see our website at 7 1 www.manitobacec.ca for information about the 2 Commission and this public hearing. 3 The Commission operates under the authority of 4 the Manitoba Environment Act. It is also directed by 5 procedural guidelines to ensure that the hearings 6 remain fair and open forums for the exchange of 7 information and ideas and that they provide full 8 opportunity for public involvement and the 9 environmental assessment process in Manitoba. 10 We are here today at the request of the 11 Minister of Conservation to conduct an integrated 12 public hearing respecting the Manitoba Hydro and 13 Nisichawayasihk Cree Nation proposal for the 14 development of the Wuskwatim generation station and 15 associated transmission lines. 16 These two words have been in the air for quite 17 some time. Even I can now say them. I sure couldn't 18 a few months back. 19 The Commission was mandated to conduct the 20 hearing to consider firstly the justification, need 21 for and alternatives to the Wuskwatim proposals. And 22 secondly, the potential environmental socioeconomic 23 and cultural effects of the construction and 24 operation of the Wuskwatim proposals. 25 The Commission has requested to conduct the 8 1 hearing in general accordance with the process 2 guidelines respecting public hearings which include 3 procedures for prehearing meetings or conferences and 4 proprietary information. 5 Following the public hearing, the Commission 6 shall provide the report to the Minister of 7 Conservation pursuant to section 7 subsection 3 of 8 the Environment Act. 9 Before continuing, I would like to call on Mr. 10 Rory Grewar to read for the record the scope of the 11 Commission's review of the Wuskwatim projects into 12 the public record. 13 MR. GREWAR: Thank you, Mr. Chairman. 14 Correspondence dated April 25th, 2003 to the Chairman 15 of the Environment Commission from the Minister of 16 Conservation, Steve Ashton. I'll read the 17 correspondence. 18 "The Environmental Approvals 19 Branch of my department is in the 20 final review stage of the Environment 21 Act Proposals from Manitoba Hydro for 22 the proposed Wuskwatim Generating 23 Station and associated transmission 24 facilities (Wuskwatim proposals). 25 A copy of the Terms of 9 1 Reference for the public hearing is 2 enclosed. If possible, the report on 3 the hearing should be submitted to me 4 on or before December 1, 2003. 5 Mr. Larry Strachan, Director of 6 Environmental Approvals Branch will 7 coordinate department participation in 8 the hearing." 9 The background and terms are as follows: 10 Mandate of the hearings. 11 "The Commission shall conduct 12 an integrated public hearing, in 13 appropriate locations in Winnipeg and 14 Northern Manitoba as determined by the 15 Commission, to consider: 16 - Firstly, the justification, 17 need for and alternatives to the 18 Wuskwatim Proposals; and 19 - Secondly, the potential 20 environmental, socio-economic and 21 cultural effects, of the construction 22 and operation of the Wuskwatim 23 Proposals. 24 The Commission shall conduct 25 the hearing in general accordance with 10 1 its Process Guidelines Respecting 2 Public Hearings which include 3 procedures for Pre-Hearing Meetings or 4 Conferences and Proprietary 5 Information. 6 Following the public hearing 7 the Commission shall provide a report 8 to the Minister of Conservation 9 pursuant to section 7(3) of The 10 Environment Act. 11 The Commission may, at any 12 time, request that the Minister of 13 Conservation review or clarify these 14 Terms of Reference." 15 I'll read into the record, Mr. Chairman, the 16 scope of the review. 17 18 "For the justification, need 19 for and alternatives to the Wuskwatim 20 Proposals component of the hearing, 21 the Commission shall: 22 - Consider whether all 23 alternative resource options have been 24 considered and whether the Wuskwatim 25 Proposals have been selected on 11 1 reasonable grounds, including economic 2 viability as an export market driven 3 project and relevant technical 4 factors. The review of economic 5 viability shall consider the Wuskwatim 6 Proposals in their entirety. 7 - Include the effect, if any, 8 of the Wuskwatim Proposals on Manitoba 9 Hydro customer rates and the 10 Corporation's financial stability. 11 The partnership between the 12 Nisichawayasihk Cree Nation and 13 Manitoba Hydro and the associated 14 arrangements for such partnership are 15 to be described to the degree such 16 information is required to understand 17 the financial analysis. 18 - Give consideration, at a 19 conceptual level, to the 20 environmental, socio-economic and 21 cultural effects of the Wuskwatim 22 proposals relative to available 23 alternative resources. 24 - Consider Manitoba Hydro's 25 electricity generation capability, 12 1 market prospects and risks as they 2 pertain to the Wuskwatim proposals 3 including: 4 - load growth in export 5 jurisdictions; 6 - energy supply situation in 7 the export jurisdictions; and 8 - energy pricing trends and 9 industry restructuring. 10 For the potential environmental, 11 socio-economic, and cultural effects 12 of the Wuskwatim Proposals component 13 of the hearing, the Commission shall 14 consider the Environmental Impact 15 Statement, and public concerns, and 16 with consideration of the evidence 17 received on the justification, need 18 for, and alternatives for the 19 Wuskwatim Proposals, provide a 20 recommendation on: 21 - Whether Environment Act 22 Licences should be issued to Manitoba 23 Hydro for the Wuskwatim Proposals. 24 Should the Commission recommend the 25 issuance of Environment Act Licences 13 1 for the Wuskwatim Proposals, then 2 appropriate recommendations should be 3 provided respecting: 4 - Measures proposed to mitigate 5 any adverse environmental, 6 socio-economic, and cultural effects 7 resulting from the Wuskwatim proposals 8 and where appropriate, to manage any 9 residual adverse effects; and 10 - Future monitoring and 11 research that may be recommended in 12 relation to the Wuskwatim Proposals. 13 The Clean Environment Commission's 14 recommendations shall incorporate, 15 consider and directly reflect, where 16 appropriate, the Principles of 17 Sustainable Development and Guidelines 18 for Sustainable Development as 19 contained in Sustainable Development 20 Strategy for Manitoba." 21 That's the direction from the Minister and the 22 scope of the hearings as contained in the terms of 23 reference for the Clean Environment Commission public 24 hearings on Manitoba Hydro Wuskwatim Proposals, Mr. 25 Chairman. And with your leave, I'd like to enter 14 1 those as an exhibit. 2 A word of explanation in terms of the exhibit 3 procedure. The Commission will issue the prehearing 4 Exhibit list later this week and that will include 5 all of the exhibits that were filed as part of the 6 prehearing process. For the purposes of the 7 proceedings today and forward, we would like to begin 8 with numbered series 1000 and beyond. And so this, 9 as the first exhibit, will be CEC-1000. And it's the 10 correspondence as dated and read and terms of 11 reference as attached. 12 13 (EXHIBIT CEC-1000 - Correspondence dated April 14 25th, 2003 to the Chairman of the Environment 15 Commission from the Minister of Conservation 16 Steve Ashton) 17 18 THE CHAIRMAN: Thank you, Mr. Grewar. The 19 Commission is convening the hearing in Winnipeg over 20 a three week period between March 1st and 17th. We 21 will then travel up north to continue the hearing in 22 Thompson on March 22nd and 23rd and in The Pas on 23 March 25th and 26th. The hearing will then reconvene 24 in Winnipeg on April 6th for closing statements. And 25 it is our expectation that the proceedings will wrap 15 1 up on April 7th. 2 We will begin today with opening remarks by 3 Mr. Larry Strachan of Manitoba Conservation on the 4 environmental assessment and review process 5 undertaken to date and the licensing process to 6 follow the public hearing. There will be no 7 cross-examination of Mr. Strachan at this time. This 8 will occur later on in the process, I believe on the 9 15th when the public administration team makes its 10 overview presentation. 11 The co-proponents Manitoba Hydro and 12 Nisichawayasihk will then give a presentation on 13 their need for and alternatives for the Wuskwatim 14 Generation and Transmission Projects and the 15 environmental impact statements to the project. This 16 will be followed by cross-examination or questioning 17 of the co-proponents by the Commission and/or its 18 counsel, then by the registered participants 19 according to alphabetical order and by any member of 20 the public in attendance. This process might well 21 take a number of days. 22 After the full cross-examination of the 23 co-proponents has concluded, the project 24 administration team consisting of members of the 25 Province and the Federal Governments will then make a 16 1 presentation on the results of the cooperative 2 environmental assessment process and then will be 3 available for cross-examination. 4 We will then proceed to hear the presentations 5 prepared by the various registered participants who 6 will present in alphabetical order unless prior 7 arrangements have been made with the Commission 8 secretary to do otherwise. 9 Throughout the proceedings, the co-proponents 10 and their counsel will lead cross-examination or 11 questioning followed by the Commission and/or its 12 counsel and then in alphabetical order, by each 13 registered participant and/or their counsel. 14 Following this, an opportunity will be provided for 15 any member of the public in attendance to ask 16 questions of the presenter. All presenters at the 17 end of their cross-examination will have an 18 opportunity to re-examine their witnesses. 19 And just before I make my final comments, I 20 would like to go back to Mr. Grewar. I believe 21 you've already presented your items on the public 22 record? 23 MR. GREWAR: Yes, Mr. Chairman. It was just a 24 clarification on the exhibit process. 25 THE CHAIRMAN: Thank you. So just a few more 17 1 words to do with the housekeeping issues. Firstly, 2 in regards to registration. Please ensure that you 3 register and indicate if you will be giving a 4 presentation. All registrants will be provided with 5 a copy of the report of this public hearing. 6 Secondly, please provide 30 copies of your 7 presentation to Mr. Grewar. The copies are needed by 8 the panel members, technical staff and for the public 9 record. Submissions will also be shared with the 10 participants. And if you have not the required 11 copies, the Commission staff can assist you with the 12 preparation of copies. All you have to do is see Ms. 13 Mueller at the registration desk to help you with the 14 preparation of the required copies. Ms. Joyce 15 Mueller has a schedule of the proceedings with the 16 names of the presenters and will provide copies to 17 the media and to others who may require it. 18 Fourthly, please use the microphones, identify 19 yourselves clearly for the record when you give 20 presentations or ask questions. If you don't, I will 21 simply have to interrupt you and ask you to do so. 22 Verbatim transcripts of each day of the 23 proceedings will be posted on the Internet the 24 morning following each session. The website is 25 www.reidreporting.com. And that is Reid spelled 18 1 R-E-I-D. I repeat www.reidreporting.com. You can 2 also make arrangements with the transcription service 3 to purchase copies of the transcripts in various 4 formats. Reid Reporting Services can be contacted by 5 calling 947-9774 here in Winnipeg, 947-9774. 6 And finally, at the conclusion of the 7 hearings, the Commission will make a report, will 8 prepare a report containing advice and 9 recommendations for the Minister of Conservation. 10 The Environment Act allows 90 days following the 11 closure of the hearing for this report to be 12 submitted. Following submission of the report, the 13 Minister will determine the date upon which the 14 report will be released to the public. 15 And lastly, just before we begin these 16 deliberations, I want to call upon the Great Manitou, 17 God, the Divine Master, whatever you call Him, to 18 look favourably upon this meeting to help us think 19 clearly, to help us speak the truth, to guide us into 20 use of proper decorum and respect of our fellow 21 participants and to help us come forward with the 22 decisions that are in the best interests of 23 Manitobans for today and for future generations. And 24 I would like to call upon Elder Sam Dysart to come 25 and speak, to bring blessings upon this gathering. 19 1 ELDER DYSART: Thank you. Please stand. 2 First thing I would like to say, it's an honour for 3 me as an Elder from Nelson House. My name is Sam 4 Dysart. I had been standing here for the last 30 5 years. I was first on the Northern Flood Agreement, 6 now on the Future Development Agreement. And I had a 7 lot of fights and I had a lot of good times with 8 people and I had a lot of griefs. But I hope that 9 this will come in better for my children, 10 grandchildren and great-grandchildren and I pray that 11 we have a very good meeting today for it's a nice day 12 outside. Let's be happy, let's be honest with each 13 other and let us tell the truth for the truth is the 14 only thing that is survival in our community and in 15 life. Let us pray in our language and let us ask God 16 to help us in Manitoba, in the whole world. 17 18 (PRAYER) 19 20 ELDER DYSART: Thank you. 21 THE CHAIRMAN: I now call upon Mr. Strachan, 22 Larry Strachan of the Environmental Approvals, 23 Manitoba Conservation to come and present an 24 assessment process overview. Mr. Grewar. 25 MR. GREWAR: Could you please state your name 20 1 for the record. 2 MR. STRACHAN: Larry Strachan. 3 MR. GREWAR: Mr. Strachan, are you aware that 4 it is an offence in Manitoba to knowingly mislead 5 this Commission? 6 MR. STRACHAN: Yes, I am. 7 MR. GREWAR: Do you promise to tell only the 8 truth during proceedings before this Commission? 9 MR. STRACHAN: Yes, I do. 10 MR. GREWAR: Thank you, sir. 11 MR. STRACHAN: Good morning, Mr. Chairman, 12 commissioners, participants, ladies and gentlemen. 13 As Rory just indicated, my name is Larry Strachan. 14 I'm employed as the Director of the Environmental 15 Approvals Branch for Manitoba Conservation. And 16 through that process, it's my responsibility to 17 administer the environmental assessment and licensing 18 process under the Environment Act. 19 For this particular public hearing and review 20 for the Manitoba Hydro NCN proposals, I also, as 21 Chair of the project administration team, to 22 administer the cooperative process. I am going to 23 talk and give you a brief overview of the cooperative 24 environmental assessment process that Manitoba and 25 Canada carried out on the proposals under review. 21 1 As you know, there are two projects under 2 review. There's a generation station and associated 3 transmission lines. Under the Environment Act, they 4 are two separate development proposals and so we 5 sought two separate development applications from the 6 proponents. We agreed to review the two proposals 7 concurrently under the Environment Act and we also 8 developed information in that regard. 9 Manitoba Environment licences are required for 10 both proposals. And under the federal legislation, 11 there is what is known as a comprehensive study 12 report and review required for some aspects of the 13 generation station and some of the stream crossings 14 of the access road to the generation station. 15 Because both Manitoba and Canada had approving 16 authorities, we agreed, pursuant to a cooperative 17 agreements we have with Canada, to enter into a 18 cooperative environmental assessment process for the 19 two proposals. I must stress it's a cooperative 20 process because it's only cooperation between the two 21 levels of government. At the end of the day, there 22 are separate and independent decisions required by 23 both Manitoba and Canada for the proposals. 24 To administer and guide the proponents through 25 the process, we developed and formed what is known as 22 1 a project administration team under the agreement. 2 The team consists of representatives of both Manitoba 3 and Canada. And as I indicated, I chaired the team. 4 One of my staff, Mr. Trent Hreno participated, Mr. 5 Dan McNaughton from the Canadian Environmental 6 Assessment Agency was on the team and Ms. Beverly 7 Ross from Fisheries and Oceans Canada was also on the 8 team. 9 Ms. Ross is the federal responsible authority 10 for the generation project and she must take 11 decisions under the federal legislation for the 12 generation station. 13 To generate the information required in the 14 cooperative process, we agreed to use the Manitoba 15 Environment Act provisions, Section 11 and Section 16 12. To further guide the proponents, we developed 17 two sets of draft environmental assessment 18 guidelines; one for the generation station, one for 19 the transmission line project. 20 We then asked the Clean Environment 21 Commission, your body, Mr. Chairman, to hold meetings 22 on the draft guidelines and provide some advice to 23 the department and the Minister following the 24 meetings. This was done and then we finalized the 25 guidelines and that formed the guidance documents for 23 1 the proponents to prepare the information on the two 2 proposals and the environmental assessment 3 documentation. 4 We also subjected the guidelines, not only at 5 the public review but to technical government review 6 where he sought information from both levels of 7 government to insert information from their 8 perspective into the guidelines. 9 The process formally started with the filing 10 of proposals in December of 2001. As I indicated, we 11 developed the environmental assessment guidelines and 12 they were actually finalized in April of 2002. It 13 took about a year for the proponents to prepare the 14 environmental assessment documentation and that 15 documentation on both the needs and alternatives for 16 the generation station and the environmental 17 assessment documentation was filed with the 18 department in April of 2003. 19 Under the Environment Act, we seek advice by 20 distributing material to both the public venue and to 21 a technical advisory committee venue. Normally, the 22 public venue is administered by the department 23 without a public hearing but because we are now 24 before a public hearing for these proposals, we are 25 relying very strongly on the Commission process for 24 1 the public input on the proposals. However, the 2 technical review was conducted through what is known 3 as a technical advisory committee. It's a committee 4 composed of a number of federal and provincial 5 government representatives and they review the 6 information provided to them and provide advice back 7 to myself and the Minister on the information under 8 review based on their area of expertise, their 9 experience and other information they have available 10 to them. 11 As a result of the public and technical review 12 of the documentation, we required two supplemental 13 filings from the proponents to further clarify and 14 get more information on issues that were under review 15 and identified by mainly our technical reviewers. I 16 must say the public input to our process was quite 17 minimal and I expect that is because of the Clean 18 Environment Commission process and people were 19 waiting to participate in your process, Mr. Chairman, 20 to provide that public input to the information under 21 review. 22 One of the challenges of environmental 23 assessment in Canada is that there are requirements 24 of both the provinces in Canada for environmental 25 assessment matters and the legislation, although 25 1 complimentary in some areas, is quite different in 2 other areas. And one of the areas that is quite 3 different is the specific requirements that Fisheries 4 and Oceans require to carry out their 5 responsibilities under both the Federal Environmental 6 Assessment Legislation and the Federal Fisheries Act. 7 And as a result, they require a lot more real 8 specific information than the province generally does 9 in these matters. And so they generally go forward 10 independently and seek and work out that specific 11 information with the proponents. 12 And they are doing that in this case. They 13 have requested a number of specific information 14 documents and the proponents have provided that to 15 Fisheries and Oceans Canada and that documentation is 16 currently under review. And it will be considered, 17 at the end of the day, in the federal decision-making 18 process. 19 As a result of our technical review of the 20 information, we determined in October of 2003 that in 21 respect of the initial documentation filed and the 22 supplementary filed information filed as a result of 23 our request for further information, we were 24 satisfied that the documentation at that stage 25 addressed the intent and scope of the two sets of 26 1 guidelines that we provided for the generation 2 station and the transmission line. 3 We recognize that there will be further 4 information generated through the public hearing 5 process and we also recognize that, as I just 6 indicated, that the Fisheries and Oceans information 7 would be forthcoming as the process unwound. 8 We, therefore, made a determination at that 9 point in time that the documentation would be 10 sufficient for you to consider through this public 11 hearing process, Mr. Chairman, and that is the stage 12 of the process that we are now in. 13 I just want to conclude by indicating that as 14 part of our process and in fact as part of the 15 federal process, the public information and advice 16 from this public hearing is a very important 17 component to our final decision making. We are 18 looking for a full and complete public hearing 19 process and we will very strongly consider your 20 advice and recommendations following the conclusion 21 of your deliberations. Thank you, Mr. Chairman. 22 THE CHAIRMAN: Thank you. 23 MR. GREWAR: Mr. Chairman, if we might enter 24 Mr. Strachan's overhead transparencies as Exhibit 25 MC-1000 from Manitoba Conservation. 27 1 THE CHAIRMAN: Thank you, Mr. Grewar. 2 3 (EXHIBIT #MC-1000: Mr. Strachan's overhead 4 transparencies from Manitoba Conservation) 5 6 THE CHAIRMAN: I realize there's a number of 7 people standing in the back and hopefully we'll find 8 a way of providing relief in terms of chairs somehow 9 during this process. And I don't know that we can 10 address that this morning but we'll make an attempt 11 to do that for the ongoing process this afternoon. 12 We will take a break sometime around 10:30 13 but we are a long ways from there. At this point, I 14 call upon the proponents to get started with their 15 presentation of their proposal. 16 MR. PRIMROSE: Good morning, everybody. Good 17 morning, Mr. Chairman. My name is Jerry Primrose. 18 I'm Chief of the Nisichawayasihk Cree Nation. I 19 would like to thank you and the Commissioners and the 20 other participants to hear the opportunity to make 21 our presentation on the Wuskwatim Generation and 22 Transmission Project. I would also like to 23 acknowledge the other interested people from the 24 public and various groups attending this hearing. 25 Today we are here with Manitoba Hydro, my 28 1 colleague, Ken Adams. I speak with pride today for 2 the people of Nisichawayasihk Cree Nation, the 3 descendants of our Cree ancestors who have lived in 4 Northern Manitoba for 7,500 years. I would like to 5 give you some background about our people. 6 Until the 20th century, our people had a 7 thriving lifestyle supported by fishers, hunters and 8 gatherers. Over the past 100 years, our once 9 thriving way of life was almost eliminated by groups 10 who had no respect for our environment and our 11 traditional ways and also our culture. Reserves were 12 created and Indian agents controlled our day-to-day 13 lives. Our children were taken away to residential 14 schools. Lobbyists destroyed the fur trade, an 15 economy that sustained us. And finally, the 16 Churchill River Diversion flooded our lands. 17 We have suffered but slowly we are putting the 18 past behind us through new treaties and agreements 19 and by taking responsibility for our own destiny. In 20 1908, Nelson House Indian Reserve was created as a 21 result of the adhesion by the Nelson House First 22 Nation to Treaty number 5. We were then an isolated 23 community but fully dependent on the surrounding land 24 and resources. 25 Until the late sixties and early seventies, 29 1 our community didn't have electricity or telephones 2 nor running water. But when we got them, we embraced 3 these modern conveniences with open arms. I still 4 remember in the late sixties when we first got 5 electricity, looking out at the lights in our small 6 community. I remember the first time I phoned my mom 7 from high school in Portage La Prairie. When I first 8 got there, I phoned at home. This is 1974. 9 Prior to 1977, our people continued to depend 10 on our traditional economy but the massive flooding 11 caused by the Churchill River diversion meant people 12 could not fish and hunt as they used to. 13 In the early eighties, the fur lobbyists began 14 its campaign and the price of fur plummeted, taking 15 our industry with it. It didn't take long for social 16 chaos to set in with an increase in alcohol 17 consumption, suicides and other related social 18 problems. 19 In 1977, the Northern Flood Agreement was 20 signed and it brought a lot of hope to our people. 21 But the implementation of this agreement was slow and 22 very frustrating. By the fall of 1992, we felt we 23 had to decide to look for a new approach in order to 24 bring benefits for our community. Our community took 25 charge. We appointed a local negotiation team from 30 1 Nelson House and we hired consultants and advisors. 2 We worked to find solutions. We didn't listen to 3 people who had never even visited our community but 4 who still thought they knew what was best for us. 5 We looked after our own best interests. We 6 entered into comprehensive negotiations and finally 7 in 1976, we settled our negotiations and developed a 8 compensation package which not only provided economic 9 support but gave us control over development of 10 resources in our traditional lands. We will never be 11 fully compensated for our losses but we have moved 12 forward to create a better future for our children 13 and our grandchildren. 14 We cannot forget the past but we must focus on 15 our future. With close to 5,000 members, we have a 16 rapidly growing population. Over 60 per cent of our 17 people are under 30 years. Half of our members are 18 of school age. One-third of our adults have less 19 than a grade 9 education. Our rate of unemployment 20 is five times the provincial average. We must 21 address these issues. 22 Today is an important step in this process. 23 What we have gained through long negotiations and 24 hard work over the past few years has given us the 25 ability and the means to be in a position to jointly 31 1 develop the proposed Wuskwatim Generation and 2 Transmission Project with Manitoba Hydro. We are 3 very proud that our proposed development respects the 4 environment and our traditional way of life while 5 providing opportunities that will offer a brighter 6 future for our people and be good for Manitoba's 7 economy. And we believe this project proposed to be 8 built within our traditional territory will help 9 provide after our own interests towards 10 self-sufficiency. It will also provide for our young 11 people as opportunities they deserve to have basic 12 opportunities other Canadians take for granted. We 13 believe this project will be among the things that 14 will help us fulfil our dream of self-sufficiency. 15 We also believe this project will be safe for 16 our water, lands, plants and animals and for the 17 people of Northern Manitoba where we live. This is 18 important to us because the north is our home, our 19 backyard. Just as the south where your cottages and 20 lake homes provide you with a spiritual place to be, 21 the north is our spiritual place. 22 So in approaching this project, we have been 23 especially concerned to do it right. We have made 24 our decisions independently to serve the interests of 25 Nisichawayasihk people whom we represent. Since we 32 1 began this process, we have heard more radical 2 opponents to the projects speak of environmental 3 terrorism, racism and a new colonialism implying that 4 we are incapable of looking after our own interests 5 towards self-sufficiency. 6 Whatever the motivation for proposing this 7 development, I think these groups are engaged in what 8 is for us economic terrorism. The Nisichawayasihk 9 Cree Nation stands to lose a once in a lifetime 10 opportunity to be self-sufficient because of the 11 interference of these outside sources. 12 Big corporations are not exploited in the 13 Nisichawayasihk Cree Nation as some opponents of this 14 project have alleged. We have firsthand experience 15 with hydroelectric developments. We understand what 16 can happen when the environmental issues are not 17 fully considered and provisions aren't made for 18 people to prosper with training and job 19 opportunities. Everything gained from our experience 20 is part of where we are today. We have been 21 cautious. We have been very careful and I'm sure to 22 Hydro's frustration, sometimes we have not just 23 accepted Hydro's plans, in many ways we have modified 24 their plans in important ways. 25 As an example, our First Nation was 33 1 influential in the decision for the low-head design 2 chosen for Wuskwatim. It is a design that would 3 create the least amount of flooding of any 4 hydroelectric project ever developed in Manitoba. 5 Less than one-half square kilometre. Or for people 6 in the city that understand maybe same size as an 7 average golf course. 8 We played a direct role in undertaking 9 environmental impact assessment studies which are at 10 the centre of this Clean Environment Commission 11 hearing. Not only did the assessment involve the 12 latest scientific methods but the process 13 incorporated the traditional knowledge of our elders 14 and resource users and other Aboriginal people in the 15 area. Our spiritual beliefs and culture are part of 16 this traditional knowledge. 17 For example, two possible routes for an access 18 road to the generating station were eliminated 19 because one was too close to a spiritual site while 20 the other route would have been too close where there 21 was an area where Caribou had been sited. Like any 22 development project anywhere, there will be change. 23 But our studies prepared cooperatively with Manitoba 24 Hydro show the project will have little impact on the 25 lands, plants and animals. 34 1 I am thankful our First Nation and our Cree 2 people were shown this respect for our knowledge and 3 for our culture. That was a crucial factor in our 4 decision to proceed to participate in this project. 5 Because based on the our past experience resulting 6 from the Churchill River Diversion, we are not 7 prepared to move ahead at any cost although we 8 believe we are a very progressive First Nation, 9 economically and socially. We face many of the same 10 challenges of other First Nations in Manitoba and 11 across Canada, poverty, inadequate health care and 12 social services, poor housing and lack of training, 13 skills and jobs. So we need to find ways to develop 14 and sustain a secure economic base for our First 15 Nation that provides the social and community 16 services we need along with meaningful well-paying 17 jobs and opportunities for our people and especially 18 for our youth. 19 For us, economic support is not abstract. Its 20 absence is a daily soul-destroying reality. This 21 development gives us an opportunity to become a 22 partner with up to 33 per cent ownership of a project 23 in our resource area that will provide us long-term 24 stable revenues. It is a tangible step into a 25 brighter future. 35 1 The new Atoskiwin Training & Employment Centre 2 of excellence in our community is already a direct 3 benefit of the development process leading to 4 Wuskwatim. The centre offers training for jobs and 5 skills needed in the north. Whether or not Wuskwatim 6 goes ahead, it provides our people with the 7 opportunity to participate in the broader economy of 8 Manitoba and of Canada. So the centre, people have 9 already completed training and are engaged in work 10 experience. Once it is fully operational, it will 11 become part of the post-secondary training program 12 for Northern Manitoba with a capacity of 100 students 13 per year. 14 Our NCN members and northern Aboriginal people 15 will have the required skills, will be given 16 preferences for the jobs on the project. Jobs will 17 include heavy equipment operators, carpenters, 18 electricians, labourers, clerical, catering and 19 others. Apprenticeships and journeyman opportunities 20 will provide for long-term skills that will serve our 21 members long after Wuskwatim is built. The project 22 also offers contract opportunities for new and 23 existing First Nation businesses to supply products 24 and services needed for the project. 25 This may provide incentives for NCN 36 1 entrepreneurs to establish businesses that provide 2 income and create jobs for others. As Chief in 3 Council of NCN, we establish a future development 4 portfolio, currently held by Councillor Elvis Thomas 5 and also our own future development team that was 6 assembled to work towards the development of this 7 project. We lead and direct our own independent 8 legal team, communication consultants and technical 9 and scientific advisors to ensure the project is 10 environmentally responsible. Any partnership with 11 Hydro is equitable and beneficial to our people. 12 In 2001, a majority of NCN members voted to 13 approve an agreement in principle to development 14 Wuskwatim with Manitoba Hydro and we have worked with 15 Hydro to prepare and submit what we believe to be 16 possibly the most comprehensive environmental impact 17 statements ever undertaken in Manitoba. We have also 18 just completed a Summary of Understanding or SOU 19 which is like a preview of the final project 20 development agreement. 21 Even though we are here today at the CEC with 22 Hydro, our people will still have the opportunity to 23 vote on the final project development agreement in a 24 secret ballot referendum to decide if NCN will 25 participate. It will be their decision. The 37 1 planning and cooperative work that has gone into this 2 project between Manitoba Hydro and ourselves 3 represents a ground-breaking positive approach that 4 we believe will change the way resource development 5 is done in Manitoba forever. We wanted to dispel the 6 issues of the Churchill River Diversion and replace 7 litigation, confrontation with cooperation, 8 understanding and trust. 9 In conclusion, we believe this is a good 10 project and an opportunity for our First Nation, 11 everyone in the north and all of Manitobans. We ask 12 that you consider the hopes and aspirations of our 13 people when you hear from the groups opposed to this 14 project. They may be well-intentioned but in my 15 mind, they are misguided if they think they represent 16 our best interests. 17 The evidence we present you with today will 18 demonstrate that the extensive joint planning 19 undertaken by NCN and Manitoba Hydro can positively 20 impact resource development to the benefit of all 21 Manitobans. 22 Wuskwatim can create the conditions to allow 23 our people to bring their full talents to the world. 24 This will help everyone in Manitoba. It can be our 25 gift and our legacy to our children and grandchildren 38 1 and their children for many generations to come. 2 That is my vision and a dream of our council 3 and of my people. With that, Mr. Chairman, I thank 4 you. 5 THE CHAIRMAN: Thank you very much. 6 MR. ADAMS: Good morning, Mr. Chair, 7 Commission members, ladies and gentlemen. My name is 8 Ken Adams and I'm the vice-president of Power Supply 9 of Manitoba Hydro. I am the member of Manitoba Hydro 10 Senior Executive Team and I have primary 11 responsibility for the projects that are under 12 consideration today. 13 Today we are pleased to present for your 14 review the Wuskwatim Generating and Transmission 15 Projects. We look forward to what I'm sure will be a 16 very vigorous discussion and we are confident that 17 when we're finished, we'll be able to demonstrate the 18 essential merits of the project and be able to 19 proceed with it. 20 Assuming that we do proceed with these 21 projects, it will be the first northern generating 22 station that we have started construction in nearly 23 20 years. And in that 20 year period, we have 24 thoroughly reviewed our approach to such development. 25 Our new way of cooperating with local Aboriginal 39 1 people and our commitment to environmental 2 stewardship is embodied in our present plans. 3 In 1992, Manitoba Hydro became one of the 4 first major companies in Canada to adopt its own 5 Principles of Sustainable Development. These 6 principles enlisted in the Sustainable Development 7 Report included in the April 2003 need an alternative 8 submission. Along with our corporate vision and 9 mission statement, our Sustainable Development 10 Principles provide the backdrop against which we 11 evaluate all potential projects and programs. 12 Hydro has an extremely rigorous internal 13 decision-making process. In part, it's designed to 14 measure a project against these criteria and in part, 15 it's designed to ensure that any recommendation 16 regarding major investments that we, as the executive 17 management team, make to our Board is in the best 18 overall interest of our customers. 19 Manitoba Hydro operates in a complex 20 continually evolving business environment that 21 reflects the changing and diverse perspectives of our 22 customers, our owners and other stakeholders 23 throughout the province and throughout the rest of 24 North America. 25 Our business environment is also affected by 40 1 unfolding events throughout North America such as the 2 structural changes in the electricity industry and by 3 global issues such as climate change. The Wuskwatim 4 project we are proposing has been shaped by all of 5 these influences. 6 We firmly believe that the Wuskwatim 7 development is an excellent project when reviewed 8 from each of the environmental, the financial and a 9 social perspective. That is the concept of the 10 so-called triple bottom line that is prominent in 11 most areas of corporate governments these days. 12 I personally have worked in the hydro power 13 industry for nearly 40 years and I'm convinced that 14 this project is a prime example of sustainable 15 development action. It reflects the core values and 16 strategic priorities recommended by the World 17 Commission on dams in 2000 and is fully consistent 18 with the International Hydro Power Association 19 sustainability guidelines just released. 20 As I noted earlier, Wuskwatim marks the 21 introduction of a fundamentally new and different 22 approach to development of Manitoba's hydroelectric 23 resources. 24 I would like to emphasize five aspects. The 25 first is that we're proposing to advance its 41 1 inservice date by about ten years from what would 2 have been required if we were building only to meet 3 Native Manitoba customers. This will help us 4 continue to participate in the highly competitive and 5 very lucrative export market. Continued success in 6 this export market is needed to allow us to continue 7 to offer low electricity prices in Manitoba. 8 The financial success of the project requires 9 us to construct it on schedule, to operate it in 10 accordance with the various licences and agreements 11 and to continue to sell the electricity it produces 12 profitably to wholesale customers in other provinces 13 and in the United States. Collectively with a lot of 14 experience in all of these areas and I'm confident 15 that our managers and their staff are fully capable 16 of ensuring that the project will be a success. 17 The second aspect is that based in large part 18 on what we learned through our consultations, 19 Wuskwatim has been deliberately designed as a low 20 impact project. As Chief Primrose said, the original 21 design was revised to reduce the size from about 350 22 to 200 megawatts to virtually eliminate any new 23 flooding. Its operation will be restricted to daily 24 run of river in order to limit water level 25 fluctuations both upstream and downstream. Also 42 1 through the consultation process, we have selected 2 transmission line, access road and construction camp 3 locations that respect environmental, cultural and 4 local community values. 5 The third aspect is the unprecedented extent 6 of the consultation that has taken place. Five years 7 ago, we initiated monthly meetings with members of a 8 number of Manitoba environmental organizations to 9 discuss issues and concerns related to potential new 10 Manitoba Hydro developments. 11 While these meetings were not part of the 12 formal consultation process for the Wuskwatim 13 project, they provided an excellent forum for 14 exchanges of information and perspectives on future 15 energy development and they have helped shape our 16 approach. 17 We started consulting with NCN in 1998. 18 Subsequently, in 2001, well starting in 2001, 19 Manitoba Hydro and NCN have consulted with every 20 community in the project area whether they are in the 21 immediate vicinity, upstream, downstream, near the 22 proposed transmission facilities or just in the 23 region and interested in the project. 24 There has been unprecedented website access 25 for all interested parties since 2002. More recently 43 1 all of the materials that have been filed for this 2 review have been placed on the website. In January 3 2003, we participated in an ENGO forum and an open 4 house in Winnipeg. 5 In June 2003, approximately six months after 6 filing with this Commission, we held a three day 7 workshop with the federal/provincial TAC. And in 8 July, we held another workshop with a number of 9 participants in this review. 10 Excluding our meetings with NCN members and 11 excluding the meetings with the regulatory 12 authorities and excluding proceedings in front of 13 this Commission, we have participated in almost 100 14 meetings with various interested parties. And to 15 date, we file binders with over 10 lineal feet of 16 written material explaining the project. 17 I doubt there has ever been a comparable 18 project in Canada with such a comprehensive community 19 consultation and public participation process. 20 The forth difference from previous projects is 21 that we have worked with the provincial and federal 22 governments and the community situated along the 23 Burntwood and lower Nelson rivers to establish a job 24 training program well before the project starts. 25 This program will ensure that Northern Aboriginal 44 1 people can develop the skills needed to qualify for 2 the higher skilled, higher paid jobs that will be 3 available on this project and on any future projects 4 that we or others may undertake in the region. It 5 will also help in prepare for long-term employment in 6 the operation and maintenance of our facilities and 7 at other locations. 8 The fifth aspect of this project which makes 9 it fundamentally different from any that we have ever 10 done before and the one for which we are the most 11 proud is our partnership arrangement with 12 Nisichawayasihk First Nation. As Chief Primrose 13 explained, NCN has participated as a full partner in 14 all of the planning activities, the public and 15 community consultation process, the open houses, the 16 environmental assessments and all other aspects of 17 the project. We look forward to a long and mutually 18 beneficial association with NCN. 19 Before we move to the detailed presentation of 20 the Wuskwatim project, it is appropriate for me to 21 confirm Manitoba Hydro's intentions with regard to 22 certain other potential sources of electricity 23 supply. We will continue to pursue energy 24 conservation and demand management, or PowerSmart as 25 we call it, to the maximum extent at which they are 45 1 economically and financially viable. We have 2 developed the best possible estimates of what is 3 achievable and we have provided for the attainment of 4 these in our financial plans. But if it turns out we 5 can do better, we will pursue them with vigour and we 6 will achieve what we can. 7 We will continue to pursue system efficiencies 8 in our existing system or supply site enhancement in 9 our terminology again to the maximum level of which 10 it is economically viable. We have upgraded most of 11 our older facilities over the last 15 years or are in 12 the process of upgrading a few of them. And we are 13 reaching the point of diminishing returns. But 14 again, if there's a megawatt hour to be gained or 15 saved in the existing system and it is financially 16 viable, then we will invest to achieve it. We 17 continue to explore the possibility of 18 non-traditional or returned energy sources and we 19 have assumed that over the next five years, we will 20 be able to purchase or construct at least 250 21 megawatts worth. If and when we're presented with or 22 if we can identify a technically and economically 23 viable option, we will pursue it. And again, if 24 higher amounts prove to be economic, we won't stop at 25 the 250 megawatts. In fact, we don't see these 46 1 energy sources as competitors to the Wuskwatim 2 project but rather as complimentary. They are not 3 mutually exclusive. 4 Returning to Wuskwatim, Hydro is fully aware 5 of the importance of these activities in Manitoba and 6 that our actions today will leave a legacy for future 7 Manitobans. So are the people we engage to undertake 8 the designs, the evaluations and the assessments of 9 our projects. 10 And I'd like to spend a few minutes to talk 11 about these people. The overwhelming majority of 12 people involved in the preparation for the Wuskwatim 13 project are Manitobans. They are very highly 14 qualified principled professionals. They are 15 accountable for their work to their peers, to their 16 colleagues, to their friends and relatives and to 17 future Manitobans. And in most cases, they will be 18 responsible for delivering on the programs and 19 projects that they recommend and they will ultimately 20 be responsible for dealing with the consequences. 21 They do not take these responsibilities 22 lightly. However, recognizing that in some areas we 23 need assistance, we do, where appropriate, engage 24 experts from other parts of North America to ensure 25 that the best available minds have been brought to 47 1 bear on all aspects of our deliberations. 2 Manitoba Hydro and Nisichawayasihk Cree Nation 3 are confident that individually and collectively, 4 their staff and consultants have performed their work 5 very well. We are confident that in its entirety 6 over the next few weeks, the body of work will 7 demonstrate Wuskwatim will provide a clean source of 8 renewable energy that will displace fossil fuels 9 elsewhere in central North America. It will provide 10 financial and reliability benefits to Manitoba 11 Hydro's domestic customers and it will be profitable 12 to both Manitoba Hydro and NCN. 13 We suggest the work will also demonstrate that 14 the environmental effects of the project are not 15 significant. And in fact, when viewed on a global 16 basis, there is a net environmental benefit. We will 17 demonstrate that the project will provide an economic 18 stimulus to Manitoba, particularly in northern 19 Manitoba. And we will show that the risks associated 20 with the proposed development are relatively low and 21 readily manageable. 22 At this point, I will turn the presentation 23 over to Councillor Elvis Thomas of NCN who holds a 24 future development portfolio amongst others. And Ed 25 Wojczynski who is Manitoba Hydro's Division Manager 48 1 of Power Planning and Development. Ed has the 2 responsibility for directing all of Manitoba Hydro's 3 development planning activities and is the corporate 4 executive responsible for overseeing our 5 participation in this review. Ed and Councillor 6 Thomas will chair and coordinate NCN and Hydro's 7 presentation of the project. 8 Mr. Chairman, I thank you. 9 THE CHAIRMAN: I thank you, Mr. Adams, and 10 Chief Primrose. And maybe this is a convenient time 11 for us to have this first break for a few minutes, a 12 ten minute break, while your colleagues get ready to 13 continue with the presentation. Thank you very much 14 again. 15 16 (PROCEEDINGS RECESSED AT 10:16 A.M. AND 17 RECONVENED AT 10:30 A.M.) 18 19 THE CHAIRMAN: I will ask the members 20 of the presenting panel to introduce themselves to 21 be sworn in. 22 MR. WOJCZYNSKI: Thank you, 23 Mr. Chairman. I'm Ed Wojczynski, I'm the division 24 manager of power planning and development at 25 Manitoba Hydro, and Councillor Elvis Thomas and 49 1 myself are going to call forward and introduce the 2 witnesses, if that is suitable. Mr. Ken Adams, 3 the vice president of power supply is one of our 4 witnesses, Ken; and Carolyn Wray, division manager 5 of treasury and business analysis; Lloyd Kuczek, 6 division manager of energy management and 7 conservation; Dave Cormie, manager of power sales 8 and operations. 9 THE CHAIRMAN: Maybe you want to call 10 the witnesses as they will come up to testify, or 11 do you want them all up at the front now? 12 MR. WOJCZYNSKI: Mr. Grewar had 13 suggested that we have them all up at once and 14 have the swearing in of all witnesses at one time, 15 Mr. Chairman. 16 THE CHAIRMAN: Thank you. 17 MR. THOMAS: For the other witnesses, 18 we are calling on Dave Hicks who is in charge of 19 N.D.Lea. They are the advisors for the 20 transmission part of the project. I have got 21 George Rempel, who is also sitting here in front 22 with TetrES. And we will call upon Cam MacInnes 23 who works for UNIES in particular with regard to 24 providing us with engineering advice. We have got 25 Cam Osler, who is with Intergroup, and we have got 50 1 Stuart Davies with North/South Consultants, and 2 then you have myself and Ed Wojczynski. 3 In terms of the swearing in ceremony, 4 I will be holding an eagle feather while we do the 5 swearing in ceremony. The eagle feather 6 represents truth, honour and respect in our 7 culture, and when we do something like this in 8 public, this is one of the things that we do as 9 First Nations people. So I'm going to be holding 10 one while you swear us in. Thank you. 11 MR. GREWAR: I wonder if I could have 12 clarification, is Ron Mazur there, please? 13 I will read the names and then I will 14 ask you to affirm your truthfulness. Ken Adams, 15 Elvis Thomas, Edward Wojczynski, Carolyn Wray, Ron 16 Mazur, Lloyd Kuczek, Cam Osler, Stuart Davies, 17 David Hicks, George Rempel, Campbell MacInnes, 18 David Cormie. 19 20 Ken Adams, Elvis Thomas, Edward 21 Wojczynski, Carolyn Wray, Ron Mazur, 22 Lloyd Kuczek, Cam Osler, Stuart 23 Davies, David Hicks, George Rempel, 24 Campbell MacInnes, David Cormie: 25 SWORN 51 1 2 MR. WOJCZYNSKI: We would like to 3 distribute copies of the presentation now, if that 4 would be acceptable. We have copies for the 5 Commission, and we have copies for everybody in 6 the audience. We have put a binder together, a 7 cerlox binder that has the presentations for the 8 whole day, for everybody's convenience. 9 Particularly, recognize that in the 10 back it will be kind of hard to see the projector, 11 so we thought that might make it a bit easier for 12 everybody. So we are just distributing copies. 13 If you don't want one, please just indicate that 14 when the people are coming around. 15 MR. GREWAR: We will enter this as a 16 single exhibit, as the presentation transparencies 17 or overhead projections, and it will be assigned 18 number, Manitoba Hydro NCN 1000, so MH/NCN-1000. 19 20 (EXHIBIT MH/NCN-1000: Presentation 21 transparencies) 22 23 THE CHAIRMAN: Thank you, Mr. Grewar. 24 You may now proceed. 25 MR. WOJCZYNSKI: Thank you, Mr. Chair. 52 1 I would like to introduce the 2 presentations that we are making today. As you 3 know, Manitoba Hydro and Nisichawayasihk Cree 4 Nation have prepared a great deal of information, 5 over ten feet of binder material. Today we can't 6 possibly present everything that we have prepared, 7 but we can summarize and illustrate for you the 8 most important things that we have learned in our 9 work. 10 We are going to do four presentations 11 today. The first presentation will be a 12 description of the Wuskwatim developments. It 13 will give you an overview of what the developments 14 are, and what they would look like and where they 15 would be located. After that, after we have shown 16 you the what and where of the Wuskwatim 17 developments, we are going to explain how the 18 Wuskwatim development fits into the Manitoba power 19 system and its operation. We expect to complete 20 these presentations by lunch time. 21 After lunch we will be moving to the 22 need for and alternative justifications for 23 developing Wuskwatim at this time. We will then 24 provide an overview of major issues that we 25 addressed as our environmental assessment of the 53 1 proposed Wuskwatim development. Finally, we will 2 provide a short conclusion and we expect and hope 3 to have this done by the end of the day. 4 I would like to now introduce you to 5 the first presenter, and that's George Rempel from 6 TetrES Consultants, who will be presenting the 7 project on behalf the NCN and Manitoba Hydro. 8 MR. REMPEL: Thank you, 9 Mr. Wojczynski. Is this mike turned on? 10 I'm going to be describing the two 11 projects. We have in this Wuskwatim development 12 two projects, the generation project and the 13 transmission project. Each of these have been 14 described in very substantial detail in the 15 individual environmental impact statements and, in 16 fact, in each of the EIS's there is a supporting 17 document which describes the project in greater 18 detail. What I'm going to be doing is providing 19 you an overview of the two projects, as the 20 project description is a very important step in 21 the environmental assessment. In fact, it is 22 typically the first step, you try to understand 23 how the project will be constructed, how it will 24 be operated, and then you look at potential 25 environmental effects. So I'm going to give you 54 1 this overview today. 2 Firstly, I will begin by providing 3 some context. This is a map of Manitoba which 4 shows some of the key features of the Manitoba 5 Hydro system. We have a Hydro system here that is 6 primarily hydroelectric based, over 90 percent of 7 the power generation comes from hydroelectric. 8 And much of this is dominated by three plants in 9 the lower Nelson, three plants on the lower 10 Nelson, 3600 megawatts of power in three plants in 11 the lower Nelson. They are primarily fed from 12 outflows from Lake Winnipeg into the Lower Nelson, 13 and those are regulated somewhat by Lake Winnipeg 14 to better conform, better shape the outflows to 15 the demand of Manitobans. 16 We also have a Churchill River 17 Diversion, a good portion of the flows in the 18 Churchill were diverted into the Rat/Burntwood 19 system in the early '70's to help feed flows, 20 deliver flows to these large plants in the Lower 21 Nelson. 22 The proposed Wuskwatim generation will 23 be placed on the Burntwood system, below Notigi, 24 which is a control structure for the diversion. 25 It will be 200 megawatts, so it will be about 55 1 4 percent of the overall Manitoba Hydro system 2 capability. 3 As I mentioned, 200 megawatts is the 4 capacity of this station. It will be Taskinigup 5 Falls on the Burntwood River. It will have an 6 associated access road, it is a critical part of 7 the construction of the project. It will also be 8 a permanent access road in that will help service 9 the plant after it is in operation. There will be 10 a construction camp. That camp will be dismantled 11 after construction and the site rehabilitated. 12 And there will be other infrastructure which we 13 will describe later. A six year construction 14 schedule is contemplated which would result in 15 first power some time in 2010. 16 In terms of the transmission project, 17 with new power comes a need to develop -- to tie 18 this into the existing distribution system. So we 19 have the project here. It will involve bringing 20 power from Thompson to the site for construction, 21 and then lines will be constructed to tie this 22 plant into the existing lines near Thompson, Snow 23 Lake and The Pas. About 350 kilometers of 24 transmission line will be required to tie this 25 into the existing system. 56 1 I'm going to turn now to a bit more 2 detail on the generation project. This is a 3 picture of the site showing the outlet of 4 Wuskwatim Lake and Wuskwatim Falls, and below 5 these falls are Taskinigup Falls, and this is 6 where we are proposing to build this dam. There 7 is about a one and a half kilometer distance 8 between these two falls, and the area that Chief 9 Primrose referred to for new flooding will be 10 associated in this immediate forebay that we are 11 talking about here, where the water will be raised 12 about 7 meters with the construction of the dam, 13 resulting in some peripheral flooding along the 14 existing shore line. I will talk about this in 15 greater detail later. 16 This project is located just 17 downstream of Wuskwatim Lake, Taskinigup Falls. 18 It is about 37 kilometers from the community of 19 Nelson House. This is the resource management 20 area of Nelson House. This shows the community of 21 Nelson House, the community of South Indian Lake, 22 and this distance here is about 37 kilometers, I 23 believe it is, from Nelson House to the station, 24 and the distance from this station to Thompson is 25 about 45 kilometers. 57 1 Further downstream we have communities 2 on Split Lake, the York Factory First Nation, 3 Tataskweyak Cree Nation, and further downstream we 4 have Gillam. 5 Now, this plant proposed here for 6 Wuskwatim will capture about 22 metres of drop or 7 head. When we referred to a low head before, we 8 were talking about the drop that is encountered 9 across these two falls, and this dam will capture 10 that head or energy and convert it into 11 hydroelectric power. 12 As the Chief and Ken Adams mentioned, 13 this project has been deliberately designed to be, 14 to have minimal flooding, it is a low head design. 15 We will tell you a bit more what that means. What 16 it does is it minimizes environmental effects 17 because the flooding is reduced to about a half a 18 square kilometer. 19 This low head design, as I mentioned, 20 has capacity of about 200 megawatts. Earlier 21 options that were considered, considered power 22 capacity up to 350 megawatts. So a lot more power 23 with this high head design, but it also came with 24 a lot more flooding, about 140 square kilometers, 25 54 square miles. So that design was rejected and 58 1 we now have a low head design which in fact has 2 the smallest amount of flooding of any existing 3 Hydro plant in the system. 4 I would like to discuss the water 5 level changes with this low head design. I have a 6 graphic here that shows the typical water profile 7 below Notigi control structure. That is the 8 control structure that controls flows from the 9 diversion downstream into the Rat/Burntwood 10 system. 11 So the brown is the shore line, or the 12 lake bottom or the river bottom, and we have the 13 blue showing the typical water line profile, 14 Threepoint Lake tumbling down the Early Morning 15 Rapids. Then again we have falls, Wuskwatim 16 outlet, Taskinigup Falls, and we have some 17 additional falls as the river proceeds downstream, 18 Opegano Lake, and we have Thompson, Birchtree 19 Lake and then Thompson over here. 20 What will happen with the new project 21 is that there will be a dam built in this area 22 here, and this will increase the water levels 23 between Taskinigup Falls, and this area here, 24 shown in the heavy blue. So you will have this 25 immediate forebay, this is where the flooding will 59 1 occur, the half square kilometer, and will also 2 stabilize the water levels on Wuskwatim Lake. 3 They will be stable in the high end of where they 4 have been in the last 25 years. The water level 5 influence will stop below Early Morning Rapids. 6 This is what we call a hydraulic break, in that 7 this water level here will not influence water 8 levels further upstream either in winter or 9 summer. 10 This is again the site that we have 11 shown earlier, but I'm showing more detail here. 12 Here is Taskinigup Falls. This is where the main 13 dam will be built. There will be a powerhouse 14 built over here which will comprise three 15 turbines, fix play design, there will be a 16 spillway as well. So the flows will now be 17 diverted, shunted over to here where the turbines 18 will be located, and the flows will typically go 19 through one or two or three turbines, depending on 20 how much flow is being taken down the system. If 21 the flows exceed the capacity of the turbines, the 22 three turbines, the spillway will bypass the high 23 flows and take them down into the river here. 24 In building this project, most of the 25 material actually comes from the site. When this 60 1 excavation is done here, that will yield rock, 2 soil, clay and silt that will be used for the dam, 3 and the rock will be used for cofferdams, crushed 4 for gravel or concrete aggregate. The only thing 5 that will be brought into the site in terms of 6 construction material, rock or earth, will be 7 granular material, aggregate from an area close by 8 the access road. The rest of it will be found on 9 site. In fact, there will be extra material 10 deposited in this area here. There will be 11 excavation done here to ease the flow from 12 Wuskwatim Lake into this immediate forebay to make 13 it easier for the flow to get to the powerhouse. 14 When this dam is built, there will be 15 an increase in water level, I mentioned about 7 16 metres increase in this area here, that will 17 result in a band of flooding here of about 25 to 18 300 metres, depending on the steepness of the 19 slope here along this shore line. The shore line 20 will be cleared in advance of this flooding, and 21 this is where the half square kilometer of 22 flooding will occur. This is a computer rendition 23 of the same development showing the channel 24 excavation, the excavated materials being placed 25 here. We now see the spillway a bit better here. 61 1 This is where the powerhouse is, and here you see 2 the three turbines. So the water will typically 3 go through those three turbines, either through 4 one or two or three. Almost always the flow will 5 be entirely directed through these turbines. Only 6 occasionally will there be a need to spill some 7 water over the spillway. 8 I would like to turn now to the 9 operation of the Churchill River Diversion. 10 Wuskwatim will not change the operation of the 11 Churchill River Diversion. The designing and 12 planning of this plant is assumed that the 13 patterns that have existed for the last 25 years 14 will continue in the future, and that includes the 15 annual modifications that are made to the interim 16 licence, where slightly additional flows are 17 allowed to be diverted from the Churchill River on 18 the Rat/Burntwood system. That has been in place 19 since 1979, and the design assumes that that will 20 continue. 21 There will be no change to the CRD 22 flow patterns. The amount of flow that is 23 diverted varies, depending on how much 24 precipitation and snow melt occurs in the 25 Churchill River and the Rat/Burntwood systems. So 62 1 those flow patterns that vary annually will 2 continue, and the only difference will be that 3 there will be some daily flow shaping in the local 4 area associated with the Wuskwatim Generating 5 Station. So in the local area there will be small 6 changes to the water level regime, but not on the 7 diversion in general. 8 The flows will normally equal, the 9 flows in will normally equal the flows out over a 10 24 hour period. So on a given Tuesday, Wednesday, 11 whatever, whatever flow arrived at Wuskwatim Lake 12 will also have left the lake. 13 Further on operation, the Wuskwatim 14 Lake will now be kept pretty much all of the time, 15 about 97 and a half percent of the time, at about 16 234 metres above sea level. Right now the lake 17 levels varies from 232.6 to 234.3, about a 1.7 18 metre variation; and that is dependent on the 19 different flow patterns along the diversion 20 itself. With this project, it will be held pretty 21 constant at 234, the higher end of what it 22 experiences now. 23 The generation station will operate in 24 what we call a modified run-of-the-river mode. A 25 true run-of-the-river mode means that all flow, as 63 1 it arrives at the station, would be sent out the 2 station. By modified run-of-the-river, we mean 3 there will be various units on or off during the 4 day. And that is to take advantage of the 5 efficiency of the turbines. It is something like 6 running your car, depending on the speed that you 7 are going, either you are in first gear, second 8 gear, or third gear. Depending on the flow that 9 arrives here, there will be either one, two, or 10 three units operating, there will be intervals 11 during the day when there might be say three units 12 operating, that is the best efficiency, and other 13 times it will be two units. And that will reflect 14 in small changes in the Wuskwatim Lake water level 15 and further downstream. Downstream the plant 16 level and flows will vary depending on how many 17 turbines are in operation. 18 I'm going to take some time to show 19 you where those variations will occur using this 20 map. And just for future reference or later 21 reference, this is the same map that you see here 22 on a different scale. Just to give you some 23 orientation, Notigi is actually over here, off the 24 map. Here we have Threepoint Lake, there is 25 Footprint Lake and the community of Nelson House. 64 1 As we proceed downstream on the Burntwood River, 2 we have the Early Morning Rapids that we showed 3 earlier. Here are some ancillary lakes to 4 Wuskwatim, Sesep, Cranberry. Here is Wuskwatim 5 Lake itself. There is the generating station 6 proposed site, and then we have the Burntwood 7 River continuing through Opegano Lake, Birchtree 8 Lake and Thompson. And this distance here is 9 about 45 kilometers, this distance here is about 10 37, to give you some scale. 11 I would like to show you on this map 12 then how this station here, placed at this site 13 here, will affect water levels in this area. 14 Firstly, there will be no changes in the water 15 level fluctuations on Threepoint Lake or Footprint 16 Lake. These areas are upstream of the Early 17 Morning Rapids, that is a control point, so there 18 will be no change in water levels as have been 19 experienced in the last 25 years in that area. 20 Going further downstream from this 21 site here, going up to Early Morning Rapids, that 22 is where the water level will be held very 23 constant, almost always at the upper end of its 24 present range, 234 metres. There will be small 25 daily fluctuations, depending again as to when 65 1 one, two, or three turbines are in place, and when 2 they are switched on or off. So that will be 3 about 5 inches or so, that is excluding wind and 4 wave effects. So it will be a very stable water 5 regime upstream of the site itself. 6 Just downstream, that is where you are 7 going to see more variation, because it is a 8 narrow river system here, and again it will depend 9 on what units are in operation. There the 10 variation will be about 1.3 metres under normal 11 open water operating conditions. And that begins 12 to dissipate as you go down through the falls and 13 to Opegano Lake. At Opegano the median daily 14 water level variation will be about 4 inches, .1 15 metres, and the maximum of 1 and a half feet or 16 .45 metres. As the river flows go further 17 downstream, by the time you get to Birchtree Lake, 18 the daily water levels will not be noticeable in 19 terms of variation. It will be about .1 metres 20 again excluding wind and wave effects, that is 21 about 4 inches of daily variation. 22 In terms of the access road, that is 23 an important component of this development. It 24 will involve 48 kilometers of a permanent access 25 road, a robust road, a key part of the structure 66 1 construction, it will continue in operation 2 permanently. There will be a construction camp 3 that will house at the peak about 625 people, that 4 will be a temporary one. 5 The preferred locations for the camp 6 and the access road were identified by 7 representatives of Hydro and NCN, and a lot of 8 consideration went into it, the Chief mentioned 9 various alternatives were ruled out because of 10 sacred sites or sensitive areas for the 11 environment -- environmental effects were 12 considered, the benefits and drawbacks, whether 13 access would be improved as a benefit or if it 14 would be a drawback. Effects on the cost and 15 schedule were obviously considered. Traditional 16 knowledge, as I mentioned, was a big factor. And 17 overall, the road and camp were selected in terms 18 of sustainability. 19 This shows the location of the access 20 road, this is PR 391. There is a 48-mile access 21 road to the site through largely uninhabited area. 22 We have aggregate sites in this area here. They 23 are not unique to the area, but there are located 24 in a good area, a good site to access those and 25 bring them on to the site for construction 67 1 purposes. 2 There has been a lot of interest in 3 controlling access because it is putting a road 4 into a new area. Hydro and NCN have prepared an 5 access management plan which identifies ways that 6 you can maximize the positive sides of this 7 access road and minimize the concerns. This plan, 8 as I say, has just been developed. It will 9 specify how access will be managed, it will be 10 relatively easy to do this during construction, 11 but it will also consider the operation aspects. 12 And the intent is to keep the benefits, which will 13 include providing access for resource harvesting, 14 but with it there are some concerns about 15 overhunting, overfishing, maybe vandalism. And 16 this management plan will describe how that can be 17 mitigated. 18 I would like to turn now to the 19 Transmission Project. As I mentioned, with new 20 power comes a need to connect this generation 21 source into the existing system. We have Thompson 22 over here, there is an existing station there, a 23 switching station. We have existing stations at 24 Snow Lake, and at Ralls Island at The Pas. What 25 is contemplated is that there will be a new 68 1 station built just south of Thompson called the 2 Birchtree Station, and there will be lines built 3 firstly to bring power in, and then to connect the 4 station into these new and existing sites. So we 5 will have about 350 kilometers of new transmission 6 line built that will connect into the very 7 substantial infrastructure that exists in this 8 area, improve reliability, and get the power out 9 for export as well. 10 Transmission lines are actually quite 11 flexible. They have to connect to the stations, 12 but in between there is a large amount of 13 flexibility, and picking the routes for these 14 transmission lines is a big part of the 15 environmental assessment process. This route 16 selection balances the biophysical, 17 socio-economic, technical and cost perspectives, 18 and public input is a very big part of this 19 process. That public input has involved local 20 First Nations, Aboriginal people, elected 21 officials, environmental groups, resource users, 22 and a general public in firstly identifying 23 potential routes, and then the selection of the 24 preferred route. The whole aim is to reduce the 25 environmental affects, avoid sensitive areas, and 69 1 try to take advantage of benefits where those come 2 about with the line. 3 Alternative routes were compared based 4 on traditional knowledge, and the Chief gave a 5 number of examples of that this morning. Local 6 input, they were compared based on the effects on 7 people and their activities, effects on the 8 environment, and as I mentioned, the technical 9 limitations and costs. Routes were compared, and 10 ultimately a preferred route was selected which 11 would minimize disruption to the people and the 12 environment, and meet the technical and cost 13 considerations. 14 This map shows the preferred routes. 15 Again, we will start at Thompson. This shows the 16 proposed Birchtree new station. Here is the 17 Wuskwatim site with a new station at the site. 18 Then we have the Snow Lake location with the 19 Herblet Lake existing switching station, and the 20 station at The Pas. The first leg of transmission 21 lines will be built from Thompson into the site, a 22 230 kV, that is 200,000 volts transmission line 23 between Wuskwatim and the station. It is about 24 45 kilometers long. It will be the first line 25 built. We will take power into the site. And it 70 1 will consist of steel structures, about 38 metres 2 high, about 4 per mile, a right-of-way of about 60 3 metres, which is cleared. Some revegetation is 4 allowed, but it is trimmed to avoid contact with 5 the lines. There will also be a 230 kV line from 6 Snow Lake to The Pas, 165 kilometers. Again, the 7 same kind of single tower line. And there will be 8 another line, double line actually in this area 9 here between the station and Snow Lake. So the 10 right-of-way here is a bit larger, 110 metres. 11 These lines are serviced by helicopter in terms of 12 maintenance. And this line will be about 13 137 kilometers, so we have about 350 kilometers of 14 line in total. 15 To give you some idea of costs, the 16 projected in-service costs, considering capital 17 cost and interest during construction, are about 18 800 million for the generation facility, and about 19 180 million for the transmission works. That does 20 not include the Herblet Lake to Ralls Island line 21 which will be required in any event. So we have 22 about a billion dollars of construction, and that 23 clearly relates to a lot of economic activity, and 24 we will be discussing that this afternoon. 25 That concludes an overview of the 71 1 project description, and I will turn it back to 2 Mr. Wojczynski, unless there is questions of 3 clarification. 4 MR. WOJCZYNSKI: Mr. Chairman, if it 5 is acceptable to you, I would like to introduce 6 the system operations presentation by Dave Cormie. 7 Should I proceed? 8 We have seen issues raised in the 9 process, in our review process and in our 10 consultations about system operations and the 11 potential for changes that may result from 12 Wuskwatim operation -- pardon me, from changes in 13 the Manitoba Hydro system operation with the 14 addition of Wuskwatim. By potential changes, 15 parties have referred to the water regime changes, 16 or that is changes in the water level and water 17 flows, resulting from the operation of the 18 Manitoba Hydro power system, with the addition of 19 Wuskwatim. The issues here go to describing how 20 will we, Manitoba Hydro, operate the system. More 21 specifically in the context of the Wuskwatim 22 project, as just described by George Rempel, we 23 are talking about potential changes in the water 24 regime, again the levels and the flows, outside 25 the Wuskwatim water regime study area that George 72 1 has described. In other words, as George had 2 indicated, there will be changes from Early 3 Morning Rapids down to here, and that was studied, 4 but now David is going to be talking about the 5 changes outside of that area. So David is 6 going be -- David Cormie is going to be discussing 7 the regime change outside of the study area that 8 George had talked about. 9 As George had indicated, the Wuskwatim 10 development is not expected to cause any 11 perceptible changes in the CRD water regime 12 outside of the study area; and secondly, is not 13 expected to cause any perceptible changes in the 14 water regime associated with the Lake Winnipeg 15 Regulation operation. 16 In response to questions about these 17 conclusions that we discussed earlier in the 18 process, Manitoba Hydro carried out a more 19 detailed review of possible system issues related 20 to the operation of the power supply with 21 Wuskwatim, and we met in the past year with 22 Pimicikamak advisors and others to discuss the 23 results of this review. 24 This review was lead by Mr. Cormie, 25 who is the division manager responsible for 73 1 operation of the Manitoba Hydro's power system and 2 for its export marketing. He will provide you now 3 with a summary of our review. These details have 4 been reported elsewhere in our filings, and the 5 supplemental filings provided in August and 6 October of 2003, and also are addressed in the 7 subsequent interrogatory responses that we have 8 already filed. I give you Mr. Cormie. 9 MR. CORMIE: Thank you, Ed. 10 As Mr. Wojczynski had indicated, the 11 addition of Wuskwatim is not expected to lead to 12 any perceptible changes in water regimes beyond 13 the study area. In order to help understand why 14 we came to that conclusion, I want to take the 15 opportunity this morning to take you through a 16 description of the Manitoba power system. I want 17 to discuss how we matched the electricity supply 18 to the demand on a daily and hourly and seasonal 19 basis. I want to talk about the major factors 20 that lead to water levels, water level changes. 21 In particular, I want to speak about the operation 22 of the Churchill River Diversion and the Lake 23 Winnipeg Regulation projects. I also want to talk 24 about what our expectation is for water level 25 change as a result of Wuskwatim, and cumulative 74 1 effects. And I will wrap up my presentation in 2 discussing some conclusions. 3 The Manitoba power system has 16 4 generating stations, 14 hydro, two 5 thermal-electric power plants, with the installed 6 capacity of 540 megawatts. Wuskwatim will add 7 200 megawatts to our production capability. It 8 will represent approximately a 4 percent increase 9 in production capability. 10 The 14 hydro stations in the Manitoba 11 Hydro system have an installed capacity of around 12 4,900 megawatts. The stations were installed over 13 the last 100 years. So approximately 14 500 megawatts of generating capacity on the 15 Winnipeg River in southern Manitoba, so 16 approximately 500 megawatts at the Grand Rapids 17 Generating Station at the outlet of Saskatchewan 18 River as it flows into Lake Winnipeg, 19 approximately 500 megawatts between Jenpeg and 20 Kelsey on the upper Nelson River. There is 10 21 megawatts of capability at the two Laurie River 22 stations, on the Laurie River which feeds into the 23 Churchill River, but by far the largest capacity 24 is on the lower Nelson at three large stations 25 with the combined capacity of around 75 1 3,600 megawatts. 2 On the lower Nelson, Manitoba Hydro 3 has 80 percent of its production, hydro production 4 capability. That hydro production is brought 5 south to serve the Manitoba load and the export 6 load primarily through a 600-kilometer high 7 voltage direct current transmission system that 8 collects the generation from the Lower Nelson 9 plants and brings it south to Winnipeg, to our 10 terminal station at Dorsey. At that point the 11 power is converted from direct current into 12 alternating current and is fed into the North 13 American electric grid at that point. 14 A key control point for the Manitoba 15 water system and for the flows on the Nelson River 16 is the Jenpeg control dam. 75 percent of the 17 water that flows down the Nelson River comes from 18 Lake Winnipeg. The dam at Jenpeg allows Manitoba 19 Hydro to control that flow in order to match the 20 supply of energy to the expected demand. It takes 21 approximately 4 to 6 weeks for water released at 22 Jenpeg to work its way down along the Nelson 23 River, through the lakes and along the river, 24 before it arrives at the Lower Nelson plants. So 25 water has to be released in advance of the power 76 1 need, four to six weeks in advance, in 2 anticipation for the demand of power at the Lower 3 Nelson stations. 4 The second critical component of the 5 water management system that feeds the northern 6 generating stations is the Churchill River 7 Diversion. There is a control structure at Notigi 8 which controls the flow of water, controls the 9 diversion of water from the Churchill River, from 10 the Southern Indian Lake reservoir, into the 11 Burntwood River, as it flows towards the Lower 12 Nelson station. There is a control dam at the 13 Missi Falls, at the northern outlook of Southern 14 Indian Lake. That dam operates to block the flow 15 and allow the water to be diverted south into the 16 Nelson River. 17 Similar to the Lake Winnipeg project, 18 it take several weeks, three to four weeks, for 19 water that is released from the Notigi dam to work 20 its way down the Burntwood River and arrive at the 21 Lower Nelson generating stations. 22 In a normal water year, the 23 hydroelectric plants in Manitoba are fully capable 24 of meeting the entire demand of the province and 25 fulfilling all of our obligations in the export 77 1 market. We don't always have high water years. 2 In times of drought, Manitoba Hydro has two, 3 operates two thermal plants at Brandon and 4 Selkirk, and these plants provide 500 megawatts of 5 generating capacity that is independent of the 6 water flows, the rainfalls, and can be operated -- 7 we burn coal and natural gas at the Brandon and 8 Selkirk stations. They operate as backup plants 9 to the hydroelectric system. 10 A critical component of the Manitoba 11 Hydro system are our interconnections to 12 neighboring markets, to Ontario to the east, to 13 Saskatchewan to the west. The prime connection is 14 to the United States. We have 2,000 almost 15 2,200 megawatts of interconnected capability with 16 with the U.S. market. Over 50 percent of Manitoba 17 Hydro's production capability can be sold into the 18 neighboring markets. Not only do these 19 interconnections provide us with an outlet for our 20 surplus power, they also provide for an energy 21 supply during low flow years. And a good example 22 is what we have done this year, become a major 23 importer of power to serve our needs during this 24 low flow period. 25 This chart shows the history of water 78 1 flows, beginning back in 1912 up to present. It 2 is expressed as percent of the long term average 3 flow. I have indicated on this chart -- the 4 lowest flow period on record, extreme drought, 5 when the water supply was as low as 56 percent of 6 the long term average. I have also shown the 7 highest flow years, record flood conditions in 8 1974, when the water supply is as much as 9 142 percent of the long term average; also showing 10 the flood of the century in 1997 -- it wasn't a 11 record, but it was very close to the record of 12 1974 -- and also indicating the flows that we have 13 experienced in the last year where water supply 14 was just above 60 percent of the long term 15 average. What you can see from this chart is that 16 the water supply varies over time, ranging from 17 very low to very high. Manitoba Hydro must be 18 able to meet its obligations to serve its 19 customers even under the lowest flow conditions. 20 And we described those low flow conditions as the 21 dependable flow. It is the flow that we can 22 depend upon to serve our firm power demands. 23 This bar chart shows the production 24 capability of the Manitoba power system as it 25 varies between minimum flows, or the dependable 79 1 flow condition, to the highest flows, as occurred 2 in 1974, and in the middle bar shows what the 3 average production capability of the system is. 4 We described the energy capability of 5 the system in units of kilowatt hours. In a 6 normal water year, the power system will generate 7 around 32 TWh of electricity. In the higher flow 8 years, it increases up to around 36. In the 9 dependable flow condition, the power system is 10 capable of producing 28 TWh hours of electricity. 11 We have talked about the need to be 12 able to serve our firm low requirements even under 13 dependable flow conditions. The red bar indicates 14 that for loads lower than 28, we describe those as 15 firm loads, if the power supply is greater than 16 the dependable capability, we will sell that as 17 interruptible power. It is not there under all 18 flow conditions, so we need the right to interrupt 19 it. We will serve firm loads from the dependable 20 capability. When Manitoba Hydro has insufficient 21 dependable capability to serve its load, at that 22 time we need to consider the construction of new 23 resources. 24 This next chart shows the variation in 25 the demand for power over a year, typical year. 80 1 The power demand varies continuously. There are 2 moment by moment variations in the demand. 3 Customers turn their lights on, they turn them 4 off. We need generating stations that can produce 5 more power when you turn your lights on, we need 6 generating stations that can back down when you 7 turn your lights off. There is an hourly pattern, 8 there is a daily pattern, there is a weekly 9 pattern, and there is a seasonal pattern to the 10 power demand. 11 The hourly and daily matching of the 12 power demand is primarily done at the three Lower 13 Nelson generating stations. The seasonal 14 variation in power demand is also done at the 15 Lower Nelson stations, but it is done by managing 16 the fuel supply, by regulating the flows on the 17 Nelson River with Lake Winnipeg Regulation. What 18 I have shown here is how the power demand on 19 average in the summertime is lower, shown here at 20 an average of around 50 GWh per day. During the 21 fall season the power demand picks up until it 22 reaches a peak in the winter time, in December and 23 January, when people's furnaces are running much 24 more often. That additional energy supply that is 25 needed to serve the load is controlled by 81 1 releasing, is met by releasing more water from 2 Lake Winnipeg, by using our ability to move water 3 from the summer season, when there is a large 4 surplus of water available, to the winter when 5 there is a greater demand for electricity. 6 In addition to matching the demand for 7 Manitoba customers, matching is also required for 8 our export sales. The next chart shows how we 9 expect to match the Wuskwatim output to export 10 sales. If we had an export customer who could 11 take the production of Wuskwatim on a moment by 12 moment basis, as it was produced, there would be a 13 perfect match between our ability to generate it 14 and the export sale. So if Wuskwatim output 15 equals the export sale, there would be no change 16 in overall system operation. The power would be 17 generated, it would flow through the transmission 18 grid, and it would go to the export customer. 19 We don't expect and we don't plan that 20 there will be a perfect match between the 21 production at Wuskwatim and the export sale. 22 There will be an hourly and a daily mismatch. 23 Wuskwatim will produce power at nighttime. 24 Manitoba Hydro intends to store that production at 25 nighttime, concentrate that electricity production 82 1 in the daytime by increasing the generation at the 2 Lower Nelson generating stations. We will not use 3 the Churchill River Diversion or the Lake Winnipeg 4 Regulation project to create the match on a hourly 5 and daily basis. That match will be done at the 6 Lower Nelson stations. 7 The seasonal mismatch between 8 Wuskwatim production and the export sale will be 9 done though with Lake Winnipeg Regulation. It is 10 expected that in the summertime primarily 11 Wuskwatim will produce more power than will be 12 sold to the export customer, and so the additional 13 Wuskwatim generation has the potential to be 14 stored and to be moved into the winter season. 15 And that transfer of summer production, that 16 transfer of production on a seasonal basis will be 17 done with Lake Winnipeg. 18 The next chart shows a typical day of 19 generation on the Manitoba Hydro system. This day 20 was chosen from June when the load variations are 21 the maximum. The bottom access shows time of day 22 from midnight to noon to midnight. It is a 24 23 hour period. Production is lowest at night, our 24 customers are sleeping, the demand for electricity 25 is low. This chart shows production as low as 83 1 about 1,700 megawatts up to about 5:00 o'clock in 2 the morning. As people wake and begin their 3 normal day activities, the demand for power 4 increases, and the Manitoba power system increases 5 its production from around 1,700 megawatts up to a 6 full capability of around 5,000 megawatts, for the 7 peak demand hours, from about 10:00 o'clock in the 8 morning until about 10:00 o'clock at night. And 9 those we describe as the on peak hours. 10 Most of the variation between the 11 overnight minimums and the daily maximum occurs by 12 changing, increasing the output from the Lower 13 Nelson generating stations. Over 90 percent of 14 the hourly and daily matching of supply to load 15 occurs by changing the output of those Lower 16 Nelson plants. 17 The gray area at the bottom shows how 18 the other generation in the Manitoba Hydro system 19 operates relatively constant over the day. And I 20 have also shown on here how Wuskwatim generation 21 is expected to vary over the day. At night we 22 expect to run, in this case around 2 units of 23 operation, increasing to 3 units of operation. 24 You will see that we've concentrated the output of 25 Wuskwatim in the top here, and the system needs to 84 1 absorb the production from Wuskwatim during the 2 nighttime hours. And it is the Lower Nelson that 3 then allows us to put that energy into the market 4 during the daytime. 5 So what will be the effect of using 6 the Lower Nelson to match the production from 7 Wuskwatim to the market needs? This chart shows 8 again on a 24-hour scale, from midnight to 9 midnight, for our Lower Nelson main reservoir, 10 Stephens Lake -- Stephens Lake operates within a 11 10 foot range between elevation 453 up to 463. 12 For the month of June it has a normal 5 foot 13 operating range. The blue and red lines show how 14 that reservoir will be operated over the daily 15 period with and without the Wuskwatim project. 16 The effect of balancing the Wuskwatim production, 17 taking it, absorbing it at nighttime and then 18 taking it to market in the daytime results in 19 approximately a quarter inch change in levels on 20 that reservoir. 21 So Nelson we have talked about the 22 hourly and daily match between load and 23 generation, and how Wuskwatim will affect that. I 24 would like to now talk about how Wuskwatim 25 generation is expected to affect the operation of 85 1 Lake Winnipeg. 2 The map on the slide is a blow-up of 3 the north end of Lake Winnipeg, with the Nelson 4 River leading north through the Playgreen Lakes, 5 past the Jenpeg control structure, and then in the 6 upper right-hand corner is Cross Lake as the 7 Nelson River flows downstream. The map shows the 8 location of the control structure at Jenpeg, and 9 the channels that were constructed as part of the 10 project. 11 As I described earlier, Lake Winnipeg 12 is the seasonal balancing reservoir. Most of the 13 water that comes into the Manitoba Hydro system 14 comes in during the summertime as a result of 15 spring, snow melt run-off, spring and summer rain 16 falls, Lake Winnipeg collects that water, and that 17 reservoir can be operated to distribute that water 18 throughout the year and bring balance to the 19 supply and demand for water. 20 The control structure at Jenpeg 21 controls the flow on the west Nelson River, 22 approximately 85 percent of the flow out of Lake 23 Winnipeg flows down the west channel. The other 24 15 percent of the flow flows uncontrolled through 25 the east channel directly into Cross Lake. The 86 1 outflows from Lake Winnipeg are the main 2 determinant of the Nelson River water levels. So 3 Jenpeg is the control point. What happens at 4 Jenpeg determines what the water levels will be 5 downstream. 6 The Lake Winnipeg Regulation project 7 is operated under a water power licence issued to 8 Manitoba Hydro from the Province of Manitoba. 9 Lake Winnipeg has a four foot range in the licence 10 that has been reserved for power purpose. The 11 licence has an upper level of 715 feet for power, 12 a lower level of 711 feet. It is within those 13 four feet that Manitoba Hydro is allowed to 14 regulate for power purposes. 15 The licence specifies how Manitoba 16 Hydro will operate the control structure at Jenpeg 17 during flood conditions. Under high flow 18 conditions such as occurred in the flood of 1997, 19 the water level on Lake Winnipeg rose above 20 elevation 715 feet, and Manitoba Hydro was 21 required to operate the Jenpeg dam in order to 22 minimize flooding along, around Lake Winnipeg. 23 During drought conditions, the level 24 of Lake Winnipeg can drop below level 711. Under 25 those conditions the licence issued by the 87 1 Province requires, transfers authority for the 2 outflows at Jenpeg to the Minister of Water 3 Stewardship. So Manitoba Hydro does not get to 4 decide independently what the outflows from Lake 5 Winnipeg will be, either under low flows or under 6 flood conditions. However, when the water levels 7 are within the 4 foot range reserved in the 8 licence for power, there are two modes of 9 operation. The first mode is conservation mode, 10 when Manitoba Hydro is holding back water in Lake 11 Winnipeg out of concern that there will be an 12 adequate energy supply in the future. 13 This is the condition that we are in 14 now. We are in a severe drought. We are in 15 conservation mode, concerned that water needs to 16 be held back to serve the future demand for 17 electricity. However, when conditions are more 18 normal, Manitoba Hydro regulates the outflows from 19 Lake Winnipeg based upon power system economics, 20 regulates within the limits that are set through 21 its agreements and other licences. This is the 22 range for which there is potential for Wuskwatim 23 related seasonal change and outflows from Lake 24 Winnipeg. If the surplus power that Wuskwatim is 25 producing is best stored for future release to the 88 1 market, that energy will be stored in Lake 2 Winnipeg, and it creates a potential for a change 3 in water regime as a result of the project. 4 So what are the major factors that 5 affect the operation of the Lake Winnipeg project? 6 A critical factor is the ice conditions that -- 7 the icing that occurs in the winter time, the 8 choking of the channels that limit Manitoba 9 Hydro's ability to release water from Lake 10 Winnipeg and get it to the downstream generating 11 stations. 12 Another major critical factor is the 13 operation of the Churchill River Diversion. The 14 Churchill River Diversion has very little storage. 15 South Indian Lake is a relatively small lake, has 16 a very limited ability to transfer water. And 17 that operation needs to be considered when the 18 decisions are made to operate Lake Winnipeg 19 Regulation. 20 By far the major factor that affects 21 the regulation of Lake Winnipeg is the water 22 supply. Extreme droughts cause low flows, extreme 23 floods cause high flows. Those flow conditions 24 cause low levels and high levels respectively. 25 Our firm power demands need to be met at all 89 1 times. Winter power demands are highest. We need 2 to hold back water to conserve that for future, if 3 there is a concern for low water conditions. 4 Relative power prices are a major 5 driving factor. Summer prices are generally 6 higher than winter prices, and that price 7 differential affects the release decisions on Lake 8 Winnipeg during normal flow conditions. 9 And the interconnection capability, 10 our ability to move energy to the export markets, 11 also has a major impact on how the lake is 12 operated. The water may be there, but there may 13 not be any room on the interconnections for the 14 energy to be taken to market. So if the 15 interconnection capability is insufficient, that 16 will affect the way that Lake Winnipeg Regulation 17 is operated. 18 Ice restrictions severely limit the 19 outflow capability from Lake Winnipeg in the 20 winter time. There is an approximate 50 percent 21 flow reduction caused by ice accumulations and ice 22 growth in the outlet channels between Lake 23 Winnipeg and Jenpeg. During the summer season, 24 Lake Winnipeg project is completely capable of 25 meeting the power demands downstream of the large 90 1 Nelson River plants. In the winter time it is 2 like clogging of the arteries, the ice chokes up 3 the river, and Lake Winnipeg is incapable of 4 supplying an adequate amount of water for the 5 downstream plants. What that means is that 6 Churchill River Diversion water is most useful in 7 the winter. The Lake Winnipeg reservoir is 8 incapable of meeting that demand, so that need for 9 water at the downstream plants needs to be 10 augmented by maximum flows on the Churchill River. 11 This chart shows levels on Southern 12 Indian Lake for the years 2000 to 2003. During 13 the summer outflows from Notigi are reduced so 14 that the level of Southern Indian Lake rises. The 15 levels are brought up, if possible, to the full 16 supply level of 847 feet. The purpose of bringing 17 the waters to the maximum levels is so that a 18 maximum amount of water is stored and is available 19 to flow down the diversion route in the winter 20 time to meet the winter power demand. So the 21 Southern Indian Lake reservoir is drawn down 22 during the winter time over that 4-foot range, so 23 the maximum amount of water can be concentrated 24 down the diversion to meet that winter power 25 demand, because Lake Winnipeg Regulation is 91 1 incapable of fully satisfying the need for water 2 downstream. 3 Churchill River Diversion operations 4 follow this predictable seasonal pattern. This 5 seasonal pattern is driven by the ice restrictions 6 on Lake Winnipeg. Those ice restrictions will not 7 change as a result of Wuskwatim project, so that 8 seasonal pattern will not change as a result. 9 I mentioned earlier that water supply 10 is the most significant driver for Lake Winnipeg 11 Regulation. If there is very little water flowing 12 into the Manitoba system, the Manitoba reservoirs, 13 outflows from the reservoirs need to be held back 14 to maintain water levels within the reservoir 15 within their regulated range. So in extreme 16 drought conditions, water supply is least, water 17 flows on the Nelson River are lowest, extreme 18 drought leads to lowest levels. 19 In major floods such as occurred 20 during the 1997 flood of the century, you have the 21 highest levels. Lake Winnipeg reaches its highest 22 level, flows down the Nelson River reached their 23 highest flows, and water levels will be the 24 highest. The range of levels along the Nelson 25 River between highest levels and lowest level 92 1 caused by variation of the water supply can be 2 between 8 and 13 feet depending upon the location. 3 The water flows are not always the lowest, they 4 are not always the highest, they follow this 5 irregular pattern. Water levels on the Nelson 6 River also follow that pattern. 7 This chart shows the variation in 8 monthly power prices in the export markets that 9 Manitoba Hydro serves. Power prices are generally 10 highest in the summertime, especially in the 11 United States market where there is, their peak 12 demands occur due to air-conditioning loads, the 13 most expensive generators have to run at that 14 time, it drives up the price of power. 15 During the spring and the fall season 16 we are not into the heavy air-conditioning period, 17 we are not into extreme heating loads, so power 18 prices are at the lowest during the fall. 19 That price differential throughout the 20 year is the price signal that Manitoba Hydro 21 responds to if it has surplus electricity 22 available to sell into the export market. If 23 there is a surplus unit of power available, 24 Manitoba Hydro wants to store that water in 25 reservoirs and release it to the market at the 93 1 time when it can get the maximum value. But that 2 can only be achieved if there is sufficient 3 interconnection capability or generating capacity 4 to allow that energy to be taken to market. So 5 Lake Winnipeg can shift surplus energy to higher 6 value months, but only if it is possible, only if 7 there is enough transmission available or enough 8 generators to take that energy to those high 9 priced markets. 10 This is the factor that creates the 11 potential for shifting water under normal 12 conditions, because Wuskwatim, because of the 13 Wuskwatim plant. All of the Wuskwatim output will 14 not be sold to a customer under a firm contract. 15 There will be some surplus power that Wuskwatim 16 produces on average. So Manitoba Hydro has the 17 choice of taking that surplus energy to the market 18 at a time of its choosing, and that time will be 19 driven by the price that the market, the price 20 signal that the market is sending to the 21 operators. 22 We have been operating the power 23 system with Lake Winnipeg Regulation and Churchill 24 River Diversion and large interconnections for 25 over 25 years. It gives us experience with how 94 1 the power system was operated in the past. But 2 the question is, what will happen in the future if 3 we build Wuskwatim and now have to operate that? 4 Lots of things can change between now and the 5 future that the operators don't know. At this 6 point we use our computer models in order to help 7 us predict the effect of operations from the 8 Wuskwatim plant. 9 Our computer modeling system is called 10 SPLASH, and it is a simulation program that looks 11 at what the Manitoba load will be in the future, 12 looks at our export power commitments, looks at 13 our historical water supply record, looks at our 14 export market price forecast and our 15 interconnection capability. It can look at these 16 variables and predict how the system will operate 17 in the future, and then we can add Wuskwatim to 18 that computer model and see what the effect on 19 system operation is with and without Wuskwatim. 20 I want to take you through that 21 comparison of water levels using Cross Lake as an 22 example of a place that will see some small 23 changes in water regime as a result of water 24 levels, as a result of Wuskwatim. 25 This chart shows the output from our 95 1 SPLASH computer model for the water years 1970 2 through 1990. It shows the water levels on Cross 3 Lake for the load year 2012. This is the output 4 of the model without Wuskwatim as part of the 5 supply and without the export sales associated 6 with the Wuskwatim project. 1974, very high water 7 year, the model predicts very high water levels on 8 Cross Lake as a result of the 1974 flood, very low 9 levels during the drought from 1977, very low 10 levels during the droughts of the early '80's, and 11 again very low levels during the droughts of the 12 late '80's and early '90's. Water levels 13 fluctuate as the water supply fluctuates. 14 The next slide shows, if we add 15 Wuskwatim to the generating system and we sell the 16 firm production from Wuskwatim in the export 17 market, how the model predicts the water levels on 18 Cross Lake will be under those conditions. Under 19 very high flow conditions as in 1974 level, there 20 is very little change; under low levels, very 21 little change. There are some minor changes 22 during the mid band, mid range of levels, because 23 Wuskwatim is providing more power to the system 24 than is associated with the export sale, and our 25 computer model identifies that that water should 96 1 be held back in reservoir storage and should be 2 shifted to a different time. So there are slight 3 changes in water levels as a result of Wuskwatim 4 and associated firm sale as compared to the 5 without Wuskwatim analysis. 6 That chart was a chronological look at 7 the water levels on Cross Lake. One way of 8 viewing that same information is to construct a 9 duration curve of water levels, where we sort the 10 water levels from lowest flows to highest flows, 11 they are ranked from lowest to highest. And we 12 have done this for the summer levels for the 13 period of, for that same period of historical 14 records, again for the load year 2012. The red 15 line indicates the levels without Wuskwatim, and 16 the black line indicates what the duration curve 17 will look like with the construction of, operation 18 of Wuskwatim and associating export sale. 19 Small changes in levels are predicted 20 by the model. The average level change will be, 21 during the summer will be .04 feet, less than half 22 an inch change in average water level, slight 23 lowering of the level during the summertime. The 24 maximum water level change was .12 feet, just 25 over, between 1 and 2 inches. And those changes 97 1 are in the context of a water level change over 2 the range of all flows of around 6 and a half 3 feet. 4 That is our -- that was our base case 5 assumption, that we build the project, we match it 6 with an export sale. As a sensitivity, we said 7 what happens if you don't enter into a firm sale 8 associated with the firm output or dependable 9 output from the system that results from 10 Wuskwatim? This analysis again for the same 11 period, for the same load year, shows that -- 12 without Wuskwatim the water levels are shown in 13 the red line, with Wuskwatim the water levels are 14 shown slightly higher during, in the normal range 15 from something near lower quartile to upper decile 16 flows. That is because the Lake Winnipeg 17 Regulation project is concentrating the surplus 18 production in Lake Winnipeg and Lake Winnipeg is 19 releasing that surplus energy to the market during 20 the summer season when power prices are highest. 21 That results in slightly higher outflows from Lake 22 Winnipeg during the summer season, resulting in 23 slightly higher levels with Wuskwatim than 24 without. Conversely, in the winter time, levels 25 would be slightly lower in the normal range than 98 1 the without Wuskwatim case. But, again, this is a 2 sensitivity, this is assuming that Manitoba Hydro 3 doesn't enter into a firm power sale and all of 4 this energy that Wuskwatim is producing is surplus 5 and can be concentrated according to the price 6 signal that the market is sending to Manitoba 7 Hydro. 8 Those are very small changes. To put 9 those level changes in context, I have shown a 10 chart here that shows maximum water level 11 variations that occur on Cross Lake now, water 12 supply results in a range of levels around 8 feet, 13 wave action on Cross Lake is approximately 4 feet 14 under maximum conditions. With constant flows out 15 of Lake Winnipeg in the winter time, water levels 16 on Cross Lake vary about three-quarters of a foot 17 just due to the ice effects caused by the thermal 18 change between a warm day and a cold day on the 19 lake. So water variations occur naturally up to 20 three-quarters of a foot. Wind setup on the lake 21 is half a foot. Operation of the Jenpeg 22 Generating Station through its daily cycle is 23 around .2 feet, about 3 inches between day and 24 night. In that context, the water level changes 25 resulting from Wuskwatim under the maximum were 99 1 shown, with the firm sale, was the reduction in 2 the summer of about .1 feet, about an inch 3 reduction, and as a sensitivity we have shown an 4 increase of about .4 feet, about 5 inches, if we 5 do not enter into a firm sale. 6 Cross Lake isn't the only lake that 7 will be affected by the change in system 8 operations as a result of adding Wuskwatim to the 9 generation fleet. Water level changes will occur 10 on other lakes in the system, Lake Winnipeg, Cedar 11 Lake, Kiskittogisu Lake, Sipiwesk Lake, Split Lake 12 and Stephens Lake, but our studies have indicated 13 that these water level changes will be even 14 smaller than those, than what we are predicting on 15 Cross Lake. 16 We looked at the cumulative effects on 17 water regime should Manitoba Hydro construct 18 Notigi, Gull and/or Conawapa in conjunction with 19 Wuskwatim. We considered the possible future 20 generating stations in the system. We came to the 21 conclusion that there will be no changes to the 22 Churchill River Diversion operation beyond the 23 study area as a result of these projects. 24 We concluded that there would be no 25 perceptible change to Lake Winnipeg Regulation 100 1 resulting from the construction of Notigi 2 Generating Station at the Notigi control 3 structure. We concluded that changes to Lake 4 Winnipeg Regulation were very dependent upon the 5 assumptions surrounding the construction of Gull 6 and Conawapa. Particularly those projects and the 7 assumptions surrounding those projects affect the 8 direction and the magnitude of change in water 9 levels; that interconnection size and how well the 10 production from the these new plants matches the 11 export sale are critical assumptions; other 12 factors can also be significant; and that no one 13 scenario is likely today. 14 So, in conclusion, there will be no 15 change to CRD operation or water regime beyond the 16 study area as a result of Wuskwatim. There will 17 be no perceptible change in Lower Nelson water 18 levels. There will be no perceptible change in 19 Lake Winnipeg outflows, no perceptible change in 20 water levels affected by Lake Winnipeg Regulation. 21 And we provided these results to the EIS team for 22 their review. 23 That concludes my presentation. 24 MR. WOJCZYNSKI: Mr. Chairman, that 25 concludes the system operation presentation. The 101 1 next one we would make is for need for 2 alternatives, but I would expect that presentation 3 is close to an hour and a half, so you may prefer 4 to have us break and conclude later, but we are at 5 your disposal. 6 THE CHAIRMAN: I think that is a wise 7 suggestion. Maybe we could break at this time and 8 come back and hear the full presentation on that, 9 at 1:00 o'clock sharp. 10 11 (HEARING RECESSED AT 11:45 A.M. AND 12 RECONVENED AT 1:00 P.M.) 13 14 (PROCEEDINGS RECONVENED AT 1:03 P.M.) 15 16 THE CHAIRMAN: I turn the ball over to you, Mr. 17 Wojczynski. 18 MR. WOJCZYNSKI: Thank you, Mr. Chair. So this 19 afternoon, we'd like to bring you the Need For an 20 Alternatives presentation and I will be leading off 21 with an explanation of the overall justification for 22 Wuskwatim for the background and the context for our 23 evaluations, a discussion of the alternative resources 24 and a description of the economic evaluations and the 25 results. Lynn Wray, Division Manager of Treasury and 102 1 Business Analysis will follow me and deal with the 2 financial evaluations of the projects. 3 I'd like to start with our interpretation of 4 the scope of the review for the need for an 5 alternatives portion, both of our submission and for 6 the hearings and the whole IRR process and everything 7 that we did. And we took our interpretation from the 8 terms of reference given to the CEC in its original 9 terms of reference from the Minister. And we've got 10 some excerpts here to explain what our interpretation 11 is. And we give it in two aspects. And so we've used 12 excerpts to help explain that. 13 The first excerpt is that all alternative 14 options are considered. Wuskwatim was selected on 15 reasonable grounds including economic viability as an 16 export project and relevant technical factors. And 17 then a little bit further in terms of reference, it 18 discusses Wuskwatim in its entirety. 19 And so this first part we take to be what 20 should be the evaluation of the project considering 21 the economics, environmental risk and other factors. 22 It is obvious from an environmental licensing 23 acceptability point of view that one should consider 24 the entire project and not portions of the project and 25 that the ownership arrangements and who owns what is 103 1 not significant from an environment acceptability 2 point of view. Thus the economic evaluations and the 3 options screening did not separate the project into 4 Manitoba Hydro and NCN portions. 5 The second part of the scope is captured by 6 this second portion from the terms of reference and it 7 is that the effect on Manitoba Hydro customer rates 8 and Manitoba Hydro financial stability should be 9 considered. And particularly, there's the phrase that 10 NCN/Manitoba Hydro partnership to be described to the 11 degree required to understand the financial analysis. 12 So based on this, our second part of the Need 13 For an Alternative is that we have an evaluation of 14 the effect on Manitoba Hydro rates and financial 15 situation. This protects the Manitoba customers and 16 the rate payers, thus the financial evaluation 17 considers only the investment and returns associated 18 with the Manitoba Hydro ownership in the project. 19 So that's the sort of the terms of reference 20 that we utilized generally. There were other aspects 21 as well in our submission and in our whole process on 22 the need and alternative side. 23 Now I'd like to turn to the presentation 24 itself. And in a nutshell, what is the justification 25 for proceeding with Wuskwatim particularly in 2010. 104 1 And in one sentence, it is that Wuskwatim is a 2 profitable project with benefits for all Manitobans 3 including those in Northern Manitoba and a very clean 4 project with much less environmental impact than the 5 generation it displaces. So in a nutshell, that is 6 our justification for Wuskwatim. 7 But what we do in this slide then is try and 8 expand on that and summarize in this one slide we're 9 going to expand on that short justification and also 10 summarize our whole need for an alternatives 11 submission. 12 We start off with the Need For portion of our 13 analysis and it deals with the fact that there's 14 economic, financial, environmental and reliability 15 benefits from increased electricity exports that will 16 be enabled by Wuskwatim. And we will, in some detail, 17 go through that in the remainder of our Need For 18 Alternatives presentation. 19 In terms of the environment, Wuskwatim is an 20 exceptional gem of a project. Wuskwatim is an 21 environmentally clean project that provides renewable 22 energy, has a low impact design and operation, and you 23 heard some of that earlier this morning. We have a 24 partnership with NCN that assisted in having a good 25 healthy design for the project and in ensuring that 105 1 there will be local benefits. It would be hard to 2 find other projects, other power resource projects as 3 environmentally attractive as Wuskwatim. 4 Wuskwatim's environmental attractiveness is 5 demonstrated through the Comprehensive Environmental 6 Impact Statement material that we've submitted earlier 7 and that we will present later on today in the second 8 presentation in the afternoon. 9 The third aspect on the Need For An Alternative 10 is risks. Any investment that anyone makes has risk 11 of some sort attached to it and of course Wuskwatim is 12 no exception. We have done an extensive assessment of 13 the risks and we have concluded that Wuskwatim, all of 14 its risks are relatively low. And it is overall a 15 relatively low-risk project and all the risks that may 16 occur are manageable. 17 Moving onto the next factor. The next factor 18 is more of a byproduct of Wuskwatim. It is not a 19 primary drive, it's not why we are doing Wuskwatim but 20 it is a very important factor. And that is that 21 Wuskwatim will provide an economic stimulus in 22 Manitoba and it will provide benefits for Manitoba and 23 all Manitobans. And we will explain that in some more 24 detail later on as well. 25 Secondly, what is the justification dealing 106 1 with alternatives to Wuskwatim? We, at Manitoba 2 Hydro, on an ongoing regular basis assess the full 3 range of resource options and stay on top of what the 4 new technologies are and continually update our 5 analysis. And we have, in our planning studies and 6 our decision-making in the corporation, come up with a 7 resource plan that we are working with and that we are 8 committed to. We are planning to continue to expand 9 our PowerSmart energy conservation, or demand-side 10 management is another term, program. We've 11 been very active in it in the past. We are already 12 planning to expand it. We are looking to expanding it 13 further. And we're planning to undertake any economic 14 wind generation in Manitoba. And that's in addition 15 to improving our existing system. So those are 16 already fundamentals of what we are doing. And then 17 in addition of course, we're now looking at Wuskwatim. 18 Looking at the other options Hydro, gas or 19 coal, we have determined that at this time at least, 20 Wuskwatim is a more attractive option than any of the 21 other generation options. 22 So that in a nutshell is the Need For an 23 Alternative justification for Wuskwatim. I'd like to 24 now move on to expanding on those points. 25 The first is that a fundamental drive for 107 1 Wuskwatim is that advancing Wuskwatim will enable 2 Manitoba Hydro to increase exports particularly in the 3 earlier years. Exports are profitable for Manitoba 4 Hydro. They have been one of the major reasons why 5 our customer rates are the lowest in the developed 6 world, amongst the lowest in the developed world. But 7 exports also of hydroelectricity contribute to 8 reducing global greenhouse gas emissions and also 9 other emissions as well. And this is done by it 10 displacing coal or gas generation in the markets that 11 we export into. 12 Proceeding with Wuskwatim and the other 13 resources we are pursuing such as the DSM and the wind 14 energy and the supply efficiency improvements will 15 enable Manitoba Hydro to continue exporting and to 16 accrue the kind of benefits I was just referring to. 17 Advancing Wuskwatim will also enhance our 18 reliability of supply to Manitobans. Should we run 19 into generation or transmission supply problems or 20 should the Manitoba load drill faster than we're 21 currently forecasting, even though it is planned to 22 commit additional export contracts, should problems 23 occur in Manitoba with Wuskwatim, there will be a 24 greater amount of supply that we can hold back in 25 Manitoba while alternate supplies are being arranged 108 1 in other jurisdictions. And this may seem somewhat 2 contrary to the people. We're saying, well, you're 3 going to advance Wuskwatim, get export revenue, so how 4 can that be any good for Manitobans if we run into 5 trouble? 6 What we would do is in an emergency, we will 7 hold back the power in Manitoba and we'd find and have 8 to somehow arrange for and pay for alternate supplies 9 on the other side of the border and the other side of 10 the interconnection. So that will be of a benefit to 11 Manitobans from a reliability point of view. Overall, 12 Manitobans are better off by advancing Wuskwatim and 13 maintaining our exports. 14 As I mentioned earlier, any investment has risk 15 and we had extensive efforts to ensure that the risks 16 are minimized at Wuskwatim and that we have a good 17 handle on what the remaining risks are. 18 The two main categories of risk that one would 19 look at with a project like Wuskwatim would be what is 20 the chance of the capital costs going higher than we 21 estimate them to be; and secondly, what if our export 22 rates are lower? Well, we have had extensive 23 experience building Hydro plants, planning Hydro 24 plants and we have had extensive experience marketing 25 export energy. So we have some fundamental good 109 1 reasons to believe that we, as an organization, are 2 capable of proceeding with Wuskwatim and staying 3 within the kind of parameters we are looking at. 4 We have had an extensive engineering and 5 environmental studies over a number of years, field 6 investigations and we now have a wealth of information 7 on Wuskwatim. We have a very advanced design and set 8 of information on Wuskwatim that gives us great 9 comfort in the project. 10 There are numerous other factors that could be 11 looked at and we will review the sensitivity analyses 12 shortly in our economic evaluation portion of the 13 presentation. But our conclusion, at looking at 14 those, again is that we've got a relatively low risk 15 project. All the risks are manageable and the 16 Wuskwatim economic benefits are very robust with 17 respect to the risk factors. 18 Moving onto that economic stimulus that I have 19 referred to as a byproduct, remembering that the 20 primary economic drive for Manitobans is that will 21 provide profits. However, it will also provide an 22 economic stimulus for Manitobans and provide 23 socio-economic benefits. There will be training, 24 jobs, business opportunities in Manitoba and Canada. 25 And we have, particularly on this project, although we 110 1 have made efforts on previous projects as well but 2 we've made an even more innovative and greater effort 3 with Wuskwatim have a special focus on Aboriginal 4 people in Northern Manitoba. We've got a pre-project 5 training program that Mr. Adams spoke to this morning. 6 There will be a number of special initiatives to job 7 preference and special measures to enhance Aboriginal 8 employment and there will be business opportunities. 9 And generally, this is for Aboriginal people in 10 Northern Manitoba. NCN, there's a special emphasis 11 being in the vicinity. This is also true for all 12 Aboriginal people in Northern Manitoba. 13 So there will be a more direct Aboriginal 14 participation in the project and during benefits 15 through the partnership with NCN and there will be 16 significant social net benefits to the economy as a 17 whole. As I will discuss later, we have had an 18 analysis undertaking to determine not just from the 19 project proponents point of view, what does the 20 project look like, but we had a special analysis 21 looking at it from the provincial society point of 22 view. And they indicated that the social return to 23 Manitobans significantly exceeds even the financial 24 returns to Manitoba Hydro and NCN. 25 So I'm just going to speak briefly about some 111 1 of the options that we're looking at. I'll go into 2 more detail on the options later on in the resource 3 screening part of the presentation. But it's 4 important to emphasize that Manitoba Hydro considers a 5 full range of resource alternatives and we are 6 committed to pursuing those that are economic and 7 viable and attractive. 8 First of all, Manitoba Hydro for over ten 9 years, has been active in the demand-side management 10 or PowerSmart area. We have a target for the year 11 2011 and 12 of having undertaken 356 megawatts of DSM 12 by that time. That's in our plans right now, in our 13 integrated plans for forecast. And that includes DSM 14 that was undertaken in the past, DSM that we are 15 currently working on and engaged in with our end-use 16 customers. DSM we're planning to undertake between 17 now and 2011. When you think of Wuskwatim being 200 18 megawatts, a 356 megawatts entire DSM program is 19 significant. 20 Most of you are aware that a few years ago, 21 concurrent with us looking at, in more detail, 22 Wuskwatim, we initiated a major review and study of 23 the potential in Manitoba. It's necessary every 24 number of years to update that. So we initiated that 25 a few years ago. That culminated in the study that 112 1 came out last summer, end of last summer, and has been 2 part of this review process. It suggests that there's 3 potential for us to expand our DSM even beyond the 356 4 megawatts we talked about. And we are in the process 5 and will be in the process of incorporating that into 6 our planning process with the expectation we will 7 likely increase our ultimate DSM target beyond the 8 356. 9 In addition to looking at customer end-use 10 efficiency, we also look at the efficiency of our 11 existing system. As Dave Cormie explained this 12 morning, we have in the order of 5,000 megawatts of 13 generation in our system, we have a large transmission 14 system. And what we have been doing particularly 15 since export rates increased a number of years ago, we 16 have been assessing all the opportunities to improve 17 the efficiency of the facilities we already have and 18 also to expand the capability. In certain cases, same 19 facility, same amount of water, you can get more water 20 out. So we're trying to do that. We have an 21 extensive program for doing that and that target, or 22 it's not so much a target as our estimate of what we 23 will achieve by 2011 is 382 megawatts. And again, 24 like the DSM, that's programs we have done in the 25 past, are doing today or have committed in the next 113 1 number of years. 2 The other area that we are actively pursuing 3 and have a commitment to is dealing with alternative 4 energy. We have right now in our plans and as part of 5 our financial forecast that we would be undertaking 6 250 megawatts of wind generation in Manitoba. It 7 could be either on the basis of an independent power 8 producer who would sell to Manitoba Hydro under 9 contract and then we'd export the power using the rest 10 of our system to enhance the value of that wind power. 11 Or we could develop it ourselves at Manitoba Hydro 12 some sort of combination. We have an extensive 13 program of assessing wind in Manitoba. We've had 14 seven monitoring stations up for nearly a year. There 15 are a number of other activities and we are assessing 16 the possibility of wind ourselves. 17 So we have quite a wide range of options where 18 we'd be looking at, if you look at site management, 19 supply efficiency improvements, alternate energy and 20 new hydro, those are four legs of a diverse portfolio 21 of economically and environmentally attractive 22 options. 23 Now, we do look at other generation options and 24 resource options than the ones I just mentioned. We 25 don't just consider Hydro, wind, DSM, alternate 114 1 energy. In the past, we have built coal plants. We 2 have a remaining 105 megawatt unit at Brandon. Two 3 years ago, we built nearly a gas combustion turbine 4 plant using natural gas almost 300 megawatts. 5 However, overall, when considering the 6 economics, rate impacts, the environment and other 7 factors, proceeding with Wuskwatim now is more 8 attractive than other forms of new generation such as 9 Hydro, gas or coal. However, this does not preclude 10 the possibility of future development of these Hydro 11 or these other generation matters. 12 We did find Wuskwatim more attractive than 13 thermal generation. But it would be possible for us 14 to, in the future, conclude that more thermal would be 15 attractive but that isn't really in our studies at 16 this time. 17 I should mention that those options, 18 particularly the Hydro options that were not precluded 19 from developing those other ones at a later date, for 20 instance, the three Hydro options, the other ones 21 we're looking at, Gull, Conawapa, Notigi are 22 attractive options. And even some of the other 23 options might be attractive in the future as our load 24 grows and the possibility of expansions to our export 25 interconnections occur, then there will be 115 1 opportunities to develop the other ones and that 2 wouldn't be precluded. 3 I'd like to now turn to the more detailed 4 evaluation of resources. In evaluating Wuskwatim or 5 other alternatives, whether it's wind or DSM or 6 whatever, an important context to start with is the 7 load growth in Manitoba. Now, as Dave indicated, we 8 first end up meeting our load in the province and then 9 we export what's left. And so as our load grows in 10 Manitoba, the amount of energy we can export, the 11 amount of surplus available to export diminishes. 12 And this graph, it's kind of a boring graph I 13 admit. It's got 2006 to 2038 and we've got the 14 energy. We've got this in annual energy. And these 15 units are hard to follow after a while. It's 16 thousands of gigawatt hours. So like this is 21,000 17 gigawatt hours which is 21 million megawatt hours. 18 And so I apologize, there's no other way for us 19 to explain the energy. The difference between the 20 indices on the axis is 4,000 gigawatt hours. And it's 21 kind of hard to relate to but if you think of 22 Wuskwatim as providing 1,250 gigawatt hours of 23 dependable energy, then you can think of Wuskwatim as 24 sort of being something like a third of the distance 25 between these two sets of lines. 116 1 That's what our load growth looks like. It's 2 fairly flat into the future. There will be ups and 3 downs. We can't predict exact ups and downs. We've 4 got an average. And it's a slight flattening into the 5 future. But it is a very boring line. 6 What is more interesting is what has the load 7 growth in the past been, the historical load growth? 8 And one of the reasons I'm bringing this up today is 9 that one of the participants, one of our esteem 10 participants in this process, TREE/RCM, their 11 consultants have expressed concern about our load 12 forecasting and the adequacy of that. This is just to 13 give a very basic first-cut indicator of what happens 14 with our load forecasting. 15 And what we have, this is the number of years 16 1960 going into the future up, this is the end of the 17 historical period 2003. And you can see, this is the 18 percentage load growth from one year to the next. So 19 we actually had two years where there was a slight dip 20 in the load growth but in the earlier years there was 21 some huge increases in load growth but that has 22 significantly tapered off for a whole bunch of good 23 reasons. And it's more or less been up and down but 24 more stable in recent years. And the average load 25 growth historically over that time period is about 4 117 1 and a half per cent. 2 Now, we don't just go and extrapolate from the 3 past, we do a sophisticated analysis dealing with 4 end-use and all the various sectors and we look 5 forward into the future. And you can see this here is 6 our forecast and the average load growth into the 7 future in our forecast is, and this is for the 2003 8 forecast, is 1.1 per cent into the future. 9 Substantially lower than the historical rate. 10 So moving on, we have to do our planning not 11 just to meet Manitoba load but any firm export 12 contracts we have. So we enter into the long-term 13 contracts with export customers and typically three, 14 four, five, 10, 15, sometimes 20 years. So what we 15 have here now as well is on top of the domestic load 16 is our firm export contracts. And the single largest 17 one we have in there is a 500 megawatt, 10 year sale 18 to Northern States power that we signed a couple of 19 years ago. It is now an approved contract. We have 20 other ones as well in here. We are in the process of 21 negotiating other contracts but they are not in here. 22 We only have the ones that are currently committed and 23 approved. And you can see into the future there's 24 very little export that are committed beyond around 25 2017 or so. So into the future, the only commitments 118 1 we have to meet are our domestic load. 2 This graph brings together the other half of 3 the picture and that is the supply side. So what we 4 have here in the yellow is the firm resources 5 available to Manitoba, the firm Electrocity Resources. 6 It's composed of our existing hydro and this is under 7 drought conditions. Dependable energy is what we can 8 do in a drought. So it consists of the dependable 9 hydro, the thermal generation we can run in the 10 province, both coal and gas, running them base load 11 through the whole year, imports over our tie lines. 12 And in a bad drought, we would start maxing out on 13 those. We'd first cancel exports and then we would 14 arrange for imports. Very costly ones eventually. 15 And also DSM is built into our resource line. 16 So you can see that there is a somewhat steady 17 amount of resources and then it diminishes over time. 18 I'd just like to point out that in the earlier years 19 here, let's say in 2006, there's a substantial 20 surplus, less than there is today, but there's a 21 substantial surplus there and the majority of it is 22 taken up by these long-term firm export contracts and 23 we have some surplus left over that we can sell either 24 into the long-term or the short-term market. 25 And you can see that the resources over time decline 119 1 around 1016/18, around there. The majority of the 2 reasons for the decline is that we assume that our 3 coal units will retire. They will be like in the 4 order of 50, 60 years old. Our natural gas units will 5 come to the end of their normal life. And also we 6 have import arrangements. Some of them tied to our 7 export contracts that will be assumed to end. 8 We do assume though that some import arrangements 9 continue after this point. So this line over here 10 does include about 1,600 gigawatt hours of energy 11 imports in the off peak over our tie lines. 12 So our supply increases over time. And around 2020, 13 the exact year is not critical, we find that the 14 demand exceeds the dependable supply and new resources 15 would be required. And our previous analyses had 16 concluded that for the 2020 time frame, that the best 17 resource we could put in at that time would be 18 Wuskwatim and our corporate integrated financial 19 forecasts and all our other resource plans have been 20 based on that resource plan. 21 So this graph shows it's the same graph with 22 adding in Wuskwatim, this is the 1,250 gigawatt hours 23 of Wuskwatim I was referring to. And coming in at 24 2010. You can see in the earlier years, Wuskwatim is 25 available for exports and then after 2020-ish, it's 120 1 available for domestic supply. If we have a drought, 2 we can use it for domestic supply. 3 The overall conclusion that can be drawn from 4 this demand resource picture is that even after the 5 economic levels of demand-side management, supply side 6 efficiency improvements and wind are taken into 7 account. First of all, new resources are required 8 around 2020 for Manitoba load. Secondly, with exports 9 diminishing over time without Wuskwatim, there will be 10 ample room for Wuskwatim to be exported over the tie 11 lines into either the United States, Ontario or 12 Saskatchewan and into those markets. There are sort 13 of the two main messages one can take. That's sort of 14 the two main messages one can take from this series of 15 graphs. 16 The next part of the picture, the fundamental 17 piece that we need to look at when considering 18 Wuskwatim and evaluating Wuskwatim and other resources 19 is the export price. We are confident that we are 20 going to be able to export. Let's say we do develop 21 Wuskwatim, we are confident we are going to be able to 22 export Wuskwatim. But the real issue is when you 23 export, what price are you going to get? 24 So this graph shows their prices historically 25 from 1990 to 2004 and it shows it in Canadian cents 121 1 per kilowatt hours, 0, 3, 6, 9, 12. And you can see a 2 definite trend here. And it's not just our market, 3 it's other markets as well, that export prices have 4 been on the increase. There are always a number of 5 reasons for things to happen. But probably the single 6 most critical factor is that in the United States, 7 that market had open access transmission instituted 8 back in 1996. This is part of the deregulation of the 9 electricity markets down in the States. And what that 10 meant was that suppliers such as ourselves were able 11 to access a broader market and to have greater 12 certainty of getting into that market, had increased 13 competition and caused the market price to increase. 14 And you can see that once it was open up, there was a 15 steady increase and it has held steady since then. 16 There is a general consensus in the industry that 17 electricity market prices will continue to be high, 18 that they won't go back to where they were in say the 19 eighties or the early nineties and that we will see a 20 sustained high price and that there will be a real 21 escalation over time. 22 Now, there will be ups and downs. There's 23 absolutely no question of that. Electricity markets, 24 just like any commodity market, has ups and downs and 25 variability in it. But the fundamentals are quite 122 1 strong and so we have a forecast into the future. And 2 again, it could be ups and downs, it could be higher 3 or lower than the kinds of things we're looking at but 4 sort of an average. And what we have projected here 5 into the future is a low export price forecast and a 6 high export price forecast. And what these try and do 7 is give us these sort of 90, 95 per cent probability 8 range of where we expect on the average future 9 electricity prices are going to be. 10 Now, I should explain we've got a low and high 11 and you might ask where is the expected? We have 12 other forecasts that are expected forecasts and we 13 can't share those because of commercial 14 confidentiality. We'd be exposed to loss on the 15 export market if that were done. But what we have 16 shared is extensive information on those expected 17 forecast prices and we have shared all the information 18 on the low and the high and all the calculations. And 19 these low and high bound what we expect will happen so 20 we can present all our analyses and we feel that is 21 more than adequate information. I'm going to 22 particularly focus on the low because even under the 23 low, we've still got a good project. The high of 24 course is even better. And we think that high is as 25 equally likely as low but I will focus on the low. 123 1 In the low, what we did fundamentally to come 2 up with this is there's two components one can think 3 of in the export price. There is the long-term 4 contracts that are firm that we have to supply whether 5 we have a drought or not and then there is the 6 short-term opportunity exports that we supply and 7 arrange on a short-term notice if we have a sufficient 8 supply. And we have a mixture of those. And that 9 mixture was an historical price as well. And in the 10 long-term low export one, the starting point of it, 11 and actually the whole forecast for the long-term 12 firm, we used the prices that we have experienced 13 recently but equal to a little bit lower than the 14 prices we have experienced recently with no real 15 escalation in the future. 16 The short term, the other component, we have 17 taken what we've experienced recently and added a 18 relatively low escalation to the long term. And the 19 escalation we've used in the low scenario is lower 20 than what the general consensus is there will be 21 escalation. So that's the sort of basis for the low 22 export price forecast. 23 Manitoba Hydro utilizes its own direct 24 experience in the market, knowledge of market trends 25 and independent consulting experts to prepare these 124 1 forecasts particularly of the expected future 2 forecasts. 3 The conclusion here is that while earlier we 4 were demonstrating there will be room on the 5 transmission interconnections to export Wuskwatim, 6 these are the range of prices we expect to obtain for 7 Wuskwatim and other resources. 8 I'd like to give some idea of how we develop 9 this expected forecast. And I should add by the way 10 that most of this information we're presenting here 11 comes directly out of the submission or the 12 interrogatories. So this is pretty well information 13 we have shared before. 14 So no one knows with certainty what the exact 15 future price is going to be for electricity exports or 16 for any commodity. Our expected price forecast is 17 composed actually of a probabilistic weighing of a 18 number of scenarios. Each scenario has a different 19 level of environmental regulation of thermal 20 generation, thermal generation being the main 21 generation which Hydro exports we displace in our 22 neighbouring markets. 23 So when we're exporting, we displace thermal 24 generation. Effectively what we get when we export is 25 the price is that our competitor would have to pay for 125 1 their generation. So that's how we can relate our 2 exports to the thermal generation prices. 3 One of the most likely generation supplies to 4 be displaced in the export market are combined cycle 5 or combustion turbines that utilize natural gas. So 6 this is a graph of how the cost of energy from a 7 combined cycle turbine would vary with the different 8 environmental scenarios that we looked at. It's going 9 from 2010 to 40 and then we've got the premiums here 10 in cents per kilowatt hour. 11 How we develop this is we start with let's say 12 a combined cycle gas turbine and we start with what we 13 call The Business As Usual environmental scenario. 14 There are regulations today in Canada and the United 15 States on any thermal generation and there are pricing 16 or a costing for the generation. We look at what is 17 in place today and what have Canadian governments, 18 U.S. governments already committed to putting in place 19 down the road for environmental regulation. We call 20 that business as usual. And then we develop what the 21 cost of that gas turbine energy would be into the 22 future and we call that the reference case. Then we 23 add to that what other environmental regulation would 24 be put in place. 25 There's a general expectation that the 126 1 regulation of thermal emissions will increase over 2 time. That's pretty well across the line. I think 3 there's a broad consensus that's what's going to 4 happen. That's true whether you're talking about 5 mercury emissions being into the air, particulates 6 meaning like dust, sulfur dioxide, nitrous oxides 7 which are acid rain precursors or ozone, other heavy 8 metals. The full range of them. There are already 9 regulations. There are going to be more increasingly 10 stringent ones. 11 The one that's most pertinent in this area is 12 greenhouse gases. Particularly in the United States 13 right now, there's no regulation on greenhouse gases. 14 There is a general expectation in the future there 15 will be. No one knows when will these regulations 16 come in, when will the entire spectrum of regulation 17 become more stringent. How stringent will they 18 ultimately be? 19 So what we did is develop a number of scenarios 20 and analyzed our exports forecasts and our system 21 exports and the attractiveness of projects using each 22 of the scenarios and then average them together to 23 come up with what we call an expected forecast. And 24 we do that with a probabilistic rating. Lower 25 probability in the earlier years, greater probability 127 1 in the later years. 2 One comment I'll just make before I finish off 3 here is that we have the high environmental premium 4 here and that is less stringent than if Kyoto was 5 ratified by the United States. The United States is 6 part of the negotiation of Kyoto and they, at least 7 with this administration, are unlikely to ratify the 8 future administrations. Who knows what will happen. 9 But we assume in here that the United States does not 10 ratify Kyoto ever. What we assume is that in the 11 first budget period which is 2008 to 12, stopping 12 around there, that the United States will probably do 13 very little on greenhouse gases. And it's beyond 14 2012. And that whatever comes into place will be less 15 stringent than Kyoto. 16 If by chance in the election in November in the 17 States, Bush is not elected and the Democrat is 18 elected, you may very well see the States still 19 ratifying Kyoto. But we don't think that's likely 20 overall and so we haven't built that at all into our 21 assumptions. 22 So this slide gives an indication of the 23 comprehensiveness and complexity undertaken by 24 Manitoba Hydro to forecast the prices. 25 So moving on away from the export prices to 128 1 what are the options we looked at. This provides a 2 life-cycle cost comparison of the main resource 3 options that Manitoba Hydro considered. We consider 4 other ones as well but these are the main ones. And 5 what we do is we come up with a cost in cents per 6 kilowatt hour here, from zero cents per kilowatt hour 7 to 32 cents Canadian dollars. And what we do is we 8 take each option and we determine over its whole life 9 and each option has a different life. You can take 10 different kinds of things and compare them on some 11 kind of common basis. We take over the life of each 12 option all of the capital costs, all of the O&M 13 operation costs, maintenance costs, refurbishment 14 costs, taxes, like capital taxes, we take transmission 15 costs. In the case of thermal options, like coal or 16 gas, we include the fuel costs. In the case of Hydro, 17 we include water rentals for example. So we include 18 all of these project costs, costs that are charged to 19 the project and we sort of average them out over the 20 life of the project and we divide by the energy 21 production over the life of the project and we 22 determine this energy cost in cents per kilowatt hour 23 here. And now we can have some sort of screening 24 comparison of options. 25 And this is a relatively simple calculation 129 1 used for initial screening purposes. It is used quite 2 widely in industry for that purpose. We do not use 3 this and others don't as well for final decisions on 4 commitments because there are a whole bunch of issues 5 that are not addressed by that kind of a calculation. 6 There is what we can call system issues that relate 7 to, well, what were the export prices, what are the 8 transmission limitations, how will these different 9 resources fit in with the existing system. So we do 10 an initial screening with those but we need a more 11 complicated detailed analysis to make a final 12 decision. 13 And a good example of that is if you have 14 intermittent generation such as wind generation, if 15 you're going to sell it on the export market, to get a 16 premium price you need to firm it up. You need to 17 have a firm product to sell into that market. So 18 there's quite a major firming cost that we have to add 19 in when we look at it on a system basis. And so those 20 kind of costs aren't included in here either. But 21 this is still a useful starting point. 22 So let's start with looking at the alternative. 23 DSM or demand-side management. It starts at 1.8 24 cents, the lowest costing on the whole scale. And 25 TREE and RCM would fully agree with me that that's 130 1 starting point. It ranges from 1.8 to 7.2 cents a 2 kilowatt hour. And why is there a range? By the way, 3 that's what this light purple is showing in each one 4 of these, is that there's a range. 5 For DSM, it's composed of many different 6 measures, some small, some large in the residential, 7 industrial, commercial sectors. And each one of those 8 sectors have many different possibilities. Every 9 end-use we have potentially has a DSM measure. So you 10 have a range of costs for all the different programs. 11 And what we have shown here are the costs for the 12 programs that Manitoba Hydro either has already 13 undertaken or is working on today and delivering to 14 end-use customers or planning to do in the next seven 15 years. And so this shows the range of cost for all 16 those programs. 17 And of course, the logical thing when you're 18 looking at this is you start with your lowest cost 19 option, you commit to that. And if you want to do 20 more, you go to more expensive options and you keep on 21 adding more expensive ones. 22 So the 7.2 cents is the cost of the most 23 expensive one we'd be putting in. But if you wanted 24 to go with the old information we had without this new 25 study yet, if you wanted to go to a higher level of 131 1 DSM more than the 356 megawatts, you can go to more 2 but the cost would be higher. So this is just the 3 cost for the programs that we are putting in. 4 The next resource down here is new Hydro and 5 we've just included Wuskwatim, Conawapa and Gull. 6 That's where we have a range from 6.6 to 7.6 cents. 7 All three of these are attractive projects but 8 Wuskwatim is the lowest cost and it's also relatively 9 small projects and it makes it a little bit easier to 10 deal with. So it's the most attractive out of the new 11 Hydro projects that we're looking at. 12 Wind generation, we show a range of 6.6 to 10.6 13 cents and there's a range there. And the reason for 14 this range is that the wind energy cost obviously is 15 going to be directly related to how much wind you have 16 when you build these turbines. What we're looking at 17 here is 450 megawatts of wind generation which would 18 give roughly the same amount of energy as Wuskwatim. 19 So we're trying to do a little bit of an apples and 20 apples here. And the 6.6 cents is if you get a better 21 wind resource than we think is likely possible in 22 Manitoba for a 450 megawatt amount. And we also have 23 the 10.6 is if you have a worse wind resource than we 24 think we likely have. And the best guess is somewhere 25 in the middle, closer to the 6.6. 132 1 There are other uncertainties though that we 2 haven't depicted in this range. We have assumed on 3 this -- by the way, I should explain. This graph is 4 taken from our original submission. The only thing 5 we've changed really is on the wind generation, we've 6 taken some updated information that became available 7 after we did the original submission. One of them is 8 that we commissioned two studies by a U.S. and 9 Canadian consultant looking into wind costs and they 10 indicated that wind costs will decrease over time a 11 little faster than our very preliminary information. 12 So we have incorporated that into our update. We have 13 incorporated a whole bunch of other updates as well. 14 And so what we have, this assumes this updated cost 15 information. It also assumes that there will not be a 16 whoopi program which is a federal subsidy. By the 17 time you get to 2009 or 10, that program would be 18 finished and there's only 1,000 megawatts and we 19 figured that would be subscribed. So there's various 20 assumptions built into it. 21 What we don't have into here of course is the 22 cost of integrating this into the system. That would 23 increase the cost even more. So you can see the costs 24 here and the cost of the wind will probably be 25 somewhat higher than the cost of Wuskwatim is our 133 1 conclusion once you look at all the cost factors. 2 These three sets of alternatives, DSM, new Hydro 3 wind generation plus the supply improvements I talked 4 about earlier, they are the most attractive options we 5 are looking at and those are the ones, the four legs 6 of the diverse portfolio that I mentioned earlier that 7 we are committed to and are working with. There are 8 other options, there's many other options. Just spend 9 a minute on the first one here, gas turbines. And 10 what's called combustion turbines are the lower costs 11 when you're trying to produce that's large quantities 12 of energy. That's the lower cost and simple cycle. 13 And the lowest cost shown in here 6.1 cents. And 14 that's if you take the newest technology and you take 15 the low forecast for natural gases prices into the 16 future. 17 And this is the price forecast that we had two 18 years ago when we were preparing the submission. Even 19 at that time, widespread in industry, there was 20 concern about two things; (A) Price spikes. Natural 21 gas is quite prone to huge price spikes. And so 22 anybody who builds one and depends on one will be 23 exposed to those and will tend to be unless you enter 24 into long-term contracts. But even there there's some 25 risk. 134 1 The second is that the expectation, there was 2 maybe a fear in the industry that we think the 3 forecast will go up -- the prices for natural gas are 4 more likely to go up than come down compared to what 5 was being forecast. But this was the information 6 available two years ago. 7 We regularly update all our background data, 8 all our information and we're just in the process of 9 updating our natural gas price forecast as part of our 10 regular cycle. And what we're finding is as people 11 expected, the forecast for natural gas prices is 12 higher and we would see even higher prices than in 13 here. 14 So the gas turbines would be more expensive 15 than the most attractive options we looked at. And 16 the other factor is that if there's an environmental 17 premium, more stringent regulation of nitrous oxides 18 or greenhouse gases, you'll see the higher end of the 19 cost range or even higher than we're showing here 20 when we get the new gas forecast in. Coal is another 21 option. I'll be honest about it, we haven't paid as 22 much attention to the possibility of coal in Manitoba. 23 Our assessments are it's probably not an attractive 24 option in Manitoba for a whole bunch of reasons. 25 However, in our export markets, it is something 135 1 that was being looked at a couple of years ago. Even 2 Alberta, they built a couple or building one and 3 planning and building another. In the U.S. market, 4 what we're finding particularly now that natural gas 5 prices are going up, there is some new coal generation 6 going in. And you can see our analysis indicates it 7 will be around 6.5 cents which is sort of the same 8 cost as Wuskwatim. But if you put any kind of 9 increasing environmental regulation on it, the cost 10 will go up and that's why we've got it up to 9.7 cents 11 there. There are other technologies as well. They 12 are significantly more costly and they are not really 13 obviously part of the most attractive group. 14 So that sort of concludes looking at the 15 screening of our options. 16 Another aspect, we don't just look strictly at 17 the cost, we look at the range of environmental 18 issues. And this one is just going to focus on the 19 greenhouse gas one which is quite prominent. And what 20 we've done is again a life-cycle analysis over the 21 whole life of the facility taking account in the 22 construction what happens. 23 When you build a Hydro dam, you use concrete. 24 The manufacturer of the concrete produces greenhouse 25 gases. When you build wind turbines, you need steel. 136 1 Steel creates greenhouse gases. No matter what you 2 do, you're going to have construction costs, 3 transportation costs, the fuel which creates 4 greenhouse gases. 5 So all of those are included. The 6 transmission, all options need transmission of some 7 kind or another. So the amount of right of way you 8 have to clear is included. If you have to build 9 roads, that's included. 10 In the case of thermal generation, these ones 11 here, the biggest emitter by far though is the 12 combustion of the fuel creates greenhouse gases. And 13 by far, this is the single biggest source of emissions 14 in the world is from fossil fuel combustion. 15 So if you look at this, you can see very 16 quickly Wuskwatim and wind produce much less 17 greenhouse gases than the others, particularly the 18 coal generation. And you can also see that Wuskwatim 19 and wind are not just very low but actually Wuskwatim 20 is around half of that of wind which is a bit of a 21 surprise to a lot of people. But Wuskwatim, there's 22 very little flooding and there is some emissions in 23 reservoirs. But actually for the kind of reservoirs 24 in the north, there is actually very low greenhouse 25 gases. 137 1 And so this analysis was done by the Pembina 2 Institute for Appropriate Development and an 3 environmental organization in Alberta. And you can 4 see that Wuskwatim is less than wind but they are so 5 low that essentially we can just call them zero. 6 DSM also would have extremely low greenhouse 7 gases. Because of such a huge range of measures that 8 you'd undertake, we didn't ask the Pembina Institute 9 to look at the DSM. Without having an evaluation, we 10 fully expect that it will be essentially zero just 11 like the wind and Wuskwatim. 12 So there are other emissions we could look at 13 but I don't think we want to take the time to do that 14 today. 15 The overall conclusion of the preliminary 16 screening in terms of the economics and environmental 17 aspects is that the most attractive options available 18 to us in Manitoba are DSM, or PowerSmart, Wuskwatim 19 and wind as well as the supply side efficiency 20 improvements we talked about earlier. 21 I'd like to now move to the detailed system 22 economics to evaluate more fully the Wuskwatim 23 economics. Before we present the economic 24 evaluations, it will be useful to explain a little bit 25 of the economic methodology we used in non-technical 138 1 terms. 2 I'm an engineer by background and when I got 3 into this field, I had a bit of a hurdle and luckily 4 there was some economists around but I don't expect 5 there's too many economists in the audience here so I 6 think it would be useful for me to give a bit of a 7 non-technical explanation of one of the fundamental 8 criteria we have used in our economic evaluations. 9 And that is what is the internal rate of return or IRR 10 which we've used again and again. 11 The IRR is used to report the detailed sequence 12 economic evaluations. It includes all the costs we 13 talked about earlier in the levelized cost, the 14 capital cost, transmission cost, everything else. It 15 also includes all of the other system kind of costs 16 and benefits that I was referring to, what export 17 revenues do we get? What are the transmission limits? 18 What is the load growth like? What is our existing 19 system doing? What are the thermal costs? All of the 20 various factors are included in this more detailed set 21 of evaluations and wrapped into this IRR. 22 So what is the IRR? And I hope the economists 23 in the crowd and the financial people will forgive me, 24 but the IRR is the long-term average monetary return 25 to the project proponent from the investment. So what 139 1 we mean by that is that the proponent in any project 2 invests into the project. And then what return do we 3 get over the long run on the average from that 4 investment? You can say, okay, so that's what you're 5 getting and we expressed it in per cent return, annual 6 per cent return. But what do you do with that? 7 Well, the first thing we do is compare it to 8 the economic criteria for what is acceptable for a 9 project. So you calculate the IRR for a particular 10 project. You do your very best guess as to what will 11 the IRR over the long term be? And then you compare 12 it against your economic criteria or hurdle rate. And 13 this is based fundamentally on Manitoba Hydro's hurdle 14 rate factors and is being adopted by the project. 15 So what we develop is for a low to medium risk 16 project is that the IRR must be greater or equal to a 17 6 to 10 per cent real return. Okay. So what do we do 18 with that? A 6 to 10 per cent real return, what is 19 the significance of that? Particularly, I'm using the 20 word "real." 21 When economists speak about the real return, 22 what's referred to there is over and above inflation. 23 So this is what's higher than inflation and I'll 24 explain right away in this little calculation here. 25 First of all, let's start with the borrowing 140 1 cost of the project. That's probably the best 2 starting point to look at. The Wuskwatim project on 3 its long-term debt, on its long-term borrowing 30 year 4 kind of money will be about 7 and a half per cent, 5 7.45 per cent. So that's what the cost of the project 6 of borrowing money would be. Now, that is the normal 7 way we think about borrowing costs. If you think 8 about your return on your mutual funds or Canadian 9 Savings Bonds or whatever. And that's what that would 10 compare to is the 7.45 per cent is the borrowing rate. 11 If you express it in real terms, if you take 12 inflation out of that or move inflation, the same rate 13 in real terms is 5.34 per cent, say 5.3 per cent. So 14 the real borrowing for the Wuskwatim project on the 15 markets would be 5.3 per cent. When we say that the 16 project has to have a 6 to 10 per cent IRR to be 17 acceptable, we're saying that like the 6 per cent 18 would be for a low risk project, it is higher than the 19 5.34. And what we're saying for a low risk project, 20 it would only have to meet a 6 per cent return and 21 there will be about a .7 per cent buffer between the 22 borrowing cost and the low risk return. And that 23 little bit of a buffer provides a profit and it 24 provides a buffer against risk scenarios. 25 But a project like Wuskwatim or wind, probably 141 1 a 6 per cent return isn't really good enough and 2 Manitoba Hydro wouldn't likely find that acceptable. 3 It would be higher up on the range although not all 4 the way to 10 per cent. 5 Let's just take 10 per cent as the other end of 6 the range. If you have a 10 per cent project, that's 7 about 4.7 per cent higher IRR than the borrowing rate. 8 And that gives you a very substantial buffer to have 9 risks happen. And there's still to be a profit above 10 the borrowing cost. 11 So that's just a basic explanation of what the 12 IRR is and I hope that helps in the understanding of 13 the information we're presenting. 14 So we'll start now with the actual evaluations 15 that we did and I'll start with the analysis we 16 provided in the original submission back in April 17 2003. In that submission, we did a number of analyses 18 and the first one is the advancement of Wuskwatim. We 19 have said in our base case that we need Wuskwatim in 20 2020 to meet Manitoba load requirements. Said, well, 21 we're going to propose to advance it from 2020 to 2009 22 to get the export benefits. 23 And when you just look at the advancement, we 24 did very detailed calculations including all those 25 factors we discussed earlier and we get an expected 142 1 return with our expected export prices. And all are 2 best guesses of 10.3 per cent IRR. Real. So above 3 inflation. So that's a very attractive return. And 4 given the relatively low risk of Wuskwatim, we felt 5 that's a very worthwhile project and we felt very 6 comfortable proceeding on that basis. Around 10 per 7 cent we find a very attractive return. 8 And if you look at those low and high export 9 price bounds that we showed earlier, it drops around 2 10 per cent. If you go to low, it goes up by around 2 11 per cent, it goes to high. It's more or less 12 balanced. And so no surprises and we drew comfort 13 from that because even at 8.5 per cent, you are still 14 getting a healthy profit on the project. 15 We provided in November an update to that 16 evaluation. A number of things happened. Everything 17 is changing all the time and so we incorporated all 18 the updates that were available in November and update 19 our analyses. There were a number of factors which 20 would tend to cause the IRR to reduce. One of them, 21 Wuskwatim got delayed from 2009 to 10. There were a 22 number of other factors. The transmission cost 23 estimate. We had a new estimate on that. It hadn't 24 been quite as advanced as the generation one earlier. 25 That was updated and it's slightly higher on the 143 1 transmission side. 2 We had a number of other changes, for example, 3 probably as most of you are aware, the U.S./Canadian 4 exchange rate has been a major shift in the last 5 little while. And even the long-term forecasts. We 6 had all these forecasts, there will be a shift in the 7 exchange rate in the long term. We're now even 8 forecasting, it will be a little bit further and that 9 reduced the IRR Wuskwatim and any other export project 10 like wind. 11 And so there were a number of other factors as 12 well but they tended to drive slightly down the IRR. 13 There were some offsetting. The most important one is 14 that the load forecast. We experienced high load 15 forecast the last couple of years and we have a new 16 load forecast which is significantly higher than it 17 was a year ago. So when you put all these puts and 18 takes together, the IRR is now 10.0 per cent instead 19 of 10.3. It's still around 10 per cent. Essentially 20 not much change at all. So Wuskwatim is still very 21 attractive. 22 So moving onto sensitivities. We have to do 23 risk analyses. So we've done many different risk 24 analyses. And we won't have time to go into them in a 25 lot of detail but I'll start off with first of all in 144 1 the original submission, I had mentioned we looked at 2 the advancement of Wuskwatim. We also looked at what 3 if you hadn't put Wuskwatim in in 2020 for domestic 4 load. What if you never built Wuskwatim in the base 5 case and what if you now built Wuskwatim forever for 6 export? So that's a totally different way to look at 7 it. 8 We looked at that and we did all of the same 9 detailed sequence evaluations and what we got is 10 somewhat coincidental. It is exactly the same IRR. 11 You wouldn't normally expect to see them exactly the 12 same but it turned out they were. But that was partly 13 due to rounding. 14 So the long-term economics was 10.3 our best 15 guess. We did low and high. It was also plus/minus 2 16 per cent on the IRR. No surprise there. We also 17 looked at the individual expected price forecast and 18 they fell within the low and the high which is more or 19 less what you'd expect. So no surprises and we drew 20 comfort from that. 21 And then we did a number of sensitivities and 22 maybe let's go through those briefly. I mentioned 23 capital cost is a possibility. We've done lots of 24 work to make sure we've got a good capital cost 25 estimate. But what if the capital cost goes up 15 per 145 1 cent? $95 million basic increase in cost. Well, the 2 IRR would drop around a per cent. On the other hand, 3 there is an equal likelihood of a capital cost 4 decreasing like they did in limestone. And well, the 5 cost would -- the IRR would increase by 1.4 per cent. 6 So they are more or less the same, plus or minus 1 per 7 cent. 8 What if the Hydro plant, what if we had less 9 water available to Wuskwatim and we did a sensitivity 10 where we only reduced the flows on the Burntwood River 11 not the rest of our system. That's more stringent to 12 Wuskwatim because if the whole system was lower, then 13 the value of Wuskwatim becomes more important. But we 14 did a sensitivity if only the Burntwood and a 10 per 15 cent reduction on the Burntwood would cause only 0.5, 16 half a per cent drop in IRR, more significant but it's 17 not all that major and still, the project very 18 profitable. 19 There are a whole bunch of other sensitivities 20 one could do. We did a 300 megawatt plus or minus on 21 the tie line. We did sensitivities there. It could 22 also be thought of more or less DSM, more or less 23 supply. With a whole bunch of differences in our 24 future would do is impact how much room there is on 25 the tie line. When you look at the 300 megawatts 146 1 either way, very small impact on the IRR. 2 So we also looked at, and this is back in the 3 original submission, what if we delayed Wuskwatim with 4 all our information then one year from 2009 to 10 and 5 we said there will be a significant dollar loss to the 6 corporation in, I can't remember, 25 million or 7 something in that order, but the IRR would only drop 8 0.1 per cent? And the reason that there is a big 9 dollar loss but the IRR doesn't change much is when 10 you've -- if you haven't got a good investment but you 11 have to wait to make it, then there's a loss even from 12 doing that. So that's part of the explanation there. 13 What we were talking about so far, independent 14 sensitivities. Nobody knows exactly how the future is 15 going to unfold so we do sensitivities. And the 16 general trend is that various factors will offset each 17 other. You'll have puts and takes, pluses and 18 minuses. But what if a really bad scenario happened 19 that had a very low likelihood that a number of things 20 all went bad and nothing went good to offset? So that 21 is a very low likelihood but it is possible. So we 22 looked at an extreme downside combination of what if 23 we had the low export prices? What if we had the 24 capital cost go up? And what if the flow on the 25 Burntwood was lower permanently by almost 10 per cent? 147 1 We say 10 per cent, it's actually just a tinge less, 2 but a permanent reduction in the water available to 3 Wuskwatim? Now there was a substantial drop in the 4 IRR, 3.7 per cent, but the IRR is still 6.6 per cent. 5 Our borrowing cost, real borrowing cost was 5.34 6 you'll recall. So we still have a 1.3 per cent profit 7 on Wuskwatim even in this very bad scenario. 8 Another comparison you can draw, and this is 9 something called the weighted average cost to capital 10 which I don't think I can go into explanation right 11 now. The weighted average cost to capital for 12 Wuskwatim including an imputed return on equity is 13 around 6 per cent. So here, you've got .6 per cent 14 higher IRRs than our cost to capital. Still a 15 profitable project. 16 I should add an extreme upside sensitivity 17 could have been done and I haven't showed that here. 18 But you could have an equal likelihood of an extreme 19 upside happening. And Lynn will present one later on, 20 too. 21 We looked at the advancement I had mentioned 22 earlier. This is that same information. We looked at 23 the low and the high. We looked at different export 24 rate scenarios. I won't take the time here today. We 25 looked at other sensitivities here as well. And we 148 1 looked at what if you, in the original submission, 2 added 250 megawatts of wind? The impact from the IRR 3 is 0.05 per cent, virtually negligible. What if you 4 doubled the amount of DSM you were planning to do in 5 the future? The same. Nearly negligible, 0.05 per 6 cent in the IRR. So Wuskwatim is virtually 7 unaffected. What if you add both of them together, .1 8 per cent? Still very little effect. 9 However, now we'll go to something else which 10 is a little bit more significant. All of our analyses 11 that I've been talking about so far will look at the 12 full range of flows that may happen. When we do the 13 expected, we know that in any particular year, you may 14 have a drought or you may have a flood or you may have 15 a middle kind of year. In all of our expected 16 analyses, we take that full range of flow 17 possibilities. We do an evaluation for each one and 18 then we add them all together. We average them and 19 that gives our expected. 20 But in this one, what we've done is a 21 sensitivity. We said what if we had the worst system 22 drought happen just as Wuskwatim is coming on line? 23 Last year at the P.U.B. status update hearings, there 24 was an extensive discussion of the 1987 to 1992 25 drought and that's what we've utilized here. So we 149 1 said what if Wuskwatim comes in and just as Wuskwatim 2 comes in, we have this extreme system drought happen? 3 Well, the IRR does drop significantly, .6 per cent, 4 but it's not that big of a drop. 9.7 per cent higher 5 is still a very profitable project. 6 We did a few other sensitivities. The one I 7 think I'll just focus on before moving on is medium 8 low load growth, this one here. The medium low load 9 growth is what if the load forecast figuring is wrong? 10 What if the load in the future is going to be less 11 than we were predicting? What if TREE was right? And 12 we can do a lot more DSM and/or our load forecast was 13 too high. 14 So we took our medium low load forecast and did 15 an analysis and still left the DSM in by the way and 16 we got the IRR only dropped 0.3 per cent? Again, very 17 small impact. So if we have a significantly lower 18 load forecast and/or much more DSM, five times more 19 DSM, we have the IRR still only drop a very little 20 amount. Or what if you did a whole bunch of more 21 wind, some sort of combination of these? 22 So moving on, speaking about wind. 23 THE CHAIRMAN: Can I briefly interrupt you? 24 We're speaking about sensitivity and wind. I've 25 become very sensitive to the lack of it here. I 150 1 wonder if we can stand for 30 seconds. 2 3 (BRIEF RECESS) 4 5 MR. WOJCZYNSKI: I actually don't have very 6 much more. So we're just drawing to a close here. 7 Speaking of wind, in the submissions and 8 interrogatories, contrary to what some participants 9 have suggested, we did much work to consider the 10 economics of Wuskwatim in relation to alternatives, 11 including wind and DSM. We did this by demonstrating 12 that Wuskwatim continues to be economic when tested in 13 sensitivities with the maximum amount of wind and/or 14 DSM that was reasonably likely to be false and 15 economic -- sorry, reasonably likely to be feasible 16 and economic. It wasn't a Freudian slip either. 17 Now how do we do this? First of all, we 18 always, when doing the IRR or the other sequence 19 evaluations, we take a case without Wuskwatim and a 20 case with Wuskwatim. And so in a case without 21 Wuskwatim, we said is we don't know how much wind or 22 DSM ultimately will be economic in the future. We 23 don't have that with great certainty but we do have a 24 sense of what the upper end of the likely range is. 25 And we say let's put in that maximum amount that 151 1 likely will be economic and feasible. And then when 2 we put that in, then we add in Wuskwatim and we see 3 the economics. And we determine, okay, if Wuskwatim 4 is then economic, then -- okay, so Wuskwatim is 5 economic, you put in all the economic wind or DSM so 6 they are both economic but you couldn't do more wind 7 or DSM because it isn't economic. 8 And our commitment in Manitoba Hydro is we're 9 going to develop all the economic and feasible wind in 10 DSM. And so as long as you check that when you put in 11 all that's economic and feasible and Wuskwatim is 12 still economic, then what Wuskwatim will be competing 13 with is uneconomic wind or uneconomic DSM. And so we 14 have been assessing the alternatives to Wuskwatim in 15 that regard. And that was the means of doing that. 16 So we believe that the work we had done is 17 conclusive and sufficient to draw conclusions about 18 the alternatives. But of course, that's why we have 19 this hearing process to test that. However, in 20 response to concerns expressed by some participants 21 that we should have compared an exact amount of wind 22 versus an exact amount of Hydro, we did do a 23 comparison of that. And we compared in this case wind 24 to 450 megawatts. 25 The 450 megawatts of wind gives the same amount 152 1 of energy as Wuskwatim and we took our updated 2 information and we did a long-term economic evaluation 3 comparison of wind and Wuskwatim and we looked at 4 putting in 450 megawatts of wind in 2009 versus 5 putting in the Wuskwatim and we did our IRR. Now, 6 this is using the same assumptions we used in the 7 submission. We used updated capital costs for the 8 wind but we used the same other assumptions to be 9 consistent with the original submission. And what we 10 got was a 10.3 per cent IRR for Wuskwatim and we got a 11 6.1 per cent IRR for the wind for 2009. 12 Now, that assumes that there is no federal 13 subsidy. If there was a federal subsidy, the wind IRR 14 would have increased by around 8 per cent, something 15 in that order. But it still would have been clearly a 16 lot less economic than Wuskwatim. And also, I need to 17 point out that we did assume lower capital cost for 18 the wind because we're assuming that capital costs 19 were reduced 16 per cent into the future to reach 20 2009. We don't know for sure if that will happen but 21 our consultants tell us that it likely will. And 22 we've done our best guess at what we call the firming 23 cost, the integration cost in the system when you take 24 the wind and you want to sell it into a long-term firm 25 market, the cost of doing that on our system. So 153 1 we've taken all our best information and that's our 2 best guess right now. 3 MR. SARGEANT: Can I just ask a question for 4 clarification? I think I know the answer but you're 5 talking about 450 megawatts of wind and we're talking 6 about 200 megawatts of Wuskwatim. Is it because of 7 the inefficiencies of wind or? 8 MR. WOJCZYNSKI: It's not inefficiency. The 9 basic explanation is that the main product that we 10 need to look at from either Wuskwatim or wind is not 11 the capacity but the energy output. You can have a 12 200 megawatt -- let me use the wind. That's the 13 easiest example. 14 Let's say you have 450 megawatts of wind. You 15 can have enough wind available so that 20 per cent of 16 the time you could produce electricity or energy. You 17 can have the same 450 megawatt wind facility but let's 18 say you've got a much better wind resource. So 19 instead of 20 or 25 per cent of the time producing 20 energy, it was 40 or 45 per cent of the time. Even if 21 I produce double the amount of energy from the same 22 facility. So it's the amount of energy that's more 23 important. 24 So what we did is Wuskwatim, we know its energy 25 output very well from all the work we've done. And it 154 1 has something in the order of over 80 per cent 2 capacity factor. Capacity factor is how much -- you 3 take the full capacity and if you take the energy, how 4 much of the year would it have to run to get that 5 energy. That's over 80 per cent. 6 Wind has, our best guess, our best information 7 that the wind resource in Manitoba, the best wind 8 resource in Manitoba is around probably 35 per cent 9 capacity factor. So you only produce energy 35 per 10 cent of the time. So we made the wind facility bigger 11 so that it would produce the same amount of energy as 12 Wuskwatim. So we compare the two and we use the 13 updated assumptions and we say that Wuskwatim is more 14 economic. 15 So moving on to the conclusions and that pretty 16 well just about wraps up. We've got one more overhead 17 to go through before the conclusions. And that is all 18 of the economic analyses we've been talking about so 19 far deals with the monetary benefits to the 20 proponents. That's the joint project owned by NCN and 21 Manitoba Hydro. There is another important 22 perspective and that's the social benefit. That is 23 from a society as a whole in Manitoba. 24 And so what we had, and this is there's a 25 standard set of techniques for doing this, what we had 155 1 is an expert consultant take our analysis. He started 2 with ours but then he made adjustments to a social 3 point of view. And that was by this report by the way 4 that details this was provided in our supplemental 5 filing last year. And there were adjustments made for 6 taxes, wage benefits, government, other government 7 costs, environmental and social costs were considered. 8 And let me just give you a basic simple example of 9 what happens. 10 In the project, the project pays the provincial 11 government capital taxes and water rentals and they 12 are significant. And that's a cost to the project and 13 we have included it in our evaluation as a cost to our 14 project. But that's not a fee for service. We're not 15 getting anything in return in terms of a fee. No one 16 is giving us concrete or service per se. So that's 17 considered a transfer to the government and a transfer 18 within society and not a cost to society. So that's 19 taken out of the analysis. 20 But there are some other costs that the 21 proponent doesn't experience at our cost. And the 22 easiest example is we've got this innovated 23 pre-project training program and we at Manitoba Hydro 24 and the project with NCN are co-funders of that 25 project with the Provincial and Federal Governments. 156 1 But our project doesn't see the cost the Feds and the 2 Province are putting in. It actually is a cost to the 3 society. That cost is put back in. 4 There are other adjustments that are explained 5 in the report. But when you take all of those and do 6 the adjustments and you use the social discount rate, 7 not what the developer would use as the hurdle rate, 8 but the social discount rate, the current thinking of 9 what the social discount rate should be according to 10 our consultant is a 6 per cent real discount rate and 11 that gave us benefits of -- the exact number is not 12 critical here -- but in the order of $267 million, 13 benefits to society in Manitoba for advancing 14 Wuskwatim. 15 Anyways, that's a very significant amount of 16 money and that's, in effect, larger than what we, as 17 the project proponents, would see. So the social 18 benefit is quite large. There is some thinking maybe 19 6 per cent social discount rates should really maybe 20 be 8. So he did a sensitivity and it's still very 21 large at $151 million. 22 So not shown here as well but provided in the 23 rebuttal that we filed on Friday, social benefit cost 24 evaluation was also undertaken to compare Wuskwatim 25 with 450 megawatts of wind. The study concluded that 157 1 Wuskwatim was more attractive than expanding the wind 2 not just for the economic perspective of the 3 proponents but even more so from a social perspective. 4 And just the last comment here is that 5 particularly in terms of Wuskwatim. So what the 6 social benefit cost evaluation shows is that the 7 project will not only benefit Manitoba Hydro and NCN 8 but also benefit workers because of employment and 9 income. Taxpayers because of significant water 10 rentals and capital tax. And the environment because 11 of displacing emission causing generation. 12 So to wrap up the conclusions for the economic 13 and the screening part of the presentation, the 14 internal rate of return for Wuskwatim of 10 per cent 15 real is a very attractive investment given the 16 relatively low level of risk. We did extensive 17 sensitivities, demonstrated that the Wuskwatim 18 economics are robust for all the reasonable risks and 19 verifying and confirming that this is relatively a low 20 risk project. 21 And lastly, we did the sensitivities as I 22 indicated and that even if you had much higher DSM, 23 like five times the DSM and/or a much higher wind 24 generation, the Wuskwatim IRR would not reduce 25 significantly. And if we did find that that much wind 158 1 and/or DSM was economic and viable, that we could 2 proceed with those legs as well. 3 Thank you. And now I'd like to turn it over to 4 Lynn Wray, Division Manager of Treasury and Business 5 Analysis who will present the financial aspects of the 6 evaluation. 7 MS. WRAY: Thank you. Ed began his 8 presentation by recalling the terms of reference to 9 this aspect of the review and the first part that he 10 has addressed is the economic viability of Wuskwatim. 11 The part that I will address is where we were asked to 12 look at the effects, if any, of Wuskwatim proposals on 13 Manitoba Hydro customer rates and the corporation's 14 financial stability. 15 The financial analysis, unlike the economic 16 project analysis, also includes the effects of the 17 arrangements with NCN. In other words, it's from a 18 Manitoba Hydro perspective as one of the participants 19 urged that we do. 20 The focus of the financial analysis rather than 21 looking at internal rates of return provides 22 projections of Manitoba Hydro's future financial 23 statements with and without the Wuskwatim advancement. 24 In this way, you can see the effects of the project's 25 costs and revenues on Manitoba Hydro's debt position 159 1 and income statement and financing requirements. 2 We've also calculated the potential effect on customer 3 rates if all of the financial benefits from the 4 project were steered back to electricity customers. 5 And finally, it's important to note, as I just 6 mentioned, this financial analysis fully includes the 7 effect of Hydro's transactions with the partnership 8 and its loans to NCN. This is a difference from the 9 economic evaluations discussed by Ed which analyzed 10 the cash flows from a total project perspective. The 11 two types of analyses we believe are complimentary. 12 This is a schematic of the financial 13 arrangements between Manitoba Hydro and NCN as laid 14 out in the summary of understandings which was filed 15 as part of I believe the first round interrogatories. 16 The numbers are the same as those provided in the 17 summary of understandings and you'll see at the top of 18 the overhead, we are assuming that the cost at 19 inservice at 2009 in this case is at $756 million for 20 the generating station. 21 Now recall that the partnership is for the 22 generating station and the transmission facilities are 23 outside of the partnership that's financed by Manitoba 24 Hydro. 25 The two partners essentially have 33 per cent 160 1 and 67 per cent shares in the partnership. Manitoba 2 Hydro, as you'll see, is the general partner. There's 3 a very small 0.1 per cent share there with the balance 4 making up the balance of the 67 per cent. The general 5 partner is, in essence, Manitoba Hydro in its role of 6 operating the plant. 7 In terms of a debt equity ratio, the 8 partnership will finance the $756 million project, 75 9 per cent by debt, 25 per cent by equity which works 10 out to the numbers that you see here. And NCN we are 11 assuming will make a cash investment of just over $20 12 million and will borrow its remaining equity 13 investment of $41.5 million from Manitoba Hydro and 14 Manitoba Hydro will lend NCN that equity money at a 15 premium over Hydro's cost of borrowing. And this one 16 will be repaid from a part of NCN's dividend proceeds 17 from the project. 18 Manitoba Hydro will be providing a project 19 itself with financing for the 75 per cent debt share 20 and that will be at Manitoba Hydro's cost of 21 borrowing. 22 The partnership will also reimburse Manitoba 23 Hydro for the use of transmission, for operating the 24 plant, for marketing the energy and for any other 25 expenses incurred as a result of the project going 161 1 forward. 2 Turning to the way that we did the financial 3 analysis. The costs that I've just mentioned will be 4 financed by Manitoba Hydro with the exception of the 5 $20.5 million or so that will come from NCN and that 6 will then be repaid over the period of the period of 7 the project through the project's net returns and also 8 from interest on loans which are made to NCN. 9 We basically did the financial analysis two 10 ways. We looked at it from the point of view first of 11 all of assuming that the rates would be the same as in 12 the base case. Now the base case in this case is 13 where Wuskwatim comes into service in 2020 rather than 14 being advanced. And we did a set of financial 15 projections that extended our forecast out to that 16 period. Figured out roughly what rate increases would 17 be and we determined that there would be less than the 18 rate of inflation. We then overlaid Wuskwatim 19 advancement to 2009 and held rate increases the same 20 throughout that period and determined in that way what 21 the impact would be on Manitoba Hydro's financial 22 position, its income statement, its balance sheet and 23 so forth. 24 The other way we looked at it which is an 25 alternative point of view is to assume that Wuskwatim 162 1 coming in at 2009 will get you to the same financial 2 results if Wuskwatim were to come in at 2020 and then 3 the change occurs in the rate increases that will be 4 required. And what that allows you to do is to 5 determine the rate benefits that will accrue from the 6 project. 7 So the first overhead is looking at it from the 8 point of view of holding rate increases the same and 9 seeing what that would do to Manitoba Hydro's net 10 income. And you can see that there is a very 11 significant positive impact on net income over the 12 period up to 2035 which is where we did our financial 13 analysis. Obviously the useful life of the plant 14 would go on long beyond that. And you can see that by 15 the time you get up to 2035, you're seeing increases 16 of close to $100 million in Manitoba Hydro's net 17 income if you have low export prices and over $200 18 million if you have high export prices. Those are 19 very significant numbers in the context of base case 20 types of net income in the sort of hundred million 21 dollar range. 22 You can also see that even at the front end 23 where you would expect there to be less of a 24 beneficial effect because you've got your costs up 25 front and you don't get your revenues right away 163 1 because the units are coming into service one by one, 2 you can see that there's only a couple of years there 3 where we're not actually adding to net income and that 4 the effect is very very small. 5 Now, if you were to take the additional net 6 income that I showed you in the previous draft and use 7 it to, in effect, pay down Manitoba Hydro's debt. Or 8 another way of looking at it is just building up our 9 retained earnings, what this graph shows is the change 10 in Manitoba Hydro's debt equity ratio. In very simple 11 terms, a debt ratio is the ratio of total debt to 12 total assets. 13 The actual calculation is a bit more 14 complicated than that but that gives you the idea. 15 And what we wanted to do is two things. We wanted to 16 see over the longer term what this would do in terms 17 of benefit. And as you can see, that's a pretty 18 substantial benefit, those $100 to $200 million in 19 additional income that you saw in the preceding graph 20 have managed to get our debt equity -- rather our 21 debt ratio down by between 7 and 18 per cent by 2035. 22 So we wanted to see what the benefits would be 23 if those profits were retained in Manitoba Hydro. But 24 we also wanted to test a particular risk aspect of the 25 financial analysis and that's this period here which 164 1 is at the front end. 2 You'll recall that I said that when you get the 3 front end of any project, you have your costs up 4 front, you have your revenues coming in later. So the 5 real question is is it going to cause a very abrupt 6 shift in the corporation's financial position? And we 7 wanted to see how significant that would be. And what 8 we found is that the highest point here in terms of 9 the change that's happening in our debt ratio is 1.6 10 per cent. So whatever our debt ratio is at that point 11 in time, 1.6 per cent is all that would be added to it 12 as a result of Wuskwatim coming on. And then you can 13 see that by as early as 2015, which is about six years 14 after the project starts or 2017 if you have low 15 prices, which is eight years after the project starts, 16 then you're back to where you were on your debt ratio. 17 And this is the point if you choose where you can flow 18 those benefits to rate payers you're back in the same 19 financial position as you were when you started and 20 this area under the curve here could be flowed to rate 21 payers. And this is a decision that would be 22 obviously brought before the Public Utilities Board. 23 Now, this overhead looks at the other type of 24 analysis which is where you assume that instead of 25 your improving your debt ratio, improving your 165 1 financial net income, you've got now to a break-even 2 point where you would have been even if you hadn't 3 brought in Wuskwatim early, what would that do 4 potentially for rate payers? And you can see the 5 shaded area shows the amount of rate savings that are 6 available. 7 What we're looking at here are cumulative 8 benefits in 2002 dollars. And you can see it starts, 9 as I mentioned, six years to eight years after the 10 project starts. And that by the end of the period 11 here, you have very significant amounts going to rate 12 payers. Even under the low price range, there's 13 potential for about $87 million in rate savings. 14 Just to put this in context, the range that 15 we're looking at here in the dollars of the day once 16 the project is up and running is somewhere between $10 17 and $30 million per year ongoing in rate savings for 18 customers. 19 Ed went through a number of risk sensitivities 20 on the economic evaluations. For the most part, we 21 can rely on those directionally when we look at the 22 financial impacts. But we also wanted to do one or 23 two key risks just again to test those up-front 24 impacts on the corporation's financial stability and 25 again to look at the type of range of changes that 166 1 might make in rate benefits. 2 So this column here, we're looking at that 3 little bump, up-front bump in the debt ratio and the 4 base case we just talked about, 1.6 per cent addition 5 to the debt ratio, even if you have low export prices, 6 that isn't going to change. And the reason is that 7 you are really at the front end of the project and 8 you're not terribly sensitive to revenues at that 9 point. It's more of the cost side. 10 So we decided we would look at the cost side 11 and we assumed a 15 per cent capital cost increase 12 which is somewhere in the order of $127 million 13 inservice to the cost of the project. And what that 14 did was it adds .5 per cent to the 1.6 per cent. We 15 then looked at the circumstance Ed talked about which 16 is what if you had the worst drought on record 17 coinciding with the start-up of the plant? I don't 18 think this is particularly likely but we wanted to 19 test it out because it is something that is of concern 20 obviously to rate payers. And the addition there is 21 .3 per cent to the 1.6 per cent. 22 So if you were to have a combination of the low 23 export prices, the 15 per cent capital cost increase 24 and an extreme drought at the start-up of the plant, 25 adding all those up, get 2.4 per cent. What we said 167 1 here is it's going to be less than 2.4 per cent 2 because if you have drought occurring with low export 3 prices, that means low import prices too. So you're 4 going to get some benefit when you're importing to 5 help yourself out with the drought. So the 2.4 is 6 actually overstated. 7 Now if you look at the other column which is 8 once you've got past this temporary hump and you're 9 into the benefits that are potentially available for 10 rate payers, you add up all the adverse circumstances 11 and you still have $61 million in 2002 dollars 12 available potentially as rate benefits. That would 13 translate into something like $8 million a year 14 ongoing to consumers. So even under a very adverse 15 combination, we think there's significant benefits 16 there for consumers. 17 We also, in a very limited way, took a look at 18 our high case. And this is not the highest case there 19 could be because we didn't have available to us the 20 highest water flow run that would be an analogy to the 21 lowest drought case. But we did have the high export 22 prices. And again, it doesn't -- it's insensitive at 23 the front end to that bump in the debt ratio because 24 the revenues haven't really got going yet. But the 25 capital cost decrease actually of course reduces the 168 1 1.6 per cent so that you're looking at, in that 2 favourable combination, an increase to your debt ratio 3 of 1.4 per cent. And we believe that would be better 4 if you were to add favourable flows to that. 5 Over on the rate side, adding those two factors 6 together, you're looking at $241 million in 2002 7 dollars to rate payers which is in excess of $30 8 million a year ongoing in terms of potential rate 9 savings. 10 So in conclusion, having done the financial 11 analysis from a Manitoba Hydro perspective, we've come 12 to the conclusion and feel confident that there will 13 be no adverse effects on Manitoba Hydro's financial 14 stability as a result of investing in Wuskwatim and 15 advancing it. The impacts in the debt ratio net 16 income are very modest as you've seen. It won't as a 17 consequence cause any additional rate increases. 18 There is some significant potential for 19 improved financial performance going forward once 20 those few early years, we've got over that and/or 21 there could be rate savings beginning as early as six 22 years after the project start-up and continuing 23 thereafter every year. 24 Mr. Chair, this concludes the end fact part of 25 the presentation. 169 1 MR. WOJCZYNSKI: There's just one last comment 2 I wanted to make. I realize with the question that 3 Mr. Sargeant posed to me, there may be a 4 misunderstanding or I may have put forward an 5 explanation in the 450 megawatts in a way that might 6 lead you think that the cost of the wind and IRR is 7 worse than it might otherwise be than if we used 200 8 megawatts. If we had done exactly the same kind of 9 analysis for 200 megawatts of wind even though it had 10 much less energy than Wuskwatim but the same capacity, 11 we would have had more or less the same kind of 12 result. 13 So the fact that we used 450 megawatt wind 14 facility did not significantly alter the IRR. That 15 was not the reason why the IRR is so much lower than 16 the Wuskwatim one. In case there was a misimpression 17 from what I was saying. 18 MR. SARGEANT: No. Thank you, Mr. Wojczynski. 19 I understood what you were getting at. That to get 20 the output from wind, you needed a higher input than, 21 if I can use non-technical terms, than for water. 22 Thank you. 23 MR. WOJCZYNSKI: That concludes our end fact. 24 We do have the EIS presentation but, Mr. Chair, we're 25 at your hands but I have a hunch that you may want to 170 1 have a bigger wind break. 2 THE CHAIRMAN: You had a good hunch. I think 3 it's about time we take it at this point in time. If 4 we can take a 15 minute break. 5 6 (PROCEEDINGS RECESSED AT 2:43 P.M. AND 7 RECONVENED AT 3:00 P.M.) 8 9 10 MR. LECUYER: We might be fewer in 11 numbers to get it started, but hopefully others 12 will show up in a moment. The ones that want to 13 hear you are here. So, take it away. 14 MR. THOMAS: Thank you, Mr. Chairman. 15 The people that are going to be doing the 16 Environmental Impact Assessment Statement are here 17 with me, beside me. Cam Osler, he is with 18 InterGroup. George Rempel is with TetrES. Stuart 19 Davies is with North/South Consultants and Dave 20 Hicks is with N.D. Lea. Of course, I am with 21 Chief and Council of the Nisichawayasihk Cree 22 Nation. 23 Prior to the actual presentation on the 24 screen, I would just like to make some comments 25 that I would like to have included as part of 171 1 the record. 2 Our lands and waters and resources are an 3 integral part of who we are as Nisichawayasihk 4 Cree Nation people. Over many years we have 5 lived in harmony with our environment and 6 adapted to changing situations. This has given 7 us the ability to survive and thrive in the 8 rugged wilderness of Northern Manitoba. Our 9 greatest challenge has been to adapt to the 10 rapidly changing world of the twentieth and 11 twenty-first centuries. Today we are 12 searching ways to integrate modern ways, 13 technologies and opportunities into our society 14 while preserving our identity and our 15 traditional way of life that we value so 16 highly. 17 Wuskwatim represents just such an 18 opportunity, but based on our past experience 19 with the Churchill River Diversion project, 20 which disrupted our traditional lifestyles, we 21 have been naturally cautious about proceeding 22 with Wuskwatim. Our key priority has been to 23 ensure that any development has minimal impact 24 on our land and waters, while maximizing 25 benefits. 172 1 One way to do this is to integrate our 2 traditional knowledge into the assessment 3 process, and we have been able to do that. A 4 landmark of the Environmental Impact Assessment 5 process for Wuskwatim has been the use of local 6 and traditional knowledge for the first time in 7 assessing the impact of a hydroelectric 8 generating and transmission project in 9 Manitoba. This information was in addition to 10 the scientific information that is usually at 11 the core of the environmental impact 12 statements. 13 As part of the process, NCN members shared 14 their local area traditional knowledge through 15 their own traditional knowledge program. This 16 program includes interviews with resource 17 harvesters, elders, and others. Traditional 18 knowledge was also shared by the many NCN 19 members who worked with study scientists in the 20 field, programs that considered the physical 21 land and water resources, heritage resources, 22 and people in the local area that could 23 potentially be affected by the project. 24 In addition, we took into consideration 25 some the sacred sites that we have on our 173 1 traditional territory and ensured that there 2 was not going to be any impact on those sacred 3 sites. 4 All the studies were reviewed with NCN 5 through the future development team and several 6 community open houses. They were also shared 7 with other communities. 8 Using traditional knowledge provides 9 significant advantages. First, it draws on the 10 intimate knowledge of our land and resources by 11 our own people, who were able to provide 12 long-term and detailed information that may be 13 missed by shorter term scientific studies. 14 Second, it allows us to be part of a 15 decision-making process in ensuring that the 16 project will have as small an impact as 17 possible. A good example is the route of the 18 proposed access road to the Wuskwatim site. 19 Traditional knowledge played a role in assuring 20 that sensitive sights were bypassed. 21 Thirdly, when our own people see that 22 their knowledge and wisdom is respected and 23 used, they will be much more confident in and 24 satisfied with the final result, and hence be 25 supportive of the Wuskwatim project. They are 174 1 part of the solution. 2 Traditional knowledge is essential to our 3 people. While there are many different 4 definitions, we have our own view of what 5 traditional knowledge is and how it should be 6 collected and used. To us traditional 7 knowledge is, but it is not limited to, the 8 observation and experience of the land, 9 Aboriginal law regarding how the environment 10 works, the understanding of NCN's place in the 11 world, how things are connected, including 12 spirituality and relationship to the land, the 13 goals and aspirations of NCN, the outlook on 14 the proposed projects, concerns that we may 15 have, and the acceptability of the projects to 16 us, NCN's identity and culture, the stewardship 17 of the land, a base for natural resource 18 management. 19 We feel that traditional knowledge comes 20 from elders and others that are both 21 traditional and also living in a modern way of 22 life. We have applied our traditional 23 knowledge to the Wuskwatim project throughout 24 the whole process of planning for the project, 25 assessing the environmental effects that it may 175 1 have, and drawing conclusions that you have 2 seen in the EIS documents. 3 Our extensive involvement in the project 4 has meant that traditional knowledge has played 5 an important role in defining the project as is 6 currently proposed and how those effects will 7 be managed and monitored. Traditional 8 knowledge has played many essential roles in 9 planning for the project and in carrying out 10 the environmental studies. 11 Selecting the low head design that 12 will cause less than one half square kilometer of 13 flooding and reduce effects on the environment 14 compared to high head options. 15 Also for selecting locations for the 16 road, the camp, and transmission lines within our 17 resource management area that will minimize 18 effects on the environment and on NCN. 19 Providing an understanding at the 20 beginning of the environmental assessment process 21 of what should be studied. This was important in 22 setting the scope of the assessment and guided the 23 studies that were done. 24 Adding in a major way to the understanding 25 of the baseline conditions. In other words, 176 1 how things were in the past, how they are 2 today, and how they may change in the future 3 without the project. This includes 4 understanding things that have affected us and 5 our environment over time from the Natural 6 Resource Transfer Act through to the Churchill 7 River Diversion project. 8 Selecting valued environmental components 9 for detailed study, such as Woodland caribou, 10 and helping with an understanding of how those 11 VEC's are connected to the whole environment. 12 Contributing, along with science, to 13 conclusions about the effects that the project 14 may have. Where results did not agree, both 15 were included in the EIS reports. 16 Helping to identify things that should be 17 done to manage effects; for example, the need 18 for ceremonies at the Wuskwatim site before any 19 changes begin. 20 Helping to monitor where monitoring will 21 be needed. For example, monitoring water 22 levels at Wuskwatim lake in the vicinity of 23 important cultural sites. 24 Along with Manitoba Hydro, we have also 25 learned about the concerns and ideas of other 177 1 Aboriginal communities through the public 2 involvement program that has been implemented 3 since the fall of 2001. Concerns raised by 4 others through this process were included in 5 the assessment process. For example, in 6 response to concerns raised by a trapper in the 7 Wabowden register trapline district, Manitoba 8 Hydro examined whether an underground river 9 could link Wuskwatim Lake, or more broadly to 10 the Churchill River Diversion system, with the 11 headwaters of Ferguson Creek and therefore be 12 responsible for increased water levels on 13 Ferguson Creek at times. 14 Also, TCN's concerns led to commitment to 15 extend long-term quality monitoring from 16 Birchtree Lake to Stephens Lake. 17 So, we have made sure that because of our 18 involvement as NCN people that the 19 Environmental Impact Assessment that has been 20 done includes our traditional knowledge, as 21 well as western scientific knowledge components 22 to the whole thing. 23 So with that having been read into the 24 record, Mr. Chairman, I would like to then hand 25 over to Cam Osler who will do some of the 178 1 presentations, and each one of my environmental 2 team here will do their portion of the 3 presentation. Thank you. 4 Cam. 5 MR. OSLER: Okay. I will deal with the review of 6 the Environmental Impact Statements, documents 7 submitted for review by this Commission. 8 This work was put together by a team of 9 people who worked jointly for both NCN and 10 Manitoba Hydro, and they will speak to you on 11 the different parts of it today. 12 The integrated approach is the first part 13 I will deal with, looking at the overall 14 integrated approach adopted for this 15 assessment. There will be a second part that 16 will follow that and will look at each one of 17 the environmental components, parts of the 18 environment that were looked at as part of this 19 process of doing this assessment. 20 When I am looking at the integrated 21 approach, I will focus on certain topics; the 22 regulatory review process itself, the 23 assessment approach taken in general, the 24 public consultation and involvement approach, 25 and the overview of the EIS studies in general. 179 1 I will focus in the end on some cumulative 2 effects issues because they have surfaced in 3 the question and answer process and they are 4 common issues to all of the assessments that 5 will be discussed. 6 Starting with the regulatory review 7 process, it is ongoing and cooperative between 8 the two governments, Manitoba and Canada, as 9 Mr. Strachan pointed out earlier today. The 10 Wuskwatim project requires Federal and 11 Provincial regulatory environmental approvals. 12 The generation and transmission projects are 13 viewed in these processes as two separate 14 projects for licensing applications and review. 15 The regulatory and the public review has 16 continued since the EIS filings were made in 17 April of 2003, and extends beyond the CEC 18 hearing process itself. 19 Now, the CEC knows it has continued since 20 the filings, because you have had processes 21 involving motions hearings and interrogatories 22 processes of the CEC. As noted earlier today, 23 the Provincial government and Federal 24 government PAT and TAC process had their own 25 reviews, their own supplementary filing 180 1 questions to us, two rounds of them, and 2 filings in response to them. 3 The Department of Fisheries and Oceans in 4 the Federal process has an entirely separate 5 process of making its own decisions from the 6 Province of Manitoba, required under the 7 Canadian Environmental Assessment Act and the 8 Fisheries Act. And that is proceeding with 9 documentation. A large part of the draft 10 documentation was filed in public registries 11 recently and put on the website and made aware 12 to all the participants in this hearing as of 13 Friday. 14 There is another process that has been 15 going on that people have heard from, it is 16 Federal and Provincial Aboriginal consultations 17 that is going onwards as we sit in this 18 process. And there will be other processes 19 even after the licencing in terms of monitoring 20 and review as these projects proceed, if they 21 are indeed licensed. 22 The focus today, going to the next slide, 23 is on the Environmental Impact Statements that 24 have been filed with you, and all of the 25 supplementary information relating to them. 181 1 These have been prepared in accordance with the 2 EIS guidelines provided to the proponents. 3 These EIS guidelines set out the information 4 that is required by the Federal and Provincial 5 government agencies. 6 The project description and refinement is 7 the first key piece of information that this 8 requirement sets out. Now, we use the word 9 "refinement" here, because project description, 10 when you start and make an application for a 11 project as was done in 2001, you have a certain 12 level of project description, but that is going 13 to keep evolving. It evolved and is refined in 14 the case of what we have heard today with the 15 selecting of an access road route, with the 16 selecting of transmission routes that were put 17 before you. 18 By the time the application was made, the 19 low head approach had already been selected by 20 the proponents, as distinct from the high head 21 approach, but there has been refinements to 22 that process since then. There has been 23 refinements in terms of how the project will be 24 operated and everything else like that. 25 So, this process is ongoing. It will 182 1 continue to be refined in response to 2 monitoring even as the project is developed in 3 some instances, as you hear from people as you 4 listen to all the evidence. 5 The assessments by each environmental 6 component -- and I am going to talk about what 7 I mean by that word -- include a series of 8 things. They include looking at what is the 9 existing setting or baseline; they include 10 looking at effects assessment on the 11 environment and on the socioeconomic 12 situations. They look at mitigation to 13 mitigate effects from these projects. They 14 look at something called cumulative effects and 15 residual effects. And they look at ongoing 16 environmental monitoring after it is all 17 finished. But they do all of these things for 18 each what we call environmental components; the 19 physical environment, the aquatic environment, 20 the terrestrial environment, and socioeconomic, 21 or in layman's language, people environment, 22 and heritage resources. These are spelled out 23 in each of the EIS guidelines as the five 24 components that have got to be examined 25 separately as part of the assessment process. 183 1 Today my colleagues will address, we will 2 address together each of the key areas that I 3 have just listed here and the key conclusions 4 in each one of them. 5 The overall assessment approach -- sorry, 6 all the way through all of them, they have 7 involved public consultation and involvement. 8 The assessment process is not just done by a 9 bunch of people working for some proponents. 10 They go out and they talk with people, and I am 11 going to talk a bit about that process. It 12 occurs all the way through the process of 13 looking at what are the issues to be examined, 14 what are the assessment findings, what are the 15 monitoring and mitigation approaches, what is 16 the refinements to the project that seem to 17 make sense? All these things involve an 18 ongoing process of dialogue. 19 Let's go on to the next one. The 20 assessment that has been put in front of you in 21 accordance with the guidelines incorporates 22 local and traditional knowledge as well as 23 scientific information, as Councillor Elvis 24 Thomas has just laid out for you. The local 25 and traditional knowledge was an essential part 184 1 of the planning and the environmental 2 assessment process and I want to say a few 3 words about that. 4 Traditional knowledge has been explained 5 to you in the hearings and the meetings in 2002 6 on the guidelines, and explained again today by 7 Mr. Thomas on the grounds of NCN's perspective. 8 And he has reminded us all that there are 9 different perspectives from different people 10 and he has given you the NCN perspective that 11 is set out in the way in which we have 12 conducted this assessment. 13 Essentially, when we listen to people, one 14 of the first things that it involves is an 15 attitude of respect by those doing the work to 16 the local and traditional views and knowledge 17 of the people in the areas that are going to be 18 potentially affected. This respect deals not 19 just with hard knowledge the way some of us 20 understand it -- where are the caribou, where 21 are the fish -- it also deals with people's 22 view of the world, their spirituality, how they 23 see relationships between and among themselves 24 and the environment, and the elements of the 25 environment, the things they value and things 185 1 they want to see protected, all of these 2 things. It isn't just traditional. Some of us 3 just listen to this discussion and we think it 4 has to be something that has been there for 5 generations only. If you listen to the NCN 6 perspective, it includes modern as well as 7 traditional. It includes their views today as 8 they have been informed and learned from 9 Churchill River Diversion, as well as their 10 views before they ever saw anybody up there 11 trying to change the environment for them. 12 So all of these perspectives are important 13 to keep in mind when we are thinking of 14 traditional knowledge, and not just for 15 listening to NCN but all the other First 16 Nations and Aboriginal peoples that these 17 projects have discussed issues with. 18 In the case of NCN, information was shared 19 from the very outset. Dialogue went on from 20 the very outset. The attitude of the respect 21 is demonstrated by the approach that the 22 parties have taken. Councillor Thomas has 23 mentioned their own traditional interview 24 study, the scoping of the projects, the design 25 of the projects, the refinements of the 186 1 projects, the actual people from NCN worked 2 with the study scientists in collecting the 3 information and sharing information there. 4 There are many, many different ways in which 5 the people of NCN for many, many years now have 6 been working with all of us to develop what you 7 see in front of you today. 8 Beyond the people of NCN, information was 9 provided by others. Ongoing public 10 consultation and involvement activities 11 occurred beyond NCN starting in 2001, and it 12 occurred with First Nations and the Aboriginal 13 peoples in the areas that could potentially be 14 affected by these projects. We took the 15 attitude potentially to be very broad. Without 16 trying to say for sure this would be a 17 potential effect, we talked about anybody 18 upstream, downstream, or in any way in a 19 contractual agreement relationship with 20 Manitoba Hydro that might perceive themselves 21 to have some possibility of being affected. 22 There have also been discussions with 23 local governments throughout this area, with 24 the potentially affected stakeholders such as 25 trappers and other resource users, and with the 187 1 general public. All of this has been very 2 important to the development, refinement, and 3 ongoing assessment process for these projects. 4 The EIS documents there before you today 5 detail over four years of research and public 6 review. The environmental studies for both 7 projects have been underway since late 1999, in 8 the case of some of the studies, have been 9 under way since 1998. 10 The EIS describes the refinement of the 11 projects that have been going on throughout 12 this time period to avoid and mitigate expected 13 construction and operation effects. 14 The table of contents volume, which is 15 separate volume all by itself -- courtesy of 16 some interveners who suggested to us that it 17 would be useful to develop such a volume -- 18 this table of contents volume outlines the EIS 19 reports filed in April of 2003. First of all 20 there is a brief summary, public summary 21 document, which we call the integrated 22 executive summary of the EIS's for the two 23 separate projects, the generation project and 24 the transmission project. That is not a long 25 document, it is not that hard to read, and it 188 1 was intended for the general public. A Cree 2 translation and an oral translation was done by 3 the elders and other people from NCN, a team of 4 them, so there was a Power Point presentation 5 developed, a disk prepared and was available to 6 anybody who was interested in hearing the oral 7 presentation of that executive summary. 8 The main technical volumes, one for each 9 of the two projects, there is one volume which 10 contains most of the information that we 11 thought would be necessary for the review by 12 the regulators, including the CEC. That is 13 intended to summarize all of the key elements 14 of the assessment process that the guidelines 15 required us to do, and put it in one document, 16 although it is a bigger document, several 100 17 pages in each case. 18 There are a series of supporting documents 19 that start to take up the numbers of feet that 20 Mr. Wojczynski was talking about as 21 documentation. These are viewed by us as 22 extensive technical, scientific, or other 23 information, that support the main document. 24 We don't expect everybody to read every single 25 one of these volumes. They are there for 189 1 professionals, for people that are interested 2 in particular technical areas, to know what the 3 details are. But the main public summaries for 4 the public and the main volumes, one for the 5 each two projects, are the ones where most of 6 the information that should be relevant to the 7 guidelines is contained. 8 There has been extensive supplementary 9 materials filed since the filings in April of 10 2003. These have generally responded to 11 questions posed by government regulators, or 12 the public, or participants in the CEC process. 13 These documents include supplementary filings 14 made to the Technical Advisory Committee in 15 August and October of last year. They include 16 the two rounds of public questions posed 17 through this process with the CEC. 18 All of this documentation today is -- when 19 we talk about the EIS, we are really talking 20 not just what we filed in April, but all the 21 documents that have been filed to date, all of 22 them are before the Commission today. This is, 23 for our purposes today, the EIS. 24 The public consultation and involvement 25 process itself was an integral part of the 190 1 overall planning and assessment process. Since 2 1997, NCN has been actively working and 3 involved with Manitoba Hydro in all aspects of 4 planning, and you have heard that, not just the 5 generation project but also the transmission 6 project in the areas where it falls within 7 their traditional territory. 8 Since 2001 we have had five separate 9 rounds of public consultation and involvement 10 beyond NCN, extensive opportunities for the 11 public to receive information and provide 12 input. In fact, the public involvement plan 13 that we filed with the regulators, I think in 14 the summer of 2002, set out the objective of 15 trying to provide early and ongoing information 16 to people and to receive information back from 17 people as to their views and concerns. The 18 focus of the involvement process has been on 19 meaningful consultation with Aboriginal 20 peoples, First Nations and Aboriginal peoples, 21 but also with all the other people that might 22 have any potential -- that might be potentially 23 affected by these projects as well as the 24 general public. 25 The website information, the open houses, 191 1 the community meetings and the newsletters were 2 used as methods to try and facilitate these 3 objectives. A very special step we took was in 4 July of this year, we had a participant 5 workshop with the various people who were 6 looking as though they were going to be 7 interested in being participants in this 8 hearing, in order to give them three days to 9 get an overview -- or two days for the EIS and 10 one day for the need for -- to get an overview 11 of what all of this documentation was and get a 12 leg up on it. 13 We have learned from this public input, it 14 has helped refine and improve the projects and 15 the assessments. I will give you a few 16 examples -- Councillor Thomas has given some of 17 these already -- 18 NCN participation in the evaluation and 19 selection of the road, camp, and transmission 20 line locations in their area, and the key 21 choices about design and other matters related 22 to the developments, these have been obviously 23 critical to the evolution and refinement 24 process. 25 Elected officials in all of the 192 1 communities in the region that would talk with 2 us have made inputs to the design of the public 3 involvement plan at an early stage. That was 4 the first stage of the discussion we had with 5 them. We dealt with them as they wanted to be 6 dealt with in terms of how the process should 7 unfold. 8 Downstream communities in particular who 9 were concerned that maybe there might be some 10 water quality issues flowing downstream to them 11 had an effect on the field work design that had 12 been carried out in terms of water quality 13 sampling. And that can be spoken to if anybody 14 is interested. 15 Communities, since we have been doing all 16 this filing and having these discussions, some 17 of them have raised questions about further 18 information on systems operations issues, 19 potential for water regime changes that David 20 Cormie presented earlier. That presentation, 21 that process of going more in-depth was in 22 response to the public in various areas raising 23 questions and concerns and looking for more 24 information. 25 Communities and other's inputs to the 193 1 identification and evaluation of alternative 2 transmission line routes and the selection of 3 the preferred transmission routes. The whole 4 transmission process in a sense is separate 5 from generation. Generation, at least they 6 start off knowing where the site is. They may 7 not know whether they want to have a high head 8 or a low head, or whether they want to operate 9 it this way or that way. Transmission says 10 they have to get from here to there, but there 11 is a lot of different ways they can do that. 12 And a lot of their work that they have been 13 doing for the last few years has been assessing 14 alternatives, looking at alternatives, talking 15 to people about what the concerns should be, 16 what they would like to see happen, what they 17 would want to make sure is avoided. 18 When we look beyond the process and start 19 talking about the outcomes, it is important to 20 understand that the environmental effects were 21 predicted specific to Wuskwatim projects that 22 we are talking about today. That is the whole 23 focus of the EIA and EIS assessments, 24 Environmental Impact Assessments. So I want to 25 look at this rather carefully. 194 1 The potential effects that we are talking 2 about from each project, or of each project, 3 are predicted separately for the projects, and 4 are predicted separately in the end for each 5 environmental component that I have talked 6 about earlier; the physical environment, the 7 aquatic, et cetera. They are done in each case 8 by comparing two things; first, what would be 9 expected without the projects, which we have 10 talked about as the existing setting or then 11 existing baseline without the projects. And we 12 compare that with, of course, what do we expect 13 to happen with the projects? And we talk about 14 effects pathways. 15 Now, an effects pathway is a very simple 16 idea. We do something with this project that 17 changes the water regime which you have heard 18 described. What might that do to the land 19 around, and the air around, and the waters? 20 The land might have more or less erosion. If 21 there is more erosion it might put more 22 sediment into the water. That sediment may 23 have an effect on water quality for human 24 beings consuming the water, it may have an 25 effect on fish and fish habitat. The erosion 195 1 process may have more trees that are valued in 2 that area falling into the waters, which may 3 affect the terrestrial habitat. The 4 development of the road may bring more people 5 to this area than otherwise had been the case, 6 which some people may view as creating some 7 opportunities, some other people may view it as 8 creating some issues. 9 Each one of these elements of the project, 10 the construction process, the changing of the 11 water regime, the development of a road, the 12 development of transmission, creates beginnings 13 of pathways through to the air, the land and 14 the water, and ultimately the people. Our job 15 is to try and understand those pathways. And 16 the end point that we talk about in each case 17 is something called a valued environmental 18 component or a valued ecosystem component -- 19 fancy word for saying somebody thinks that is 20 important, it is a resource use, it is an 21 element of the environment that is important. 22 For starters, the regulators have told us 23 that each one of those environmental components 24 are important and we better look at each one of 25 those. But within each one of those components 196 1 there are things that some people particularly 2 want us to focus on, and we call those valued 3 environmental components or valued eco-system 4 components. And we are trying to find out 5 where the project is going to have a pathway 6 through to effect on those components. And we 7 are trying to do that by comparing what that 8 component will be like without the project 9 versus what it will be with the project. 10 In a sense, just to be very clear, there 11 are not only direct effects, but a lot of 12 indirect effects involved in the pathways that 13 we are examining. And to be very clear, in 14 case there is any confusion, we are not limited 15 in the way in which the guidelines have told us 16 to look at this by the Canadian Environmental 17 Assessment Act. The Canadian Environmental 18 Assessment Act only looks at some pathways as a 19 matter of law. We have to look at all of them. 20 We look at the effects on human beings through 21 jobs, and not just through the pathways through 22 the physical and bio-physical environments. 23 When all is said and done, we are talking 24 about residual effects, the end result after we 25 have talked about mitigation, and their 197 1 significance. That is what the end result is, 2 that is the end product. Is there going to be 3 a likely effect on valued environmental 4 component as a result of a pathway of effects 5 from this project, direct and indirect? Is it 6 likely to be -- is it likely, particularly if 7 it is going to be adverse, and is it going to 8 be significant? And significant is a 9 terminology that is used with factors built in 10 that are explained in the reports, but they 11 look at the frequency, they look at the 12 magnitude, they look at the geographical 13 extent, various factors such as that. They 14 decide whether or not, based on judgment and 15 based on information, or based on if there are 16 threshold guidelines, which there are in some 17 cases, whether it is likely to be a significant 18 change. 19 In looking at all of this, we look at 20 mitigation, we look at monitoring, we look at 21 follow-up measures. They are all important. 22 Monitoring in this case is looking at either 23 trying to deal with uncertainties and find out 24 what happens in fact, or to deal with 25 confirming what we have predicted, or as part 198 1 of an adaptive management strategy to manage 2 the results that occur rather than sitting here 3 debating at great length what the most expected 4 ones are going to be. 5 So that sets the framework in which we are 6 working, and it gives us the focus, and it is 7 going to be there for each one of the 8 environmental components that we are going to 9 talk about. 10 There is one big issue everybody has asked 11 us a lot of questions about, that is cumulative 12 effects. So I am going to spend a few moments 13 concluding my comments by looking at that. 14 Cumulative effects assessment was an 15 integral part of the overall effects assessment 16 as directed that it should be by the 17 guidelines, it shall be. So cumulative effects 18 assessment, or CEA, was an approach used for 19 both projects as required in the guidelines. 20 The approach we took reflected the EIS 21 guidelines. We looked at all effects that are 22 likely to result from the Wuskwatim projects, 23 when they are anticipated to occur, in 24 combination with other projects or activities 25 that have been or will be carried out -- words 199 1 right out of the guidelines and words right out 2 of section 16 of the Canadian Environmental 3 Assessment Act. 4 There will be -- I am going to dwell on 5 for one second the words "will be." Quite 6 legitimately in some cases people would assume 7 that means they have to be for sure. Well, 8 Canadian practitioner's guide and other things, 9 have an evolved thinking on this. It isn't 10 just those projects that are already licensed, 11 it is at least the projects that are already 12 licensed and those for which the licences have 13 been made, applications have been made is sort 14 of the basic requirement. We have adopted the 15 approach as saying, and are reasonably likely 16 to occur within a certain time period, and I 17 will talk about that. Hypothetical projects, 18 though, are outside the bounds clearly of the 19 concept of saying something will be carried 20 out. 21 The approach that we have taken in 22 accordance with the guidelines is intended to 23 meet the single project regulatory assessment 24 requirements as reviewed by the Technical 25 Advisory Committee and Project Administration 200 1 Team. That's our focus, that is our direction. 2 This differs, I have to note, and it is laid 3 out in some of the interrogatories we received 4 from the CEC, in particular number 137. This 5 differs from broader regional planning 6 approaches or cumulative effects assessment. 7 When you are focused on how to assist doing an 8 environmental assessment to get the effects -- 9 as I have just talked about a few minutes 10 ago -- assessed, you are focused on project and 11 the changes it will make to the environment. 12 There is another approach that can be 13 taken under other mandates to talk about a 14 region and to talk about planning for that 15 region, and to talk about cumulative effects of 16 all the different developments that may take 17 place in the region, and the different 18 approaches to be taken. That usually requires 19 a mandated authority with a regional 20 jurisdiction to look at such things. That's 21 not what we are doing, to be very clear. 22 Inside the areas we are talking about, there 23 are mandated authorities, Federal, Provincial, 24 and Aboriginal, First Nations that look at some 25 of these areas, including the Nelson House 201 1 Resource Management Board and the Cormorant 2 Resource Management Board. So there are bodies 3 that do look at regional issues within certain 4 areas. But we didn't take that approach. That 5 doesn't mean we ignored regional issues, it 6 just means that our focus was on the single 7 project regulatory assessment requirements as 8 set out to us in the guidelines. 9 I would just note that the approach we 10 have taken, and this is set out in the answers 11 to questions, is consistent with the Canadian 12 Environmental Assessment Agencies 13 Practitioner's Guide. The CEA -- as said in 14 that guide and as the view we have taken -- is 15 an Environmental Impact Assessment done well. 16 Essentially, it is not something magical, it is 17 not something unique and special, it is 18 something integral, and it is basically doing 19 environmental assessment properly and well, 20 taking into account how the environment may be 21 changing due to past, current, and future 22 projects that we are reasonably certain will be 23 carried out. 24 The CEA approach is integrated throughout 25 each EIS for each environmental component. It 202 1 is done for the transmission as well as for the 2 generation, and for each one of the components 3 therein. It considers local and traditional 4 knowledge throughout. 5 To deal with a couple of very specific 6 points, to conclude, two slides: Cumulative 7 effects were assessed with regard to past and 8 current project activities as required by the 9 guidelines. 10 Past and current project activities were 11 considered to form an integral part of the 12 existing or baseline or setting environments. 13 We considered current and ongoing effects, for 14 example, of the Churchill River Diversion, 15 including the augmented flow program, as well 16 as other specified projects and activities. 17 The assessment separately was done for each 18 environmental component, and where it was 19 considered relevant for that component to think 20 about the Churchill River Diversion, it was 21 thought about. I point to various areas where 22 you will see this surface. When we are looking 23 at the physical environment, it surfaces in 24 looking at the where are we on the erosion 25 spectrum with respect to the CRD? Are we early 203 1 days, middle days, late days, in terms of 2 erosion effects, sediment effects, mercury 3 effects? People did not put on blinkers and 4 not ask themselves those questions, how is that 5 baseline evolving? 6 When we are dealing with socioeconomics, 7 you cannot work in this area without hearing 8 from the people in that area the effects on 9 them of the CRD and the LWR, what it did to 10 shatter their confidence and raise their 11 anxiety about any future hydro development. 12 So although we talk about the baseline 13 taking into account the CRD and where we are 14 today, where it is relevant, we have to take 15 into account because we are forced to, the 16 situation of how that baseline is evolving. 17 The scoping for each environment was based 18 on the potential for overlapping pathways. 19 What does that mean? 20 Section 2.3.2 of the guidelines lays out 21 some ground rules for scoping in terms of 22 geography. It talks about, you will look at 23 the reflected local areas directly impacted by 24 the project, the area right around the dam, the 25 area where you have a right-of-way for 204 1 transmission, for example. Obviously, you have 2 got to look at that. But it also says you have 3 got to look at the zones within which there may 4 be regional or global effects from these 5 projects -- zones meaning what? If you are 6 going to affect some caribou and they range 7 over a much bigger range, then you better take 8 account of all of the things that are going on 9 inside the areas where they are ranging, or you 10 may miss something that will be critical to 11 them. If you're going to the air, you better 12 think about that. If the result of what you 13 are doing will save emission somewhere else 14 globally, you better think about that. 15 We have certainly, as you have heard and 16 you will hear, have been thinking about those 17 types of things with respect to the pathways of 18 effects from these projects. The secret is, we 19 have to look at the pathways of effects in each 20 one of the environments from these projects, 21 and then consider whether other projects such 22 as CRD, or LWR, or forest reactivity, or other 23 things that are going on, overlap with these 24 effects pathways. And if so, we have to think 25 about what is the issue and how does it change 205 1 our baseline and the future of the effects? 2 Essentially, it also means that where 3 there are no overlaps, we are not looking. We 4 don't go and study everything. If there is no 5 effect downstream on the Churchill River, we 6 are not looking there. The critical 7 assumption, the critical point, is there a 8 reasonable basis for belief and critical 9 evidence to support that key assumption as to 10 where we looked and where we didn't look? That 11 will get tested in the process of this hearing. 12 That is the past and the current projects. 13 Looking at the future projects, cumulative 14 effects were assessed with regard to specific 15 future projects. I would say that in the EIS 16 in the general approach we do lay out the 17 specific past projects that we had in mind, 18 just so there is a checklist. In section of 19 for example, the generation project, a 20 checklist of all the past projects we had in 21 mind, so that you can know what we had in our 22 mind when we were thinking about what I just 23 talked about, beyond the CRD. 24 We did the same thing with respect to the 25 future projects we had in mind. They are all 206 1 listed there, but just to summarize it. When 2 we are looking at future projects or 3 activities, they have to be scoped into the 4 cumulative effects assessment to deal with the 5 "will be carried element" that I was talking 6 about. As a practical ground rule, we included 7 projects being considered as reasonably likely 8 to occur, by Manitoba Hydro, for the possible 9 construction starting within the next five to 10 ten years. We also looked at other specific 11 activities, the forestry area, et cetera. 12 Now, we think that that is consistent with 13 good practice, best practice. Elsewhere we 14 have answered some questions, I think the PCN 15 in the second round, to document that, as well 16 as earlier on to the TAC questions in the 17 supplementary filings. 18 The assessment was done again separately 19 for each environmental component, and I will 20 give you some examples. 21 When we go to the scoping, generation 22 project scoping for each environment is based 23 again on the potential overlapping pathways. 24 Again, we are talking about the same ground 25 rule I just used a few minutes ago. But here, 207 1 let's apply it to the future. In the 2 bio-physical study area, for example, we are 3 talking about an area from the foot of Early 4 Morning Rapids down through Opegano Lake as a 5 bio-physical area that might be affected by 6 water regime changes due to this project. We 7 looked at with Notigi, with Gull, or with 8 Conawapa, three projects that Manitoba Hydro 9 sees as reasonably likely they might start 10 construction within the next five to ten years, 11 would they have an overlapping effect with the 12 effects of Wuskwatim projects? The conclusions 13 set out are, they don't think so and therefore 14 these projects are not a part of any detailed 15 cumulative effects assessment because we could 16 not see an overlap. But, again, that is open 17 for discussion. In the second round of 18 questions from the CEC, there were some very 19 specific questions about, well, why did you 20 exclude Notigi for that reason -- CEC 103 if I 21 am not mistaken. So that is one example. 22 When we go to socioeconomic study regions, 23 the approach we took acknowledges that the 24 effects of employment go far beyond the local 25 area. They include the people in the north, 208 1 certainly the people in the project region, 2 that goes throughout all the area where 3 preference for employment will be given. We 4 talked about a number of different regions in 5 the socioeconomic assessment, particularly the 6 generation project, to reflect that. The 7 transmission project, we tended to focus more 8 on the individual segments where the 9 transmission lines were being built. 10 Finally, when we were looking at what Dave 11 Cormie was talking about this morning on system 12 water regime, we looked at that in more detail 13 after the EIS was filed in order to address 14 issues being raised by people, we of course are 15 looking at, okay, the whole CRD, the whole LWR 16 are, are there any potentials for overlap of 17 effects. 18 You heard today that in the case of CRD 19 there is no potential for overlap in the 20 judgment of the information put in front of 21 you. Downstream in the Nelson River, Lower 22 Nelson plants, there is no basis that we can 23 understand proceeding any perceptible change in 24 the water regime. And dealing with the LWR 25 releases, again, the information is, no 209 1 perceptible change seems to be reasonably 2 expected. 3 We tried to look at how this might be with 4 the Gull and the Conawapa projects added in, 5 Notigi didn't make any difference, but Gull and 6 Conawapa might, but we could not come up with 7 any likely scenarios to how Gull and Conawapa 8 would be developed, including tie lines and 9 everything else, and therefore make a 10 reasonable basis for a likely prediction, which 11 is required if you are going to do a cumulative 12 assessment. We are not just trying to talk 13 about anything, we are trying to talk about 14 what is likely to be an effect. So we scoped 15 out, for the purposes of the system water 16 regime issues we talked about this morning, we 17 ended up scoping out any attempt at assessing 18 Gull and Conawapa for that reason. There is no 19 likely scenario. We considered it, we looked 20 at whether it could be used, and we came to the 21 conclusion that there is no one scenario 22 likely. 23 I have given you that to set the stage for 24 the discussion by components. We will now go 25 to the second part of our presentation dealing 210 1 with specific environments. The studies 2 extended to the siting and the refinement of 3 project components and assessments of effects 4 on the physical environment, the aquatic 5 environment, terrestrial, and then the 6 socioeconomic and heritage. And George Rempel 7 is going to start off by focusing on the 8 physical environment, and then others will 9 follow on the others ones. 10 MR. REMPEL: I will be talking about 11 the physical environment components that were 12 identified in the guidelines as needing to be 13 addressed. These components include, the 14 following items: Climate, geology, soils, water 15 regime, ice processes, erosion, sedimentation and 16 debris. 17 These guidelines were for both the 18 project -- the Wuskwatim Generation Project and 19 the Transmission Project -- included these 20 components. Obviously, there was more 21 discussion of some of them on the Generation 22 side -- debris, for example -- than there was 23 on the Transmission. 24 Each of these components are assessed in 25 great detail in the various documents that 211 1 Mr. Osler has described. 2 Subsequent to their filing of the EIS, 3 there actually was additional information on a 4 number of topics, and rather than go through 5 all these items in detail, I will make some 6 comments on some of the topics that were raised 7 in the interrogatory process. 8 To begin with, in terms of climate, the 9 Wuskwatim development overall will have a 10 positive effect on climate. The Generation 11 project is expected to result in a net 12 reduction in greenhouse gases. That is 13 particularly true because of the displacement 14 of power that would otherwise be generated 15 using coal or gas as explained by 16 Mr. Wojczynski this morning. 17 And also, it is also a fact because there 18 will be minimal flooding because there will be 19 such a small amount of new flooding associated 20 with the Generation Project. 21 The Transmission Line Project will result 22 in clearing of the forest and vegetation along 23 the right-of-way along different station 24 sights. 25 There will be a loss of carbon stocks. We 212 1 have been very conservative in estimating the 2 loss. We have considered there would not be 3 revegetation. Obviously, there will be. But, 4 even when we look at it in a very conservative 5 manner, the loss of carbon stocks, we believe, 6 are very nominal in the overall regional 7 context. 8 So, overall, the climate effects are 9 positive. 10 In terms of water regime, we spent some 11 time talking about this today, the effects of 12 Wuskwatim Generation on the water regime are 13 minor. If you look at the upstream side of it, 14 water levels will be raised between Taskinigup 15 Falls and Wuskwatim Falls about 7 metres. 16 In the immediate forebay, as we talked 17 about before, the water levels that today 18 annually vary, subject to the flows along the 19 diversion out on Wuskwatim Lake, will be 20 stabilized in the upper area of its present 21 range. 22 There will not be water regime changes 23 upstream of Early Morning Rapids. Those act as 24 an hydraulic brake in the water profile. 25 Looking downstream, there will be changes 213 1 downstream of the Generating Station, 2 particularly immediately downstream of the 3 station. This is a function of when the 4 various turbines are operating. 5 If, for example, three turbines are 6 running during the day and only two at night, 7 there will be an immediate change in the water 8 level downstream in the Burntwood River. 9 So, these will be most pronounced in the 10 first 9 kilometres or so downstream of the 11 plant itself. These variations are going to be 12 up to about 1.3 metres per day and they will 13 occur daily, I should say, under normal, 14 open-water conditions. 15 As you proceed further down to Opegano 16 Lake, these will be dampened out. By the time 17 you get there, it will be about 0.45 metres and 18 they will be further smoothed out as the water 19 proceeds down the rapids and gets to Birch Tree 20 Lake. There, the water level changes will be 21 not perceptible. It will be about 0.1 metres; 22 about four inches. 23 So, we have got changes in the water 24 regime essentially from Birch Tree Lake up to 25 the foot of Early Morning Rapids. Those are 214 1 the changes that are brought about by the 2 station. 3 The station will not change the operation 4 of the Churchill River Diversion. The 5 Wuskwatim project will not affect the operation 6 of Notigi, that is a controlled structure, 7 regulating flows into the Rat/Burntwood, nor 8 Missi Falls, which is the outlet -- that 9 controls the flows into the Churchill River. 10 The monthly and seasonal flow patterns on 11 the Churchill River diversion will not change 12 their function of the rainfall and snow melt in 13 the watershed of the Churchill and 14 Rat/Burntwood Rivers. They will continue as 15 they have for the last 25 years. 16 In the immediate area of the new 17 Generating Station, the daily flows will be 18 shaped to conform to the modified run of the 19 river operating mode. On a daily basis, the 20 flow into Wuskwatim Lake will equal the flow 21 out. 22 Wuskwatim will not have a perceptible 23 effect on Lake Winnipeg water regime. 24 When we filed the EIS back in April 2003, 25 we did so on the basis that the assessment did 215 1 not see any perceptible effects on the overall 2 system regime, including the Lake Winnipeg 3 Regulation and Lower Nelson River flows and 4 water levels. 5 Subsequently, after filing the EIS, there 6 was a lot of interest in system effects, and 7 potential effects, and as Mr. Cormie explained 8 this morning, as a result, Manitoba Hydro and 9 NCN conducted a lot more analysis. 10 This confirmed that there were little 11 effects on the rest of the system. It showed 12 that there were no perceptible changes in the 13 water levels for the water bodies downstream of 14 Lake Winnipeg, including Cross Lake. So, that 15 confirmed what we had judged to be appropriate 16 in the EIS initially. 17 There are no perceptible water regime 18 changes that are expected and, therefore, when 19 we look at the pathways that Cam Osler 20 discussed in the Assessment, you look for 21 changes in one component in the environment to 22 see if it will have other changes as they 23 proceed. For example, will water level changes 24 affect erosion or the use of the shoreline by 25 animals and people? In this case, we found no 216 1 perceptible water regime changes and, 2 therefore, we had no credible pathways for 3 measuring other environmental effects. 4 In the absence of credible pathways, we 5 also determined that an Accumulative Effects 6 Assessment was not appropriate. 7 With respect to erosion, we do expect 8 shore line erosion to increase on Wuskwatim 9 Lake. About 30% of the shorelines of Wuskwatim 10 Lake and the adjoining lakes, like Sesep and 11 Cranberry, are actually eroding today. These 12 are clay, silt shorelines. They are mostly in 13 the main part of Wuskwatim Lake on the south 14 and east shorelines. That is where the wind 15 induced waves can hit the shoreline and cause 16 erosion. 17 These erosion rates on the shorelines were 18 increased rather dramatically when this 19 Churchill River Diversion was put in place. 20 Wuskwatim Lake, for example, was increased in 21 depth by about ten feet when the diversion was 22 put in place. So, there was fairly aggressive 23 erosion in the initial years after the CRD was 24 introduced. 25 That erosion has been declining over the 217 1 past 25 years. Hydro has had a number of 2 sites. I believe there is about 15 sites along 3 Wuskwatim Lake itself, with about, I think, 4 over all, 45 different erosion profiles being 5 measured. 6 Those erosion rates have been declining 7 and today are approaching what you would expect 8 to be long-term rates in northern lakes that 9 have erodible shorelines. 10 When the water levels are changed with the 11 new project, they will be kept at the upper end 12 of the current range during Wuskwatim 13 operation. Right now, they vary about 1.7 14 metres. They will now be kept pretty 15 consistent within about six inches or so at 234 16 metres above sea level. 17 That will initially increase the amount of 18 erosion on the shorelines that are subject to 19 erosion. In other words, where the water is 20 not contacting bedrock, but is contacting the 21 clay and silt shorelines, there will be 22 increased erosion. 23 After about five years, that erosion will 24 settle down again and begin to decline. After 25 about 25 years, we expect the erosion rates for 218 1 all the eroding shorelines to be about the same 2 as they are at present before the Wuskwatim 3 project. 4 There will be work done in the river, in 5 the construction of this project. There have 6 been concerns expressed about how much sediment 7 will be released into the river during the 8 construction process. We have a picture here 9 showing a cofferdam construction during the 10 Limestone Generation Project construction. You 11 can see there is equipment working on the river 12 and you will have some sediments and soil 13 released into the water. 14 We recognise that will happen here as 15 well, and particularly during cofferdam 16 construction. Most of this will occur during 17 the first years -- years two to five of the 18 construction period, especially when the 19 cofferdams are removed. It is pretty hard to 20 avoid some sediment being mobilized into the 21 water. 22 DFO has been very interested in sediment 23 management and they have asked for a separate 24 document on how sediment will be managed during 25 construction. That document has been filed. 219 1 It is being reviewed by DFO at present. 2 In the course of those discussions, 3 Manitoba Hydro and NCN introduced additional 4 measures to reduce sediment mobilization, and 5 this plan now identifies specific design and 6 contingency measures to mitigate sediment 7 releases during the course of construction. 8 There will be monitoring during 9 construction and we are confident that with 10 this mitigation, measures that we have defined 11 in the Sediment Management Plan that the 12 release of sediments will be satisfactory -- 13 and will be controlled to levels that are 14 satisfactory to the regulatory authorities. 15 With this increased erosion I have spoke 16 about, there will be increase in shoreline 17 debris. As the banks do recede, the vegetation 18 that is there will be brought into contact with 19 the water. Our belief is that most of this new 20 debris will actually be trapped by the existing 21 debris that is against the shoreline and the 22 new debris will remain against the shore and 23 not move out into the lake. That is based on 24 observations on other northern Manitoba lakes, 25 including Wuskwatim. 220 1 When we discussed this with the local NCN 2 Elders, their belief is that some of this 3 additional debris will, in fact, be carried out 4 into the lake or they are concerned it might 5 be. So, we have two different judgments here. 6 We can't really determine which is correct, but 7 we can say that this will be monitored. 8 Manitoba Hydro has a Debris Management Program 9 that it does implement across the various 10 waterways that it uses. This ivolves 11 monitoring debris where it is an issue, 12 cleaning up debris or controlling its release. 13 In this case, we believe that new debris 14 can be tied into the shorelines or removed, if 15 necessary. 16 So, there will be monitoring taken and in 17 consultation with NCN, Manitoba Hydro will 18 address the mobilization of this debris. 19 With respect to the Transmission Project, 20 there are 350 kilometers or so of transmission 21 line. There will be clearing and construction 22 along this line. The effects are actually 23 confined primarily to the rights-of-way, 60 24 metres wide, 110 metres in some cases and the 25 immediate adjacent areas. 221 1 Transmission lines are typically 2 constructed and the bulk of the construction 3 takes place in the winter. There is selective 4 clearing, winter clearing, winter construction 5 and this greatly reduces potential impacts, and 6 Hydro has a great deal of experience in 7 constructing these to the satisfaction of the 8 Regulatory Authorities. 9 The effects on soils and terrain are, 10 therefore, confined mostly to the 11 rights-of-way. Access is limited during 12 construction and so the effects are quite 13 nominal. 14 That concludes my comments on the Physical 15 Environment. At this point, I will turn it 16 over to Mr. Stuart Davies who will discuss the 17 Aquatic Environment. 18 MR. DAVIES: The Environmental Impact 19 Statement for the Generation Project considered 20 water quality, aquatic habitat, lower trophic 21 levels, which includes aquatic plants, algae and 22 invertebrates, fish and stream crossings. 23 As councillor Elvis Thomas stated earlier, 24 the NCN Elders and Resource Harvesters played a 25 major role in designing these studies right 222 1 from the very start. They also played a major 2 role in conducting them. About two-thirds of 3 all the field workers that worked on the 4 environmental studies were NCN members. 5 Throughout the project, respect was shown 6 for the environment. Just as an example, when 7 the fish were taken from the water to be 8 sampled, tobacco was offered to the water. 9 For the Transmission project, EIS 10 considered watersheds and stream crossings and 11 fish and fish habitat. 12 There is an extensive water quality 13 sampling program that has been conducted. 14 There is about four years of data that has been 15 collected right now and this coming year would 16 be the fifth year of pre-project data. 17 It is being conducted over quite a large 18 geographic area that originally extended from 19 upstream of Wuskwatim Lake to just upstream 20 from Thompson. 21 Through the PIP process, there were 22 comments and input through downstream 23 communities and as a result of that, the Water 24 Quality Sampling Program was extended to an 25 area just upstream of Split Lake. 223 1 There is also a broad range of parameters 2 that are being looked at. It includes a full 3 suite of nutrients, metals, and TSS, as George 4 had discussed earlier. 5 Selected sites, parasites and bacteria 6 were also collected as well as hydrocarbons. 7 During construction, there will be some 8 specific construction activity that will cause 9 a short-term water quality changes. We had 10 talked about the increases and total suspended 11 solids that would occur during the construction 12 of the cofferdams and the removal of the 13 cofferdams. 14 There will also be sewage inputs during 15 the construction period that will be monitored 16 throughout the construction of the project. 17 I was also told the Sediment Management 18 Plan, which addresses the TSS issues that have 19 been raised has been put on the website as of 20 Friday. 21 During operation, we don't expect to see 22 any major changes to water quality except at 23 some local areas there will some increased 24 water erosion along the shorelines and perhaps 25 some TSS in the immediate area. But, the lake 224 1 itself will not be affected and the areas 2 downstream we don't expect to see any 3 measurable changes either. 4 The Wuskwatim Lake reduced water level 5 fluctuations will increase the amount of 6 habitat and we expect that will increase the 7 invertebrate production in the lake and also 8 the forage fish eaten there by the larger fish. 9 We feel it will increase the spawning 10 habitat that will be available to fish. Right 11 now there is about a 4.5 foot water level 12 fluctuation during the year. And with the 13 project in place, the water levels will be much 14 stabler. 15 So, habitat that is sometimes wet right 16 now and sometimes dry, will be wet the majority 17 of the time and we will see increased 18 production from that. 19 Initially, increased erosion on Wuskwatim 20 Lake may reduce the suitability of some of the 21 areas for invertebrates and fish. Again, 22 because some of the near shore erosion that we 23 do expect there will be some site specific 24 reductions in invertebrates and fish. 25 Overall though, in the long-term, we 225 1 expect that there will be increases in the four 2 key fish species, which are: Pickerel or 3 Walleye, Jackfish or Northern Pike, Lake Cisco 4 or Tullibee or White Fish. 5 Long-term populations in the lake will of 6 course depend on the level of harvest. We did 7 expect to see an increase in domestic harvest. 8 White Fish from Wuskwatim Lake are preferred by 9 NCN Elders, so we expect some will be 10 harvested. There is also commercial fishing on 11 the lake. 12 It is good to have a bit of perspective on 13 the areas that we are talking about. This 14 large area here is the area that we are saying 15 will be positively effected by the stabilized 16 water levels over the long-term. This smaller 17 area here is the area where we will see larger 18 water fluctuations and this very small area 19 here is where the flooding will appear. The 20 flooding will be limited to that small piece 21 right there. Again, the stable water levels 22 here and increased water level fluctuations 23 downstream. 24 This area here, which is a key part of the 25 lake, which is primary Walleye spotting habitat 226 1 will not be affected by erosion on the main 2 part of the lake. 3 Operation of a Generating Station will 4 have a negative effect on the fish and fish 5 habitat in the downstream reach that we have 6 just showed. There will be increased water 7 level fluctuations on top of the existing water 8 level fluctuations and we also expect that 9 there will be fewer fish migrating from 10 Wuskwatim Lake -- or moving from Wuskwatim Lake 11 downstream. 12 Right now, fish currently cannot move 13 upstream over Wuskwatim Falls or Taskinigup 14 Falls. It is about a 22-metre rise if you 15 consider Wuskwatim Falls and Taskinigup Falls 16 together. Some fish do move downstream over 17 Taskinigup Falls. The movement is not a 18 migration -- fish moving downstream as a 19 migration wouldn't be a very good life history 20 movement. Once they moved down, they are 21 basically lost to the system. 22 When the Generating Station is in place, 23 we expect that fewer fish will move down for a 24 couple of reasons. One, the larval fish will 25 not be drifting downstream. We also expect 227 1 that with the change in habitat, we will have 2 fewer fish going downstream than before. One 3 of the reasons being that right now when fish 4 move over to Wuskwatim Falls, they are 5 basically trapped between -- excuse me. When 6 they move over Wuskwatim Falls, they are 7 basically trapped between Wuskwatim Falls and 8 Taskinigup Falls and can't get back into the 9 main portion of the lake. 10 When the Generating Station is in place, 11 the water levels at Wuskwatim Falls will allow 12 the fish to swim back rather than being trapped 13 between to impassable falls. 14 The fish that do go downstream will move 15 through the turbines and there will be some 16 mortality. We expect that the survival rates 17 of fish going through the turbines will be 18 roughly between 80 to 90%. We feel that is a 19 relatively conservative estimate. 20 The net effect on fish in the study area 21 as a whole, we feel will be positive. There 22 will be a small positive increase upstream. As 23 you saw from the map, the area upstream is much 24 larger than the area downstream and it provides 25 better fish habitat and it is the area that is 228 1 harvested by domestic fishers and commercial 2 fishers. 3 DFO plays an important role in regulating 4 aquatic developments. One of the things that 5 it requires is the Habitat Compensation Plan, 6 which provides compensation for negative 7 effects to the fish habitat. 8 A draft Fish Habitat Compensation Plan has 9 been provided to DFO. We have been working 10 closely with them to develop that. That plan 11 compensates for the negative effects on fish 12 habitat. 13 If we take a look at the fact that we feel 14 overall that there will be a small, but 15 positive effect on fish in the area as a whole, 16 the addition of compensation being provided by 17 the Fish Habitat Compensation Plan will provide 18 even a larger benefit to fish populations in 19 the area. 20 In regards to mercury, mercury was one of 21 the issues that NCN raised very early on in the 22 process because of their experience with the 23 Churchill River Diversion and a lot of effort 24 has been focused on that. We feel that there 25 will be a very small increase in mercury 229 1 because of the small area that will be flooded. 2 We don't feel that you will be able to 3 distinguish the increase in mercury from 4 natural variation. 5 We looked at both a best case scenario and 6 a worst case scenario and out of the worst case 7 scenario, we are still not certain if you will 8 be able to see the difference in some of the 9 fish species after the project. 10 Downstream from the project, there will be 11 increases in some individual fish that may be 12 resident near some of the peat areas that we 13 feel will be decay with the project. 14 Downstream of Opegano Lake, we don't feel 15 that there will be any measurable change in the 16 mercury levels. 17 One of the things -- the way that mercury 18 is transported downstream is primarily through 19 biota. One researcher recently gave me a good 20 example that provides people with a perspective 21 that if you are looking at downstream 22 transport, the difference between mercury being 23 transported in water as compared to fish is, if 24 you ate an average meal of pickerel, the 25 mercury that you would accumulate from that 230 1 would be similar to washing that meal down with 2 about 100,000 gallons of water. 3 So, there is a huge difference between the 4 amount of mercury that is transported by water 5 and the amount of mercury in the biota. 6 Right now, there is very few fish that are 7 moving downstream, primarily because of the 8 impassable falls, the Taskinigup Falls, 9 Wuskwatim Falls and downstream of Opegano, 10 there is also impassable falls. 11 Manitoba Hydro and NCN have committed to a 12 very complex, detailed monitoring program and a 13 draft of that monitoring program has been 14 submitted to the Department of Fisheries & 15 Oceans for their review. The program will 16 monitor water quality and vertebrates, fish and 17 fish habitat and mercury levels during both the 18 construction period and the operation of the 19 project. 20 Among other things, the results of the 21 monitoring plan will be used to confirm whether 22 impact decisions are correct or not. They will 23 used to identify unexpected impacts and refine 24 mitigation as required. 25 In regards to Transmission, local 231 1 knowledge was used to avoid important fish 2 habitat and fishing areas during the routing of 3 the Transmission line. There is extensive 4 consultation with local communities. No 5 habitat critical to sustaining local fish 6 populations was identified along the proposed 7 route. All potential negative effects on 8 aquatic habitat can be mitigated for 9 construction of the transmission lines. 10 There will be site-specific environmental 11 protection plans that will be put in place to 12 make sure that impacts to fish and fish habitat 13 do not occur, and there will also be follow-up 14 monitoring that will happen during the 15 construction period again as another check. 16 I think it is now passed over to Dave 17 Hicks for the Terrestrial Environment. 18 MR. HICKS: For the record, I am Dave 19 Hicks. With your permission, Mr. Chair, I will 20 stay in my chair. I am not as mobile as my 21 colleagues here. 22 My particular role in the Environmental 23 Assessment studies and the Route Selection 24 studies were for the Transmission facilities. 25 I have about 11 slides here which deal with 232 1 both Transmission and Generation in the context 2 of effects and impacts on the Terrestrial 3 Environment. 4 The Environmental Impact Statements in 5 both cases consider the following Terrestrial 6 features: Plants and habitat, insects, 7 amphibians and reptiles, birds and mammals. As 8 my colleague Mr. Osler noted earlier, that 9 consideration did not end with the filing of 10 the Environmental Impact Statements in 11 April 2003. We have continued to do field 12 research through the summer of 2003 and will be 13 doing additional research in the years leading 14 up to the clearing and construction for the 15 Transmission lines and the development of the 16 roadway, for example. 17 In the case of the Generation Project, the 18 effects on habitats and plants will be site 19 specific or local. 20 Construction of the Generating Station 21 will potentially affect about 2600 hectares. 22 That is a very conservative estimate. That 23 deals with the total amount of disruption of 24 the Terrestrial Environment that might occur 25 over the 6-year construction period for the 233 1 Generating Station. Much of that will be 2 rehabilitated or restored towards the end of 3 the construction period. In the final 4 analysis, there will be about 660 hectares 5 permanently removed from its current vegetative 6 state. 7 I should confess many of my colleagues 8 consider I am metrically challenged. So, if 9 anyone has a problem with hectares, I will 10 remind you that one hectare is two and a half 11 acres. One hectare is basically 100 metres 12 squared and there are 100 hectares in one 13 square kilometer. So, the 660 hectares that 14 would be permanently removed here translates to 15 6.6 square kilometers. 16 No endangered, threatened or very rare 17 plants were found in the course of the research 18 work for the Generation site. 19 The use of the phrase "very rare" refers 20 to classification systems that are applied both 21 federally and provincially. Most of the 22 effected habitats are common in this particular 23 area of the province. 24 There are three less common habitat types, 25 specifically, Jackie Forest on dry soil, 234 1 which is encountered in the vicinity of the 2 portions of the access road in the borrow 3 areas, north and east of the Generation Station 4 site. There is some Balsam Fir forest, which 5 is generally at the site of the Generating 6 Station and at one stream crossing. There is 7 some white spruce forest, again associated with 8 the Generation Station site and with the shores 9 of Wuskwatim Lake. 10 The mitigation measures there would ensure 11 that any damage or disruption to those less 12 common habitat types would be subject to 13 replanting or similar mitigation at/or that 14 immediate site or nearby. 15 Again, talking to the Generation Station, 16 the effects on the shoreline habitat and plants 17 will vary a bit by location. Stuart has 18 earlier said that upstream of the Generating 19 Station, the reduced water level fluctuations 20 will occur and that will tend to favor the 21 growth of plants that are adapted to these 22 conditions; for example, peak lands, sedges. 23 There will be a decrease in plants like 24 cattails which favor a more fluctuation in 25 water levels. 235 1 Downstream in the reach immediately below 2 the power station, the increased frequency of 3 water levels fluctuations could increase the 4 break-up of peatlands along the shore, 5 particularly in some of the inlets where the 6 water is slower moving and there is a -- some 7 incidence of peatland. It could also reduce 8 the abundance of stable water regime. 9 In the case of Transmission, the effects 10 on forest and plants will be relatively small. 11 In this case, about 2800 hectares or 28 square 12 kilometers. 13 Now, I am referring here -- again, 14 conservatively -- to the entire area of the 15 rights-of-way. George Rempel has earlier 16 mentioned that there are about 350 kilometers 17 of Transmission line associated with this 18 project. In point of fact, that refers to the 19 length of the right-of-way associated with the 20 project as opposed to the length of actual 21 lines. 22 As he explained to you, in the case of the 23 corridor between Herblet Lake station at Snow 24 Lake and Wuskwatim itself, there will be two 25 lines sharing a single right-of-way. 236 1 So, the overall 350 kilometer length 2 refers basically to the distance from Thompson 3 to Wuskwatim to Snow Lake to The Pas. 4 That length, multiplied by the variously 5 60 metre or 110 metre right-of-way produces the 6 estimate of 28 square kilometers effective 7 right-of-way. The actual clearing will be 8 restricted to about 50% of that because the 9 remainder is either water, drop-out crop, or 10 wet lands. Areas where, although there will 11 still be an effect, the effect will not be to 12 clear the areas. The same impact will not be 13 incurred. 14 Shrub cover post-construction will be 15 maintained along the rights-of-way. 16 There will be a rare plant survey 17 conducted along the rights-of-way. Again, this 18 is a bit misleading. There have already been 19 plant surveys along the rights-of-way and will 20 continue to be so additional surveys. 21 In 2004, for example, our plan for the 22 Birch Tree to Wuskwatim section as preparatory 23 to finalizing the Environmental Protection Plan 24 for that area and prior to the clearing of that 25 right-of-way. 237 1 The same will occur for other Transmission 2 line rights-of-way, later on as we approach the 3 time of their actual construction. 4 One of the -- apart from the very careful 5 routing of the Transmission lines, one of the 6 principal mitigating effects is the fact that 7 the lines will be constructed during the winter 8 when there is far less risk of damage to 9 vegetation. 10 In the case of both the Transmission and 11 Generation projects, there are not to be 12 significant adverse effects in particular on 13 wildlife. 14 There will be site specific measures taken 15 to minimize effects during construction. These 16 will be described in "EnvPPs", which is 17 shorthand for "Environmental Protection Plans". 18 Site specific plans that will be filed prior to 19 the actual commencement of construction, for 20 both the infrastructure and the Generation 21 Station and for the Transmission Lines 22 associated with the Transmission project. 23 Construction effects generally tend to be 24 short-term and local. An example, noise during 25 construction may be a cause to temporarily 238 1 scare wildlife away from the right-of-way. 2 Keep in mind the construction period 3 for the Generating Station is approximately six 4 years. In the case of the Transmission lines, it 5 tends to be one or two construction seasons. 6 Winter time, two or three months in length and 7 actual construction activity tends to be 8 concentrated at particular points as construction 9 moves down the right-of-way. 10 Effects of operation of the Generation 11 and Transmission projects on birds are not 12 expected to be significant. The effects will be 13 small, although in some cases, long-term during 14 the operation period; peat habitat and some 15 habitat loss through erosion. 16 Emerging peatlands -- I think Stuart 17 earlier referred to the fact that there are some 18 mobile peat islands in that may be enjoying the 19 isolation of the islands now, may be less isolated 20 and more prone to predators than they would be in 21 the current condition. 22 The reduced fluctuations in water 23 levels upstream of the station will generally 24 benefit shoreline nesting areas, as we said, may 25 reduce some areas of offshore marsh habitat 239 1 preferred by certain species. 2 In the case of transmission project 3 again, the altered bird community, other than the 4 rights-of-way themselves, is relatively limited to 5 the area adjacent to the rights-of-way, and we 6 have filed a great deal of information on that 7 particular topic in both the EIS's and in the 8 supplementary materials. 9 There is a small risk of bird 10 collision. Manitoba Hydro experience with this 11 tends principally to involve waterfowl in areas 12 where there is a lot of waterfowl staging during 13 migration and where there may be fly-ways that 14 would be perpendicular to the rights-of-way of the 15 transmission lines. Even in those cases, there 16 are mitigative measures that can be taken. 17 In the particular case here, we, at 18 this point, have not identified any special 19 mitigation requirements for birds because 20 principally of the location of the routes relative 21 to known staging areas within the area. 22 Operation effects of mammals, again, 23 for both the generation and transmission lines 24 will be small, not expected to be significant. 25 There will be some loss of habitat, that would 240 1 will be particularly at sites like station sites 2 or the generation station site itself where the 3 loss of habitat is permanent. 4 There will be habitat alteration in 5 other locations, for example, along the 6 transmission line rights-of-way, the loss of tree 7 vegetation doesn't necessarily mean a complete 8 loss of habitat, it means an alteration in 9 habitat. As shrubs and grasses come back into the 10 right-of-way, there is a different habitat, 11 different species in some cases may favour that 12 habitat. 13 Access management, it is a key 14 consideration in this conclusion that the effects 15 on mammals will be small and will not be 16 significant, and access is a significant concern 17 of all the communities we visited, both with 18 respect to the access road for the generation 19 station, but also with respect to the transmission 20 line rights-of-way themselves. 21 There is a good deal of effort 22 currently being made. I know that Stuart has just 23 recently, working very closely with NCN, has 24 developed an access management plan for the access 25 road. We are very close at this point to an 241 1 access management plan for the first transmission 2 project, which is the construction power line from 3 Thompson into Wuskwatim itself. We have some 4 comfort now I think in dealing with NCN, and some 5 comfort on the part of NCN members, that access is 6 manageable through careful routing and through 7 attention to detail in the routing. 8 A couple slides here that deal with 9 specific species, caribou of course are a species 10 of considerable interest and concern, highly 11 valued by NCN and other communities in the area. 12 We do not expect the impacts on caribou or the 13 effects on caribou to be significant. The changes 14 in habitat will be relatively small. 15 In the case of generation project, the 16 road has been carefully selected to avoid 17 important winter range and calving habitat. There 18 are only a small number of caribou known to be 19 present in the area that would be directly 20 affected. 21 In the case of the transmission 22 project, we don't have the same certainty because 23 of the larger areas involved, but we have listened 24 very carefully to both NCN members and the case of 25 the other Aboriginal communities to other 242 1 harvesters, elders who have told us the areas that 2 they feel should be avoided, in part because of 3 their concern for caribou habitat. 4 There will be some minor alteration of 5 the habitat on an ongoing basis along the 6 rights-of-way. 7 The rights-of-way themselves, in the 8 case of transmission lines, are not considered to 9 pose an actual barrier to caribou movements. 10 There have been studies that suggest that caribou 11 will cross the rights-of-way without a great deal 12 of difficulty. 13 Another slide, this one on moose. 14 Again, the effects are not expected to be 15 significant. The habitat for moose in the area is 16 widespread. The changes in habitat will be 17 relatively small. High quality habitat has 18 generally be avoided through the careful routing 19 of the access route. The transmission line 20 rights-of-way are expected to have a neutral 21 effect. The forage will tend to be better along 22 the cleared rights-of-way, but experience 23 elsewhere has shown no demonstration of an 24 increase in habitat use along the rights-of-way by 25 moose. 243 1 Effects on fur bearers will vary by 2 species and between the projects, and again 3 overall they are not expected to be significant. 4 In the case of a generation project, 5 negative effects on aquatic fur bearers included 6 the small -- include the small loss of habitat 7 from flooding and erosion. In the case of the 8 more stable water levels upstream of the dam, 9 again, we said earlier that will tend to reduce or 10 have an adverse effect on certain plant life like 11 cattails. 12 Cattails are, in turn, a significant 13 food source for muskrats, so there may be a small 14 negative effect on muskrat that is a result of 15 that change. There will, on the other hand, be 16 some negative effects because of the increased 17 water level fluctuations levels downstream of the 18 G.S. On balance, there is no significant change 19 anticipated. Again, the more stable water levels 20 in Wuskwatim Lake should be positive in respect of 21 their impact on aquatic fur bearers and with 22 respect to the increase in shoreline peat habitat. 23 Effects on fur bearers again will vary 24 between species and projects, and again overall 25 are not expected to be significant. 244 1 I think I got a little ahead of myself 2 there at one point. 3 Again, if I can summarize quickly, the 4 generation project, the net effect is no 5 significant change expected. In the case of the 6 transmission line, there will be some small 7 habitat effects on fur bearers and some potential 8 fragmentation effects on certain species. I think 9 it came up in the course of the interrogatories 10 that there is some literature that suggest that 11 martians, for example, might be at the limit of 12 their willingness to cross the 110 metre gap that 13 would be created in the right-of-way between 14 Wuskwatim and Herblet Lake. 15 There is other evidence that suggests 16 that may be not be that serious, but nonetheless 17 there are concerns in the area which have been 18 identified in the filing. 19 Finally, as in the case of the Aquatic 20 Environment, it is intended that there will be 21 monitoring and follow-up during construction and 22 immediately following construction. That 23 monitoring will be directed principally to 24 ensuring that the mitigation measures identified 25 and demanded of the contractor in the construction 245 1 of the lines, and outlined in the environmental 2 protection plans, have been complied with. If 3 they haven't, this would be the point when any 4 remedial measures would be identified and 5 implemented. 6 We are also in the process now of 7 developing monitoring plans for the operation 8 phase. This is becoming more frequent and a more 9 routine aspect of environmental planning with 10 Manitoba Hydro. In the course of the 15 or so 11 years that I have been involved with the 12 corporation on projects of this kind, we have 13 gradually been, I think, improving the quality of 14 environmental protection planning, and working 15 very hard in recent years to incorporate not just 16 construction, but also operating considerations in 17 the protection plans, so that the operation staff 18 are equally aware of the issues and looking to 19 avoid any detrimental effect in the rights-of-way. 20 I mentioned earlier that there is 21 concern about access, increased access. In some 22 cases, trappers with NCN actually see an 23 opportunity here to gain better access to areas 24 south of the Burntwood that have been relatively 25 inaccessible since the implementation of the CRD 246 1 because of water crossing risks and ice 2 conditions. But there is concern in virtually all 3 the communities that we visited, certainly among 4 the resource users, that increased access might be 5 a problem. 6 What we have said, experience has 7 indicated to us that the problem is not perhaps as 8 serious as is the concern in some cases, but to 9 the extent that there is a concern expressed by a 10 local community, we have undertaken to work with 11 the communities to develop access management 12 plans. As I said earlier, we are nearing 13 completion of such a plan, or at least the first 14 draft of such a plan with NCN for the construction 15 power line from Thompson into Wuskwatim. 16 That concludes my presentation and I 17 will turn it back to Cam Osler. Thank you. 18 MR. OSLER: The final set of 19 components we will talk about is socioeconomic and 20 the heritage resources. This set of -- this part 21 of the environmental components, as set out in the 22 guidelines, includes the following: It includes 23 resource use by people. It includes land and 24 water use in the transmission EIS. It includes 25 the economy, which are the effects on jobs, 247 1 business, economic activity. It includes 2 infrastructure and services in the communities, 3 whether they are affected. It includes personal 4 family and community life, which itself is a broad 5 range of elements dealing with the family, with 6 the person, and with the community, whether it is 7 health and safety, whether it is community access, 8 whether it is esthetics, planning by communities, 9 governance, a wide range of matters that we will 10 talk about. And finally the heritage resources, 11 which is a separate component in the EIS 12 guidelines and in the EIS statements, which are 13 physical heritage resources, and whether they are 14 affected in any way, shape or form by this 15 project. 16 The pathways for these effects are 17 laid out in the document. We are not going to go 18 through them today, but I will just go to some 19 highlights like my colleagues. 20 Dealing with first resource use, the 21 generation projects, the effects will tend to be 22 long-term and positive for the reasons you already 23 heard. 24 Resource harvesting in the Wuskwatim 25 area is currently limited due to difficult access. 248 1 By developing this project, there will be 2 increased access, not only where you see the road, 3 but for harvesters, if this is the way people want 4 to manage it, even across the dam to the south 5 side of the Nelson House resource management area, 6 which has not been accessible given the CRD, and 7 there will be positive effects therefore for the 8 domestic harvesters, commercial fishers and 9 trappers. 10 A road access management plan being 11 developed -- well, a draft plan has been 12 developed, it has now been approved by NCN and 13 Manitoba Hydro, and it was circulated to 14 participants in this hearing as of Friday, and it 15 is on the Manitoba Hydro website as of Friday. 16 So, that's a draft plan that focuses 17 on the construction phase in particular and the 18 outlines of how they would think they would 19 approach the operations phase. It talks about 20 controlled access on the road. It talks about the 21 intent of having that controlled access maintained 22 even during operations by having a private road or 23 its equivalent. 24 So, we commend that document for 25 people's attention to lay out the approach that 249 1 NCN and Manitoba Hydro are taking with respect to 2 that issue. 3 Transmission effects on resource use 4 will be both positive and negative. The clearing 5 and construction activities may cause some 6 wildlife to temporarily move away from the area, 7 as Dave Hicks has just explained. Short term and 8 minor will be the nature of the effects. The 9 trappers will be notified in advance of the 10 schedule for clearing and construction activities, 11 and Manitoba Hydro will reimburse trappers for 12 loss for harvesting during construction and 13 clearing. 14 After construction some trappers may 15 then benefit from improved access to their 16 traplines, which has been noted throughout the 17 discussions that have taken place with them. 18 If a community, though, has concerns about 19 increased access, a transmission access management 20 plan will be developed with them. And of course 21 you have heard that NCN for sure is asking that 22 this be done, and it will be done for transmission 23 routes in their area. 24 Transmission effects on land and water 25 use -- which is specifically required in the 250 1 guidelines for the transmission EIS. None of the 2 proposed routes are located on existing reserved 3 lands. Two treaty land entitlement selections are 4 affected by the proposed routes, and discussion 5 will be required with the affected First Nation, 6 which is NCN, and the Provincial government 7 regarding any necessary use by Manitoba Hydro of 8 those lands. 9 The proposed routes cross through the 10 Nelson House resource management area, the 11 Cormorant resource management areas, and OCN's 12 tradition territory. Proposed routes also crosses 13 the Tom Lamb wildlife management area, and area of 14 special interest of ASI under the Manitoba's 15 protected areas initiative. It does this for 16 approximately 47 kilometers. Approximately 16 of 17 these 47 kilometers are parallel to an existing 18 rail line. The transmission line is expected to 19 have a very minimal effect therefore on this 20 wildlife management area. 21 Moving beyond the effects on resource 22 use and land and water use, and moving into the 23 economy, the pathway -- main pathway here is the 24 construction period jobs of the generation 25 project. This diagram summarizes those jobs over 251 1 the time period, the six years of the 2 construction, which if the project goes forward, 3 it will be 2004 to 2010. It shows you two stages 4 of construction. The first two years, access 5 road, infrastructure, and camp development, in 6 order to get the site prepared for the development 7 to be done, and the next four years stage 2 of the 8 generating station construction itself. You see 9 that the nature of the employment jumps up and 10 down. It peaks in the summer and is very low in 11 the winter. It is seasonal in its nature. 12 The two colours here tell you two 13 different levels of skill requirements. The green 14 represents designated trades. That is trades such 15 as carpenters, electricians, where you have to 16 have at least four years of training and 17 employment history in order to be fully qualified, 18 and you have to have at least three years before 19 you are even qualified as an apprentice for the 20 20 percent of the jobs that will be available for 21 apprentices. 22 When you see all that green, don't 23 think that somebody gets a job at day one and 24 keeps going. Of course it cycles through the 25 different trades as they are required, the 252 1 carpenters being earlier on and electricians being 2 later on. So you don't get one job all the way 3 through here, and you don't get one job all year 4 long. 5 In terms of the blue, we are talking 6 about the balance of construction contractor jobs, 7 the 90 percent or more jobs on the site that are 8 being contracted by the contractors. 9 These are the non-designated trades, 10 construction support services, heavy equipment 11 operators, truck drivers, people working the 12 catering, et cetera. 13 These require typically less than 14 three years worth of training, and in many cases, 15 almost the majority of them, less than 12 months 16 worth of training and history of employment. They 17 are very dominant jobs in stage two period, and 18 they are not as dominant in the period of 19 building, the actual construction of the facility 20 over the four years. 21 All of these jobs on this construction 22 site will be through a collective agreement. The 23 current collective agreement Burntwood/Nelson 24 Agreement will expire and a new one is being 25 negotiated. It is not yet negotiated. 253 1 Looking at the information that you 2 saw there, our job was to look at this and come up 3 with some estimates of what the effects of 4 employment will be for Aboriginal northerners. It 5 will be positive is our conclusion, but the 6 numbers were developed looking at factors, 7 including what you just saw for generation 8 project. We looked at four factors in effect. We 9 looked at the negotiated contractors, contracts, 10 which could be very important through stage one. 11 Looked at the pre-project training activities that 12 were described earlier today by Mr. Wojczynski and 13 Ken Adams, being funded by Hydro and the 14 governments -- and also being heavily developed at 15 NCN through their ATEC training facility which has 16 been developed in the last short while. We looked 17 at the preference that is likely to exist. We 18 made an assumption that the preference for hiring 19 will be for Aboriginal northerners, resident not 20 just at NCN, but resident in what we called the 21 Nelson and Burntwood River regions, which includes 22 South Indian Lake all the way downstream on the 23 CRD. It includes the entire water reserve area of 24 the CRD and the LWR, as well as Pikwitonei, 25 Wabowden and Thicket Portage. 254 1 Finally, we considered beyond the job 2 training activities as well required of the 3 contractor. With all these things in mind, our 4 estimates for the two stages, the first two years, 5 stage one, that there would be, as you can see 6 here, 81 to 93 potential jobs for NCN, including 7 their members at South Indian Lake, and 57 to 69 8 potential jobs for other Aboriginal residents. 9 That reflects the very important role that we 10 think negotiated contracts involving NCN 11 businesses will play in that stage. During stage 12 two, there is much more employment but a much 13 heavier requirement in terms of training and skill 14 development. The numbers are, absolute terms, not 15 that much different, they go up a bit, 80 to 113 16 potential NCN jobs, and 181 to 256 potential jobs 17 for other northern Aboriginal residents. But the 18 percentages go down because of the skill 19 requirements we are talking about. . 20 Overall, in the project region that I 21 talked about, Nelson River CRD region, up to 90 22 percent of the jobs during the first two years, or 23 about 142 at the peak, might go to northern 24 residents in that region, and 31 to 42 percent 25 might go to northern residents during the next 4 255 1 years. 2 If this is achieved through all the 3 measures we are talking about, it will be 4 noticeably different than say the Limestone 5 experience where the average was in the range of 6 20 to 25 percent of northern Aboriginal 7 employment. 8 The full socioeconomic effect of what 9 we are talking about here is not just money in 10 people's pockets, it is all the effects that go 11 with it in terms of the training and the 12 development and the capability and the learning 13 experiences that come from working in this type of 14 environment if you haven't had the opportunity 15 before, and the opportunity, if you like that type 16 of work, to do it again in the future. It is, 17 particularly for those that get more training, it 18 is a career, and it s development of which this is 19 a start rather and an end. The extent to which 20 this is indeed the first of several projects could 21 be very important to these people if they have the 22 opportunity to get their start here. 23 Moving beyond that, the generation 24 construction effects will include northern 25 business purchasing opportunities, negotiated 256 1 contracts are being pursued with NCN, as I have 2 just mentioned. The limited opportunities may 3 also exist for other entrepreneurs to start 4 businesses. To the extent that we go beyond that 5 and think of contracts not being negotiated 6 contracts, we would be looking at Manitoba Hydro 7 having tenders for qualified northern businesses 8 such as restricted tendering, or from all 9 businesses which would be open tendering. 10 Overall, when you look at the full 11 development, the full hundreds of millions of 12 dollars that are being dealt with, most of the 13 contracts for developing this facility, including 14 the general civil contract, will be awarded 15 through open tender. 16 Generation will benefit NCN also 17 through ownership investment. In the type of 18 assessment we are doing, we look at this. If you 19 are looking under the Canadian Environmental 20 Assessment Act, we wouldn't look at this. 21 NCN has an option to be a partner in 22 the project with an interest of up to 33 percent, 23 as you have heard. Revenue from this investment 24 would be a main economic benefit realized by NCN 25 during the operations phase, after the facility 257 1 starts operations, ranging from several million 2 dollars a year in the early years after 2010, and 3 growing to tens of millions of dollars a year in 4 the long-term. However, NCN also share in some of 5 the risks and actual revenues will be based the 6 financial performance of the generation project 7 itself. 8 Moving beyond the generation, the 9 transmission effects on employment and business 10 will be positive and small. The contracting 11 opportunities in this case will be available under 12 Manitoba Hydro's northern purchasing policy rather 13 than throughout the partnership agreement as such, 14 or through anything we were just talking about. 15 Discussions with First Nations and 16 Aboriginal communities in the vicinity of these 17 transmission lines will help to assess and improve 18 opportunities. These discussions will be ongoing 19 as the projects get approved and go forward. The 20 employment opportunities for transmission line 21 construction will be during the winter months. 22 They tend to be over two years, one year for 23 clearing and the next year for construction 24 activities. 25 The jobs are much, much smaller, and 258 1 we are just talking about in the generation. You 2 are talking 15 to 30 jobs for each one of those 3 three line segments, Thompson to Wuskwatim, or 4 Wuskwatim to Snow Lake, or Snow Lake to Ralls 5 Island, and maybe 10 to 70 jobs during the second 6 year of construction. So, there are very much 7 smaller opportunities than exist with the 8 generation site. 9 When we go to operation and 10 maintenance, there may be -- it may result in some 11 small sort term contracts for brush clearing on an 12 ongoing basis as the lines are maintained. 13 At the stations that are being built, 14 the transmission stations -- Birch Tree and 15 Wuskwatim are new, and the others are being 16 modified inside their existing limits -- stations 17 will require highly specialized workers, but it is 18 likely to provide some job opportunities during 19 development. 20 Moving from the economy to the 21 infrastructure and services, the effects will be 22 mitigated. The generation project, the community 23 based training and construction employment may 24 result in some NCN members and their families 25 returning to Nelson House. Returning migration 259 1 may strain the housing situation and other 2 infrastructure, and measures will be taken to 3 monitor and reduce this. 4 There is a very wide range of 5 possibility here. The members in the reports, 6 anywhere from 35 to 400 individuals. This has to 7 be monitored. The community is looking at how to 8 do this. It has to be mitigated and managed as a 9 process. But on the other hand, if people are 10 coming back, they are coming back for a reason, 11 and the best we can do is to inform them and to 12 help manage the process to the best of everybody's 13 ability. 14 Transmission project, proposed routes 15 crossed or in the proximity of some existing 16 infrastructure such as roads, railways, airports, 17 float plane base -- special requirements or 18 mitigative measures currently are not anticipated 19 to be needed and no effects are expected on the 20 local community infrastructure and services. 21 Moving beyond infrastructure and 22 services to the final component of the 23 socioeconomic environment, personal family 24 community life, one of its elements is 25 transportation and safety, and we are throwing in 260 1 esthetics here, in each one of these the effects 2 will not be significant. 3 In terms of the generation project, 4 yes, there will be some additional traffic during 5 the construction period in certain areas, but this 6 is not seen to cause any significant basis for 7 concern. Measures to warn newcomers who were at 8 the site working, or travelling there, about the 9 existing travelling hazards on Wuskwatim Lake and 10 along the Burntwood River system will be part of 11 the program. Physical changes themselves brought 12 about by the generation development on the 13 esthetics of the area will be limited to the land 14 of the project site, the borrow areas along access 15 road, areas which are at the moment not generally 16 accessible or being viewed by people. 17 In terms of the transmission route 18 project, route selection where feasible avoids 19 residences and cabins. In one instance a cabin is 20 approximately 120 metres away, but will be 21 screened from the transmission right-of-way by 22 buffers of trees. The community of Umperville is 23 located east of the proposed route, but there is a 24 vegetative buffer that separates it and the 25 right-of-way. Impacts in general are expected to 261 1 be, in terms of access, safety and esthetics, 2 minor, and what they call incremental in nature, 3 meaning that in many cases they will be inside 4 existing right-of-ways in the area, for example, 5 around Umperville. 6 Generation effects on NCN health and 7 social well-being, another element of personal, 8 family and community life, will be managed. There 9 is no direct effect on health due to the water 10 quality changes that Stuart described earlier at 11 Wuskwatim Lake. People camping and living there 12 and using the water will not see significant 13 quality changes in the water. 14 Mercury levels in the pike and walleye 15 in the lake may be temporarily increased. The 16 levels would remain lower, though, than those 17 found today at Threepoint and Footprint Lakes, and 18 mitigative measures as noted, and monitoring will 19 take place of mercury in the fish. 20 During construction, indirect effects 21 both positive and negative will occur on community 22 health at Nelson House and social well-being at 23 Nelson House, and these will need to be managed. 24 Income, employment and training are 25 wonderful things, but they are changes for people 262 1 and they could produce issues in terms of their 2 ability to deal with these changes. The people of 3 Nelson House are examining that, they are well 4 aware of it and they are looking at ways to manage 5 the positive and the negative, so that the outcome 6 is good for everyone. 7 Returning population, I noted is a 8 potential issue that has to be managed and 9 monitored by the community. Concern about 10 environmental changes is another dimension that 11 comes from the history of the CRD. No matter what 12 we say, no matter what we do, people who lived 13 through the CRD in Aboriginal communities have a 14 high degree of stress and anxiety, particularly if 15 they are elders, that new changes will not be 16 whatever we say they will be, they will be a lot 17 worse. That NCN, in order to deal with the issue 18 with its community, has to manage and deal with 19 and discuss. 20 In the long term, potential new 21 revenues from this NCN investment, if it is 22 developed and if they make the investment, could 23 help address community priorities in the longer 24 term and contribute to improvements on an ongoing 25 basis in health and social well-being of their 263 1 community. 2 Looking beyond the generation, looking 3 at the transmission projects, it will not result 4 in adverse effects on health. Design and 5 operating standards will avoid risks to health and 6 safety. No adverse health effects are anticipated 7 from exposure to electric and magnetic fields 8 associated with the transmission facilities. The 9 general consensus of world-wide scientific 10 community, as far as we report on it, is that a 11 public health risk from exposure to electric and 12 magnetic fields, or EMF as they are often referred 13 to, is not established. And this position is 14 supported by Federal and Provincial health 15 agencies, and by the Manitoba Clean Environment 16 Commission sponsored EMF experts workshop and 17 position statement in 2001. Manitoba Hydro 18 continues to monitor studies on this subject, 19 though, and measurement of EMF in individual homes 20 will be made available on request for people that 21 have specific concerns. 22 Generation projects effects on NCN 23 culture will also be managed by the community. 24 NCN has identified the need for ceremonies to be 25 undertaken before changes are made to Taskinigup 264 1 and Wuskatim Falls and the area. Although the 2 esthetics may not be a big deal because nobody is 3 there at the moment, these are very important 4 cultural areas for the community, and the treating 5 of them with respect and the ceremonies involved 6 with them in dealing with it, and dealing with the 7 other sacred areas and cultural areas in this 8 traditional Wuskatim Lake area of NCN, is critical 9 to dealing with this in a respectful way. NCN 10 members in the future, if this is developed, could 11 more easily visit the important sites in this area 12 which they have been shut away from so long. 13 Monitoring and contingency plans to 14 protect Wuskatim Lake cultural sites are critical 15 elements, including, as Councillor Thomas and 16 others have noted, it doesn't matter that Manitoba 17 Hydro and the expert team say we don't think there 18 will be any problems of water invading the 19 cultural sites in this area, the elders and other 20 people want to make sure that they will be 21 monitored anyway, and people talk about ways to 22 deal with it in case the experts are wrong. 23 NCN will establish a culture and 24 heritage committee as a community to deal with 25 these issues and to deal with all of the cultural 265 1 ongoing management issues associated with this 2 project. 3 Generation effects on the heritage 4 resource, which is the final component in the EIS 5 guidelines, will not be significant and will be 6 monitored. The heritage resource surveys 7 conducted in areas for the construction camp, the 8 site of the generating station, the access road 9 and the borrow areas for the generation project 10 showed no specific archeological sites being found 11 at the present time. A way marker, which is a 12 marker showing the way, was found and has been 13 relocated. But when these areas are developed, 14 using good, best practice, there will be an 15 archaeologist on site to check as the process 16 unfolds during the construction process for any 17 artifacts or any other heritage resources as they 18 are defined under the Act. 19 NCN elders and members were consulted 20 to ensure that cultural and other sites were 21 identified and protected, both in the planning and 22 in the programs for implementation and 23 construction, and indeed in the long run through 24 the operation of the area. 25 To complete this, on the transmission 266 1 side, the effects on heritage resources will be 2 minimized and are being minimized through routing, 3 and they will be monitored through the 4 development. The routing process avoided known 5 important cultural heritage sites, as Dave Hicks 6 has already set out, and they are very important 7 in various places, including the NCN area around 8 Wuskwatim Lake. 9 Construction phases of the project 10 have the potential though to affect unknown 11 heritage resources. So before construction, 12 surveys along the rights-of-way will be done to 13 identify unknown heritage resources, and newly 14 identified sites will be flagged and/or removed 15 before construction begins. The Manitoba Heritage 16 Resources Branch and First Nations in the area, 17 and Aboriginal communities in the area will be 18 advised as appropriate of anything that is found 19 and how it is being dealt with. 20 That concludes our review of the 21 components by each one of the environments -- and 22 I will ask George Rempel, as the overall 23 coordinator for our team that has been working on 24 this, to just summarize three slides of the 25 overall effects that were put in the integrated 267 1 summary, and then there will be some concluding 2 comments I think from Mr. Wojczynski and 3 Councillor Thomas. 4 MR. REMPEL: Thank you, Cam. 5 As Cam indicated, we have three 6 slides, one each on the generation and 7 transmission projects and then a summary slide. 8 Basically the summary of effects for 9 the generation project builds on the fact that it 10 was designed to be a low impact project. This low 11 head design that we have talked about reduces the 12 amount of flooding, a very key characteristic of 13 this project. The modified run-of-the-river 14 operation balances inflows and outflows. This is 15 not a fill and draw reservoir. The reservoir will 16 be kept very stable. As a result, water level 17 fluctuations on Wuskwatim Lake will be reduced, 18 and the extent of water level fluctuations 19 downstream will be limited. 20 The environmental and cultural 21 considerations have been incorporated into the 22 route selection and the management of access on 23 the road to the site. 24 There will be environmental protection 25 plans, that is a requirement of the guidelines. 268 1 They will be developed before the construction 2 starts. In fact, work has already begun on that. 3 They will meet regulatory requirements and any 4 conditions that are imposed in the event the 5 project is approved, and they will incorporate 6 proven environmental practices, and the 7 contractors will be obligated to conform to these 8 environmental protection plans. 9 With regard to the Wuskatim 10 transmission project, again, it has been designed 11 to minimize effects, and that has been primarily 12 done through careful selection of proposed routes. 13 And Manitoba Hydro has extensive experience with 14 design and construction standards and practices 15 which will reduce environmental effects. Manitoba 16 Hydro has standard environmental protection 17 practices. It incorporates local and traditional 18 knowledge in the construction and operation of the 19 lines, but particularly in the construction. 20 Again, environmental protection plans will be 21 developed before construction starts, and this 22 will outline site specific mitigation measures 23 which will be provided to the contractors, and 24 again, they will be obligated to adhere to these 25 measures. 269 1 So, in summary, the projects have been 2 designed to avoid and minimize adverse effects. 3 Our conclusion, as environmental practitioners, is 4 that they are not going to create significant 5 adverse effects on the environment or related 6 effects on people. We have identified some 7 adverse effects such as erosion and land use 8 changes. They are unavoidable. It is our 9 judgment that these are not significant. 10 We do believe there will be positive 11 bio-physical effects by displacing global 12 greenhouse gas emissions from other sources and by 13 the reduction of fluctuations that presently occur 14 on Wuskwatim Lake. 15 We also believe that there will be 16 positive socioeconomic effects during construction 17 and operation for people in the local region of 18 the projects, as well as throughout the project -- 19 throughout the province I should say. 20 That concludes our presentation on the 21 Environmental Impact Assessment. We appreciate 22 your patience. At this point, I believe 23 Mr. Wojczynski and Councillor Thomas are going to 24 wrap up the presentations. 25 MR. WOJCZYNSKI: Mr. Chair, Councillor 270 1 Thomas and I talked, we thought we could get done 2 in less than 10 minutes. If you prefer, we can 3 hold and wait until the morning, but we could try 4 to keep it as brief as possible. We are at your 5 disposal. 6 MR. LECUYER: I hear you saying 10 7 minutes, and I think that is best that we conclude 8 the presentation at this time, with the additional 9 remarks that you are referring to. I think we 10 have sat here through until now, we can continue 11 for -- another 10, 15 minutes won't change that. 12 MR. WOJCZYNSKI: I will start off, and 13 then Councillor Thomas will provide the final 14 remarks. 15 You have heard much today about the 16 need for alternatives and the EIS. I would like 17 to now briefly summarize both of these in the 18 context of Manitoba Hydro's commitment to 19 sustainable development principles that Mr. Adams 20 referred to this morning in his opening remarks. 21 I will do so very briefly and I will keep it short 22 by listing the 7 principles of sustainable 23 development and how the project embodies these. 24 So, starting off with the integration 25 of environmental and economic decisions, it is one 271 1 of the principles, sustainable development 2 principles in Wuskwatim, the environmental and 3 economic factors have been integrated quite 4 clearly in the kind of discussion we had today, 5 resulting in a profitable project that minimizes 6 negative local environmental impacts, creates 7 positive global environmental impacts, and 8 produces overall positive social benefits. 9 A second principle is shared 10 responsibility and understanding. Through 11 NCN/Hydro partnership and through consultation 12 with other people and communities, there is shared 13 responsibility and understanding. 14 Global responsibility, another 15 principle -- clearly, and we have been emphasising 16 throughout the day, Wuskwatim will contribute to 17 global efforts to reduce greenhouse gases and 18 other emissions as well. 19 Other principles as well, 20 conservation -- Wuskwatim will make sustainable 21 use of renewable resources with no anticipated 22 significant adverse environmental effects. 23 Prevention -- major adverse effects 24 are avoided, others are mitigated. 25 Rehabilitation -- construction sites 272 1 will be rehabilitated. 2 Stewardship -- current and future 3 generations both will benefit. Perhaps I should, 4 at that point, expand slightly and I will be 5 quick. 6 The current generations will benefit 7 from training, employment, and business 8 opportunities as we talked about earlier. Future 9 generations will benefit from the project 10 benefits, overall the project profits, and the 11 enduring benefits to all Manitoba Hydro ratepayers 12 and to NCN. 13 As well, though, there will be a 14 reliable and clean source of power for domestic 15 customers in the long term and the very long term. 16 Overall, the planning and development 17 of Wuskwatim embodies the principles of 18 sustainable development, and help convince us, 19 help assist us in being confident that Wuskwatim 20 will be Wuskwatim a very beneficial project. 21 Thank you. I will turn it over to 22 Elvis. 23 MR. THOMAS: Thank you, Mr. Chairman, 24 Commissioners. We have now come to the end of our 25 formal presentation today, and I would like just 273 1 to make a few brief concluding comments as well. 2 We have focused on three main areas. 3 We have described the whole project to everyone 4 here. And also we have focused on the need for 5 and alternatives to, area of concern, and also the 6 Environmental Impact Statement and the role that 7 our people have played in the role of traditional 8 knowledge in the whole process. 9 Article 8 of the Churchill River 10 Diversion implementation agreement that NCN 11 ratified and signed in 1996, which is commonly 12 referred to as the Northern Flood Agreement 13 implementation agreement, signed by our people 14 includes an article A process that requires that 15 Manitoba Hydro consult with our First Nation prior 16 to proceeding with any future hydroelectric 17 development in our traditional territory, which is 18 now referred to as our resource management area. 19 They also have to obtain our consent and deal with 20 compensation issues prior to the start of 21 construction. 22 Now, when Hydro first began 23 considering the Wuskwatim project a number of 24 years ago, the corporation complied with article 8 25 and approached our First Nations to ask us, to see 274 1 if we wanted to look at the possibility of 2 participating in developing the Wuskwatim project. 3 The NCN Chief and Council decided, yes, this would 4 be a good opportunity to explore. And I, as a 5 member of council, was given the future 6 development portfolio to ensure that this issue 7 can be looked at as well as can be. 8 Along with that, a former negotiator 9 for the implementation agreement, Marcel Moody, 10 was leading negotiations at that time, and there 11 was also a former Chief, Norman Linklater. Both 12 of those people I saw as being valuable to this 13 process, so I engaged them as my co-managers, and 14 they became a part of my team to oversee the 15 future development portfolio. 16 We hired our own legal, financial and 17 engineering advisors. On top of that, we also 18 made sure that, if this is going to be a 19 meaningful process, that we would engage in a 20 community driven process. By that, it used to be 21 that outside experts, advisers, consultants, you 22 name them, they all seem to be leading the 23 situation with respect to trying to negotiate for 24 the best interests of our people. We found that 25 it ended up being a long drawn out process where 275 1 all the benefits went to them as opposed to my 2 people. So we had enough of that. The Chief and 3 Council decided that we were going to take the 4 bull by the horns and start negotiating for a 5 deal. It wasn't too long when we concluded the 6 implementation of the 1996 agreement, and we 7 started receiving benefits for our community, and 8 we also negotiated strongly to have an article 8 9 process included that would require Manitoba Hydro 10 to come to us first before doing anything again 11 within our traditional territory, efforts or 12 activities that would severely impact upon our 13 rights as First Nations people. 14 We established a team. We made sure 15 that our people were hired to be the consultants. 16 We hired also financial, legal, engineering 17 advisors, and these people are all working for us. 18 We direct them as opposed to them directing us. 19 So there has been quite a significant change. As 20 a result, by doing things that way where our 21 people are involved via open houses, newsletters, 22 and other forms of communication, something that 23 has not been done by any government that I have 24 seen in Canada, whether it is the Manitoba 25 Government or the Government of Canada, they have 276 1 not consulted with the people in the way that we 2 have. We have established a process that is truly 3 historical in nature and different from the way 4 business is done as usual. 5 So, with that, we feel confident that 6 we will -- we have been involved in this process 7 that will produce a very positive impact for our 8 people. 9 If you will note from all the 10 presentations that have been done, we have focused 11 on three main areas, in addition to other things 12 as well, of course. One being employment and 13 training. We have tried to secure employment for 14 our First Nations people, for NCN, because it is 15 our area that is going to be developed and 16 impacted. But we have also taken into 17 consideration that there are other people living 18 in Manitoba and Canada, and we factor that into 19 our thinking as well, and tried as best we can to 20 spread out the opportunities and the benefits that 21 would be materializing from this project. 22 We have also tried to secure the 23 contracts, the direct contracts where we could do 24 some of the work that is going to be needed for 25 the project. And we have also come to a point 277 1 where we have also asked for some ownership. Our 2 people asked us, or directed us to go out and 3 negotiate with Hydro to see if we can own a 4 portion of the dam. We initially started with 10 5 percent, we ended up with 33 percent. We think 6 that is a very good achievement for us. Hydro so 7 graciously decided they were going to consider 8 that as a good -- part of the deal that we are 9 negotiating. 10 We think it is a very wise decision, 11 to ensure that we can partner in projects that 12 occur on our traditional territory. And I think 13 that will help to set the stage for the any 14 upcoming ing projects that are going to be 15 considered. We have done things in a way that is 16 quite different. 17 We have had two -- or we are going to 18 have had two, by the time we finish, referendums 19 on this issue. The first one we got back in 20 September of 2001. We received 66 percent overall 21 support. In Nelson House per se or proper, we 22 received 82 percent support from our community. 23 Now, that is a very strong amount of support that 24 we got from our people to pursue this deal. 25 In addition, when we finalized the 278 1 project development agreement, most of which is 2 previewed in the summary of understandings that 3 has also been put forward to the Commission -- 4 excuse me, I think it was bad water in the first 5 place -- the project development agreement itself 6 will be taken to the people, again, and we will 7 have another secret ballot vote in a referendum to 8 either get approval or not get approval for this 9 particular project. 10 We want the Chairman and Commissioners 11 to keep in mind that we have had a number of 12 critics as well along the way. In any democratic 13 society, you will find you do not have 100 percent 14 support from all the people that put you in 15 positions of leadership. You will have some 16 people that think they have better ideas than you 17 do, and they voice those kind of concerns. 18 In addition, just as a final comment, 19 we have had various environmental groups -- and I 20 don't want to disparage or say anything negative 21 towards the people who are expressing genuine 22 interest about impacts on the environment -- but 23 we have had one very significant environmental 24 group come in while we were living our way of 25 life, and they protested against us capitalizing 279 1 on the fur trade. That totally decimated our way 2 of life. They did not have anything to offer in 3 its place. I hope that that doesn't happen this 4 time around. That you will hear their concerns, 5 but at the same time, if they have nothing better 6 to offer, I suggest that perhaps maybe our way of 7 doing things might be a better option to pursue. 8 With that, I thank you very much for 9 taking the time to listen to me and also my 10 people. Thank you. 11 MR. LECUYER: Thank you very much. I 12 realize you have been sitting at the front and 13 speaking to us all day, and we will reconvene 14 tomorrow morning, and we will expect you will 15 still be sitting and answering to us, or speaking 16 to us again for some days to come -- not only to 17 us, but to anyone present and participating who 18 has questions, concerns to address. So, we are 19 early in the process. We have gone along way in 20 one short day. I thank you for that. We will 21 reconvene tomorrow, Mr. Grewar, again at 9:00 22 o'clock? 23 MR. GREWAR: That's correct, 24 Mr. Chairman, 9:00 a.m. 25 280 1 2 (ADJOURNED AT 5:15 P.M.) 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25