1885 1 2 MANITOBA CLEAN ENVIRONMENT COMMISSION 3 4 VERBATIM TRANSCRIPT 5 Volume 8 6 7 Including List of Participants 8 9 10 11 Hearing 12 13 Wuskwatim Generation and Transmission Project 14 15 Presiding: 16 Gerard Lecuyer, Chair 17 Kathi Kinew 18 Harvey Nepinak 19 Robert Mayer 20 Terry Sargeant 21 22 Tuesday, March 16, 2004 23 Radisson Hotel 24 288 Portage Avenue 25 Winnipeg, Manitoba 1886 1 2 LIST OF PARTICIPANTS 3 4 Clean Environment Commission: 5 Gerard Lecuyer Chairman 6 Terry Sargeant Member 7 Harvey Nepinak Member 8 Kathi Avery Kinew Member 9 Doug Abra Counsel to Commission 10 Rory Grewar Staff 11 CEC Advisors: 12 Mel Falk 13 Dave Farlinger 14 Jack Scriven 15 Jim Sandison 16 Jean McClellan 17 Brent McLean 18 Kyla Gibson 19 20 Nisichawayasihk Cree Nation: 21 Chief Jerry Primrose 22 Elvis Thomas 23 Campbell MacInnes 24 Valerie Matthews Lemieux 25 1887 1 LIST OF PARTICIPANTS 2 3 Manitoba Conservation: 4 Larry Strachan 5 6 Manitoba Hydro/NCN: 7 Ed Wojczynski 8 Ken Adams 9 Carolyn Wray 10 Ron Mazur 11 Lloyd Kuczek 12 Cam Osler 13 Stuart Davies 14 David Hicks 15 George Rempel 16 David Cormie 17 Alex Fleming 18 Marvin Shaffer 19 20 Community Association of South Indian Lake: 21 Leslie Dysart 22 Merrell-Ann Phare 23 24 CAC/MSOS: 25 Byron Williams 1888 1 LIST OF PARTICIPANTS 2 3 Canadian Nature Federation/Manitoba Wildlands: 4 Eamon Murphy 5 Gaile Whelan Enns 6 Brian Hart 7 8 Time to Respect Earth's Ecosystems/Resource Conservation Man: 9 Peter Miller 10 Ralph Torrie 11 12 Trapline 18: 13 Greg McIvor 14 15 Displaced Residents of South Indian Lake: 16 Dennis Troniak 17 18 Environment Approvals (Manitoba Justice): 19 Stu Pierce 20 21 Presenters: 22 Billy Moore - Private 23 Bill Turner - MIPUG 24 Caroline Bruyere - Private 25 Grand Chief Margaret Swan - Southern Chiefs 1889 1 LIST OF PARTICIPANTS 2 3 Presenters: 4 Peter Kulchyski 5 Patrick McCully 6 Timothy Rudnicki 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1890 1 2 3 INDEX OF EXHIBITS 4 5 Number Page 6 7 CNF 1000: Correspondence received by 8 the CEC from CNF regarding process 1920 9 CNF 1001: Letter of presenters and 10 background presentation area 11 from CNF dated March 2, 2004 1920 12 CNF 1002: Letter of presenters and 13 background presentation area 14 from CNF received March 11, 2004 1921 15 CNF-1003: Overhead slide presentation, 16 report of the World Commission 17 on Dams, remarks and its relevance 18 in the Manitoba context 2060 19 CNF-1004: Mr. Rudnicki's 20 PowerPoint slide presentation 2177 21 CNF-1005: Mr. Rudnicki's typed 22 submission re Proposed Wuskwatim 23 Generation & Transmission Project 2178 24 MH/NCN 1011: Letter, May 25, 2001 2157 25 1891 1 2 INDEX OF UNDERTAKINGS 3 4 UNDERTAKING NO. PAGE 5 6 MH/NCN 42: Produce letter from Law 7 Society 2163 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1892 1 TUESDAY, MARCH 16, 2004 2 Upon commencing at 9:36 a.m 3 4 THE CHAIRMAN: Mrs. Gaile Whelan Enns, will 5 you please take the front table. And as we begin, 6 we would like for you to respond to the memo of March 7 12th, which you got from Hydro I believe. 8 MS. WHELAN ENNS: Good morning. There is a 9 memo to the Secretary of the Clean Environment 10 Commission as of the end of the day yesterday in 11 response to both scheduling questions and the 12 Manitoba Hydro memo. 13 THE CHAIRMAN: Yes. Would you tell us what 14 that is about. 15 MS. WHELAN ENNS: Sure. Thank you. For the 16 public in the room and for other participants in the 17 room, we had a combination of challenges in respect 18 to scheduling presenters, most of whom are 19 volunteers. Okay. I'm going to -- just because that 20 maybe needs to be said the second time. Most of the 21 presenters or witnesses, if one chooses to use that 22 word, that we have approached to participate in these 23 hearings are volunteers. I was asked last night what 24 the proportion was. I think there are at this point 25 only three that are contractors and then remunerated 1893 1 to be here. 2 The arrangement for today for Manitoba 3 Wildlands CNF presenters was made with the CEC based 4 on the previous schedule where the days in week three 5 were identified for public participants' 6 presentations. 7 Our arrangements then were made in terms of 8 being able to book flights, book time in people's 9 schedules, particularly those who have agreed to do 10 this as a volunteer. Our arrangements were then made 11 on that basis. 12 We ran into some challenges with three 13 presenters, on-site presenters as we term them. One 14 of them was called out of the country. One of them 15 became ill last week, was actually in Manitoba and 16 became ill and is in B.C. right now. And the third, 17 the archeologist was a function of discussions that 18 had to wait until they could be undertaken in person. 19 We had identified prior to that the hope, if 20 you will, and the need to have some independent 21 advice, content, information for the CEC in regards 22 to archeology. And I had been attempting to find the 23 participant and witness and had struck out a few 24 times. That generally applies both in relation to 25 our resources to participate in these hearings and 1894 1 the number of approaches that it takes to in fact put 2 together a group of presenters for the hearings. 3 It's been going on since November though I think we 4 would have all wished a bit more time for other 5 things in November. 6 I'm going to check with the Chair, if I may, 7 to see if I am answering the questions appropriately 8 in terms of what is requested this morning. 9 THE CHAIRMAN: Perhaps not altogether. In 10 particular, I guess you had given some of that 11 explanation but perhaps not all of what I might have 12 wanted to hear in regards to the memo that you got 13 from Hydro, NCN on March 12th in regards to the 14 lateness of putting out your list of expert 15 witnesses. And as well, I would like to hear from 16 you how Manitoba Wildlands intends to use the day 17 here to make its presentation. 18 MS. ENNS: Thank you. A little bit more 19 background, and thank you again to the Chair. The 20 public participants for this review and then the CEC 21 stages of it and these hearings first applied for 22 funding based on their perception and understanding 23 of the stages of technical work and public review 24 involved in June two years ago. Then there was a 25 notice in November of that year to add to alter, 1895 1 change, increase, if you will, the request. 2 And we have all I think been doing our level 3 best as proponents, commissioners, staff and public 4 participants since last July in respect to the fairly 5 dramatic changes in what has been required and 6 expected of us. 7 So when we got down to the third week in 8 January of this year, our organization was a 9 situation where two-thirds, a little bit more than 10 two-thirds probably of the participant funding was 11 gone. At that point, I had to in fact make decisions 12 in terms of how to make sure we were still able to in 13 fact participate in the hearings. And a variety of 14 things that were expected procedurally in February 15 did simply not have the expected resources or 16 attention. 17 That was a tough set of decisions. But we 18 would have if we, for instance, put the, by my 19 estimate, 100 to 200 hours of technical time to 20 certain of the expectations in February, then we 21 would not have been able to participate in the 22 hearings. So there were some very real challenges 23 again due to the changes overall in the process that 24 we've all been doing our best in. That included then 25 being able to close with the various individuals, 1896 1 scientists, experts, environmentalists that we had 2 been talking to in regards to participating here and 3 presenting here. 4 That's the reality, if you will, and I think 5 that it applies to everybody who has been involved 6 that we have all been working to, in fact, fulfil the 7 expectations to the best of our ability. 8 Our capacity and our organization has been 9 affected in particular by the need for legal 10 services. We are in a situation now where we are 11 overall but not specifically in terms of 12 participants' expectations to be here, we're well 13 beyond what the participants' funding was in the 14 first place. So to put all that in one simple 15 sentence, we've been doing our best and wanted to 16 make sure that we were actually still able to 17 participate and be here for the hearings. 18 The presenters who are here today or and are 19 going to be on the phone this afternoon are going to 20 in fact provide information for the Panel, for the 21 Commission and for the audience in the room in areas 22 that we have been concerned about in relation to the 23 information provided to date. 24 They are not here to provide analysis in terms 25 of transcript, EIS review and all of the many steps 1897 1 and stages of technical work and information that 2 we've all been through. Again, in the non-profit 3 sector when the majority of presenters are 4 volunteers, they have not been pursuing and reading 5 and studying the way that most of us have been 6 attempting to. 7 So for instance, Dr. Kulchyski from the 8 University of Manitoba is here to put some context on 9 a community basis for the Commission in regards to 10 Aboriginal rights and community concerns. It's his 11 speciality certainly both in the role he's in at the 12 University of Manitoba now and before at Trent 13 University. 14 Mr. Soprovich is very knowledgeable regarding 15 the west side of the province, the regions that these 16 joint projects are intended for. He is a forest 17 ecologist and knows this landscape and knows the 18 species and is going to be quite specific in terms of 19 some of our concerns where the EIS contents has not 20 been explicit or specific enough. In particular, he 21 will be addressing the concerns that we have 22 attempted to address since the first round of review 23 comments in July last year on the approach to 24 modelling and arriving then at conclusions for the 25 environmental statements and impact statements and 1898 1 the plan for transmission corridors. 2 Mr. Rudnicki is, as you all know, from 3 Minnesota. He is a lawyer and he is knowledgeable in 4 respect to alternative energy, wind, policy, both 5 public policy and the regulatory framework in respect 6 to energy in Minnesota. He is also knowledgeable on 7 a more not day-to-day basis but ongoing basis in 8 respect to discussions, if you will, debates and the 9 political context for Minnesota's objectives for 10 home-grown energy. 11 Mr. McCully is both of the International 12 Rivers Network in terms of being campaign director 13 for them and of the World Commission on Dams. The 14 proponents on day one of these hearings were making 15 specific references. I think it happened probably 16 two or three times now where the references to the 17 World Commission on Dams are in the transcript. 18 What we were doing in this discussion in terms 19 of hoping for some of Mr. McCully's time on the 20 ground here in Winnipeg was seeking to bring an 21 international perspective into the discussion in 22 respect to dams, decommissioning, climate change in 23 dams, affects on rivers and a whole variety of areas 24 in terms of international policy. 25 We have three presenters by phone this 1899 1 afternoon. Dr. Bayne's, from the University of 2 Alberta, speciality is a combination of, and he may 3 correct me because he's the scientist and I do not 4 have their biographies beside me at the moment, but 5 he is in fact an expert in terms of what sometimes is 6 referred to as linear disturbance or forest 7 fragmentation. In short form, impacts on the forest 8 itself by corridors, roads, trails and so on. And 9 that includes transmission corridors. His area of 10 knowledge in terms of species is birds, and birds in 11 the boreal and migratory birds. 12 What we were attempting to do on these topics 13 was secure Dr. Keith Hobson to speak to the Panel and 14 to provide information and evidence. Dr. Hobson has 15 spoken to Clean Environment Commission hearings in 16 Manitoba previously. And he works for the Canadian 17 Wildlife Service and is therefore a public servant. 18 Our advice was to in fact ask Dr. Bayne to 19 participate. Dr. Bayne is a former student and now 20 colleague of Dr. Hobson who is, on an international 21 basis, recognized as being expert in these areas. 22 And in particular in both mixed wood and boreal 23 forest regions. 24 Senators Anderson and Kubly, who have a 25 limited amount of time this afternoon on the phone 1900 1 because they are in a legislative session and I don't 2 know whether it's a wind-down or a wind-up of 3 committee meetings, have been asked to briefly and 4 specifically speak to you. In terms of Senator 5 Kubly, who is a rural Minnesota Senator, to talk 6 about the rural economy and alternative energy, 7 specifically wind. 8 Senator Anderson who Chairs the committee in 9 the Minnesota Legislature who deals with a variety of 10 things in terms of environmental licensing and 11 standards for alternative energy and also the 12 economic development decisions in respect to 13 alternative energy and wind will have some remarks in 14 those areas. 15 THE CHAIRMAN: Mr. Mayer. 16 MR. MAYER: Ms. Whelan Enns, you mentioned 17 that of your witnesses, most of them are volunteers 18 and only three are contractors. Which three are the 19 contractors? 20 MS. WHELAN ENNS: I was making a reference to 21 the complete set. All of the presenters are 22 witnesses whom we have registered to date. Today, 23 the contractors are Mr. Rudnicki and Mr. Soprovich. 24 MR. MAYER: And those people are to be 25 qualified I take it as experts in their field? 1901 1 MS. WHELAN ENNS: Yes, though I have not and 2 the people assisting me in terms of securing 3 participants and presenters for these hearings have 4 not taken a legal approach in terms of qualifying 5 experts. 6 MR. MAYER: Well, my concern is is that 7 several months, well not several months ago, some 8 time ago, there was a concern raised about the fact 9 that no substantive evidence had been filed on behalf 10 of Canadian Nature Federation. And in light of your 11 presentation to the Participant Assistance Committee, 12 we had expected to see some of that. 13 I can understand how it would be very 14 difficult to get volunteers to actually prepare 15 reports. But were either of the two contractors that 16 you are calling today requested to provide evidence, 17 written evidence, written reports that would give the 18 Commission and the proponents some indication of what 19 they might be saying? 20 MS. WHELAN ENNS: I think that's quite a fair 21 question. In time for these deadlines in February, 22 no. The ability to respond and have work product 23 thought out, contracted and completed in time for 24 certain of these deadlines in February was not there. 25 And that has to do with both, for instance, my 1902 1 capacity personally as managing our participation, 2 their schedules and other responsibilities we found 3 ourselves working on in January. 4 MR. MAYER: Did you request either of the two 5 contractors who we are expected to hear from today to 6 prepare such reports? 7 MS. WHELAN ENNS: I think you mean by the 8 deadline in February? 9 MR. MAYER: No, I don't mean by the deadline. 10 Did you at any time ask them to prepare reports? 11 MS. WHELAN ENNS: I'm going to try again and 12 do my best to understand your questions. Close to 13 the time of the substantive evidence deadline, all we 14 were able to do is post a memo indicating what we 15 were aiming to include, okay. 16 MR. MAYER: Ms. Whelan Enns, perhaps I should 17 ask the question again because you appear not to 18 understand it. 19 MS. WHELAN ENNS: Sure. 20 MR. MAYER: Did you, at any time, request 21 either of the two contractors who we are expected to 22 hear from today to prepare substantive reports? 23 MS. WHELAN ENNS: It wasn't feasible, no. 24 These presentations that are prepared for today 25 literally were being worked on until ten or eleven 1903 1 o'clock at night last night. Even when a contractor 2 is providing services specifically to a non-profit 3 organization, they are almost, without exception, 4 providing those services at a different rate 5 schedule, a different time schedule where -- how do 6 you describe the fact that in most cases, rates are 7 significantly decreased? It's sort of like being 8 half volunteer and half on contract. It's a reality 9 in terms of our efforts to provide information. 10 MR. MAYER: Ms. Whelan Enns, I understand what 11 you're saying. However, the last I heard, a Time to 12 Respect Earth's Ecosystems was an NGO. CAC/MSOS are 13 NGOs. Both of them have experts. Both of them have 14 provided reports significantly in advance. 15 That aside, what I understand you're saying is 16 that neither of the two people who we will hear from 17 today who are contractors have been requested to 18 provide any such report. So this is not their fault 19 I take it? 20 MS. WHELAN ENNS: It was a judgment on my part 21 in terms of what was needed, what we were able to do 22 at what point in time. It was not a deliberate 23 avoidance of any expectation in these deadlines in 24 February. I have done my best along the way to make 25 sure that the CEC knew what restrictions and 1904 1 limitations we had. Among other things, I was 2 involved in trying to secure additional funding so as 3 to be able to be here. 4 If I may respond to your references to the 5 Consumers Association of Canada and the Seniors 6 Society who are joint funded public participants and 7 Resource Conservation of Manitoba and Time to Respect 8 Earth's Ecosystems who are joint public participants 9 here. In their situation, they had very specific 10 singular and direct topic requirements and 11 expectations in terms of what they have been working 12 on technically. They also both had significantly 13 more funding than Manitoba Wildlands Canadian Nature 14 Federation. 15 MR. SARGEANT: Which group had significantly 16 more? 17 MS. WHELAN ENNS: I believe, and again I do 18 not have the figures in front of me, okay, so I'm not 19 going to try to quote figures, but I believe that the 20 TREE/RCM funding, which is mostly of course as Mr. 21 Mayer is pointing out, gone to the consultant who has 22 been doing their technical work, is a greater amount 23 than we received. And the same is true for the 24 Public Interest Law Centre who represents the Society 25 of Seniors and the Canadian Association of Consumers. 1905 1 The main thing that I was trying to say is 2 that in our situation, again, without knowing when we 3 were filing a submission to participate and request 4 funding in the middle of 2002, in our situation, we 5 in fact found ourselves in a very, well, a 6 dramatically different sequence of expectations and 7 technical work where we in fact have the 8 environmental impact statement itself. And we are 9 the only public participant specifically funded in 10 terms of the entire environmental impact statement. 11 We were of course working on both the EIS, the 12 JNFAAT. And I think you'll find that both of your 13 example organizations' primary responsibility is 14 JNFAAT only. 15 So what I'm trying to make a couple of 16 comments on is that the expectations and 17 responsibilities and technical work for ourselves was 18 quite a bit wider and included more elements. 19 MR. MAYER: Thank you. I have no further 20 questions, Mr. Chair. 21 THE CHAIRMAN: Other members of the Panel? 22 Any comments from -- 23 MS. WHELAN ENNS: I'm sorry, if I could 24 provide an example of one of the consequences of 25 having the EIS, the JNFAAT and both the parts of the 1906 1 combined project to deal with. In our request, we 2 fell short about $20,000 from what our initial budget 3 was in the submission. That has caused us to seek 4 other ways to provide information in respect to wind 5 energy because the request of us was to work on wind 6 energy. That goes then directly to Senators Kubly 7 and Anderson, Mr. Rudnicki's presentation, Robert 8 Hornung's presentation, some of who are volunteers. 9 THE CHAIRMAN: Ms. Whalen Enns, I asked you a 10 while ago how do you intend to proceed today? Do you 11 intend to make a presentation yourself and then 12 you're going to be calling upon the individuals that 13 you have mentioned? Is that how you intend to 14 proceed? 15 MS. WHELAN ENNS: I have no presentation 16 myself this morning and I believe that there is a 17 question in terms of cross-examination and then the 18 sequence and use of time. So what we would like to 19 do, and this is sort of one shift in the sequence of 20 presenters from what I provided to the Secretary of 21 the CEC yesterday afternoon, we would like to start 22 with Dr. Kulchyski, we would like to then move to Mr. 23 Rudnicki and to Mr. McCully and then to Mr. 24 Soprovich. 25 THE CHAIRMAN: Those are the four that we'll 1907 1 be talking to this morning? 2 MS. WHELAN ENNS: Yes, with the aim in terms 3 of it fitting in the morning. And my request or 4 suggestion in terms of questions for these presenters 5 would be to, in the interest of use of time and a bit 6 of continuity, hear the four of them and then have 7 questions. But I'm completely open to what the Chair 8 and the Commission prefers. 9 THE CHAIRMAN: All right. Can all four of 10 these speakers be up front and then make their 11 presentation and then be questioned afterwards? You 12 also have to appreciate the fact that neither the 13 Panel here nor anybody else has had the opportunity 14 to see any of their presentations or know exactly 15 what they intend to present. This may present 16 difficulties in the questioning or cross-examination 17 afterwards. We may have questions in that regard as 18 well. 19 MS. WHELAN ENNS: I appreciate that those are 20 concerns. In writing a short memo yesterday 21 afternoon on these subjects for the Commission, our 22 aim was to respectfully ask that these presenters be 23 given the flexibility and the opportunity that a 24 public participant, as in a general public 25 participant, would receive in these hearings. And 1908 1 you are completely right about the documentation and 2 the presentation material. We were receiving it 3 yesterday and have been doing production last night 4 and this morning. 5 MR. SARGEANT: But you're not a public 6 participant like the average person off the street. 7 You've been funded. I mean there's a higher bar for 8 the funded participants. 9 MS. WHELAN ENNS: That's correct. And I am 10 not disagreeing with what you're saying, Mr. 11 Sargeant. What I'm basically trying to describe is 12 what we have been doing to our capacity, to our 13 resources in an effort to fulfil those standards. 14 And I am perhaps begging the question then of whether 15 there should be a situation where a public 16 participant would actually have more success 17 presenting than presenters that we have approached in 18 situations, in circumstances we've been in. 19 So I wasn't trying to say they are the same, I 20 was just basically, again as the memo indicates, 21 hoping that that flexibility will be able to be 22 there. 23 THE CHAIRMAN: As we've told you before in a 24 memo that I myself signed, we do recognize that we 25 want to hear from as many people that have interests 1909 1 in the issues before us. And in that regard, we have 2 always tried to make that as much as possible happen 3 and allowed some leeway in that regard, and we are 4 prepared to do so again. But on the other hand, we 5 also reminded you that there's a limit to this 6 elasticity of flexibility. And you had to be ready 7 to accept, that if you wanted to test it to the 8 limit, that you could be challenged in that regard. 9 And that may still happen. 10 I think at this point in time, we'll begin the 11 process and see how it evolves. And I don't know if 12 the proponents have any comments to make before we 13 begin or if there is any problems in that regard. 14 Mr. Bedford? 15 MR. BEDFORD: Mr. Chair, if I could have a few 16 minutes to talk to Ms. Matthews Lemieux, I think we 17 will have one or two comments we would like to make 18 to you. 19 THE CHAIRMAN: Mr. Byron Williams. 20 MR. WILLIAMS: Yes. Thank you, Mr. Chairman. 21 Good morning, members of the Panel. Just very 22 briefly on instructions from my clients. I just want 23 to make their position clear for this morning and if 24 it will be of any help to the Panel. 25 My clients, as did their legal counsel, had 1910 1 some concerns with the process that was undertaken 2 and the lack of pre-filed information. That being 3 said, like this Commission, my clients look forward 4 to hearing the presenters presented by Manitoba 5 Wildlands or CNF. 6 And I guess to protect my client's interest, 7 to the extent that there is expert evidence that they 8 consider to be relevant and material, if that occurs 9 and they feel that that needs to be questioned, they 10 will make a judgment call at that point in time in 11 terms of whether they need an adjournment to test 12 that evidence or whether they need it at that point 13 in time. And that will be the suggestion I make to 14 the Panel in that sense that certainly let's proceed 15 and hear their witnesses, recognize that there's 16 been, from our perspective, a bit of a disadvantage 17 but it may not be a real disadvantage. We'll see as 18 the day progresses. 19 So I just wanted to put my client's comments 20 on the record in that regard, Mr. Chairman. 21 THE CHAIRMAN: Thank you, Mr. Williams. You 22 do have wise suggestions as usual. Mr. Bedford. 23 MR. BEDFORD: Mr. Chair, Commissioners, we 24 wrote the letter last Friday for two reasons. One 25 was to bring to your attention a concern that, quite 1911 1 frankly, we believe is the Clean Environment 2 Commission's responsibility to address and we believe 3 you have been addressing it this morning. The second 4 reason was to give advance notice of the position 5 that we intended to take this morning. And I can add 6 something further to that but you know, having read 7 the letter, that we are not going to object to the 8 Canadian Nature Federation Manitoba Wildlands being 9 allowed at least to bring forward these witnesses. 10 You have already noted what we of course and 11 all in the room ought to have been aware of, the 12 Canadian Nature Federation Manitoba Wildlands has 13 been a registered and funded participant in these 14 proceedings since last July. And with all due 15 respect to Ms. Gaile Whelan Enns, there is no reason 16 in our view why, six months ago, witnesses for the 17 price of long-distance telephone calls could not have 18 been identified; why, for the price of posted stamps, 19 the relevant portions of the material that we have 20 filed could not have been sent to these individuals 21 for their review. And there is no reason why any of 22 these witnesses could not at least have filed a 23 report of five pages, 10 pages or 25 pages setting 24 out the substance of what they intend to tell us 25 today. 1912 1 These are all simple things that can be done. 2 Funding is not an excuse for not having done them. 3 Complaints about time constraints is not an excuse 4 for not doing simple things. 5 We're here today, as you've correctly 6 observed, without any pre-filed material. We have an 7 abject failure to provide the names of any of these 8 witnesses within the deadline that you stipulated. 9 Our concern is that the Canadian Nature 10 Federation Manitoba Wildlands has completely failed 11 to grasp that the foundation of a fair process, be it 12 before the Clean Environment Commission of the 13 Province of Manitoba, the Public Utilities Board of 14 the Province of Manitoba or Her Majesty's Court of 15 Queen's Bench begins with simple respect for 16 procedures and directions of the Tribunal before 17 which one is appearing. 18 We don't think it's acceptable to substitute 19 for respect for procedures and directions pious 20 hypocrisy. And we find it astonishing that the 21 Canadian Nature Federation Manitoba Wildlands which 22 has been masquerading for months as the champion of 23 the public interest has so flagrantly betrayed the 24 public interest. 25 There is a simple reason why participants, at 1913 1 least those who care about the public interest and 2 fair process, were required by you, the 3 commissioners, to file a month ago substantive 4 hearing documentation. Questioning expert testimony 5 is hard work. For it to be meaningful to those who 6 wish to question, one needs to understand in advance 7 what the expert's opinion is, what the expert intends 8 to say. 9 Those who question, as I do and Ms. Matthews 10 Lemieux does, on behalf of a client, need time to 11 review with the client in advance what it is that the 12 expert will be saying and indeed to review with those 13 experts that our clients have retained for the 14 purpose of providing advice. 15 Now all those who have been here for two weeks 16 now can appreciate how much richer discussion is, how 17 much more useful expert testimony is and how much 18 better informed Commissioners are when those who 19 question have worked hard and have been able to 20 prepare. And conversely, those of us who have been 21 here for the last two weeks can all appreciate how 22 much less useful questioning is when there has been 23 little or no preparation. 24 Now, in the absence of any written material 25 whatsoever having been filed by any of the witnesses 1914 1 that the Canadian Nature Federation, Manitoba 2 Wildlands intends to call today, there can be no 3 meaningful preparation by us. That defeats your 4 public process. That hinders a full sharing of 5 information and a richer discussion that you've been 6 able to benefit from with the previous testimony and 7 the previous questioning that's taken place here. 8 That's the concern. And I reiterate, we have 9 observed that you have been addressing that concern 10 this morning which we do think it was your 11 responsibility to address. 12 Now, before the letter was written on March 13 12, I sat down and I reread, several times, Mr. 14 Lecuyer's letter of February 17. And although he 15 signed it, I assumed, I think quite comfortably, that 16 that letter was written on behalf of the Clean 17 Environment Commission and its content endorsed by 18 all five Commissioners. 19 We well recognize that you have a process here 20 which you wish and which should encourage public 21 participation, open discussion and the sharing of 22 information as you have written. And I well 23 recognize that a too rigid adherence to rules of 24 procedure, a too rigid adherence to laws of evidence 25 and in fact simply having too many lawyers in the 1915 1 room can intimidate and discourage public 2 participation. 3 And accordingly, it was my advice shared by 4 Ms. Matthews Lemieux to her client when faced with 5 what we're now faced with today, that we recommend 6 that these witnesses be allowed to be called. But to 7 the extent that any of them are going to express 8 opinions, give expert testimony, we request that it 9 is in your interests as well as ours that we all 10 first understand what their areas of expertise are 11 and whether in fact the areas of expertise upon which 12 they wish to present a topic are relevant to your 13 tasks in reviewing the Wuskwatim projects. 14 We will do our best to ask questions if 15 testimony goes forward and if we determine that we 16 should be asking questions and if what is said is 17 relevant. However, to the extent that we are unable 18 to ask meaningful questions because we have been 19 unable to effectively prepare, we ask that the 20 witnesses be brought back at the convenience of the 21 Commission and of us. And where there is no 22 cooperation in bringing them back, we will ask that 23 their evidence be disregarded and stricken from the 24 record. Thank you. 25 THE CHAIRMAN: Thank you, Mr. Bedford. I will 1916 1 now turn to Ms. Gaile Whelan Enns and ask whether 2 Manitoba Wildlands Canadian Nature Federation is 3 prepared to accept to call back the witnesses at a 4 time that is mutually agreeable to all parties 5 sometime in early April probably to respond to 6 questions. Those who make their presentation in 7 person would have to come back to respond in person. 8 Those who make their presentation by phone would have 9 to be available to respond to questions by phone. 10 Would that be agreeable, if so requested by the 11 members here? 12 MS. WHELAN ENNS: We would do our utmost to be 13 able to do that. I can't speak for the individuals 14 who are going to present this morning. I can't ask 15 them here. We also will of course be out of 16 participant funding. But we would certainly aim to 17 do that. 18 If I may comment upon something I may have 19 heard incorrectly or assumed wrongly, I was aware of 20 the possibility of questions for presenters or 21 cross-examination, as it's termed, happening over the 22 phone. I was not aware procedurally of the 23 distinction in terms of in present, then questions in 24 present. Presentation by phone, questions by phone. 25 But we would definitely do our best to accommodate. 1917 1 And I appreciate the relevance of what you're 2 asking and doing procedurally this morning. I would 3 like to know if I could make a couple of comments to 4 the proponent? 5 THE CHAIRMAN: Briefly, yes. 6 MS. WHELAN ENNS: Okay. So that we have a 7 record in the transcript this morning, our legal 8 counsel is not able to be here. Our funding 9 basically provides us with the time on site last week 10 and then time on site by our legal counsel during 11 closing arguments in April. So that remains the 12 situation which means that I am basically doing my 13 level best then to answer questions procedurally and 14 talk to our legal counsel by phone. So again, just 15 to make sure that the record shows that that is the 16 situation. 17 Six months ago is a very good retrospective in 18 respect to presenters and identifying witnesses 19 because before we knew there were going to be two 20 sequences or two kinds of interrogatories for this 21 review, we were well into beginning to identify our 22 witnesses. 23 Again, to emphasize that the majority of our 24 witnesses are not contractors, they are volunteers 25 and it takes talking to advisors, finding individuals 1918 1 then who know or already work with the individuals 2 that we have been approaching. It takes finding a 3 contractor to pick that work up to be able to 4 identify the witnesses. 5 I have not been aiming to sound like we are 6 making excuses but rather to clearly identify the 7 situation and I think it's probably perhaps relevant 8 for future reviews for the public participant program 9 overall and for decisions in terms of ability to 10 participate and best way to qualify. I think the 11 provisional order in respect to our funding was 12 explicit and clear and we have been doing our best to 13 fulfil it. I do not deny where we haven't managed 14 that. 15 I would like to thank the Commission for their 16 consideration this morning. I believe that the 17 presenters who are here have definitely something to 18 contribute and we will do our utmost in terms of, 19 well, the written material obviously and the 20 opportunity to question. 21 I would take it then, Mr. Chair, that we are 22 not going to have questions of presenters this 23 morning or are we going to do both? 24 THE CHAIRMAN: That is not necessarily so. 25 There may be some questions this morning but I think 1919 1 from what I've just told you before, we reserve the 2 right to ask further or additional questions and the 3 proponents want to have that right as well. That 4 doesn't imply that there won't be any questions 5 today. 6 MS. WHELAN ENNS: It doesn't imply that there 7 will be follow-up questions either, that we will hear 8 about that determination. 9 THE CHAIRMAN: I think it's something we want 10 to leave open and that we want to make sure you 11 understand that this is a possibility. And if we ask 12 that one of the expert witnesses be back to respond 13 to questions and is not available, then we would have 14 to consider striking his presentation, his comments 15 from the record. So let me -- 16 MS. WHELAN ENNS: I understand that and I 17 appreciate it. 18 THE CHAIRMAN: Okay. Now, we understand some 19 of the challenges that you have to face. One of the 20 factors being that there are two portions to the 21 hearing I suppose adds to that but in the same vein, 22 we also want to be fair to all the participants. 23 So that having been put on the record, maybe 24 we can begin. But seeing the time, maybe we will 25 take a short break. And we're responsible, that 1920 1 was unavoidable because of an emergency this morning, 2 we had to start a bit late. If we take ten minutes 3 now and then we can go on straight till noon. 4 MS. WHELAN ENNS: Thank you. 5 MR. GREWAR: Mr. Chairman, there's just a 6 number of exhibits that should be entered just for 7 consistency. The first would be correspondence 8 received by the CEC from the Canadian Nature 9 Federation of yesterday regarding process, and that 10 will be Exhibit CNF 1000. In addition to which 11 because they've been referred to, we should perhaps 12 indicate two documents that were received after the 13 commencement of the hearing which were letters of 14 presenters and background presentation area from 15 Canadian Nature Federation. One would be dated March 16 2, 2004 and that would be CNF 1001. And one received 17 on March 11th would be CNF 1002. So those are the 18 documents that should be on the record. 19 20 (EXHIBIT CNF 1000: Correspondence received by 21 the CEC from CNF regarding process) 22 23 (EXHIBIT CNF 1001: Letter of presenters and 24 background presentation area from CNF dated 25 March 2, 2004) 1921 1 (EXHIBIT CNF 1002: Letter of presenters and 2 background presentation area from CNF received 3 March 11, 2004) 4 5 THE CHAIRMAN: Thank you, Mr. Grewar. We will 6 just take a break for ten minutes. 7 8 (PROCEEDINGS ADJOURNED AT 10:23 A.M. and 9 RECONVENED AT 10:36 A.M.) 10 11 THE CHAIRMAN: Ladies and gentlemen, we are 12 ready to proceed. I gather you're Mr. Kulchyski? 13 MR. KULCHYSKI: That's correct. 14 THE CHAIRMAN: I'll let you proceed then. 15 MR. GREWAR: Sorry, this is Rudnicki? 16 THE CHAIRMAN: Kulchyski. 17 MR. GREWAR: Okay. We've got the 18 presentations out of order then. You have no 19 PowerPoint presentation? 20 MR. KULCHYSKI: No. 21 MR. GREWAR: I will have to swear you in. 22 Could you state your name for the record, please. 23 MR. KULCHYSKI: Sure. Peter Kulchyski. 24 MR. GREWAR: Mr. Kulchyski, are you aware that 25 it is an offence in Manitoba to knowingly mislead 1922 1 this Commission? 2 MR. KULCHYSKI: Now I am, yes. 3 MR. GREWAR: Do you promise to tell only the 4 truth in proceedings before this Commission? 5 MR. KULCHYSKI: Absolutely. 6 MR. GREWAR: Thank you, sir. 7 MR. KULCHYSKI: Thanks. 8 9 (PETER KULCHYSKI: SWORN) 10 11 MR. KULCHYSKI: Well, I'm currently head of 12 the Native Studies Department of the University of 13 Manitoba. Kathi asked me to say, or Ms. Kinew, that 14 I was actually born in Bissett, Manitoba. I attended 15 high school at Cranberry Portage at Frontier 16 Collegiate Institute, the government-run residential 17 high school. I did my undergraduate degree at the 18 University of Winnipeg in Politics before completing 19 my Masters and PhD at York University. So I'm a dyed 20 in the wool Manitoban who is very happy and proud to 21 have come back here. And it's an honour for me to 22 address you. 23 What I want to do in the brief amount of time 24 that I've got, it is a thoroughly -- an oral 25 presentation. I am currently writing up an analysis 1923 1 for the Canadian Centre for Policy Alternatives about 2 the Wuskwatim Statement of Understanding between 3 Manitoba Hydro and the Nisichawayasihk Cree Nation. 4 I will make that available to the Commission. It 5 will be ready within a few days. 6 Also I just haven't had time. I am a 7 volunteer and I've been very busy with the teaching 8 term but I will write up my notes for you from today 9 and attach any other documents. Although I'm 10 speaking to you at a very general level, I'm not 11 going to be looking at the technicalities of any 12 agreements for you so I believe you'll be able to 13 follow what I have to say. Also I'm quite prepared 14 to come back and deal with any further questions you 15 have apart from any you might have today, if you want 16 me to, subject to both of our schedules. 17 What I'm going to speak to you about today 18 comes into four categories. The first is 19 communities. I think it's important I say a few 20 words about the distinctive nature of Aboriginal 21 communities because that's really the basis of 22 Aboriginal and Treaty rights. Secondly, I'll talk 23 about Treaties. Thirdly, I want to talk about 24 contemporary agreements. And lastly, I want to talk 25 a little bit about rivers and legacies. And I 1924 1 believe I can do this within the 20 minutes or half 2 an hour that I've got. So let me begin with 3 communities first of all. 4 I think in general, I believe Canadians 5 misunderstand some of the things that distinguish 6 aboriginal communities from mainstream communities. 7 And I want to get a few of those out on the table 8 because I think before we get anywhere, it's 9 important to understand this. And so there's three 10 points that I want to make. 11 First of all, Aboriginal cultures are hunting 12 cultures. They are not agricultural or they don't 13 come from agricultural societies, they come from 14 hunting societies. And there's profound and basic 15 differences between hunting cultures and other kinds 16 of cultures. 17 Most of the rest of multicultural Canada, 18 whether you're an immigrant from Vietnam or England 19 or Poland or where ever, you came either from an 20 agricultural society or an industrial society with a 21 whole different set and kind of values and 22 understandings. 23 One of the distinctivenesses of Aboriginal 24 peoples is that the values, structures, the nature of 25 the culture itself owes itself to the fact that it's 1925 1 a hunting culture. And I should say Manitoba is one 2 of the last homelands in the world for hunting 3 cultures. So when we talk about Aboriginal cultures, 4 it's important to remember that they are not simply 5 another link in the chain of multicultures. We can't 6 say Polish, Ukranian, Vietnamese, Portuguese, Cree. 7 In fact, there's a qualitative difference between 8 Cree and all of those other cultures because of the 9 nature of it as a hunting culture. 10 Secondly, there's also a distinction between 11 Cree and all of those others that I listed because of 12 the fact that Cree were prior occupants of Manitoba. 13 That fact means that my parents are Polish and 14 Ukranian and I speak neither Polish and Ukranian. I 15 walk around with my hand on my forehead like this and 16 lament the fact that I don't know much about Ukranian 17 culture and I try and pretend it's a grand tragedy 18 but actually it's just a personally sad event. 19 If the Cree language disappears from Northern 20 Manitoba, the chances of the Cree language surviving 21 in the world become greatly reduced. Portuguese 22 language will continue to be practised in Portugal. 23 Polish language and culture will continue to be 24 practised in Poland. Vietnamese language and culture 25 will continue to be practised in Vietnam. 1926 1 It's a sad fact that Aboriginal cultures have 2 Canada as their homeland. Well, the sad fact and the 3 great fact. It means that we have the obligation, 4 the responsibility and the great privilege of being 5 the homelands of those cultures. And to the extent 6 that we're keeping those cultures alive and vital, 7 we're making a contribution to the world's cultural 8 diversity in a way that none of the other 9 multicultural elements of Canada can quite claim. 10 Last thing I want to say about Aboriginal 11 communities is the extended nature of occupation of 12 those communities. Families in Aboriginal 13 communities can rest assured that their descendants 14 will continue to be in those communities for 15 generations to follow. All right. So if you're a 16 Neckoway from Nelson House, you have a very good 17 chance that there will be Neckoways in Nelson House 18 200 years from now. And you have to be concerned 19 about that. 20 I'm a Kulchyski from Bissett. When my older 21 brother passes away, there will be no more Kulchyskis 22 in Bissett. And that's a fact of life for most of us 23 for the reality of most non-Aboriginal Canadians. 24 It's not a fact of life for most Aboriginal 25 Canadians. There is out migration from Aboriginal 1927 1 communities but there is also a long-term 2 generational commitment family by family to every one 3 of those communities that distinguishes them from the 4 rest of the rural communities in Manitoba. 5 So in my view, the fact that they are hunting 6 cultures, that they are prior occupants and that they 7 contemplate an extended occupation of particular 8 areas of land, their homelands, into the distant 9 future are things that mark Aboriginal communities 10 out from non-Aboriginal communities and are one of 11 the reasons why we have, not only the reason, but one 12 of the main reasons why I think it's right that we 13 have Treaty rights and we have Aboriginal rights. 14 Treaties have been with us in Manitoba for a 15 long time and of course Treaty 5 was signed initially 16 in Northern Manitoba in 1875 with various adhesions 17 through into the 20th century. So I am on to my 18 second topic now on treaties. 19 It's only in the last 15 years that the 20 Supreme Court of Canada has really started to look at 21 what are the canons of interpretation? How do we 22 interpret treaties? What do treaties mean? And in 23 two particular cases that I want to mention, the 24 Sioui case and the Marshall case which I wanted to 25 just talk about at a very general level. 1928 1 The courts have said treaties are a lot more 2 valuable than they have been treated through much of 3 the first 100 years of the history. The Sioui 4 decision of 1990 written by then Justice Dickson said 5 that treaties need to be interpreted in a liberal and 6 generous manner. And I'm paraphrasing. They said 7 you don't just read the literal words of the 8 treaties. You have to pay attention to what both 9 parties were understanding when they came to the 10 table. 11 The Marshall decision of 1999 emphasized that 12 the oral history of Aboriginal peoples and other 13 extrinsic evidence should play a role in interpreting 14 the treaty. And it reaffirmed the nature of the 15 Sioui decision. 16 Both of those two decisions would tell us that 17 we shouldn't look at the treaties the way we have for 18 much of the last 100 years, which I would say has 19 been based on the literal rendering of the treaties 20 and I would characterize as a narrow and 21 mean-spirited interpretation of the treaties. 22 The courts have said we need to take a liberal 23 and generous interpretation of treaties. The 24 treaties are now constitutionally protected since 25 1982. Section 35 says existing Aboriginal and treaty 1929 1 rights are hereby recognized and affirmed. 2 I would say at a bare minimum, if you want to 3 then say well what would a liberal and generous 4 interpretation of the treaties look like? What would 5 a liberal and generous interpretation of the treaties 6 look like? What would the understanding of both 7 parties be? There are two critical aspects. 8 Certainly it was the understanding of the 9 Federal Government that they were negotiating 10 something like access to Aboriginal lands. They 11 worded that as a land surrender. But what, in my 12 view, they were actually getting was access to 13 Aboriginal lands. 14 What they were promising, what they certainly 15 strongly promised in every treaty orally during 16 treaty negotiations was that the Aboriginal people 17 could maintain their way of life. And what the 18 treaty itself indicated was that Aboriginal people 19 would continue to have hunting, fishing and trapping 20 right on so-called unoccupied Crown lands. And it's 21 that that I want to devote my attention to here, 22 unoccupied Crown lands which is in a sense some of 23 what we're talking about. 24 It's my view that if we were to actually have 25 a liberal and generous interpretation of the Treaty, 1930 1 we would recognize that Aboriginal peoples have an 2 ongoing interest, a legal right and an ongoing 3 interest in all unoccupied Crown lands in Manitoba 4 and specifically in Northern Manitoba. 5 If we were to be liberal and generous, we 6 would say it's our duty to ensure that enough 7 unoccupied Crown lands remain intact in a way that 8 would continue to support the hunting economy and way 9 of life of Aboriginal peoples. And at a minimum to 10 me, not really being liberal and generous, but at a 11 bare minimum, that would mean understanding 12 Aboriginal people as co-owners and co-managers of 13 unoccupied Crown lands. Of consulting with them 14 before we have a plan for a project and we're this 15 far down the road. But actually talking to people 16 before we make plans and say what are your plans, 17 what lands do you need? How viable and sustainable 18 is the hunting economy of your community? These are 19 questions we should have asked a long time ago. 20 We should be asking now if we want to take a 21 liberal and generous interpretation of the treaties 22 the way the Supreme Court of Canada has said. And 23 it's unfortunate to me that we don't. All we seem is 24 to come to this point where a project is proposed and 25 we're well down the road before we can engage in 1931 1 serious consultation. 2 Thirdly, I want to turn then to agreements. 3 It was certainly not the intention of the signers of 4 treaties that they would be in a worse off position, 5 particularly the Aboriginal signatories of treaties, 6 that that would put them in a worse off position than 7 people who hadn't signed treaties. 8 But the history of Manitoba in the last 20, 30 9 years has actually -- that's been the case. The 10 Treaty nations of Northern Manitoba who got into 11 agreements with us 100 years ago have effectively 12 been punished for signing those treaties because 13 they've gotten worse deals around hydroelectric 14 development proposals than First Nations have in 15 Northern Manitoba. 16 So the James Bay in Northern Quebec agreement 17 compares favourably and is much better in many 18 respects than the Northern Flood Agreement which was 19 even seen so generous that some of the parties felt 20 they needed to buy out some of the provisions. 21 The current Peace of the Braves in Quebec 22 structurally is a much better agreement than the 23 Statement of Understanding between Manitoba Hydro and 24 the Nisichawayasihk Cree Nation which I've had the 25 opportunity to look at, the October document. 1932 1 Primarily on a structural basis, we can argue 2 about the amounts of money and about the sizes of the 3 project, but structurally the Wuskwatim agreement, 4 the Statement of Understanding says Wuskwatim -- the 5 Nisichawayasihk Nation will gain funds as a result of 6 assuming some risk. They will be lent money and 7 therefore they will assume risk for a project and 8 therefore they will gain an equity position in the 9 project. 10 Structurally on the other hand, the James Bay 11 Cree are being offered funding, $70 million a year 12 for 50 years. And they actually, in the 13 negotiations, talked about having an equity position. 14 The Cree rejected that. They are getting paid 15 effectively because these developments are taking 16 place on their lands. 17 Today, that deal, the Peace of the Braves, was 18 negotiated after the Cree had a modern Treaty. So we 19 can't even say the situation is different in terms of 20 treaties. There's a treaty now in Northern Quebec, 21 the James Bay in Northern Quebec agreement. There's 22 a Treaty in Northern Manitoba, Treaty 5. 23 Why are we offering the Nisichawayasihk Cree 24 Nation so much less? Why are we having them have to 25 assume risk in order to take an equity position in a 1933 1 project? And in Quebec, they are saying you get 2 money, you have no risk. 3 I'm not faulting the leaders of 4 Nisichawayasihk Cree Nation. I think they do the 5 best they can to get the best deal they can. But I'm 6 saying we, the public, Manitoba Hydro and the 7 Manitoba Government, aren't being fair to them. 8 We're not offering them anything like the deals that 9 are being offered in other jurisdictions. 10 It's my view in fact that Manitoba was founded 11 on an Aboriginal fact, Louis Riel, concerns of the 12 Metis and concerns of First Nations. It's my view as 13 a proud Manitoba citizen that we should be leading 14 the way in having Treaties respected and in 15 developing modern arrangements with First Nations and 16 with treaty nations that stand the scrutiny of other 17 jurisdictions within Canada. 18 In fact, I believe this agreement, if it goes 19 ahead, puts us behind other jurisdictions, puts us in 20 last place. And is something that, as a Manitoban, I 21 would hang my head over. And I would say we're not 22 giving our First Nations and our treaty nations 23 anything like the kind of respect they are getting in 24 other jurisdictions. And actually that makes me 25 ashamed. 1934 1 Finally I want to turn to rivers and legacies 2 and I'm not -- I have no expertise on environmental 3 issues. I do have some expertise on treaty rights 4 and on northern communities and northern cultures. 5 But I travel on rivers. I've travelled on the Nelson 6 River with bottled river. I've travelled on the 7 Winnipeg River with bottled water. It's hard to 8 survive as a hunter in the world today when you have 9 to take water out with you wherever you go. 10 Rivers are the life blood of the hunting 11 economies. They are the transportation routes. They 12 connect people together. They are really how people 13 survive. The current poster for the Department of 14 Native Studies -- I will attach it to documents that 15 I send you -- has an image by an Aboriginal artist 16 called River People. I think that's quite true 17 actually. If you look at the traditional maps of 18 Canada and you look at many of those communities 19 today, they are situated along rivers. 20 And regardless of the various debates about 21 the projects, I know that before the first wave of 22 Hydro development in Northern Manitoba, you could 23 drink the water on the Nelson River. And I know that 24 now, practically speaking, most people don't. I know 25 that now with this project that's proposed and future 1935 1 projects that's proposed, we're striking another 2 stake in the hearts of hunters. 3 And think about it. We don't hesitate to say 4 that farming families are the basis of rural 5 communities. And we invest in farming families 6 because we want those communities. Right. The 7 Federal Government is announcing $500 million for the 8 beef industry because it's been hard hit. Have you 9 ever seen an announcement of that magnitude 10 supporting hunting families in northern Canada? Has 11 anybody done anything conscientiously to try and say 12 maybe hunters are the basis of a sustainable future 13 in Northern Manitoba? In fact, the hunting economy 14 doesn't even register with economists. They see 15 hunters as unemployed people. They don't see any GDP 16 coming out of hunters. 17 If there's one thing that I would want to 18 leave you with is that hunting is not an outdated way 19 of life. Hunters can actually live a wealthier way 20 of life. And I'm among now the privileged members of 21 society. It wasn't always that way and I can 22 appreciate my privilege. But actually, many hunters 23 live a better way of life than me because the hunting 24 way of life allows them more time. It allows them to 25 spend time with their families. It allows them to 1936 1 invent very rich cultures. It allows them to be 2 their own bosses, to live a bush life. That's a good 3 way of life. 4 What we're underestimating in all of this is a 5 quality of life that we have systematically 6 denigrated for a few hundred years that we're only 7 now becoming to be in a position that we can actually 8 appreciate. If we say the only economic development 9 that can take place in northern Manitoba is Hydro 10 development and mining development and lumber 11 development, we're missing the very basis of what 12 sustained Northern Manitoba communities actually for 13 centuries. 14 And I'll leave you with one image of hunting 15 communities. Hunting communities around the world 16 have been around for at least as long as modern human 17 beings have, according to archeologists. Let's say 18 60,000 years is the current estimate. Agricultural 19 societies have been around for about 8,000 to 10,000 20 years. Industrial society wouldn't even make it on 21 that chart. It would something like a few hundred 22 years. 23 Hunting communities have proven themselves to 24 be the most sustainable social organization that 25 human beings have ever invented. No other way of 1937 1 life has sustained itself for that long. And I'm not 2 talking about a past way of life, I'm talking about 3 now a contemporary way of life. Hunters hunt with 4 modern technologies and enjoy some of the modern 5 benefits of life but they are still living. 6 One of the last homelands of the world of 7 hunters is Northern Manitoba as a part of Northern 8 Canada. If we don't begin to start appreciating 9 that, I think we continue a legacy that will leave 10 another generation of children hating Manitoba Hydro, 11 hating Manitoba Hydro. We'll leave another 12 generation of children who have small wage work and 13 whose families are largely unemployed and are 14 meaningfully unemployed because they can't even 15 sustain themselves by going out on the land and 16 living that rich way of life. 17 The Berger Inquiry of the mid 1970s said they 18 didn't say no to the proposed pipeline development, 19 they said delay it. I was born in Northern Manitoba. 20 My father is buried under the earth of Northern 21 Manitoba. I've travelled around the world and came 22 back to Manitoba because I want to be here. My 23 daughter was born here. I love this province and I 24 love the north. 25 I urge you, as a Commission, to use whatever 1938 1 powers you have to delay or stop this project 2 because I think we're doing the wrong thing with 3 Northern Manitoba and I think we are doing the wrong 4 thing with the hunters who deserve a much better 5 break in our economy and in our lives. And that's, 6 in a nutshell, what I have to say to you. Thank you. 7 THE CHAIRMAN: Thank you. Mr. Sargeant. 8 MR. SARGEANT: Dr. Kulchyski, just on your 9 almost very last point about the Berger Commission, 10 you noted that Berger suggested delaying the 11 pipeline. And in the last two, three, five years 12 we've seen great development on those pipelines as 13 the Aboriginal communities in the NWT, particularly 14 in the McKenzie Valley, have concluded their treaties 15 and now feel in a position to take advantage of the 16 economic development. 17 How does that differ from the Nisichawayasihk 18 Cree Nation now moving to take advantage of economic 19 development in their region much as the Deh-Cho and 20 other NWT Bands are moving in that direction? 21 MR. KULCHYSKI: Well, I should say the two 22 regions that are in favour of development and that 23 have completed their modern treaties are the Sahtu 24 and the Gwichin. The Deh-Cho region which is a third 25 region to the south. 1939 1 MR. SARGEANT: I just picked that out. It's 2 just one of the three or four in the valley. 3 MR. KULCHYSKI: Since I'm actually intimately 4 familiar with the Deh-Cho and with all of those 5 regions, I'll say this. The Deh-Cho, from my 6 discussions with the leadership, they continue to be 7 opposed to pipeline development and they haven't 8 concluded a modern Treaty agreement. I know the 9 Sahtu very well. I haven't worked that closely with 10 the Gwichin. There's a fair bit of controversy 11 within the Sahtu community. 12 But I would say between the early 1970s when 13 that project was first proposed and now, and it's 14 again there's a lot of talk of it, we haven't seen 15 construction happening, certainly those communities 16 have had a long time. Some of them have finished 17 Treaty negotiations and some of them are now prepared 18 to be involved. And you know, I wish them the best 19 in that. 20 I don't believe that the nature of pipeline 21 construction is as economically devastating as the 22 nature of Hydro development in terms of its impact on 23 the environment. Because when you affect a whole 24 river system, you affect all of what comes off of 25 that. I would suspect even the Sahtu and Gwichin 1940 1 regions would have a great deal of difficulty if 2 someone wanted to try and do Hydro development on the 3 Deh-Cho River, on the McKenzie River itself. 4 So the difference is partly the nature of the 5 projects, partly that they've had agreements that 6 have given them significant equity to start off with. 7 They can decide to buy in or not buy into the project 8 without borrowing money but having their own money. 9 And they've had enough money to sort of train 10 themselves and prepare themselves from their land 11 claims. 12 We've disrespected the treaty 5 land claim to 13 such an extent that most of the First Nations, you 14 know, they haven't been sitting on $75 million, 15 hiring their own lawyers, looking at the broad 16 situation, spending 10 years sort of thinking about 17 do they want to be involved or not. For the most 18 part, they've been funded by Indian Affairs. They've 19 been underfunded. There are serious and aggravated 20 problems in the communities. I don't think they've 21 been given the time to prepare. 22 And it's partly because the modern treaties, 23 the Sahtu Treaty and the Gwichin Treaty as more 24 recent agreements, have more money attached to them 25 and are given more respect. 1941 1 Treaty 5 has given the Nisichawayasihk Cree 2 Nation members $5.00 a year. 3 MR. SARGEANT: I don't want to speak for 4 Councillor Thomas but we've heard from him over the 5 last two or three weeks or couple of weeks that we've 6 been sitting here that his community has really put a 7 lot of thought and a lot of consideration into this 8 over the past number of years really since I suppose 9 since the early, mid-nineties when they started to 10 negotiate the NFA implementation agreement. And not 11 long after that was put in place, they moved into 12 this. 13 So at least I don't get the impression that 14 it's been a hasty decision and an uninformed decision 15 on their part. 16 MR. KULCHYSKI: You know, I'll leave that to 17 members of the community including the Chief to speak 18 to. I hear different things obviously from different 19 community members. The one thing I'd say is that to 20 me, the real comparison is between what's going on in 21 Northern Quebec and what's going on in Manitoba where 22 you have two treaties, one an earlier Treaty and one 23 a modern Treaty and effectively, by the nature of 24 this agreement, we're punishing people from having 25 solemnly signed an agreement more than 100 years ago. 1942 1 Apart from the dollar amounts and other things 2 that's structural disparity, I don't think anybody 3 looking at the situation objectively can't say we're 4 doing much worse. We're not offering the same kind 5 of deal here in Manitoba than is offered to the Crees 6 of Quebec. And I don't see any logical reason why 7 that's the case. 8 MR. SARGEANT: We heard yesterday from 9 Councillor Thomas that they did consider the Quebec 10 situation and they opted for this one. 11 MR. KULCHYSKI: Well, when people only have 12 one offer on the table -- 13 MR. SARGEANT: He indicated there was more 14 than one offer. Again, I don't want to speak for him 15 but this is what I heard from him yesterday. 16 MR. KULCHYSKI: I mean it certainly would seem 17 to me to be incomprehensible if you were offered 18 anything like what the Cree of Quebec were getting 19 which is simply money without strings attached to it 20 and without assuming risk. You know, I can't believe 21 that the leaders of Nisichawayasihk wouldn't have 22 taken that rather than a debt that gives them risk 23 and gives them equity. They could have just used the 24 money to buy if they want equity which is what the 25 Cree in Quebec could consider and at the moment, 1943 1 generally speaking, they ruled that out. 2 I should say one of the other problems with 3 equity, and I haven't had the time to do a detailed 4 analysis for you of the agreement, but I will send 5 you one, I believe this is the reason that the Cree 6 in Quebec didn't use the money they got to buy into 7 the project is because when they do have equity, they 8 are tied into it. And that ties our hands up when it 9 comes to being critics over the environment damage. 10 Once you start assuming equity, you have to hope that 11 the project is going to succeed and, therefore, you 12 start having objective interest in, you know, not 13 being as rigorous in making sure that the 14 environmental impacts are mitigated and all of those 15 sorts of things. You start needing to make sure the 16 project makes profits so your community doesn't go in 17 debt. 18 So apart from its value in dollar terms 19 structurally, the equity position means that the 20 community becomes tied into the success of the 21 project. And if strict environmental standards, for 22 example, are limiting the profit margin, then you're 23 in an objective conflict of interest. The Cree in 24 Quebec are in no such conflict of interest. 25 MR. SARGEANT: How about the Gwichin and Sahtu 1944 1 and the McKenzie Valley pipeline? Aren't they going 2 to be equity partners? 3 MR. KULCHYSKI: They are proposing to be 4 equity partners and I would say they will be in a 5 similar kind of conflict of interest. But again, I 6 will emphasize, the Hydro development won't have the 7 same kind of environmental impact. You know, I know 8 those communities, particularly the Sahtu 9 communities, they are very very concerned about doing 10 things that will support the hunting way of life. 11 They see that as really one of the basis and the 12 future of their communities. 13 So you know, they are not looking at hunting 14 is something that belongs in the past and we're 15 getting into this dismissing that. They are saying 16 we've looked at this carefully. We think, you know, 17 it's not going to have as much environmental impact. 18 We think we can continue to protect our hunters and 19 it's probably in our interest to take an equity 20 position. I have concerns that that will put them in 21 a similar conflict of interest still around the 22 environmental impacts. But you're not looking at 23 something that's going to affect the whole river 24 system. So the impacts are less. 25 MR. SARGEANT: Thank you. 1945 1 THE CHAIRMAN: Mr. Mayer. 2 MR. MAYER: Dr. Kulchyski, I have some similar 3 concerns that Mr. Sargeant has. You say you're 4 writing a paper on the agreement or the memorandum 5 that presently exists between Nisichawayasihk and 6 Hydro? 7 MR. KULCHYSKI: That's right. 8 MR. MAYER: And how long have you had those 9 documents? 10 MR. KULCHYSKI: I'm drafting something, so I 11 have a draft of something. I gave a paper at a 12 conference at the University of Winnipeg. It's all a 13 blur to me now because it's been a very busy month 14 but I believe it was three weeks ago. 15 MR. MAYER: We heard about that conference. 16 Have you had the opportunity or did you in fact read 17 the material filed by Hydro and Nisichawayasihk on 18 this very issue? 19 MR. KULCHYSKI: I've read the Statement of 20 Understanding and then I followed the debates in the 21 newspaper but I haven't had the opportunity to read 22 further. 23 MR. MAYER: Were you aware, doctor, that 24 volumes of documents have been filed before this 25 Commission all of which have been in the hands of the 1946 1 person who calls you or of the organization that 2 calls you today as a witness and you're telling us 3 you haven't read any of that? 4 MR. KULCHYSKI: I'm telling you that I'm a 5 volunteer witness. I happen to have a full-time job 6 that's a very busy one. And so I want to thank Gaile 7 Whelan Enns for inviting me here. She's made those 8 documents available to me and I must say she leaned 9 on me quite heavily to try and have my report 10 prepared. If I was testifying tomorrow rather than 11 today, I might have been able to bring a document. 12 That's how close I am. But I will not bring 13 something that's not complete and I haven't had the 14 chance to kind of dot the I's and cross the t's. I 15 simply won't do that. 16 MR. MAYER: Doctor, I too have a day job and 17 for all intents and purposes on this Commission, I am 18 a volunteer and I have read that material. Now, 19 you're giving evidence today on an agreement or 20 criticizing an agreement that you have seen bits and 21 pieces of -- 22 MR. KULCHYSKI: I've seen the agreement and 23 read it closely. 24 MR. MAYER: Okay. 25 MR. KULCHYSKI: And -- 1947 1 MR. MAYER: Do you have the whole agreement, 2 sir? 3 MR. KULCHYSKI: I'll show you what I have. 4 MR. MAYER: I'll take your word for that, sir. 5 MR. KULCHYSKI: October 2003 Summary of 6 Understanding. 7 MR. MAYER: Okay. 8 MR. KULCHYSKI: And I should say that this 9 refers to, and I'll be happy to look at it when it 10 comes out, a further deal that would be signed 11 afterwards that would be in legal language. I'll be 12 happy to look at that. You know, I'm concerned about 13 the big picture here rather than all of the technical 14 details. I appreciate your work in looking at all 15 the technical details. I look at the agreements to 16 legal understandings as I look at treaties, the 17 actual legal understandings. 18 MR. MAYER: But then, sir, if you've read that 19 agreement, you know it is not legally binding, don't 20 you? 21 MR. KULCHYSKI: That's right. 22 MR. MAYER: So you talk about legal 23 understandings, what they have is a Memorandum of 24 Agreement. My concern, sir, is that you are asking 25 us to substitute your decision on the issue of this 1948 1 agreement and this partnership for that of the 2 Nisichawayasihk Cree Nation and Manitoba Hydro and 3 the members of the Nisichawayasihk Cree Nation who 4 have voted on this. Doesn't that seem a little 5 paternalistic to you, sir? 6 MR. KULCHYSKI: No, it doesn't at all seem 7 paternalistic. And let me say that you are 8 absolutely correct. This is a non-binding agreement. 9 A project development agreement will be signed 10 subsequent to this. 11 I've seen a lot of ratification processes go 12 on in communities I didn't have time today to talk to 13 you about, although I'd be happy to talk to you 14 about. The ratification process that's discussed in 15 this agreement is kind of a travesty actually in the 16 sense of there's no time line that's mandated. So 17 you can have an agreement and try and have the 18 community vote on it within a few days. These are 19 agreements that will affect people's long-term future 20 and often they are presented with a legal document. 21 Usually -- well, not usually, almost always 22 the ratification processes involve people coming and 23 selling an agreement to the community without any 24 opportunity for internal community debate. I also 25 happen to know that there's a good portion of the 1949 1 community that opposes the agreement. And since 2 their voices aren't largely paid for or subsidized 3 and since they don't have offices, fax equipment, 4 computers, I do partly make it my job to try and 5 speak for those who don't get the opportunity and 6 don't have the resources sometimes to speak for 7 themselves. Although I believe the Commission has 8 probably heard from a few of them here. 9 MR. MAYER: I have no further questions. 10 THE CHAIRMAN: Mr. Nepinak. 11 MR. NEPINAK: Thank you, Mr. Chairman. Dr. 12 Kulchyski, first of all, I want to commend you for 13 the work that you are doing and my question is, I 14 guess no disrespect to your opinion, but I also come 15 from a treaty area, a treaty 2. Treaty 2 and treaty 16 5 overlap. And my question is, you know, I guess the 17 growing demand by our First Nations people. I had 18 the opportunity to lead the community at one time. 19 My community is situated below the Hydro 20 development areas south of Grand Rapids. To the 21 south, we have agricultural development. And at one 22 point, as you stated that, you know, I can recall 23 back to my childhood that I don't think there was any 24 unemployment, you know, the trapping, you know, the 25 fishing. The hunting was abundant. And shortly 1950 1 after those years, a fur block was developed 2 overlapping the Treaty areas 2 and 5. Fur blocks 3 were to protect our way of life, mainly our trapping 4 in the late forties, early fifties. It's a similar 5 process as what the NCN has done through their 6 resource management area to protect, you know, those 7 traditional hunting areas. 8 And in my own experience, doctor, you know, 9 unfortunately the fur trade has been weakened. You 10 know, the hunting we enjoyed at one time is no longer 11 there due to settlements as you outlined. And I 12 agree that, you know, we welcome the new settlers and 13 they have I guess every right to enjoy the resources 14 in the country we so enjoy. 15 But my question to you is, firstly, I think it 16 was an excellent presentation by the Chief of NCN 17 and, you know, his councillors and his people as to 18 why they entered into this kind of an arrangement 19 with Manitoba Hydro. You know, through their 20 documentation, it's an excellent work that they have 21 done. But I'm not doubting that I'm making a 22 decision here now. 23 But my question to you, doctor, is for us, my 24 community, we're now over 100 per cent larger in 25 population than we were at the time you know. And if 1951 1 you look at the surveys that were done by NCN and I 2 think every First Nation is experiencing the same 3 dilemma, a fast growing population, the demand on our 4 resources. What then do we now do with the 5 unemployment you know? I'd like to ask you what do 6 you recommend to the Commission? What should 7 governments do, today's governments, you know, 8 today's corporation? I guess that is my question. 9 Thank you. 10 MR. KULCHYSKI: Well, there's a couple of 11 things I'll pick up from what you said and then I'll 12 answer your question directly. But one is, in 13 effect, this is a decision about whether the northern 14 communities are going to basically go the same way as 15 the southern communities. And the southern 16 communities, Aboriginal communities mostly had to 17 give up on the hunting way of life and experienced 18 extraordinary problems and are still trying to decide 19 then what kind of economies can they have because the 20 communities want to stay together. That's one of the 21 features that defines them. They want to remain as 22 communities. They want to remain connected to each 23 other but they have virtually no sustainable economy 24 and not a sufficient land base to build much of a 25 sustainable economy and so they are in serious 1952 1 trouble. 2 The northern communities have, many of them, 3 the basis for continued sustainable economy. And 4 that's effectively what we're talking about 5 destroying. And I've seen northern communities where 6 they have small scale economic development, a degree 7 of commercial fishing, a degree of tourism, a degree 8 of craft industries. And actually the communities 9 promote and support people going out on the land. 10 They have schools for the young children that take 11 place out on the land. They have programs that try 12 and support hunters and try and support people going 13 out on the land. So that you can use contemporary 14 technology to be settled in one place but use vast 15 regions worth of resources. 16 Technology, since really the mid-sixties, can 17 actually allow centralized communities to use much 18 larger land areas in a way that was much harder for 19 people to earlier in this century. And there's been 20 very little that's promoted, little to nothing that's 21 promoted that kind of a vision in Aboriginal 22 communities. I would say, you know, we can go the 23 path of industrial style economic development and 24 create marginal, very poorly supported 25 infrastructures of suburbs that look like poor 1953 1 versions of suburbs in Southern Canada. And I would 2 say ultimately create more despair and real hatred 3 for what's been done to the land that can't be 4 changed. 5 Or we can say stop and we can say maybe we 6 should look at what sustained the people here for 7 thousands of years and maybe there are ways with the 8 technology we have and the large amounts of land that 9 are still left intact that that could be the basis. 10 And then other things can work around it. You can 11 find other forms of economies that will work with it. 12 But until you change your thinking and say no, 13 this isn't some outdated way of life and this isn't 14 something that's gone and this isn't something that 15 we don't really care about anyway, you have to start 16 with the presumption this is something we value. 17 This is the bedrock of these communities and 18 everything else we're going to do is going to be, in 19 respect, working around that. It's a change in 20 attitude. 21 And that's what I think respect for the 22 treaties really implies, that's what the treaties in 23 my mind were about. So I would say those forms of 24 economic development. 25 Every time I see young people go out on the 1954 1 land with elders, I see young people who start 2 getting inspired and getting a little bit of hope and 3 who start believing in themselves. Every time they 4 are sent down to the south, they look at models and 5 say well, can I -- and they can achieve that but it 6 creates senses of doubt and insecurity. 7 I think people need to walk in the footsteps 8 from the past into the future and gain pride and have 9 that pride in what was done in the past. More 10 important than anything else, if people can have 11 that, they will have hope. And if they can have 12 that, they will have a future. 13 If they grow up having gone hunting and 14 fishing on the land with their grandparents and then 15 when they are in their twenties and thirties, they 16 will see that their own people decided to allow the 17 land to be destroyed, I don't see much hope there. 18 THE CHAIRMAN: Mr. Nepinak. 19 MR. NEPINAK: Thank you. Could you elaborate 20 a bit on the proposal that was laid out by the 21 proponents on traditional knowledge? 22 MR. KULCHYSKI: I didn't see what was laid out 23 by the proponents on traditional knowledge. But I'll 24 say this much. Again, with anything like that, 25 right, we can study it. We can put it in a box and 1955 1 put it in a museum, right. Hallelujah, it's in a 2 museum. People can go to see it one day a month. 3 That doesn't do anything for a culture. A culture 4 survives if it's alive. If you can hear the children 5 speaking their own language in the playground, you'll 6 know you've got a culture. 7 If we've got ten tonnes of volumes of reports 8 on traditional knowledge that have been researched 9 and put in the library, you don't have a culture, 10 you've got a library. 11 MR. NEPINAK: Thank you. 12 THE CHAIRMAN: Ms. Kathi Kinew Avery. 13 MS. AVERY KINEW: Professor Kulchyski, I just 14 have one or two comments about treaties. You 15 referred people to Supreme Court judgments where it 16 said to interpret them within the context of the 17 times. And surely it would be within the context of 18 the times to look at that Summary of Understanding 19 within the whole development that the Nisichawayasihk 20 are seeking. And part of it was what Mr. Nepinak 21 referred to the traditional knowledge, not to set it 22 aside in a museum but to ensure that if a project 23 goes ahead, that it would respect the sacred lands 24 and the viable lands that they would use for hunting. 25 So I wonder about your structural analysis if 1956 1 you're just looking at papers and speaking with one 2 component of the First Nation when actually they've 3 been working for several years, at least we heard 4 yesterday since 1996 to make sure if a project goes 5 ahead, it respects the people, the land, the 6 resources, the treaty. 7 MR. KULCHYSKI: Well, I should say I look at 8 the papers in the context of the travel I've done to 9 very many Aboriginal, particularly northern 10 communities. And I think about these things as a 11 human being on this earth and what the future holds. 12 The Summary of Understanding actually is not a 13 treaty document. It says it in the document itself. 14 It's kind of hidden at the very back. I'll read to 15 you what it says. It say, 16 "Nothing in this Summary of 17 Understanding or any other 18 arrangements or agreements 19 contemplated in this Summary of 20 Understanding which means the Project 21 Development Agreement that would come 22 subsequent from it is intended to 23 alter Aboriginal or Treaty rights. 24 Recognized and affirmed under Section 25 35 of the Constitution Act." 1957 1 It doesn't say diminish Aboriginal or Treaty 2 rights, it says alter which means that there's no way 3 that this document or the documents that flow from 4 them can actually be seen as a treaty which is one of 5 the weaknesses of these documents that I talk about 6 in my more detailed analysis in the first instance. 7 MS. AVERY KINEW: Would you say the Peace of 8 the Brave in Quebec is a treaty? 9 MR. KULCHYSKI: I would say it is, yes. 10 MS. AVERY KINEW: On what basis? 11 MR. KULCHYSKI: Well, I've talked to various 12 of the negotiators and none of them can answer that 13 question firmly. There's no language that says it 14 isn't a treaty. 15 So the Sioui decision, actually the one that I 16 referred you to, outlines the criteria for assessing 17 whether something is a Treaty or not. And it talks 18 about the capacities of the various parties and the 19 nature of the document itself. And I would say if 20 you apply those criteria, actually both to the 21 Northern Flood Agreement and to the Peace of the 22 Braves, you would have to conclude that both of those 23 documents are treaties. 24 What keeps this document from being a treaty 25 is that it says it's not a treaty, very clearly in 1958 1 black and white. 2 MR. SARGEANT: It doesn't say it's not a 3 treaty what you read to us. Basically it's a 4 non-derogation clause. It says it doesn't affect the 5 existing treaties. 6 MR. KULCHYSKI: It says it doesn't alter 7 Aboriginal or treaty rights. If it doesn't alter 8 Aboriginal or treaty rights, I don't see how it can 9 be then said to be a treaty because if it were a 10 treaty, it would entirely alter. 11 MR. SARGEANT: I'm not saying it is a treaty 12 but it doesn't say it's not a treaty. 13 MR. KULCHYSKI: I'm saying it looks clear to 14 me that it's not a treaty. 15 MS. AVERY KINEW: Sorry, I don't want to get 16 carried away in this direction. I wasn't necessarily 17 saying it was a treaty, I was applying the same 18 approach that if you're going to have an 19 understanding, you need the context of the times. 20 MR. KULCHYSKI: Well I would say for me the 21 overriding treaty that deals with this situation is 22 Treaty number 5 and that's where we'd need some 23 context. And there we had Aboriginal people who 24 wanted as strongly as possible to put in black and 25 white that their way of life would be protected. 1959 1 And to the extent that they could find 2 wording, they articulated that as a hunting way of 3 life in the English language. 4 MS. AVERY KINEW: The Supreme Court has also 5 said that you don't have to be frozen in time, you 6 can evolve. 7 MR. KULCHYSKI: Well, sure. And I think 8 hunting itself has evolved in time as it evolved in 9 time before Europeans ever arrived on the continent. 10 MS. AVERY KINEW: As a hunting people, I would 11 think Nisichawayasihk would have looked at how to 12 protect their people's right to continue hunting. 13 And from evidence that we've had, that things have 14 happened. Because they've decided to proceed as 15 co-proponents, they have changed the access road to 16 where this construction site might be. They've 17 changed the whole design of the dam to be a lower 18 head. And traditional knowledge in that sense has 19 been put to work. And that would be the context in 20 which I'm wondering are you interpreting this Summary 21 of Understanding? 22 MR. KULCHYSKI: Well, I appreciate that. 23 Although again, the language in the Summary of 24 Understanding, which is what I've got in front of us, 25 talks about normally the water levels would be in 1960 1 certain degrees and so I worry that that's -- I would 2 love to have a copy and I will look at a copy of the 3 Project Development Agreement when it comes forward. 4 But if the language there is as weak as the language 5 in the Summary of Understanding and if 6 Nisichawayasihk then is one of the proponents and has 7 an equity position, you start having a conflict of 8 interest around protecting the environment. And I 9 would say in general, you're very clearly moving away 10 from seeing the hunting economy as the basis of the 11 way of life. That part of it seems to me I can't see 12 how we can deny that. 13 MS. AVERY KINEW: Just two more things. The 14 structural analysis you're doing does say that you're 15 comparing an interim document, Summary of 16 Understanding, with a final document, Peace of the 17 Braves? 18 MR. KULCHYSKI: When I see the final document, 19 I'll do an analysis of that as well but I'm right now 20 analysing what I have in front of me which is the 21 Summary of Understandings between the Nisichawayasihk 22 Cree Nation and Manitoba Hydro. 23 MS. AVERY KINEW: The last point I'd just like 24 to ask about is it's been brought up before by CASIL 25 too as to whether Nisichawayasihk leadership is in 1961 1 conflict of interest. And wouldn't you say it's a 2 fact of life that Chiefs and Councils are called upon 3 to do many things at once? You have to protect 4 rights, you have to develop your economy. You have 5 to see to the needs of elders and people who require 6 assistance. You want to provide opportunities for 7 young people by getting broadband Internet into your 8 communities. I mean everyday is a conflict and you 9 have to balance the interests of many. 10 MR. KULCHYSKI: I would certainly say it's a 11 case that there are general competing forces that 12 Aboriginal leaders as other leaders in society have 13 to deal with that put them in conflict. When I talk 14 about conflict of interest, I am talking about a very 15 specific thing that this agreement contemplates which 16 is a group that will be co-owners of a project also 17 supposedly has a role in monitoring the environmental 18 degradation. That means there's a specific conflict 19 of interest where on the one hand, it's in your 20 interest because you're in debt to make sure that the 21 project makes money. And on the other interest, what 22 might limit that project making money is strict 23 environmental standards. That's a very specific kind 24 of conflict of interest that's embodied by this 25 document that I'm concerned about. And it's 1962 1 different than the general nature of having to make 2 political decisions as an Aboriginal or even as a 3 non-Aboriginal politician. I think that becomes kind 4 of an objective conflictual position. 5 MS. AVERY KINEW: Okay. Thank you. I won't 6 pursue it. I'm sure others will. 7 THE CHAIRMAN: Dr. Kulchyski, I find that it's 8 unfortunate that you did not go beyond the Memorandum 9 of Understanding. You talk in terms as if you had no 10 knowledge at all about the environmental impact 11 assessment about the project. And I would like to 12 hear your comments based on a broader understanding 13 of what's proposed here. 14 It's a fact of life that every community makes 15 decisions for its future and you did make reference 16 or a distinction between southern communities and 17 northern communities in terms of their 18 sustainability. And you did yourself indicate about 19 the hundreds of millions that are being put in 20 agriculture. In spite of that, it's changing and has 21 changed rapidly. It's not so surprising that 22 northern communities would like to ensure their 23 sustainability as well. And in spite of that, there 24 will be some changes. 25 A community such as NCN looks at carrying on 1963 1 its livelihood and its culture but at the same time, 2 they also need the finances to ensure the survival of 3 the community to retain their community. And you 4 seem to imply that hunting and trapping is going to 5 make it possible for the community to stay forever as 6 it is as if it was in a sort of a vacuum because it 7 pleases us all to look back and say, well, there's 8 great value and culture there and we have to find a 9 way of sort of building walls around it to make sure 10 it stays the way it was. I seem to hear that in your 11 interpretation here that because it's sort of the 12 last bastion somewhere in the world where we have a 13 language spoken, where we have cultural values, we 14 sort of have to ensure that we protect them every way 15 and we prevent it from choosing for themselves 16 economic development to retain its people to do 17 exactly what you want. 18 So I am not so sure that you have taken enough 19 of a broad view of the issue in terms of what the NCN 20 is proposing here. 21 MR. KULCHYSKI: I'll say a couple of things in 22 response to that, and I appreciate your concerns. 23 First of all, in terms of the sustainability, I would 24 say right now northern Aboriginal communities are 25 sustainable. What threatens their sustainability are 1964 1 projects like this. It's not a question of, as in 2 farming communities, they developed -- you know, 3 within the last 100 years, haven't proven themselves 4 sustainable and we found actually that they are not 5 sustainable and there's lots of problems. With 6 Aboriginal communities, they were there for thousands 7 of years. 8 THE CHAIRMAN: Is that why they are leaving 9 their communities? 10 MR. KULCHYSKI: I'll come back to that but let 11 me respond to your first question first. We'll get 12 back to why people are leaving their communities if 13 you want to ask that as a question. 14 Northern Aboriginal communities have proven 15 themselves sustainable. And it's something like this 16 that will put them in the situation where they become 17 no longer sustainable in my view. That's the 18 problem. I'm not thinking about culture behind 19 walls. I think culture has adapted, culture has 20 grown. 21 Aboriginal culture, like other cultures, has 22 changed over time. I am not talking about hunting is 23 something that people practice the way they practised 24 the same 200 years ago. Obviously technology has 25 changed. The ways and forms of hunting have changed 1965 1 quite dramatically. But the values underlying 2 hunting culture has remained remarkably consistent. 3 You know, anthropologists at the beginning of 4 the 20th century, all the talk was about Aboriginal 5 people are disappearing, Aboriginal culture is 6 disappearing. At the end of the 20th century, 7 there's this remarkable talk about people were 8 surprised to find that Aboriginal cultures are 9 surviving and thriving in many respects. No thanks 10 to projects like this, thanks to the fact that in 11 northern communities, they've been isolated from 12 projects like this. And that's proven the basis of 13 their sustainability and their ability to survive. 14 Now, you can laugh about cultural 15 distinctiveness. You can say what's another culture. 16 I don't laugh about cultural distinctiveness 17 actually. I think that if Cree culture disappears as 18 a meaningfully different culture from Northern 19 Manitoba, we have done the world an enormous 20 disservice and ourselves an enormous disservice. 21 Whatever any particular culture can tell us about 22 what it is to be human, about how we can live with 23 the world around us, about how we can treat other 24 human beings gets lost to us. 25 I don't laugh when I think about what happened 1966 1 to the Baothuck in Newfoundland. We don't even know 2 what language group the Baothuck belong to. I don't 3 laugh when I think that 200 years from now, people 4 might look back at these hearings and say these 5 people really weren't concerned about culture. Now 6 we don't have it. 7 The reason why I don't laugh about it is 8 because I think about those Aboriginal kids who are 9 leaving their communities. And I'll tell you for the 10 most part, many of them, they are leaving because 11 they haven't had the proper exposure to their own 12 culture. They haven't been able to be proud of who 13 they are as Aboriginal people because most of what 14 gets taught and most of what goes on around them 15 doesn't give them the opportunity. They don't get 16 the opportunity to go in the bush. They don't get 17 the opportunity to be with elders. They don't get 18 the opportunity to take pride in the contributions 19 that their people have made. 20 I would say destroying those cultures or 21 dismissing them, we're really effectively condemning 22 those communities to be ghettos 100 years from now 23 and I think that that's for me almost criminal 24 behaviour. 25 THE CHAIRMAN: Well, everybody will agree with 1967 1 you on that point or a lot of people will and I'll be 2 the first one to agree with you on that. But to say 3 that the northern communities are better off because 4 they are in a position where they are very different 5 and they are allowed to retain their culture and 6 their language, I myself have worked in The Yukon and 7 found out that that is absolutely not the case except 8 for the Gwichin in the north because there is no 9 access to their community. But all of the other 10 languages, seven of them, are gone and they are gone 11 forever. 12 MR. KULCHYSKI: What that tells you is that 13 those communities that are more connected to the 14 industrial economy lose their culture. Those 15 communities that are more isolated and able to 16 maintain their hunting economy are able to keep it 17 and are better off for that. And we have the same 18 situation in Northern Manitoba. 19 THE CHAIRMAN: We will agree on that but then 20 we'll have to agree as well that that's not the 21 reality we live in. 22 MR. KULCHYSKI: Go to those communities. I 23 mean I have gone to Lac Brochet, put my cup in the 24 lake and drank the water. And I've almost never been 25 treated that respectfully by young people, by 1968 1 teenagers. I'm used to teenagers just dismissing 2 strangers. I'm quite impressed with the degree of 3 the strength of the culture that's there. 4 And this is an area I don't take anecdotally. 5 I do research on this. I've travelled to far 6 northern communities all across Canada and I'm 7 pleased to be back in Manitoba and working more in 8 Northern Manitoba communities doing that. And to me 9 where there's a hope, there's a strong hunting 10 culture that's being passed on to young people. 11 Where you can see elders who will be elders 50 years 12 from now is where you have hunting families in place. 13 THE CHAIRMAN: Unfortunately, more or less 14 come around to agreeing with what I said before 15 because when I gave you the example of the Gwichin in 16 the Northern Yukon, the only reason that that is 17 happening is because they are, within a wall and a 18 nut, have access to the rest of the world. So 19 basically, they haven't got a choice at this point in 20 time to evolve perhaps the way they would like to. 21 MR. KULCHYSKI: They have choices. There's 22 oil and gas developments constantly being proposed to 23 them, constantly being proposed to them. There's big 24 dollars constantly being presented to them for oil 25 and gas development. They have the Internet. I know 1969 1 people from the community of Old Crow who are as 2 articulate and world travelled as any people that you 3 will see. They have choices. 4 And the people who are most cosmopolitan in 5 Aboriginal communities, who have seen most of the 6 world, come to appreciate that it's their own 7 grandparents' hunting. That's the thing they love 8 the most. They go back to that constantly. I've 9 seen very cosmopolitan Aboriginal people from a 10 variety of communities, that's what they find they 11 love and I don't blame them. 12 THE CHAIRMAN: Any further questions? Mr. 13 Bedford? 14 MR. BEDFORD: Mr. Chair, we had not 15 anticipated frankly that witnesses would come today 16 and promise to deliver written material in the 17 future. We had thought the deadline for that was in 18 February. However, you, as Commissioners, will have 19 to decide if you are going to accept, from Dr. 20 Kulchyski or indeed any further witnesses, papers in 21 the future. 22 If you decide in Dr. Kulchyski's case that you 23 are going to accept a written paper from him, then we 24 most certainly will wait until we have received the 25 paper and read it before we ask him questions about 1970 1 the very many thought-provoking matters he's raised 2 here this morning. 3 However, if you decide that you're not going 4 to accept his paper, then it may well be that we can 5 ask some questions. I rather anticipate you may wish 6 to discuss that among yourselves, at least over the 7 noon hour. Certainly we would urge caution that if 8 you open the door and allow one expert to file his 9 written report after he's testified, I rather fear 10 you may be faced with the same request from other 11 experts. And I for one have difficulty understanding 12 how you would distinguish and allow one to file and 13 others perhaps not. But that is your decision to 14 make. 15 THE CHAIRMAN: I think I can respond for the 16 Panel that Mr. Kulchyski has made his presentation 17 and he has chosen to make it orally and we will 18 accept his oral presentation. And that is what will 19 be on the record. 20 So if you wish to question him on the basis of 21 his presentation, you may do so. 22 MR. BEDFORD: In that event, we would like a 23 short break so I can discuss with Ms. Matthews 24 Lemieux which questions we're able to put to Dr. 25 Kulchyski. 1971 1 THE CHAIRMAN: There may be others who wish to 2 ask questions. Mr. Abra? 3 MR. ABRA: Mr. Chairman, I can ask some 4 questions and that may take us through to the lunch 5 break in any event. I just have a few questions of 6 Dr. Kulchyski. 7 THE CHAIRMAN: Yes, proceed. 8 MR. ABRA: Dr. Kulchyski, my name is Doug 9 Abra. I'm the lawyer for the Commission. Do I 10 understand from your evidence that all you have read 11 is the Summary of Understanding related to this 12 application? 13 MR. KULCHYSKI: I've read quite a bit of other 14 stuff actually. 15 MR. ABRA: Well, what else? 16 MR. KULCHYSKI: Supreme Court cases, I 17 referred to the treaty itself. Actually I've read 18 the treaty itself. I've read a fair bit of treaty 19 history. 20 MR. ABRA: No, I'm sorry. I didn't make my 21 question clear, sir, I'm sorry. What I'm asking is 22 related to today, this particular application by 23 Manitoba Hydro and NCN, the only document that you've 24 read is it the Summary of Understanding. For 25 example, have you read any of the documents that had 1972 1 been filed that are known as NFAAT or Needs For 2 Alternatives? 3 MR. KULCHYSKI: No. 4 MR. ABRA: You haven't? 5 MR. KULCHYSKI: No. 6 MR. ABRA: Have you read any of the 7 Environmental Impact statements that have been filed? 8 MR. KULCHYSKI: I've read some summaries of 9 what I take to be those but I haven't read the 10 statements themselves. 11 MR. ABRA: Which summaries are those, sir? 12 From where did you get them? 13 MR. KULCHYSKI: Well, from the Manitoba 14 Wildlands. I've gone through their website and they 15 have some of the documents and they have some 16 summaries of them. 17 MR. ABRA: I see. So this was a website of 18 Manitoba Wildlands that you read? 19 MR. KULCHYSKI: That's right. 20 MR. ABRA: And it was a document prepared by 21 Manitoba Wildlands? 22 MR. KULCHYSKI: I've read documents prepared 23 by them but I think they have also included documents 24 by the proponents. 25 MR. ABRA: You see, for example, there was a 1973 1 summary that was prepared by Manitoba Hydro and NCN 2 of 10 or 15 pages that describe the project. Did you 3 read that? 4 MR. KULCHYSKI: I am not an environmental 5 expert so I haven't gone into the environmental 6 aspects of the project. 7 MR. ABRA: As you've heard, Mr. Thomas, a 8 councillor from NCN, did testify before the 9 Commission. Did you read his evidence at all? 10 MR. KULCHYSKI: No. 11 MR. ABRA: You didn't read the transcript of 12 his evidence? 13 MR. KULCHYSKI: No. 14 MR. ABRA: Chief Primrose gave evidence before 15 the Panel the first day or at least made a statement 16 on behalf of NCN at the beginning. Did you read his 17 statement? 18 MR. KULCHYSKI: I should say I read newspaper 19 accounts of both of those but I didn't read his 20 statement. 21 MR. ABRA: But you didn't read his statement? 22 MR. KULCHYSKI: No. 23 MR. ABRA: I see. So you didn't hear Mr. 24 Thomas' explanation for the reason that NCN, from his 25 perspective, has decided to go into a partnership 1974 1 with Hydro as opposed to receiving lump sum 2 compensation? 3 MR. KULCHYSKI: Well, I read accounts of and 4 quotes of his statement but I didn't read his 5 statement itself. 6 MR. ABRA: Well, that was a newspaper article? 7 MR. KULCHYSKI: Yeah. 8 MR. ABRA: I see. Now, you also referred to 9 the James Bay Project where the decision was made to 10 accept compensation of $70 million. What did you 11 read with respect to that arrangement? 12 MR. KULCHYSKI: Actually, if you had read that 13 arrangement, you would find it was $70 million a year 14 for 50 years to a total of $3.5 billion. 15 MR. ABRA: Well, that may be but I'm wondering 16 what you read, sir, in preparation for giving 17 evidence related to that arrangement? 18 MR. KULCHYSKI: I heard testimony from a 19 member of Quebec Hydro, from a staff person of the 20 James Bay Cree and from one of the leaders who 21 negotiated the agreement. And I talked to them quite 22 extensively about what they have negotiated. 23 MR. ABRA: So in preparation for giving 24 evidence today, you did read evidence from the Quebec 25 hearings and did talk to a number of people? 1975 1 MR. KULCHYSKI: I didn't read any evidence 2 from the Quebec hearings. I heard papers, 3 presentations given by people from the Quebec 4 situation and I had a chance to talk to them 5 afterwards. 6 MR. ABRA: I see. 7 MR. KULCHYSKI: And I should say -- 8 MR. ABRA: Do you know -- I'm sorry, go ahead. 9 MR. KULCHYSKI: The Summary of Understandings, 10 here we have it. You might say, oh, we need to read 11 3,000 pages in order to understand this. I would say 12 here it is. I have it. I looked at it. I read it 13 quite closely in the context of my knowledge of 14 Supreme Court decisions, Aboriginal rights, history 15 and various other things. So I'm not apologizing for 16 not having read the mounds that you want me to read. 17 I have a specific area of interest. I look at nation 18 to nation style agreements. I looked at this with 19 the knowledge that I have. 20 MR. ABRA: No, sir, I am not being critical of 21 what you've read or what you haven't read, I just 22 want the Commission to know what you've read and what 23 you haven't read. 24 MR. KULCHYSKI: It would take me a long time 25 to tell you what I've read. I'll tell you that much. 1976 1 MR. ABRA: Sir, I'm talking about this 2 hearing. 3 MR. KULCHYSKI: Well, even what's relevant to 4 what I've had to say today. For example, I didn't 5 mention Hugh Brody's book "The Other Side of Eden" 6 which paints a fairly compelling picture of the place 7 of hunting cultures around the world. It will be a 8 valuable resource for the Commission. But I 9 appreciate the fact that you've already got mounds of 10 hearing and you don't need another pile that I could 11 give you. But I tell you that I come to this well 12 prepared. 13 MR. ABRA: I see. And with respect to the 14 agreement in Quebec related to the James Bay Project, 15 you have read papers written about it? You've spoken 16 to people that were involved? 17 MR. KULCHYSKI: That's right. 18 MR. ABRA: And you have their version of why 19 they decided to accept what they did? 20 MR. KULCHYSKI: Yes, including Quebec Hydro. 21 MR. ABRA: Including Quebec Hydro, I see. 22 Have you talked to anyone from Manitoba Hydro here 23 related to this project? 24 MR. KULCHYSKI: Yes, I did actually. There 25 were some people from Manitoba Hydro and of course I 1977 1 heard from the Minister as well at our -- at the 2 conference at the University of Winnipeg. 3 MR. ABRA: I assume you didn't read any of the 4 evidence that's taken place over the last three weeks 5 related to their -- 6 MR. KULCHYSKI: No, I haven't. As a matter of 7 fact, I've had a very busy last three weeks. 8 MR. ABRA: I'm just asking you, sir, whether 9 you read the evidence. That's fine. I have nothing 10 further. Thank you, Mr. Chairman. 11 THE CHAIRMAN: All right. If no other members 12 of the Panel have any questions at this time? Mr. 13 Bedford, do you still wish to take additional time or 14 do you wish to adjourn at this point in time until 15 after lunch? 16 MR. BEDFORD: Mr. Chair, I will wait. Thank 17 you. 18 THE CHAIRMAN: You will wait until after 19 lunch? 20 MR. BEDFORD: Yes. 21 THE CHAIRMAN: Are you available after lunch, 22 Dr. Kulchyski? 23 MR. KULCHYSKI: I teach at 2:30 so I'm 24 available after lunch. 25 THE CHAIRMAN: Is it possible to reconvene by 1978 1 quarter to one instead of one o'clock because it's 2 only 20 to 12:00 now. So if we take an hour and five 3 minutes, we should have enough time for lunch. It is 4 agreed? We will reconvene at quarter to 1:00 instead 5 of 1:00? All right. Thank you. 6 7 (PROCEEDINGS RECESSED AT 11:43 A.M. AND 8 RECONVENED AT 12:45 P.M.) 9 10 11 THE CHAIRMAN: All right, ladies and 12 gentlemen, we will continue, and I will ask 13 everybody to get with it. We are ready to begin, 14 Mr. Bedford. 15 MR. BEDFORD: I have no questions. I 16 know Ms. Matthews Lemieux has some. 17 THE CHAIRMAN: As soon as 18 Mrs. Matthews Lemieux gets here we will carry on. 19 MR. BEDFORD: I'm just informed that 20 Mr. Thomas will ask the questions on behalf of the 21 Nisichawayasihk Cree Nation. 22 THE CHAIRMAN: Thank you. You have 23 the floor, Mr. Thomas. 24 MR. THOMAS: Thank you very much. I 25 didn't quite get the name. Is it Mr. Kulchyski -- 1979 1 MR. KULCHYSKI: Yes. 2 MR. THOMAS: -- or doctor I should 3 say. First of all, I want to explore what you 4 mean by preserving a hunting way of life. You 5 would agree with me that to do this our young 6 people would need to be taught the following by 7 our elders: The first item is how to trap, how to 8 skin the animal -- first of all, I should say, 9 would you agree with me on these particular 10 things, the following being how to trap? 11 MR. KULCHYSKI: Sure. 12 MR. THOMAS: How to skin the animal? 13 MR. KULCHYSKI: I would rather hear 14 the whole list and then I can -- 15 MR. THOMAS: I prefer to answer the 16 questions as I am moving along? 17 MR. KULCHYSKI: How to skin animals? 18 MR. THOMAS: How to skin the animal? 19 MR. KULCHYSKI: How to what? 20 MR. THOMAS: How to skin animals? 21 MR. KULCHYSKI: Yes. 22 MR. THOMAS: How to tan hides? 23 MR. KULCHYSKI: Possibly, yes. 24 MR. THOMAS: How to hunt? 25 MR. KULCHYSKI: Yes. 1980 1 MR. THOMAS: How to prey for the 2 animals? 3 MR. KULCHYSKI: Yes. 4 MR. THOMAS: How to build a bush 5 cabin? 6 MR. KULCHYSKI: Yes. 7 MR. THOMAS: How to pick medicines? 8 MR. KULCHYSKI: Yes. 9 MR. THOMAS: How to dry, store and use 10 those medicines? 11 MR. KULCHYSKI: Yes. 12 MR. THOMAS: How to make tools and use 13 them? 14 MR. KULCHYSKI: Not necessarily, they 15 can buy a lot of tools that they need. 16 MR. THOMAS: How to fish? 17 MR. KULCHYSKI: Yes. 18 MR. THOMAS: How to smoke fish? 19 MR. KULCHYSKI: As long as I have a 20 chance to respond to the whole list, I will say 21 yes. 22 MR. THOMAS: How to choose the wood 23 and the type of fire to build to smoke the fish? 24 MR. KULCHYSKI: Sure. 25 MR. THOMAS: And you will agree with 1981 1 me that preservation of culture includes 2 following, which is not an exhaustive list; 3 language? 4 MR. KULCHYSKI: Yes. 5 MR. THOMAS: How to make drums and how 6 to use them? 7 MR. KULCHYSKI: I wouldn't say any one 8 particular element like that I would single out 9 and say, if you can't make a drum, you don't have 10 your culture. I would certainly say that normally 11 among a hunting community there are some people in 12 the community who know how to make and use drums. 13 MR. THOMAS: Bead work? 14 MR. KULCHYSKI: Again, I wouldn't say 15 that that is -- in Supreme Court terms -- integral 16 to the culture, but I would say it is important 17 and certainly I would think there would be people 18 in the community who would have that skill. 19 MR. THOMAS: How to make clothing from 20 hides such as moccasins and mukluks? 21 MR. KULCHYSKI: Not necessarily. 22 MR. THOMAS: How to choose a site for 23 a sweat lodge? 24 MR. KULCHYSKI: Sure. 25 MR. THOMAS: How to build a sweat 1982 1 lodge? 2 MR. KULCHYSKI: On the part of some, 3 yes. 4 MR. THOMAS: How to pick the stones 5 for a sweat lodge? 6 MR. KULCHYSKI: On the part of some. 7 MR. THOMAS: How to become fire 8 keepers and what that means? 9 MR. KULCHYSKI: Yes. 10 MR. THOMAS: How to carry a pipe and 11 about pipe ceremonies? 12 MR. KULCHYSKI: Yes. 13 MR. THOMAS: Dancing? 14 MR. KULCHYSKI: Yes. 15 MR. THOMAS: Are you aware of the 16 following NCN programs: Country Foods, hunters, 17 fishers, trappers and berry pickers are 18 responsible for finding food and bringing it back 19 to NCN, where it is packaged professionally and 20 distributed to elders and others in the community? 21 MR. KULCHYSKI: Yes. 22 MR. THOMAS: You are aware of that 23 program? 24 MR. KULCHYSKI: Yes, I am. 25 MR. THOMAS: What do you know about 1983 1 it? 2 MR. KULCHYSKI: I knew that there was 3 such a program in existence basically, and that it 4 was operating, and I have heard good things about 5 that program. 6 MR. THOMAS: Are you aware that we 7 have a place called Left Brook Lake which is a 8 cultural retreat, and it is a traditional village 9 that is used by our people for family and other 10 cultural retreats? 11 MR. KULCHYSKI: No. Is that the only 12 one or are there several? 13 MR. THOMAS: There is a number of 14 them. Mile 20? 15 MR. KULCHYSKI: No. 16 MR. THOMAS: It is an important 17 traditional site where we hold ceremonies. 18 MR. KULCHYSKI: I have heard of it, 19 actually. 20 MR. THOMAS: We have a program for 21 grades 3 to 9, where our youth are taught how to 22 build cabins, make tools, hunt, trap, fish, tan 23 hides, pick medicines, berry pick? 24 MR. KULCHYSKI: No. 25 MR. THOMAS: Do you know that we have 1984 1 a powwow club? 2 THE WITNESS: It doesn't surprise me, 3 but I don't know of it particularly. 4 MR. THOMAS: Do you know that we have 5 several dance and drum groups? 6 MR. KULCHYSKI: Yes. 7 MR. THOMAS: Are you aware that Cree 8 is taught in our school? 9 MR. KULCHYSKI: Yes. 10 MR. THOMAS: And you mentioned Treaty # 5, 11 and the $5 that my people are paid every year as a result 12 of Treaty. Do you know what the $5 represents to 13 my people? 14 MR. KULCHYSKI: It depends on which 15 terms -- I could speak to you at some length about 16 what the $5 may represent. 17 MR. THOMAS: I suggest to you that it 18 represents the sacred bond of peace between my 19 people and the Crown? 20 MR. KULCHYSKI: I would suggest to you 21 that it also at one time represented a material 22 way of the people, helping the people continue to 23 have their well-being. At some time ago when the 24 $5 was paid, that money was actually significant 25 to people in their annual incomes. Today it is 1985 1 not significant at all in their annul incomes. It 2 has both a symbolic and a material value. It is a 3 difficult question when you asked me what the $5 4 represents. I certainly agree with you that it 5 does represent the spirit of the treaty, the pact 6 that was made, the promises that were made, but I 7 would also say to those people that accepted that 8 money, it had very real material implications 9 about how their way of life was going to be 10 supported. 11 MR. THOMAS: You mentioned that you 12 attended a conference that helped form your 13 opinions about our project. Was that the 14 conference at the University of Winnipeg in 15 February of this year? 16 MR. KULCHYSKI: I would be misleading 17 you to say I merely attended it. I helped to 18 organize the conference. 19 MR. THOMAS: But that is the 20 conference that you are referring to -- 21 MR. KULCHYSKI: That's right. 22 MR. THOMAS: -- that helped form 23 opinion, okay. You mentioned Thomas Berger. Are 24 you aware that a conference in Thompson in 25 November of 2003, where Mr. Berger recommended 1986 1 that to have peaceful co-existence between 2 Aboriginal people and industry, partnerships 3 should be established between them? 4 MR. KULCHYSKI: Not only am I aware he 5 said that, but I agree with it. It is the nature 6 of the partnerships that is the question that I -- 7 MR. THOMAS: You mentioned that 8 Aboriginal youth have problems coming to school in 9 Winnipeg. Are you aware that as a result of this 10 project that a post secondary training centre 11 called Atoskiwin Training & Employment Centre is 12 being built in Nelson House, or in Nisichawayasihk 13 so that our children can be trained at home? 14 MR. KULCHYSKI: I have heard something 15 to that effect, yes. 16 MR. THOMAS: I should point out that 17 syllabics is also taught in grades 4 to 8. Are 18 you aware of that? 19 MR. KULCHYSKI: No. 20 MR. THOMAS: Thank you. 21 MR. KULCHYSKI: If I can then respond 22 to the totality of the questions. I am not 23 doubting that you have a good deal of programs 24 that support Aboriginal culture in your community, 25 as there are in many other communities. What I am 1987 1 suggesting is that, unfortunately, this deal will 2 go against the grain of many of those programs. 3 There is no use training people to be out on the 4 land if you end up destroying the land itself, or 5 upon the water upon which people depend. Teaching 6 young children the language in the school sounds 7 very nice, but if they are not using it in the 8 playground, if they are not using it outside of 9 the school, nobody really learns a language by 10 having it taught to them in the school. People 11 learn the language by speaking it at home, by 12 speaking it with other children. 13 So those are kind of, often, 14 sometimes -- some of the programs that you 15 mentioned I think are very valuable, some are band 16 aid solutions. And it is clear to me that the 17 project being contemplated really works against 18 virtually the whole terrain of all of those 19 programs. 20 On the one hand you are doing some 21 laudable things really trying to do what you can 22 for your culture. On the other hand, if people 23 don't have access to the land and the land way of 24 life, I think all of those things will ultimately 25 have no impact. 1988 1 MR. THOMAS: Just as a supplementary 2 question I guess; we have an agreement that we 3 refer to as the implementation agreement for the 4 NFA, that was ratified in 1996. Have you read 5 this? 6 MR. KULCHYSKI: I haven't read it, I 7 am aware of it. 8 MR. THOMAS: You are aware of it. Are 9 you aware that many of the programs that I pointed 10 out have been established as a result of this 1996 11 agreement? 12 MR. KULCHYSKI: That was my 13 understanding yes. 14 MR. THOMAS: And my other question to 15 you is, have you ever actually been to 16 Nisichawayasihk? 17 MR. KULCHYSKI: Yes, I have. I should 18 say, you know, the counsel for the Commission, I 19 guess Mr. Abra, was asking me about all of the 20 documents that I haven't read. One of the things 21 that I didn't say in response to him, but your 22 question allows me to say it, is: Instead of 23 reading piles and piles of documents, I have 24 travelled to many communities and spoke to many 25 people, both about the broad issues that I have 1989 1 been dealing with here, and specifically about the 2 project that you are contemplating. So I came 3 here prepared to talk really, primarily based upon 4 people that I have talked to. 5 I was in your community in the late 6 1970's actually, so quite a time ago, I will say 7 that. And I have travelled to other Northern 8 Manitoba communities since I have been back to 9 Manitoba, and I look forward to the opportunity to 10 go to your community. 11 MR. THOMAS: You have been in Nelson 12 House in 1970 or so you say? 13 MR. KULCHYSKI: About 1978 or '79. 14 MR. THOMAS: Okay. That concludes my 15 questions. Thank you. 16 THE CHAIRMAN: Thank you. Other 17 questions? Seeing none, thank you, Mr. Kulchyski. 18 MR. KULCHYSKI: Can I make a 19 concluding remark? 20 THE CHAIRMAN: There is no questions 21 asked for you to -- you missed the opportunity to 22 do so when the questions were asked. I guess the 23 procedure normally is you speak at this particular 24 time when you are asked questions. 25 MR. KULCHYSKI: Thank you very much 1990 1 for your attention. 2 THE CHAIRMAN: Sorry, I am advised 3 that counsel for the Canadian Nature Federation 4 has the opportunity to re-direct or ask questions 5 of Mr. Kulchyski. I mislead you, but 6 involuntarily. But at the time I did, I think I 7 was right. 8 MS. WHELAN ENNS: Thank you, 9 Mr. Chairman, Gaile Whelan Enns speaking. I am 10 going to make an attempt to frame a question that 11 I thought was going to be answered a little while 12 ago. 13 Mr. Kulchyski, Dr. Kulchyski, would 14 you tell us -- and we do want to hear from Patrick 15 McCully pretty quick -- would you tell us why you 16 do what you do? What motivates you, in respect to 17 your area of expertise, your studies, your work 18 with your students, and the volunteer work you do 19 with communities? 20 MR. KULCHYSKI: Sure. As I said, I 21 went to Frontier Collegiate, a residential school, 22 I went from Bissett. The school was mostly a high 23 school for Aboriginal students. There were very 24 few non-aboriginal people there, I was one of 25 them. There were 400 kids in my grade 9 class, 1991 1 there were 36 kids in my grade 13 class. Of the 2 36, only one went to university, me. 3 I didn't have -- I didn't come from a 4 wealthy family. I didn't have more money than the 5 other kids that I went to school with. I 6 concluded that the only reason I went to 7 university and others didn't had to do with the 8 colour of my skin. So from the time I started 9 university, I was interested in trying to figure 10 out why that was the case, what was wrong with 11 people who were just as bright as me, who were my 12 friends, who somehow didn't have the kind of 13 opportunities that I had. 14 As I went along in my studies, I 15 started to travel to remote communities and I 16 could see that the hunting culture was entirely, 17 being entirely unappreciated, and part of that had 18 to do with money. Whenever there is a resource 19 development project, the people who are proposing 20 it have a lot of money and they bring a lot of 21 money to the table. Whenever Government is doing 22 something to communities rather than with them, 23 they do it with a lot of resources behind them. 24 Since I grew up in a poor background -- I am a 25 university professor, I am well paid now -- so I 1992 1 work for Aboriginal communities for free. 2 Particularly those that are faced with very large 3 challenges with very expensive processes. So, I 4 genuinely do it out of commitment and out of my 5 life experience I suppose. 6 THE CHAIRMAN: Thank you. I just want 7 to remind Ms. Whelan Enns as well that the 8 questions that you are allowed on the re-direct 9 have to be related to the information provided or 10 responses provided to questions. 11 MS. WHELAN ENNS: I will work to be 12 more specific. Thank you, to the chair. 13 I think that that is probably going to 14 close today. And I appreciate the reminder from 15 the secretary of the Commission in terms of 16 re-cross. Thank you. 17 MR. KULCHYSKI: I want to take the 18 opportunity to thank you, since I had to sit 19 through this morning hearing you being personally 20 insulted actually, I want to say that I think you 21 have done a service to the Province of Manitoba 22 and to this Commission by bringing those of us 23 that you have brought forward. Thank you. 24 MS. WHELAN ENNS: Thank you. And 25 thank you for being a volunteer today. 1993 1 MR. KULCHYSKI: Does this mean that I 2 am actually done this time? 3 THE CHAIRMAN: Yes. Thank you. 4 Sir, you may now proceed, and 5 introduce yourself, and Mr. Grewar will then 6 proceed to swear you in. 7 MR. MCCULLY: Thank you. My name is 8 Patrick McCully, I am the campaign director for an 9 organization based in Berkley, California, called 10 International Rivers Network. 11 MR. GREWAR: Sir, are you aware that 12 it is an offence in Manitoba to knowingly mislead 13 this Commission? 14 THE WITNESS: I am. 15 MR. GREWAR: Do you promise to tell 16 only the truth in proceedings before this 17 Commission? 18 MR. MCCULLY: I do. 19 20 PATRICK MCCULLY: SWORN 21 22 MR. MCCULLY: So thank you, 23 Mr. Chairman, thank you to the rest of the 24 Commission. I will just get going while the 25 technical problems are sorted out here. 1994 1 My presentation is not on the specific 2 projects under discussion here. I haven't read 3 the 10 linear feet of documents that Manitoba 4 Hydro has produced relating to this project, but I 5 am here to talk about the issue of the 6 international contacts and what are international 7 standards and international best practice, and 8 particularly, especially the World Commission on 9 Dams. And I am just picking out some of the 10 issues which the World Commission on Dams made 11 recommendations on, which I think are relevant in 12 this case and that I hope that the Commission will 13 look at. And I also will give a little bit of 14 background on what exactly was the World 15 Commission on Dams, and also a little bit about my 16 organization and myself. 17 Firstly, International Rivers Network, 18 we are a non-profit organization. Our mission is 19 to halt destructive river development projects, 20 and to encourage equitable and sustainable methods 21 of meeting needs for water, energy and flood 22 management. We work mainly outside of North 23 America, mainly in developing countries, but some 24 work in North America and European context, and 25 also in Japan. 1995 1 We provide technical and lobbying 2 support to local groups that have already been 3 affected by projects or that face projects in the 4 future. We also provide, we provide technical 5 assistance in terms of reviewing documentation, 6 feasibility studies and so on, and also lobbying 7 support in terms of trying to influence 8 governments on specific projects, and also at the 9 policy level. And we are seeking to try to 10 basically democratize the way water and energy 11 planning is done at the international level, and 12 then down to the national and regional levels. 13 Just to explain my own personal 14 involvement in the World Commission on Dams, I 15 don't speak for the World Commission on Dams, I 16 was not a member of the World Commission on Dams; 17 I was, however, very involved in lobbying for the 18 creation of the Commission. I played an important 19 role in getting NGOs, environmental, indigenous, 20 human rights groups and others to be involved in 21 the Commission, because the Commission was partly 22 funded by the World Bank, and a lot of the dam 23 industry was involved, so there was a lot of 24 suspicion from the people who had been critical of 25 dams, so I played a role in getting them involved, 1996 1 giving evidence to the Commission and so on. 2 I was a member of what was called the 3 Dam Review Reference Group, which was the group 4 which basically set the terms for the Commission 5 and chose the Commissioners, and that included 6 environmentalists, indigenous rights activists, 7 the Government of China, the World Bank, 8 representatives of the large dam industry. I was 9 also a member of the forum, which was sort of an 10 advisory, multi-stakeholder advisory group which 11 followed the Commission's work. I am currently a 12 member of the steering committee of the United 13 Nation's environment program project, which is set 14 up to promote discussion on the World Commission 15 on Dams report. The Commission itself does not 16 exist anymore. It was, as planned, disbanded on 17 the publication of the report. 18 The report itself is quite a hefty, I 19 think a 400 page document. There is also a 20 shorter -- for people who don't have time to read 21 that, there is a shorter overview that is also 22 available. 23 So, quickly, what was the World 24 Commission on Dams? It was an independent 25 Commission sponsored by the World Bank, which 1997 1 people here may know is a development bank based 2 in Washington DC. Almost all of the countries of 3 the world are members of it. It promotes, 4 supposedly promotes economic development in 5 developing countries. It has been one of the -- 6 it has been the single largest funder of large dam 7 projects in developing countries in the last 60 8 years. 9 The other, the co-sponsor was IUCN, 10 International Union for the Conservation of 11 Nature, which is an umbrella group of 12 environmental organizations and Government 13 environment departments. It was a 14 multi-stakeholder Commission, and the different 15 stakeholders that come from all of the different 16 perspectives in the dam debate selected the 17 Commissioners, chose what the mandate of the 18 Commission would be. And also the funding came 19 from many different sources, it was about a 20 $10 million U.S. budget. 21 The initiative began at a meeting in 22 Switzerland in 1997, which brought together all of 23 these different interests. It took about a year 24 and a half of quite complex negotiations to 25 actually get the Commission going, and then 1998 1 released its report in November 2000 at a ceremony 2 in London with Nelson Mandela. 3 The Commission was disbanded on the 4 release of the report, but since then there have 5 been numerous follow-up initiatives. The main 6 sort of official follow on is this United Nation's 7 environment program, dams and development project. 8 And who were the Commissioners? There 9 were twelve Commissioners from a wide range of 10 different backgrounds and different parts of the 11 world. The Chair is the gentlemen up in the left, 12 Kader Asmal, who is the Minister for Water 13 Resources in South Africa. Vice-chair was an 14 Indian economist called Lakshmi Chand Jain. The 15 rest of the Commissioners came from the dam 16 industry, from indigenous rights groups, from dam 17 affected peoples organizations, from academia, and 18 river basin agency in Australia. 19 The mandate of the WCD was firstly to 20 review the development effectiveness of dams and 21 assess alternatives; and secondly, to develop 22 internationally accepted standards, guidelines, 23 and criteria for decision making in the planning, 24 design, construction, monitoring, operation and 25 decommissioning of dams. 1999 1 To do all of this there was a quite 2 extensive work program which involved -- just an 3 outline -- there was eight very detailed studies 4 of individual projects with about 100,000 U.S. 5 spent on each study, and consultations and so on 6 were involved. Again, spread widely around the 7 world, dams built for different purposes and at 8 different times. The North American example was 9 Grand Coulee, which affects Canada in that the 10 Upper Columbia River in British Columbia was quite 11 severely affected by that. 12 There is also a survey of, briefer 13 survey of 125 dams looking at what was projected 14 in terms of benefits and impacts of the dams, what 15 actually turned out where the dams had been built, 16 two country studies, 17 thematic reviews, 17 including on the socio-environmental, one of the 18 issues looked at was the greenhouse gas emissions 19 and reservoirs, which Hydro Quebec hosted a 20 workshop in Montreal to look at that issue, then 21 also looked at economic and financial issues, and 22 alternatives to dams, the various institutional 23 issues involved in the dam building. Water and 24 energy planning more widely, there were four 25 regional hearings and about 1,000 submissions that 2000 1 went to the Commission. 2 No hearings were actually held in 3 Canada. There was Canadian involvement in -- the 4 financial contributors included Manitoba Hydro, 5 who I understand did some contribution for a 6 workshop on the Grand Coulee study. Hydro Quebec 7 was a major contributor, I think around 200,000 8 U.S. they put in. The Canadian Government, 9 through the Canadian International Development 10 Agency, put in about 100,000 U.S. And SNC 11 Lavalin, the Quebecois engineering firm, put in 12 about $1,000. 13 Hydro Quebec has been actively 14 involved, beyond just putting in money, they were 15 actively involved in the actual process, being a 16 member of this advisory group called the WCD 17 forum, and now Hydro Quebec is represented on the 18 steering committee, which I am also on, for the 19 U.N. environment program dams and development 20 project. 21 So just to run through some of the 22 findings on impacts, in terms of social impacts, 23 first of all, the most striking figures is the 24 huge number of people that have been displaced 25 world-wide by dam projects. The Commission 2001 1 estimated 40 to 80 million people around the world 2 have been actually physically displaced. A number 3 of other people have been affected. As we know 4 from the Manitoba experience, it is not just 5 direct displacement which can affect people's 6 livelihood and lives. 7 The conclusion was that the impacts on 8 many of these people have been devastating. We 9 see it all around the world, whether it is in 10 North America, Africa, Asia, significantly 11 negative impacts. These negative impacts fall 12 disproportionally on indigenous people, Aboriginal 13 people. We have seen that in Canada, we have seen 14 it in the United States, we see it just about 15 everywhere that there are indigenous Aboriginal 16 people, we see that they suffer the brunt of dam 17 building. 18 Local economic benefits have been 19 provided to communities, but often these have been 20 transient because of the nature of the 21 construction. You have a boom and bust cycle when 22 the dam construction comes in. 23 Now, of course, there have been a lot 24 of services that have been provided by dams, there 25 is no question. They have provided obviously a 2002 1 lot of electricity, about a fifth of the world's 2 electricity, somewhere around 2.5 percent of the 3 world's total primary energy comes from hydro 4 power. About $2 trillion have been spent on dam 5 projects, as estimated by the Commission. So 6 there is no doubt that out of those $2 trillion, a 7 lot of services have been provided. But the 8 overall findings of the Commission was that, in 9 very many cases, not all cases, but very many 10 cases, the benefits have been much less than 11 claimed, and that other things could have been -- 12 the money could have been invested otherwise and 13 it may have had better development outcomes. 14 The findings on biodiversity, like 15 60 percent of the world's major rivers are 16 affected by, moderately or severely affected by 17 dams and diversions. The impact of this 18 biodiversity has been about a fifth of the world's 19 freshwater fish species are now threatened, 20 endangered or extinct. There are a number of 21 different reasons for that. The single major 22 reason is habitat loss, and the major reason for 23 that is related to dam building. 24 In North America specifically, there 25 is 123 species of fish, mollusks, crayfish and 2003 1 amphibians have gone extinct in the 20th century. 2 Almost 40 percent of U.S. freshwater mussels 3 species are extinct or incredibly endangered. 4 That is mainly because of dam building in the 5 southeastern United States. The extinction rate 6 overall of U.S. freshwater species is extremely 7 high, about 5 percent per decade, which is 8 comparable to the losses in the tropical rain 9 forest, which gets a lot more attention. 10 These are findings on ecosystem 11 mitigation. Of course, there have been a lot of 12 efforts to try and lessen, to mitigate the impacts 13 of dam projects. The conclusion of the Commission 14 was that these have met with limited success for a 15 number of reasons, partly because of just a lack 16 of attention, partly because of poor predictions, 17 also just because in the inherent nature that it 18 is very difficult to predict what is actually 19 going to happen with these big projects because 20 they cause so many changes. Also at issue, 21 because there are so many changes, it is difficult 22 to cope with them and difficult to know how to 23 mitigate. And also a lack of monitoring, so that 24 no measuring is made of what impact has happened. 25 And a lack of compliance, even if you have a 2004 1 monitoring program, and you have recommendations 2 that actions should be taken, there is often no 3 authority which can force the dam operator to make 4 the changes in operation which would mitigate the 5 impacts. There were 87 projects which provided 6 data to the WCD, so this is actually data from the 7 developers themselves, or the operators 8 themselves, this is not environmental groups or 9 communities putting forward the evidence. 10 60 percent of the impacts recorded after 11 construction were all anticipated. And that is in 12 the context of very, generally very inadequate 13 monitoring, so probably more impacts were there 14 than recorded in that statistic. 15 So findings on technical and economic 16 performance -- just in terms of Hydro, I won't go 17 into the flood control, irrigation water supply -- 18 just to say that actually their performance was 19 worse than hydro power, hydro power actually had 20 the better performance. And that multi-purpose 21 projects which try to do several things at once 22 perform the worst of all. 23 Of the 63 large hydro power dams 24 reviewed, 35 generated less power than predicted 25 Another 7, which did meet their targets, only did 2005 1 it because they increased the installed capacity, 2 in other words, more investment was required to 3 meet those targets. 4 Another issue which of course is a 5 major impact on dam economics is the cost 6 overruns. These averaged 56 percent over 81 dams 7 looked at, extremely high. Also time overruns are 8 very common. And only half of the dams reviewed 9 were able to be completed within a year of their 10 scheduled completion date. 11 So overall, the findings painted 12 rather a bleak picture of the record of hydro 13 power and of dams in general. But the Commission 14 did not say, okay, you know, we should now stop 15 using this technology. It did recognize that 16 there are going to be cases, even if you do the 17 best assessment of all different options, there 18 may well be cases where you see that the dam 19 really is your best or your least bad option. And 20 the real issue is how do we come up with a 21 decision making process which means we get the 22 best possible projects, whether those be dams, or 23 wind turbines, or flood control embankments? And 24 also then, once we decide through an open process 25 that dam is a best option, then how do we set up 2006 1 mechanisms to ensure agreements between 2 communities and dam builders? How do we ensure 3 compliance with agreements? How do we change this 4 record of impunity that has been in the past where 5 impacts have been felt and people have not 6 received compensation, and promises have been made 7 and not carried through with? 8 So the Commission came out with what 9 they call their seven strategic priorities. And I 10 will mention a couple of those that I think are 11 specifically relevant for the Manitoba case. The 12 seven priorities are, and these priorities are now 13 widely accepted by Hydro Quebec, by a lot of other 14 people in the dam industry, by the World Bank, by 15 quite a few governments. And Manitoba Hydro has 16 said, I think the first day, one of the earlier 17 days of the hearing, that the project under 18 discussion does meet these strategic priorities. 19 The priorities are, one, gain public 20 acceptance. Two, assess options, look at the full 21 range of what is available. And also not only 22 look at the options for supply, but first of all 23 look at the needs, what do we really need, and 24 then how do we meet, what options are there to 25 meets those needs? Thirdly, address existing 2007 1 dams. It was recognized that there are a lot of 2 outstanding problems around the world from 3 existing projects that need to be dealt with. 4 Sustain rivers and livelihoods, that we can no 5 longer go on building dam projects which are 6 destroying rivers and the livelihoods of the 7 people depending on those rivers. Recognize 8 entitlements and share benefits with the people 9 affected by the projects. Ensure compliance, 10 which is very important. And share rivers across 11 boundaries, which is not an issue in this case, 12 but is important in a lot of parts of the world 13 where you have international rivers. 14 So strategic priority two on the 15 comprehensive options assessment, some of the 16 relevant issues to be taken from this, firstly 17 that priority should be given to maximizing 18 efficiency of existing systems before building new 19 projects, so you have to make sure you get the 20 most bang for your buck from the existing projects 21 before you go ahead and build more. 22 Secondly, clearly formulate the 23 development needs and the objectives through an 24 open participative process, so that you don't just 25 have an open process for discussing how do you get 2008 1 that number of megawatts, but first of all you 2 decide, okay, how many megawatts do we want, how 3 many megawatts do we need? 4 And thirdly, you do a comprehensive 5 assessment of all of the different ways of getting 6 those megawatts, whether that be demand side 7 management, or Hydro power, wind turbines, or 8 whatever else. 9 Strategic priority 3 is addressing 10 existing dams, the dams that have already been 11 constructed. First of all, it is very important 12 that we need comprehensive post project monitoring 13 and evaluation processes. We need to know -- 14 before we can of course assess what are the 15 outstanding issues and what needs to be resolved, 16 we need to know what actually have the impacts 17 been. We need to have some sort of monitoring. 18 It is very important that this monitoring be 19 multi-stake holder, it is not just the operator of 20 the projects that do it, the affected stakeholders 21 need to be involved in the monitoring. And it 22 should be at the basin level where this is 23 relevant where you have a basin, a whole basin 24 affected or interlinked basins affected by 25 projects, you need to look at the whole system to 2009 1 assess what are the impacts. Second main issue is 2 the need to establish formalized operating 3 agreements with timeline licence periods for all 4 large dams. And that these agreements or licences 5 should set out obligations for the operator and 6 provide a legal basis for the stakeholder to 7 participate in decisions on the changes in project 8 design or operation. 9 So this means that if you have a 10 licencing period dam, when that licence is being 11 negotiated, that the affected communities are able 12 to have a say on how the project is going to be 13 operated under the new licence. This is -- this 14 does happen in the United States for privately 15 owned dams, not for the Federal dams, which is a 16 big problem. But for the privately owned dams in 17 the U.S. there are extensive relicencing processes 18 that go forward and which have allowed a lot of 19 reoperation to occur at projects to minimize their 20 impacts on the environment and in some cases on 21 the native communities in the U.S. They also have 22 in some cases been opportunities for 23 decommissioning when it is proven to be more 24 expensive to continue operating the dam with the 25 mitigation measures than just to remove the 2010 1 project. 2 And following on the same topic, that 3 the decommissioning should be an option within 4 relicencing processes. And then the relicencing 5 processes should identify outstanding social 6 issues, develop remedial mechanisms directly with 7 the affected communities, and that priority must 8 be given to financing and negotiated reparation 9 plan before funding new dam projects in a specific 10 location or river basin. 11 So you use -- the proposal to build a 12 new project in the basin should be used as an 13 opportunity to go back to the people affected by 14 the previous projects and say okay, let's 15 negotiate how do we compensate and mitigate the 16 impacts of the previous projects. This doesn't 17 mean of course just cash compensation, although 18 that may be part of it, it also means actually 19 discussing, negotiating how you can operate 20 existing projects differently so that those 21 impacts are lessened, and also various different 22 measures, may not be operational changes, but 23 other measures to mitigate impacts of existing 24 projects. 25 And then similarly related to the 2011 1 social issues, identify and act on environmental 2 mitigation and restoration opportunities. Where 3 there are opportunities to restore the environment 4 they should be taken before any new projects go 5 forward. 6 Strategic priority 4, sustaining 7 rivers and livelihoods. There should be a basin 8 wide understanding of ecosystem functions, values 9 and requirements, and how livelihoods depend on 10 these ecosystems before developments are made. 11 The project proponents must assess ecosystem 12 consequences of the cumulative impacts of dams, 13 dam-induced developments and other options along 14 the full length of the river. This I suppose 15 should be quite obvious that we do need to have 16 this comprehensive basin wide knowledge before 17 proceeding, but in many cases that has not been 18 there. Secondly, emphasize the avoidance of 19 impacts rather than causing the impacts, and then 20 trying to mitigate or compensate for them. Fairly 21 maintaining the ecosystem integrity by providing 22 environmental flows, which is a major issue now 23 especially for existing dams, how do you change 24 the flow regime so that the projects have less 25 impacts than they do at the present. Which we 2012 1 know now is possible -- in some cases no impact on 2 economics of the existing projects, in some cases 3 it can be only a very small impact from the 4 economics. 5 I just wanted to present a few slides 6 on one of the issues that I think is of extreme 7 importance, but is receiving very little attention 8 in the current debate over hydro power is the 9 issue of climate change and what the WCD's 10 recommendations are of that. It says that we need 11 to consider the impacts on the performance and 12 safety of changing hydrologies -- there is a 13 little bit more about this later -- but basically 14 the hydrological records that we had in the past 15 are no longer the clear guide to the future that 16 we thought they were. We know our climate is 17 changing so we need to take account of that. The 18 hydro industry in generally worldwide is rather in 19 denial of this fact. 20 There is a little bit of work being 21 done in the western United States, the California 22 Department of Water Resources is looking at how 23 climate change is going to affect their water and 24 they are very worried about it, but in general 25 worldwide, very little attention is going into 2013 1 this, but it is a very major issue which we are 2 going to waste an awful lot of money -- we are 3 going to make it more difficult to adapt to 4 climate change if we don't take this into account. 5 And secondly is the issue of the 6 impact upon climate change of dams and reservoirs 7 themselves and that there is need -- we know that 8 reservoirs do emit greenhouse gases. It is less a 9 problem here, especially a problem in the tropics, 10 but there is an impact on greenhouse gas 11 emissions, and that when you build a new project 12 you need to do a system wide -- you need to look 13 at the emissions from the individual project, but 14 you also need to do a system wide review to see 15 how this building a new project may also change 16 the operations of existing projects which may have 17 an influence on emissions. 18 How is climate change going to affect 19 water sources? Well, it is going to intensify the 20 hydrological cycle. That means it is going to get 21 warmer, it means there is going to be more energy 22 in the atmosphere, it means there is going to be 23 more evaporation, there is going to be more 24 precipitation. The patterns are going to change. 25 Some areas are going to get wetter, some areas are 2014 1 going to get dryer and some areas will get wetter 2 at some times and wetter at others, and vice 3 versa. None of us knows, even the best scientists 4 and modelists working on this issue can give any 5 sort of an accurate prediction of what is going to 6 happen when. But what we do know is that 7 hydrologies are going to change and become less 8 predictable. That the risks that we can 9 accurately -- or the risks that we can't 10 accurately predict future stream flow are much 11 higher than we previous thought they were. 12 Severity and frequency of droughts is 13 going to increase everywhere. We are going to see 14 especially major impacts on glacier and snow fed 15 rivers. This is a big problem for California, in 16 that our biggest water reservoir is the snow and 17 ice locked up in the Sierra mountains, and if that 18 it is going to melt earlier or a lot of the snow 19 is going to start falling as rain, it is going to 20 be a major problem in terms of water storage and 21 hydro power generation. 22 So, how does climate change affect 23 Hydro power? We are likely to see reduced power 24 generation because of droughts, which I believe 25 you have seen in Manitoba over the last year. And 2015 1 also greater evaporation. Probably more of an 2 issue in hotter areas. Increased hydrological 3 known certainties, so that the hydrological risk 4 is now much greater than what we previously 5 thought, and it should be included in all 6 feasibility studies for projects. It is quite -- 7 it would be quite blinkered now to make investment 8 decisions for hundreds of millions of dollars 9 without looking at the very basic issue of how 10 much of a resource are you going to have in the 11 future, what is the risk that you are not going to 12 have what you thought might have. 13 Increased sedimentation is going to be 14 a problem partly because if you have more 15 downpours, more intense storms, that leads to a 16 much greater erosion. 17 Safety issues, because greater storms 18 mean greater rainfall, greater periods of intense 19 rainfall means that spillways may be overwhelmed 20 and risk of down failure. And of course existing 21 dams were made for past climates which really 22 aren't going to apply. And sadly it is still 23 going on in the existing dams being planned now, 24 the many that I have looked at are not looking at 25 these extra hydrological uncertainties, so it is 2016 1 also a problem for future projects. And also that 2 there is a sort of synergistic effect in that 3 climate change is going to have a large impact on 4 river biodiversity for various reasons. Just 5 drying up rivers is one, if there is more droughts 6 obviously that will affect fish biodiversity. One 7 way of adapting to climate change we know is to 8 have better corridors of all types, migration 9 corridors for animals so animals can get to 10 refuges where they may be safe. 11 So in the case of a river it means if 12 part of a river is dried up, fish and other 13 creatures are able to move say upstream where 14 there is still water. Dams fragment rivering 15 habitats and mean that this type of adaptation is 16 going to be more difficult. 17 So lastly taking the big worldwide 18 look, where do I see large dam building going? We 19 see there has been a large decline since the 1970s 20 worldwide when dam building peaked at about 500 a 21 year, 500 large dams completed a year. This is 22 large dams defining dams of over 15 metres in 23 height. Then we see a steady decline through the 24 1990s to a level of about half, less than half, 25 well under half of what it had been. 2017 1 A number of reasons for that. One is 2 what is called site depletion, that the best sites 3 have already been built on, especially the case in 4 the U.S. and Europe where so many dams have been 5 built, there are very few places that are economic 6 still to build. And of course there is opposition 7 from the affected people like we saw in Quebec 8 with the great whale project, and see now very 9 strongly in India, Brazil, Thailand, Chile, all 10 around the world where we look there is a lot of 11 local opposition to these projects being built. 12 The third main thing is economics, 13 especially privatization. Worldwide over the last 14 ten years there has been a concerted effort by the 15 World Bank and others to push the privatization of 16 big infrastructure projects and try to push these 17 into the private sector. And for dam building it 18 basically hasn't worked because the upfront costs 19 are so huge and because the hydrological risks are 20 so high, and people have for the first time become 21 aware of the very poor past performance of hydro 22 power projects. And people have realized that 23 very often the projects are not able to meet their 24 performance projections and especially the 25 vulnerability to drought. 2018 1 So, that is sort of a quick round up 2 of the international context with some relevance I 3 hope for Manitoba, and some things that I hope 4 will be interesting for the Commission and here 5 are some websites with more information. The 6 first is my own organization, International Rivers 7 Network. Dams.org is the website for the World 8 Commission on dams where you can go and download 9 this full report, as well as the several linear 10 feet of supporting documentation in the overview. 11 And then the bottom site, unep-dams.org, is the 12 site for the dams and development project which is 13 more information of the various follow-up 14 initiatives on the WCD. So with that I will just 15 wish everybody a little early Happy St. Patrick's 16 day for tomorrow, and I will close. 17 THE CHAIRMAN: Thank you. Mr. 18 Sargeant. 19 MR. SARGEANT: I have two or three 20 questions, but your last slide, were the numbers 21 correct, were there 5500 large dams built in the 22 70's? 23 MR. MCCULLY: Yes. One thing about 24 those figures, as I say, they exclude China which 25 is half of all of the world's large dams, so tose 2019 1 are actually figures for the world outside of 2 China. If you included China, it would just be a 3 higher peak and a higher drop off, because the 4 1970s also had a huge spell of dam building. 5 MR. SARGEANT: How many of those were 6 Hydro power dams? Surely there weren't 5500 dams 7 build worldwide. 8 MR. MCCULLY: No, there is about -- 9 the figures are not very precise, but something 10 like 45,000 large dams that are in existence 11 worldwide, of which something like 23,000 are in 12 China. Of those 45,000 large dams I think 13 somewhere under 20 percent are hydro power. 14 MR. SARGEANT: Okay. What is the 15 bottom line, what was the bottom line of the 16 report of the World Commission on Dams in respect 17 of hydroelectric dams? Is it that they shouldn't 18 be built or that they should be built, but taking 19 into consideration all of those cautions that you 20 showed us? 21 MR. MCCULLY: Yes, the Commission 22 didn't say for any purpose dams should not be 23 built. They recognize that large dams should 24 remain an option for all of those purposes, but 25 that the decision making process had been very 2020 1 flawed in the past, so that they put forward what 2 is -- really it is a very stringent set of 3 recommendations, but they thought that because the 4 past problems have been so severe that the future 5 processes needed to be very stringent to make sure 6 that mistakes were not repeated and that if the 7 projects were built, they would be good projects 8 and would really realize benefits and would be in 9 the greater interest. 10 MR. SARGEANT: Now, did the Commission 11 conclude or does the World Bank take a position on 12 whether or not, or what is the best source of 13 electrical energy? I mean, do they take a 14 position that hydro dams are the best or not the 15 best? 16 MR. MCCULLY: The World Bank's 17 position is pretty controversial at present. I 18 can't speak for the World Bank, but if I try to 19 fairly paraphrase what I think their position 20 would be, it would be that in developing countries 21 all viable options should be looked at within 22 social environmental constraints. They would say 23 something like that. In reality most of their 24 energy lending, about 94 percent goes to coal, oil 25 and gas projects, less than 94 percent. 2021 1 94 percent is including -- includes large hydro, 2 but the majority of that is fossil fuels. And now 3 they say about 6 percent of their lending is going 4 to energy efficiency in the new renewables. The 5 World Commission didn't come up with any -- it 6 didn't say particularly this option is necessarily 7 better, but it did say that a lot of -- the 8 framework for energy planning is changing because 9 these new options, especially wind power, 10 geothermal and biomass, and coming down the line 11 solar now are increasingly viable and a lot more 12 attention needs to be paid to them. And there is 13 a problem worldwide in that there is a big coal, 14 oil and gas lobby. There is a big hydro lobby, 15 because these are established industries, they 16 have all their money and their lawyers and 17 lobbyists and so on. The renewable industries are 18 still very small. In 20 years time they are going 19 to be big, powerful industries. Right now they 20 are not, so there needs to be actions to level 21 that playing field. 22 MR. SARGEANT: I understand about a 23 year ago the World Bank sponsored something called 24 the World Energy Forum in Washington DC, are you 25 familiar with that? 2022 1 MR. MCCULLY: The bank sponsors every 2 year, they have sort of an energy week. They do a 3 water week and then they do an energy week, and it 4 is probably the same thing that you are referring 5 to. I wasn't there, so. 6 MR. SARGEANT: You are not familiar 7 with what their discussion was at that time in 8 respect of hydro dams? 9 MR. MCCULLY: The World Bank's 10 position on hydro dams at the moment has actually 11 swung to be much more bullish, in that over the 12 past year or so they came out with a new water 13 strategy last March and since then they have been 14 much more I would say rhetorically pro large 15 Hydro. The World Bank largely backed out of 16 funding large hydro for almost a decade. Through 17 the '90s the amount of money that they lent for 18 large hydro showed a pretty steady decline. Now 19 they are now saying they are going to go back into 20 the sector. They are taking a very aggressive 21 attitude from our perspective, saying we have had 22 enough of all of these people complaining about 23 hydro power and we want to go out there and lend 24 for it. Privatization has not worked, so we are 25 going to put money back into these big public 2023 1 sector projects. I don't know what it means in 2 terms of concrete in the reverse, so to speak. 3 MR. SARGEANT: Thank you. 4 THE CHAIRMAN: Other questions? Mr. 5 Mayer. 6 MR. MAYER: Good afternoon, sir. Did 7 I hear you correctly when you indicated at the 8 beginning of your address that you hadn't had an 9 opportunity to assess the Wuskwatim project in 10 particular, or to compare it to any of the 11 recommendations that appear to have been 12 recommended by the report that you have been 13 referring to? 14 MR. MCCULLY: I read the transcripts 15 from the first day of the hearings, the 16 presentations by the proponents from the first 17 day, and I read background documents from the 18 Manitoba Wildlands website and from newspaper 19 coverage and some past coverage. 20 MR. MAYER: And you are aware then of 21 the basic nature of the Wuskwatim project? You 22 were aware it has been referred to as a modified 23 run of the river project. How does your 24 Commission perceive run of the river or modified 25 run of the river projects as opposed to projects 2024 1 that require significant reservoir or forebay? 2 MR. MCCULLY: The Commission didn't 3 come up with any specific recommendations on run 4 of river versus storage projects. But I think 5 clearly if you applied the Commission's 6 recommendations that they would -- it would be 7 easier to build run of river projects. The 8 Commission also didn't make a recommendation 9 because it is very -- run of river is a very 10 vaguely defined term. It is used differently in 11 different contexts. It is funny actually, there 12 has been a tendency, especially in the last ten 13 years or so, to call more projects run of river. 14 Acres International, which is an 15 Ontario based engineering firm, very big 16 internationally, did a study of dams in the 17 Macong, and they called it -- because dams were 18 becoming so controversial at the time, the early 19 '90s, they wouldn't even call it a dam study, they 20 called it a run of river study. And instead of 21 reservoirs they called it ponds, so they had 60 22 kilometre long ponds along the Macong. But it is 23 not very clear. Some people call some projects 24 run of river and others wouldn't, so it is not a 25 clear term. 2025 1 In this case I understand it is quite 2 complicated because the river they are talking 3 about is not a natural river, its flows are many 4 times larger than the natural flows. It is a sort 5 of a run of a modified channel would be the 6 description. 7 MR. MAYER: Understanding that the 8 Burntwood River has been affected significantly by 9 Churchill River Diversion and by the augmented 10 flow program, you said you saw the Hydro 11 presentation, so you know that the pond that you 12 referred to is a fraction of a square kilometre, 13 and you know what Hydro means by modified run of 14 the river, so the comments that you made about the 15 60 kilometre pond and Acre's comments about run of 16 the river, I trust you are not suggesting that 17 that applies to the Wuskwatim project? 18 MR. MCCULLY: I made that comment to 19 say that it is hard -- there is no hard and fast 20 definition of what run of river is. So the 21 Commission therefore did not try to define run of 22 river, or to say that run of river is acceptable 23 and storage isn't. In some parts of the world run 24 of river dams have had major impacts, especially 25 on migratory fish, on the Columbia River and the 2026 1 tributaries of the Macong and elsewhere, and the 2 Mississippi also. 3 MR. MAYER: I recognize that. But you 4 also I trust then from reading the transcripts of 5 the Hydro presentation are aware what precautions 6 they appear to have taken and their prediction 7 with respect to even fish survivability through 8 the turbines? 9 MR. MCCULLY: I didn't come here to, 10 you know, sort of come down for or against this 11 project. I don't feel that I have sufficient 12 knowledge of the project to give an opinion on it. 13 I just want to say that there is parts of the 14 Commission's recommendations which I think are 15 important in this case, especially I think the 16 issues to do with dealing with existing projects, 17 which I think are very relevant here. 18 MR. MAYER: Unfortunately we have of 19 course limited jurisdiction to deal with -- we 20 certainly have some jurisdiction to deal with the 21 effects as they would relate to the whole of the 22 system, we are specifically not permitted to go 23 back and particularly review other hydro projects 24 that may have been constructed in the past. I 25 thank you very much, sir, I have no further 2027 1 questions. 2 THE CHAIRMAN: Sir, I just wanted to 3 ask one question. Has the World Commission on 4 dams or your organization, International Rivers 5 Network, do you comment on projects that are 6 proposed? Like, for instance, in Guyana right 7 now, the huge hydro electric project, or in 8 southern Mexico, or the project that is currently 9 being developed on the Yangtze in China? 10 MR. MCCULLY: We have been working on 11 projects all over the world for the past, I think 12 maybe we are 16 years old now, our organization, 13 so we work in China, we work in India, Nepal, 14 Pakistan, large parts of South America, a lot of 15 places. So we have been involved in some of those 16 projects. As I say, often our role is not -- is 17 to provide sort of technical support to local 18 community organizations or environmentalists or 19 indigenous groups on reviewing technical studies, 20 giving them information about what is the record 21 of other dam projects around the world, giving 22 them information on what is the record of the 23 companies involved in the projects, or explaining 24 to people what the policies are of lenders like 25 the World Bank, so that they can make sure that 2028 1 lenders follow their own policies and hold them 2 accountable. 3 THE CHAIRMAN: I should have been more 4 specific. I wanted to know if you had been or 5 were currently involved in the project in Guyana 6 and the major proposed project for southern 7 Mexico? 8 THE WITNESS: In Guyana, we are doing 9 some work in the aluminum industry and I have 10 heard about this Guyana project because it is 11 mainly to provide power to produce aluminum, so we 12 have been contacted by some Guyanese, I am not 13 sure who, some people in Guyana have contacted us, 14 but I am not working on that project myself, and 15 we are not very active in it. 16 In terms of southern Mexico, we are 17 very active working with people in southern 18 Mexico, Guatemala, Honduras and throughout 19 Mesoamerica because there has been a lot of damage 20 been done by hydro projects there, and a lot of 21 massacres that happened because of resettlement 22 linked to dam projects built during the 23 dictatorships, and now a lot of new projects are 24 being proposed and we are actively working in that 25 area. 2029 1 THE CHAIRMAN: Thank you. Questions? 2 From Manitoba Hydro or NCN? 3 MR. BEDFORD: Good afternoon, Mr. 4 McCully. My name is Doug Bedford and I'm counsel 5 employed by Manitoba Hydro. I can tell you that I 6 have had the benefit of reading the report to the 7 World Commission on dams. And you are correct, it 8 is over 400 pages, 404 to be precise. The date on 9 the copy that I have is November 2000, is that 10 correct? 11 MR. MCCULLY: That is the date of the 12 report, yes. 13 MR. BEDFORD: I think what won't be 14 apparent to those in the room who haven't had the 15 opportunity to read the 404 pages as you and I and 16 a few others in the room have, is that this report 17 is focused on large dams. There is repeated 18 references throughout the 404 pages to large dams, 19 is there not? 20 MR. MCCULLY: It is actually -- it is 21 not quite clear. It is called World Commission on 22 Dams, not large dams. Clearly the larger dams, 23 the more controversial projects that have the 24 bigger impacts are the best documented. But 25 actually they did look at the small dams as well. 2030 1 For example, one of the detailed case studies was 2 of a basin in Norway where most of the projects 3 were small, according to the industry definition 4 of less than 15 metres in height. It is a 5 complicated issue because there is also 6 distinctions between large and small hydro and 7 people often get mixed up between large dam, small 8 dam, small hydro, large hydro. 9 The distinction between large and 10 small hydro that we use and which the small hydro 11 power industry uses is 10 megawatts, but in other 12 places, it is some places 25 megawatts, some 13 places 30, sometimes 50. But the Commission 14 didn't get into the issue of really distinguishing 15 between large and small projects for a number 16 of -- well, for number of reasons. It is quite a 17 complex issue there. Recommendations don't say, 18 you know, small dam is good, large dam is bad, or 19 run of river is good, storage is bad, or vice 20 versa. They said whatever sort of water and 21 energy planning you are doing, this is the process 22 that you should follow. 23 MR. BEDFORD: You were correct that 24 the only case study in North America was the Grand 25 Coulee dam and the Columbia river basin, correct? 2031 1 MR. MCCULLY: Yes, out of the eight 2 detailed case studies. 3 MR. BEDFORD: That dam, Mr. McCully, 4 has a capacity of 6,500 megawatts, does it not? 5 MR. MCCULLY: If you say so. I don't 6 remember the latest capacity figures, but I will 7 trust you on that. 8 MR. BEDFORD: That is a large dam. 9 MR. MCCULLY: That is a very big dam. 10 MR. BEDFORD: Can you tell us what the 11 megawatt capacity of the proposed Wuskwatim is? 12 MR. MCCULLY: It is 200 megawatts, but 13 I think you know that yourself. 14 MR. BEDFORD: Relatively speaking that 15 is not a large dam. 16 MR. MCCULLY: That is a large dam, 17 there is no definition -- I will start again. The 18 definition of a large and small dam is not 19 actually related to the number of megawatts. The 20 majority of large dams don't provide any 21 electricity. There is many large dams that may 22 provide only 5, 10 megawatts of electricity. 23 However the issue, if it is an issue, it is not an 24 issue for me but it may be an issue for you, it is 25 a large hydro power project, under any definition 2032 1 I have seen of large hydro power, that is large 2 Hydro power. 3 MR. BEDFORD: The other thing that 4 those that haven't looked at the 404 pages will 5 not realize is that much of the report deals with 6 dams other than hydroelectric dams. You made 7 passing reference to that from time to time. But 8 this report deals certainly with dams built for 9 irrigation purposes, dams built to control 10 flooding, dams built to supply water supplies to 11 communities, all of those different kinds of dams, 12 doesn't it? 13 MR. MCCULLY: Sorry, is that a 14 question? 15 MR. BEDFORD: Yes. 16 MR. MCCULLY: As I said, it looks at 17 all of the different types of dams and hydro power 18 is only one kind of dam that it looks at. 19 MR. BEDFORD: I was a little concerned 20 watching the slides that you were leaping around 21 with the data and the statistics, and from time to 22 time you were identifying statistics related to 23 the group of hydro dams that were studied 24 worldwide and at other times you had statistics 25 that I detected, having read the report, really 2033 1 related to conclusions drawn from the studies of 2 all different kinds of dams, which I suggest to 3 you may not be particularly applicable to hydro 4 dams or indeed to dams in North America. Is that 5 fair of me to suggest that? 6 MR. MCCULLY: I don't think so. I 7 think that I presented the statistics as well as 8 they can be desegregated in the report, and the 9 Commission itself did a pretty good job, I think 10 of disaggregating the statistics as far as it is 11 possible between the different purposes. The 12 problem is that the dam industry has been very -- 13 has done a very, very poor job worldwide of 14 actually keeping records on how many projects it 15 has built and what the impacts of the projects 16 have been and so on. So you can't actually say -- 17 it is impossible to say, okay, 60 percent of 18 rivers are in some ways impaired by dams of which 19 X percent is affected by hydro, X percent of water 20 supply and X percent by flood control. You can't 21 do that. Because statistics aren't available and 22 it would be difficult anyway, because you have 23 multiple dams in the same basin, all of which may 24 affect the river, even though not all of them are 25 for one of those purposes, you have many, many 2034 1 dams which are for multiple purposes. You have 2 dams which are claimed to be for purposes which 3 really they are not. Often dams are claimed to be 4 for irrigation even if they don't supply 5 irrigation water, and claimed to be for flood 6 control even if they make floods worse, but it is 7 not possible to distinguish all of that. 8 So I don't think it is a fair question 9 to say, oh, when you are talking about hydro power 10 you should only include impacts of hydro power 11 dams. For example, 40 to 80 million people 12 displaced by dams, nobody knows, that is a very 13 vague estimate with a wide margin of error because 14 the data hasn't been properly collected. It would 15 be sort of a meaningless margin of error to then 16 say of this 40 to 80 million, X percent were 17 purely because of hydro power. And just to 18 conclude that also, the impacts, generally you see 19 the same set of impacts with hydro power as other 20 dams. There are some basic characteristics that 21 are the same and there are some other things that 22 are different, and they differ between different 23 hydro power dams according to how they are 24 operated. 25 MR. BEDFORD: What I had in mind when 2035 1 I asked the question was that I did recollect from 2 the reading that I did of the report, the subject 3 of cost overruns on the construction of dams. And 4 you did show us a slide that referred to 81 dams 5 immediately after you showed us a slide that 6 referred to a particular group of 63 hydro dams. 7 And my recollection of what the report found on 8 cost overruns in the construction of dams was that 9 that was a problem that was particularly relevant 10 in the third world, I recollect southeast Asia, 11 but I may be wrong on the geographic location. 12 MR. MCCULLY: South and central Asia 13 were the worst areas. 14 MR. BEDFORD: But the suggestion was 15 that it was in a different part of the world that 16 construction cost overruns occurred, although the 17 report was not clear as to why that happens in 18 that part of the world. The common sense 19 conclusion that I drew is you would have to 20 understand how business is done and how the 21 economies work on that part of the planet to begin 22 to come to grips with why they have cost overruns. 23 MR. MCCULLY: I think actually the 24 cost overruns are a problem in all parts of the 25 planet. In particular in South Asia the cost 2036 1 overruns are mind boggling, I can't remember the 2 exact statistics, but over 100 percent, it is 3 really pretty catastrophic. They are a problem in 4 all regions of the world. I don't know the 5 statistics in Canada. In the western United 6 States, the Bureau of Reclamation several years 7 ago said they were averaging 50 percent cost 8 overruns on their water projects. That is water 9 projects, not pure hydro projects, but I think it 10 is a worldwide problem. But I don't know the 11 statistics on Canadian dams. 12 MR. BEDFORD: My recollection is that 13 the report is in fact modestly complimentary of 14 the subject of cost on hydro dams, but as you have 15 said, the report speaks from a worldwide 16 collection of data, nothing unique to Canada, 17 correct? 18 MR. MCCULLY: I wouldn't say 19 moderately complimented. The Hydro power record 20 is definitely better than the irrigation record in 21 terms of cost overruns, but the irrigation record 22 is particularly bad. In terms of the economic 23 viability of the hydro power projects, which are 24 all developing country projects, one is built by 25 the World Bank and other development banks because 2037 1 that is where they have data. The rates of return 2 were averaged considerably less than what has been 3 projected. 4 MR. BEDFORD: On the subject of 5 greenhouse gas emission from the reservoirs, can 6 you tell me what the conclusion was regarding 7 boreal reservoirs? 8 MR. MCCULLY: The conclusion was that 9 a lot more work needs to be done on the subject. 10 That the emissions from boreal reservoirs appear 11 at this point to be less than fossil fuel options. 12 That is the conclusion. 13 MR. BEDFORD: The conclusion that I 14 recall is that boreal lake reservoirs have very 15 low emissions. 16 MR. MCCULLY: The meeting held in 17 Montreal sponsored by Hydro Quebec concluded that 18 a lot more work needs to be done on measuring the 19 emissions, and that I think certainly the 20 emissions from boreal reservoirs appear to be 21 considerably less than fossil fuel alternatives. 22 I think that the hydro power industry in terms of 23 Hydro Quebec, at least I'm familiar with their 24 figures, I think that they exaggerated how low the 25 impacts are. I think they have a very strong 2038 1 vested interest in trying to minimize the numbers. 2 So I think a little bit of a pinch of salt is 3 needed when dealing with Hydro Quebec numbers on 4 reservoir emissions, and international energy 5 agency numbers on reservoir emissions, because the 6 international energy agency numbers on hydro power 7 emissions come from Hydro Quebec, because the IEA, 8 International Energy Agency figures on hydro which 9 the hydro power industry frequently quotes are all 10 from IEA Implementing Agreement on Hydro Power, 11 which is a group of hydro power utilities. 12 MR. BEDFORD: Did the Commission not 13 suggest that the best way to compare greenhouse 14 gas emissions from different resources is a life 15 cycle analysis? 16 MR. MCCULLY: It did, yes. 17 MR. BEDFORD: One of the Commissioners 18 asked a question that I asked myself after looking 19 at 404 pages of a report, and that was so what is 20 the bottom line? What conclusions can I draw that 21 would assist me and be useful in understanding 22 whether or not what we call the Wuskwatim projects 23 are worthwhile? And the first conclusion or 24 message that I get from reading the 404 pages was 25 that those persons who are impacted by a dam 2039 1 project should benefit by it. Is that a fair 2 conclusion for me to have drawn? 3 MR. MCCULLY: I think that is a very 4 important conclusion of the report, and I would 5 very much agree with that conclusion. 6 MR. BEDFORD: I'm sure then that while 7 you have conceded that you haven't read what 8 amounts to about 10 feet of material that has been 9 filed here, but within that ten feet of material 10 there is plenty of information about how it is 11 intended that the Nisichawayasihk Cree Nation, 12 which will certainly be impacted by this project, 13 will benefit by it. That I assume you would say 14 is a good thing. 15 MR. MCCULLY: If the people benefit 16 from the project I think it is a good thing, yes. 17 MR. BEDFORD: The second conclusion 18 that I drew for myself from reading the 404 pages 19 is that it is important in the view of those who 20 prepared this World Commission report that 21 extensive studies and consultations take place 22 before any one proceeds to build a dam of any 23 nature or kind; is that a fair conclusion to have 24 drawn? 25 MR. MCCULLY: I think that is a rather 2040 1 obvious conclusion that the Commission came up 2 with and I agree with that. 3 MR. BEDFORD: Can I conclude that you 4 are reasonably impressed that we have ten feet of 5 studies detailing work done by a whole variety of 6 specialists who have considered this project from 7 any number of environmental and financial and 8 economic angles, and in addition within the ten 9 feet of material, is the record of all sorts of 10 consultations throughout Northern Manitoba with 11 communities who it is anticipated either will be 12 affected or will have some interest in the 13 project? 14 MR. MCCULLY: As I said, I haven't 15 read the ten feet of material so I can't comment 16 on its quality. But certainly it is a good thing 17 when studies are done and these projects should be 18 extensively studied. And there should be 19 extensive consultations, I think so. As I say, I 20 don't come here to make a for or against opinion 21 on this project under discussion. I'm coming 22 presenting what I feel are international standards 23 on dam construction which I would advocate be 24 followed in this case, and then it is up to I 25 guess the people of Manitoba and affected 2041 1 communities to decide whether they want the 2 project to go ahead. 3 MR. BEDFORD: And finally, I drew a 4 conclusion that in the minds of those who wrote 5 the report of the World Commission on Dams that it 6 is important when one builds dams to have 7 monitoring of the effects of having built those 8 dams. Is that fair conclusion to draw? 9 MR. MCCULLY: Again it is a very 10 important conclusion of the report, and I agree 11 with it. 12 MR. BEDFORD: Once again, while I know 13 you haven't read through the ten feet of material, 14 I'm sure you will be impressed to know that within 15 that material there are numerous references to the 16 sorts of monitoring that is proposed for the 17 Wuskwatim project. You are nodding your head. 18 That is all of the questions that I 19 have. Although I would like to note for the 20 record that I was pleased and proud to see your 21 reference to Manitoba Hydro having contributed to 22 this study, I'm informed that Manitoba Hydro 23 specifically contributed to the reservoir emission 24 study as opposed to the study of the Grand Coulee 25 dam. Thank you. 2042 1 MR. MCCULLY: Thank you. 2 THE CHAIRMAN: Ms. Matthews Lemieux. 3 MS. MATTHEWS LEMIEUX: My name is 4 Valerie Matthews Lemieux, and I represent the 5 Nisichawayasihk Cree Nation. And I just have a 6 couple of questions for you. As I understood your 7 presentation, you indicated that the focus of the 8 recommendations by the Commission was really on 9 decision making processes, is that right? 10 MR. MCCULLY: That is my 11 interpretation of the Commission, yes. 12 MS. MATTHEWS LEMIEUX: In terms of 13 preparing for your presentation today, I know you 14 reviewed some materials, you said you haven't 15 reviewed all of the materials. Were you provided 16 with a copy of Article 8 of the 1996 agreement 17 between the Nisichawayasihk Cree Nation, Manitoba 18 Hydro and the Governments of Manitoba and Canada? 19 MR. MCCULLY: I may have been referred 20 to it. I was referred to a lot of documents on 21 the web. As I say, the main document from the 22 advocate's perspective that I read was the 23 presentations on the first day, the transcript of 24 the first day of this hearing. 25 MS. MATTHEWS LEMIEUX: So you have not 2043 1 read then article 8 of the 1996 agreement, is that 2 right? 3 MR. MCCULLY: That's right. 4 MS. MATTHEWS LEMIEUX: Then you are 5 not really aware of what the specific decision 6 making processes are that have been followed with 7 respect to the Wuskwatim project, is that right? 8 MR. MCCULLY: Only as was explained in 9 the presentations on the first day. 10 MS. MATTHEWS LEMIEUX: Okay. Thank 11 you. 12 THE CHAIRMAN: Thank you. 13 Mr. Williams. 14 MR. WILLIAMS: Good afternoon, Mr. 15 McCully. I'm Byron Williams. Good afternoon 16 again, panel. I just want to follow up on a few 17 questions that my friend Mr. Bedford asked you in 18 terms of cost overruns in terms of major projects. 19 And if I understand your response to him, you were 20 indicating that the concerns in terms of cost 21 overruns are not restricted to water dams, they 22 extend as well to hydroelectric operations across 23 the world, is that correct, sir? 24 MR. MCCULLY: Yes. 25 MR. WILLIAMS: Can you give us some 2044 1 sense of what are the factors that may drive these 2 cost overruns in terms of hydroelectric 3 operations? 4 MR. MCCULLY: There is different 5 political and technical factors that -- the 6 political factors are that proponents want to give 7 the lowest possible cost because they want the 8 project to be approved. Because in the past all 9 large dams around the world, at least the bigger 10 large dams have been built by the public sector. 11 There hasn't been any accountability basically for 12 the builders of the dams to come in on budget, and 13 when you get, for example, the World Bank involved 14 in a project, they have been showing themselves 15 very willing to lend more money if cost overruns 16 happen. This is to the advantage of most people 17 involved in the project, the more money the dam 18 costs, the more money the contractors get 19 basically. And the more money there is -- in many 20 countries we know money gets skimmed off into 21 pockets where it shouldn't be, and the more money 22 the project costs, the more opportunity there is 23 for graft. So there is a lot of issues like that 24 which provide momentum for a deliberate 25 understatement of costs in the knowledge that, 2045 1 yes, costs are maybe going to go up later, but you 2 know, one, it's better to give a loose statement 3 because you are more likely to get the dam 4 approved because it looks better before 5 construction. Two, if the costs do go up it is a 6 good thing because there is more money for the 7 people involved. 8 Secondly there are technical reasons, 9 the main one which is geological reasons in that 10 it is very difficult to be able to assess the 11 exact geological nature of a site before you 12 actually start building on it. And even if you do 13 lots of test drillings, there still may be things 14 in terms of faults in the rocks and weak rock 15 structures that you don't know were there. 16 According to the World Bank data that is the 17 single most important technical reason for cost 18 overruns. 19 MR. WILLIAMS: In terms of the 20 technical problems or flaws, what kind of 21 recommendations are you aware of in terms of 22 reducing those or mitigating those? 23 MR. MCCULLY: I can't think of any 24 specific technical recommendations which the 25 Commission made. They may be there, I can't think 2046 1 of them. However, I think that the Commissioners 2 would have said, or the purpose of some of the 3 recommendations were that if you have a fully 4 transparent decision making process with all 5 documentation provided, there should be scope for 6 independent review of the cost estimates so that 7 hopefully there would be some independent 8 validation of how accurate the estimates were. 9 MR. WILLIAMS: In terms of building 10 hydroelectric dams, who is building them? I'm 11 taking it that it would be a fairly elite small 12 group of firms that are responsible for the 13 construction of large dams, would that be fair? 14 MR. MCCULLY: There is quite a small 15 number of firms that are involved in a big way in 16 the international a level. In terms of, for 17 example, equipment supply, there is actually a 18 shrinking number of firms, like in many other 19 sectors there has been a lot of consolidation in 20 the hydro power generation section. So there is 21 companies from Europe, Toshiba and Mitsubishi from 22 Japan, GE Hydro in Canada and the U.S. that are 23 the major suppliers. There is quite a small 24 number. In terms of civil works construction, 25 there is a small number of engineering firms that 2047 1 are involved at the international level, but there 2 are a lot of local contractors that are involved 3 in operating the bulldozers and piling up the 4 earth and so on. 5 MR. WILLIAMS: Now, somewhere during 6 your testimony today you mentioned a firm called 7 Acres International. Is that a Canadian firm? 8 MR. MCCULLY: Yes, based in Toronto -- 9 Ontario. 10 MR. WILLIAMS: And what kind of 11 functions are you aware that Acres performs in 12 terms of this industry? 13 MR. MCCULLY: It doesn't do just dam 14 building, although it is a major part of what they 15 do. They do a very broad range of functions. 16 They do feasibility studies, they do environmental 17 impact assessment, they work as the engineering 18 consultant during construction, they do sort of 19 the whole suite of I guess engineering feasibility 20 and environmental impact studies. They do options 21 assessment studies whereby they look at assessing 22 the viability of different Hydro power options on 23 a river and so on. 24 MR. WILLIAMS: Now, you referenced a 25 study that Acres did in regard to the 60-mile pond 2048 1 in the Macong Delta or river. Who was that study 2 performed for? 3 MR. MCCULLY: It was performed for an 4 United Nations body called the Macong River 5 Commission. It was done partly by -- Acres were 6 partners. It was done by Acres and a French firm. 7 MR. WILLIAMS: Now in your comments, I 8 was perhaps reading too much into that, but were 9 you suggesting that Acres in terms of its 10 recommendations in terms of that project was 11 acting almost as an advocate in terms of the 12 merits of that particular project? 13 MR. MCCULLY: I don't think that I 14 referred to that, but I certainly think that there 15 was a study which actually we did a critique of 16 and we found it to be highly flawed in numerous 17 respects. 18 MR. WILLIAMS: And this was a study 19 conducted by Acres? 20 MR. MCCULLY: Acres and Company. 21 MR. WILLIAMS: And can you just give 22 me some of the concerns that you had with the work 23 performed by Acres in regard to that particular 24 study? 25 MR. MCCULLY: I reviewed this about 2049 1 ten years ago, but from my memory, one of the 2 major problems was that the conclusions in the 3 executive summary, the short executive summary 4 which is what we all know people mainly read, they 5 don't go back and read the however many linear 6 feet of studies that go into it. But the 7 conclusions in the executive summary were much 8 more pro hydro development than the information in 9 the supporting documents. So, for example, on 10 fish impacts, now you have to realize that fish 11 are extremely important in the Macong basin in 12 terms of livelihood, fish is the main source of 13 protein for people in the Macong basin. 14 60 million people there. An extremely important 15 issue. The conclusion of the executive summary 16 was the impacts -- basically the impacts are not 17 severe, impacts on fisheries. When you read the 18 actual basic documents done on fisheries written 19 by a different consultant it said that we don't 20 have enough evidence to assess any of these 21 impacts to fisheries, they are extremely complex, 22 we know there will be impacts, we can't possibly 23 predict what they will be. So there was certainly 24 basically some creative writing on the 25 conclusions, given what was actually in the 2050 1 supporting documentation. 2 MR. WILLIAMS: Now have you had the 3 opportunity to review the work of Acres in terms 4 of the other projects that they have been involved 5 in? 6 MR. MCCULLY: Yes, several places. We 7 have been following Acres involvement in the Usutu 8 where they were convicted of corruption, and have 9 been fined I think $1.2 million U.S., I would have 10 to check that figure, certainly of that order. 11 Acres are currently appealing the case, but they 12 have been claiming their innocence all along, but 13 they were actually convicted last year, they were 14 convicted of bribing the chief executive on the 15 Usutu Highlands Water Project. 16 We have also followed their 17 involvement in Uganda, where they did an options 18 assessment, electricity generation options 19 assessment which was supposed to look at all 20 electricity options, but basically just looked at 21 a range of different hydro power sites and came 22 out saying that basically hydro power was the only 23 viable option for Uganda, and very controversially 24 said that a specific option was the cheapest and 25 best option. This main study that they have done 2051 1 has been kept secret by the World Bank, despite 2 our efforts with the World Bank's ombudsman who 3 has ruled on our side, World Bank's inspection 4 panel has ruled on our side, but we haven't been 5 able to get ahold of this study. 6 A Norwegian development magazine did 7 get ahold of this study and they are claiming that 8 this study deliberately, or very curiously 9 underplays the costs of another hydro power option 10 which local people, environmentalists have said is 11 less destructive. It seems they have underplayed 12 the costs by 200 million. And now we think the 13 World Bank has possibly been embarrassed into 14 relooking at those numbers. 15 MR. WILLIAMS: I guess the lesson one 16 might draw from your comments in terms of Acres, 17 is the opinions and views of these consultants in 18 this small industry, from time to time we may want 19 to view them with a grain of salt or two, would 20 that be fair? 21 MR. MCCULLY: I spent a lot of the 22 last 11 years of my life reviewing various types 23 of environmental and economic feasibility studies 24 written by these types of consultants, and on the 25 whole my experience of them is that they are 2052 1 extremely biased and extremely poor quality. They 2 do not -- the major problem that I have is they 3 don't rely on the latest scientific data. They 4 don't look at actual experiences, they make 5 predictions based on sort of wishful thinking 6 rather than any real evaluation of past projects 7 and how they performed. And there is this, it 8 happens in all industries with all consultants, 9 there is a bias to deliver what the client wants. 10 It is always there. If they know that the client 11 is a government or utility that wants to build 12 hydro power projects, the chances are that the 13 consultant is going to say these hydro power 14 projects are viable and make rosy predictions 15 about how the impacts can be mitigated and so on. 16 It happens across the board. I haven't reviewed 17 in detail any Canadian documentation, but my 18 experience from countries where I have looked at 19 documentation, that is how the industry works. 20 MR. WILLIAMS: Thank you for your 21 comments, sir. 22 THE CHAIRMAN: Ms. Whelan Enns. 23 MS. WHELAN ENNS: Mr. McCully, I think 24 I was probably not the only person in the room to 25 hear your reference to energy planning and 2053 1 democratizing energy planning. Would you give us 2 a hypothetical description of what an energy 3 planning might include. For instance, we are 4 sitting in Manitoba now, but I'm thinking about 5 North America, so it is comparable, in Manitoba or 6 in a state of the midwest in the U.S. that has 7 hydro power? 8 MR. MCCULLY: Well, energy planning is 9 a big and complex subject, and there is a large 10 gulf between what currently happens in the U.S. 11 and the way I would maybe like to see things done. 12 Certainly planning should be done on an integrated 13 resource planning basis, which means that you look 14 at all of the options. You assess demand side 15 options and energy, in other words, energy 16 efficiency, energy conservation, as seriously or 17 in fact more seriously than you look at the new 18 supply options. And when you look at supply 19 options you look across the whole broad range of 20 options that may be available. 21 Other things, when you talk about 22 stages of hydro power, one of the things that I 23 think is very important now with the threat of 24 climate change is diversification away from hydro 25 power for hydro power dependent grids. We felt 2054 1 that in the western United States over the last 15 2 years at different times the problems of drought 3 affecting energy production is one of reasons for 4 the supposed energy crisis in California. There 5 is a lot of different reasons, but one of them was 6 poor snow pack over the Cascade mountains which 7 meant poor stream flow in the dams in the Pacific 8 northwest so they weren't able to export their 9 hydro power down to California. We see around the 10 world actually where you have places that are very 11 hydro power dependent, you have major problems 12 with drought. I think that problem is growing and 13 going to get worse. I think diversification into 14 other power sources, I would hope into the new 15 renewable resources, is very important. 16 MS. WHELAN ENNS: Going to your 17 reference to democratize energy planning, would 18 energy planning then, again in our hypothetical 19 jurisdictions, include making available to 20 affected communities and, for instance, if there 21 is a public utility involved, you know, a clear 22 and accurate picture in terms of the impacts to 23 date, the whole system that is in place, and then 24 what the options are to increase energy resource? 25 MR. MCCULLY: Well, you know, the 2055 1 conclusions from the World Commission on Dams that 2 I emphasized some of them were the ones relating 3 to existing projects, and I think it is extremely 4 important that when you have a proposal for a new 5 project and a process like this where a lot of 6 information can be brought out into the open, that 7 you use this as a place to start discussing -- 8 hopefully, you would have started it earlier, but 9 if it hasn't started you can't do anything about 10 this, but use this as an opportunity to discuss 11 all of the impacts with the affected communities 12 and then discuss ways of lessening those impacts. 13 And that may include things like operating the 14 projects differently to generate less electricity 15 and then trying to deal with that bringing in more 16 energy efficiency elsewhere in the system. There 17 is a number of ways that could be dealt with. 18 But I think in terms of integrated 19 resource planning, especially when you look at the 20 World Commission on Dams recommendations that 21 looking at existing projects and doing proper 22 monitoring of existing projects and putting that 23 information out into the public domain is 24 extremely important. 25 MS. WHELAN ENNS: You have made a few 2056 1 references in your comments today and just now to 2 monitoring, both in terms of existing structure 3 and the whole of a hydro system. Should that 4 monitoring be independent of the utility? 5 MR. MCCULLY: It is essential that it 6 is. I mean, the utility may be involved in that 7 there can be joint monitoring between utility and 8 affected communities, but it cannot be under the 9 control of the utility for obvious reasons. 10 MS. WHELAN ENNS: I'm going to stop 11 for just a second and ask the chair, if I may, we 12 have a 2:30 call booked, and I'm asking someone to 13 watch the clock carefully. 14 THE CHAIRMAN: We are almost there. 15 MS. WHELAN ENNS: If I may, and again 16 I have not had the opportunity to read the World 17 Commission on Dams report, I read summaries, you 18 know, and other public information at the time, 19 and then bought a copy for our contractors and our 20 staff to have access to, and have spent some time 21 on the website. So my questions may clearly show 22 that I have not read the material. 23 Would you tell us whether the World 24 Commission on Dams conducted any exercise or 25 computation to put a value or cost on 2057 1 environmental impacts from dams worldwide or 2 regionally, and social impacts? 3 MR. MCCULLY: No, there was no attempt 4 to monetize what the overall impacts has been. 5 One of the background studies is on methods for 6 estimating monetary costs of environmental 7 impacts, but there was no attempt to actually 8 apply those methods, which would actually not be 9 really meaningful in a worldwide scale. It would 10 be too difficult. 11 MS. WHELAN ENNS: Thank you. In your 12 recently released report, 12 Reasons to Exclude 13 Large Hydro from Renewable Initiatives, I want to 14 ask a quick question about number 4. Your fourth 15 reason has to do with large hydro increasing 16 vulnerability to climate change. And we have 17 heard both in your first comments and your 18 presentation and also in questions, some comments 19 from you. I would like to know if you have any 20 recommendations or suggestions in terms of how we 21 might in Manitoba -- 22 THE CHAIRMAN: We would like to 23 interrupt. I believe you are asking a question 24 which is not related to what was presented. It is 25 not part of what was presented. 2058 1 MS. WHELAN ENNS: I would certainly 2 rephrase it so that it is specific to his 3 presentation. 4 THE CHAIRMAN: Okay. 5 MS. WHELAN ENNS: My apologies. There 6 were questions put to you in respect to climate 7 change and emissions and reservoirs in the boreal. 8 What steps would you recommend so that we know 9 more of what we need to know in this regard in 10 terms of lakes that are reservoirs in our hydro 11 system in Manitoba and then, for instance, how to 12 know what difference there might be from the 13 Wuskwatim projects? 14 MR. MCCULLY: The issue of how do you 15 allow for the impacts of climate changes on the 16 projects, it is very difficult to do that because 17 we can't know exactly what the impacts are going 18 to be. We can do modeling which will give us an 19 idea what the models say, it won't necessarily 20 tell us what exactly is going to happen. But what 21 climate change does is increase the hydrological 22 risks. It means that sensitivity analysis of what 23 the different ranges of likely power outputs are 24 going to be, and therefore ranges of economic 25 returns, need to reflect severe drought scenarios. 2059 1 And I have to say I was very surprised in reading 2 the testimonies from the presentations from 3 Manitoba Hydro on the first day that they said 4 that their worst case scenario of low flows came 5 from historic droughts. But the whole point about 6 climate change is that it is change, it is not 7 climate same old same old. It is new climate, it 8 is different. 9 So you can't say because we had, or 10 that the drought we are in now is the worst we are 11 ever going to get. We need to look at the risks 12 that we are going to have worse droughts and more 13 frequent droughts. We may have more floods, there 14 may be more rainfall, maybe suddenly things are 15 going to change, maybe it is going to get a lot 16 wetter in Manitoba. We don't know that. But I 17 think when hundreds of millions of dollars are 18 going to get invested in a project that it is 19 responsible for the promoters of the project to 20 have a sensitivity analysis and look at different 21 hydrological outcomes outside of the range of what 22 has currently happened. Because what has happened 23 in the last 50 or 100 years is not what is going 24 to happen in the next 50 or 100 years, and anyone 25 who thinks it is I think is really deluding 2060 1 themselves. It is very difficult to know what is 2 going to happen, but we need to look at a wider 3 range of scenarios than are currently being looked 4 at. 5 MS. WHELAN ENNS: Thank you. 6 THE CHAIRMAN: Thank you. 7 MS. WHELAN ENNS: I have a couple of 8 more questions, but I'm assuming it is time. I'm 9 just double checking. 10 THE CHAIRMAN: It is 2:30. 11 MR. GREWAR: Mr. Chairman, before I 12 place the call to the other two witnesses, Senator 13 Anderson and Senator Kubly, I wanted to enter 14 Mr. McCully's overhead slide presentation, Report 15 of the World Commission on Dams, remarks and its 16 relevance in the Manitoba context as exhibit 17 CNF-1003. 18 19 (EXHIBIT CNF-1003: OVERHEAD SLIDE 20 PRESENTATION, REPORT OF THE WORLD 21 COMMISSION ON DAMS, REMARKS AND ITS 22 RELEVANCE IN THE MANITOBA CONTEXT) 23 24 THE CHAIRMAN: Thank you Mr. McCully. 25 To those who are wondering what is going on, we 2061 1 are lost in the woods here. We are waiting for a 2 telephone connection. 3 MR. GREWAR: I wonder if I could ask 4 you each to state your name for the record, 5 please? 6 SENATOR ANDERSON: I am Ellen 7 Anderson. 8 SENATOR KUBLY: I am Gary Kubly. 9 MR. GREWAR: I just ask if you are 10 aware that it is offence in our Province, in 11 Manitoba, to knowingly mislead this Commission? 12 SENATOR ANDERSON: Thank you for 13 letting us know that. 14 SENATOR KUBLY: I wasn't aware of 15 that, but that is fine. I am not planning TO 16 mislead anyone. 17 MR. GREWAR: And you promise to tell 18 only the truth in proceedings before this 19 Commission then? 20 SENATOR ANDERSON: Yes. 21 SENATOR KUBLY: Yes. 22 SENATOR ANDERSON: SWORN 23 SENATOR KUBLY: SWORN 24 MR. GREWAR: Thank you very much. I 25 am now going to turn you over to our chairman, 2062 1 Mr. Gerard Lecuyer. 2 THE CHAIRMAN: Good afternoon, Madam 3 and sir. I don't know which one of you will begin 4 the process, but I will let you decide. So we are 5 ready, we are listening, go ahead. 6 SENATOR ANDERSON: Maybe I will start. 7 I am Senator Ellen Anderson from St. Paul. And I 8 guess, as I understand it, what we had been asked 9 to do is to talk about, under Minnesota laws and 10 policies, what types of programs we have in place 11 to support and promote renewable energy. And I 12 think that is where I will focus my comments very 13 briefly, and we would be happy to take questions 14 if you have them. I don't know that either one of 15 us have very long prepared comments. We do not. 16 So I just wanted to start by saying 17 that in the Minnesota Senate, I chair the 18 committee called Jobs Energy and Community 19 Development, which does encompass the energy 20 committee in the State Senate. 21 Under Minnesota law we have what is 22 called the renewable energy objective, which is 23 not quite a renewable energy standard or a 24 renewable portfolio standard. What it is, it is a 25 requirement that our utilities in Minnesota make a 2063 1 good faith effort by the year 2015 to have 2 10 percent of their portfolio be produced from 3 renewable energy. 4 As of last year's energy bill, we have 5 a stricter requirement for Excel Energy. So they 6 actually -- which is our largest utility, as I am 7 sure you are aware -- they actually have a 8 requirement to produce, or acquire 10 percent of 9 their electricity from renewable sources by the 10 year 2015. However, there are some caveats in 11 that law that allow them to opt out of that if it 12 is too expensive or compromises reliability. 13 Right now it depends on how you count 14 it, but most people say that we are around 15 2 percent wind in our production of electricity. 16 That is about 2 percent of it comes from wind 17 right now, and other renewables are a very small 18 percent, less than a percent beyond that, or close 19 to that. I don't have the exact number here with 20 me. 21 Under Minnesota law we only consider 22 smaller Hydro projects that are under 23 60 megawatts -- if I read correctly, that is not 24 right. I think it might be 60, but, anyway, small 25 hydro projects are considered renewable energy. 2064 1 As you can see, Senator Kubly and I 2 rushed out a committee hearing to be here, so, as 3 I said, we don't have the opportunity to have 4 prepared statements. 5 So we do know, it has been estimated 6 that in Minnesota we could meet somewhere between 7 7 to 10 times our electricity needs with renewable 8 energy, because we do have an enormous wind 9 resource that has barely begun to be tapped. We 10 also have great, as Manitoba does, we have great 11 agricultural resources, so we know that we can 12 produce electricity using agricultural byproducts 13 as well. 14 My committee has recently heard 15 testimony about what is happening in northern 16 Europe, and I am very interested in trying to more 17 aggressively follow their example, where the 18 countries of Denmark, and Germany, and the 19 Netherlands have adopted aggressive policies to 20 promote renewable energy and are incorporating 21 somewhere between 25 and 50 percent of their 22 electricity from primarily wind, but also biomass 23 energy. And that is certainly very, very 24 achievable in the State of Minnesota. 25 Again, my vision or my goal would be 2065 1 to move our State towards energy independence, and 2 I think that over the long term it is very 3 feasible for our State to achieve energy 4 independence. It would provide enormous benefits 5 for our rural economy in particular, where a lot 6 of these fuel sources would come from. Currently 7 we import billions of dollars worth of fossil 8 fuels. And if we could reverse that trade 9 imbalance for our State, that would be very 10 beneficial to keep those dollars here in our 11 State's economy, as well as having benefits for 12 our environment and our lakes and our air quality. 13 Having said all of those things, I 14 guess I wouldn't be honest if I didn't say that, 15 you know, the coal plants and the nuclear plants 16 which make up the vast majority of our electricity 17 production in this State are widely supported. 18 And the point of view that Senator Kubly and I 19 might support, which is to move towards more 20 renewable energy and more energy independence, is 21 not necessarily adopted or endorsed by everyone in 22 the Minnesota Legislature or our Governor. We are 23 hoping for movement in that direction, but it is a 24 very slow process and there is still a lot of 25 support for traditional fossil fuel base load 2066 1 kinds of plants. 2 So as we try to meet our energy needs 3 in the next few years, there will be kind of a 4 debate about which types of sources are the best. 5 We will certainly be pushing forward more 6 aggressive policies to promote renewable energy to 7 try to meet those needs. 8 SENATOR KUBLY: I have heard that 9 about 70 percent of our citizens here in Minnesota 10 do support the move toward more and more 11 renewable. And I think that Senator Anderson 12 mentioned 10 percent renewables by 2015. I guess 13 I would like to pursue a little more ambitious 14 goal than that, and look at 20 percent by 2020 or, 15 you know, even move that number up a little bit in 16 the years. So it does seem to me that those are 17 goals that are really quite realistic and things 18 that could be achieved. 19 Now, in the part of the State that I 20 serve, I serve an area out along the western edge 21 of Minnesota, but we have, you know, a geologic 22 formation out there called Buffalo Ridge that runs 23 quite some distance. It runs nearly through my 24 entire district along the western edge of the 25 State, but it is actually quite a bit longer than 2067 1 that. And if we work to develop the whole 2 corridor there along the Buffalo Ridge, and some 3 of the geologic formations that surround it, it 4 does seem to me that, as Senator Anderson 5 indicated, we could become a net exporter of 6 electricity just based on the wind energy alone 7 that could be developed along the western ridge. 8 From my perspective as a rural 9 legislator here in the State of Minnesota, that 10 would be huge in terms of its economic development 11 potential for the rural parts of the State. 12 And like you, I am sure, there in the 13 rural parts of Manitoba, you are quite interested 14 in doing economic development there. You know, we 15 feel it is in our own best interest to develop 16 this kind of energy production potential for the 17 citizens of Minnesota. You know, we would like to 18 keep some of those dollars within the State and 19 generate that capacity there. 20 Now, I know that some of the opponents 21 of wind energy say that wind energy is not 22 reliable. The State of Minnesota's commerce 23 department has actually done a study of our area 24 of the State and feels that there is opportunity 25 for peak wind energy development in our part of 2068 1 the State because of the amount of time the wind 2 blows out there. It blows a fairly substantial 3 period of time. 4 I know that some of the utilities, I 5 think they have a tendency to downplay how much 6 wind energy is dependable and what percentage of 7 the time. You hear a lot of variables there, and 8 a lot of quotes from different sources that really 9 are not in agreement as to how dependable wind 10 energy is. 11 From the perspective of those of us 12 who serve the western regions of the State, we 13 kind of feel that we would like to see some pilot 14 projects out there that would run for a couple of 15 years, that would look at the possibility of using 16 some other agricultural products -- primarily soy 17 oil is one of those that we are looking at right 18 now. There is a glut of soy oil in the United 19 States, all across the country, and we would like 20 to see some of that used in diesel engines to keep 21 the supply of energy from our wind turbines a 22 steady supply, and look at ways that we can make 23 wind energy a part of the base load, and not just 24 part of the intermittent production of energy that 25 we have here within the State of Minnesota. 2069 1 So, from my perspective, I guess as a 2 rural legislator, I look at it in terms of the 3 number of jobs that could be created in the rural 4 parts of this State, and the number of dollars 5 that would flow toward those rural parts of the 6 State because of that wind energy generation. 7 You know, we have a report here from 8 Indiana that talks about, you know, 1500 jobs 9 being created just on the basis of a small portion 10 of the electrical energy production that could be 11 supplied from that region of the State, and that 12 it would create an impact on Minnesota's economy 13 in the neighborhood of $1 billion. That is a 14 billion with a B. 15 So I think there is a lot there that 16 we need to look at in terms of economic 17 development. Certainly the environmental aspects 18 of it are another piece that we would like to look 19 at. But both in the production of wind energy, 20 which is about as environmentally clean as 21 anything that you can do, and really even in the 22 burning of soy oil you don't have the kinds of 23 hydrocarbons being released in the atmosphere that 24 you get from regular diesel fuel. So from that 25 perspective, I think that Minnesota is looking at 2070 1 using more soy product in their diesel fuel too. 2 And we have some legislation on the board that 3 will change the fuel standards in Minnesota a 4 little bit as we move forward. And I think, you 5 know, as we go forward into the out years that we 6 would look at increasing that capacity somewhat as 7 well. 8 I think those are just some of the 9 comments that I would like to make. And I guess 10 Senator Anderson has made some of hers. If there 11 are some questions that your committee would like 12 to entertain there, we would be willing to respond 13 to those, if we can, or if we don't have any 14 information, we will simply tell you that as well. 15 THE CHAIRMAN: Thank you, Senators 16 Anderson and Kubly. 17 So I will open the floor to questions, 18 and I know some are already indicating that they 19 wish to ask you questions. I will ask you one to 20 begin with. What is the total energy need of the 21 State of Minnesota? How much of that do you now 22 produce from your own sources of energy? 23 SENATOR KUBLY: My guess would be 24 somewhere between 93 and 95,000 kilowatts. We 25 produce, I would guess, 2 and a half percent from 2071 1 renewable sources. 2 SENATOR ANDERSON: Sorry, I don't have 3 any numbers at the top of my head. 4 SENATOR KUBLY: That is just a rough 5 guess. I just looked at, you know, if 6 75,000 kilowatts, you know, is eight times the 7 State's potential, we would be somewhere in the 8 neighborhood of 93 to 95,000 kilowatts as being 9 the demand. So, you know, I don't know if I can 10 give you anything more specific than that. 11 THE CHAIRMAN: Now, I appreciate that, 12 but that doesn't sound correct. I am sure it is 13 more than 95,000 kilowatts but -- 14 SENATOR ANDERSON: We could easily get 15 you that information. I know I have it in a file, 16 I just don't know that off the top of my head, the 17 number. We could easily get that to you. 18 THE CHAIRMAN: You have indicated that 19 you produce about 2 and a half percent of your own 20 renewable resources. The rest of your electricity 21 is produced from coal and nuclear energy, from 22 what I understood? 23 SENATOR ANDERSON: About 70 to 24 75 percent of the electricity comes from coal, 25 about roughly 20 percent or slightly under that is 2072 1 from nuclear. 2 THE CHAIRMAN: Okay. And are you 3 self-sufficient within your State or do you 4 import? 5 SENATOR ANDERSON: We import. We have 6 no natural coal sources or uranium deposits, so we 7 import all of that. 8 THE CHAIRMAN: Thank you. I will open 9 it to other members for questions -- Mr. Mayer, a 10 member of the panel. 11 MR. MAYER: Good afternoon. My 12 question is for Senator Anderson. You had 13 indicated that you have objectives for a minimum 14 amount of your power being produced by renewable 15 energy. And then you said, if I heard you 16 correctly, only small hydro is renewable energy. 17 Did you say that? 18 SENATOR ANDERSON: Yes, that's right. 19 I am going to grab the statute book to see if I 20 can give you the exact definition, but we do have 21 a statutory definition of what is considered 22 renewable to meet that objective. 23 You have to keep in mind that it is a 24 very political process to establish that 25 definition, and right now, after the energy bill 2073 1 last year, we include burning of municipal waste 2 to be considered renewable, and we narrowly 3 defeated an effort to define coal as renewable 4 energy. So, it is somewhat a political process to 5 make because those definitions are set by the 6 legislature, but for a number of years we have 7 had -- our definition of renewable does limit it 8 to small hydro projects. 9 MR. MAYER: Maybe my next question is 10 going to be really difficult to answer, because I 11 was going to ask you for the rationale as to why, 12 if hydro power is renewable, why it stops being 13 renewable when you produce more of it? 14 SENATOR ANDERSON: Well, I think that 15 is a good question, and I frankly don't know what 16 the legislative history of that definition is. So 17 I can't answer the question about what the 18 original reasoning was, but I guess my 19 understanding, my belief is that small hydro 20 projects are considered to have less of an 21 environmental impact on the surrounding landscape 22 and to the water, and so it is based on those that 23 have the less significant footprints. But I can't 24 give you more details than that about what -- why 25 that particular cut-off was arrived at. 2074 1 THE CHAIRMAN: Mr. Mayer. 2 MR. MAYER: I don't think there is 3 much sense in pursuing that much further. I was 4 going to wonder if the issue was efficiency. And 5 environmental damage, I would wonder why your 6 definition wouldn't include something like that, 7 as opposed to limiting it to the number of 8 megawatts that can be produced by any particular 9 hydroelectric facility. But I take it that that 10 too is probably part of the political balancing 11 that takes place in your legislatures? 12 SENATOR ANDERSON: I would say you are 13 right. I think asking for all of the statutes to 14 be completely consistent and rational is probably 15 expecting too much. 16 MR. MAYER: Thank you very much. I 17 have no further questions. 18 THE CHAIRMAN: We also understand 19 that. 20 SENATOR KUBLY: There is a new piece 21 in Minnesota statute -- well, fairly new -- it is 22 216C.051, subdivision 3 reads, 23 "To provide Minnesotans with adequate 24 electricity from in-State renewable 25 energy sources for the long term and 2075 1 export to adjacent States." 2 And then toward that end, 3 "The statute requires, among other 4 actions, an inventory of energy 5 resources used to generate all 6 electricity sold in Minnesota and an 7 analysis of the socio-economic and 8 environmental benefits and burdens 9 associated with each source." 10 THE CHAIRMAN: Thank you. I am 11 looking at my colleagues on the panel, or my 12 colleagues in the room here, and I see one coming 13 up to ask questions, and there may be some from 14 the proponents here as well. 15 THE CHAIRMAN: Mr. Byron Williams. 16 MR. WILLIAMS: Good afternoon, 17 Senators. My name is Byron Williams. I am an 18 attorney representing the Consumers Association of 19 Manitoba and the Manitoba Society of Seniors. 20 I just have a few questions relating 21 primarily to Excel Energy and the renewable energy 22 policy with regards to that. And my understanding 23 is that Excel is a private company, it is not 24 publicly owned; is that right? 25 SENATOR ANDERSON: It is an investor 2076 1 owned utility. 2 SENATOR KUBLY: It is an investor 3 owned utility, and our definitions may differ from 4 yours on what a public company is, you know, but 5 there is stock available for sale to the public. 6 SENATOR ANDERSON: But it is privately 7 owned. 8 MR. WILLIAMS: Thank you. You 9 answered the question better than I asked it and I 10 appreciate that. 11 You mentioned that Excel, unlike other 12 utilities in the State, has a 10 percent, I 13 underline the word "requirement" to produce 14 renewable energy. Is that right? 15 SENATOR ANDERSON: That's right. 16 MR. WILLIAMS: What were the two 17 limitations in terms of that requirement? You 18 mentioned two limitations. 19 SENATOR ANDERSON: Again, I apologize, 20 I don't have a copy of the language in front of me 21 of last year's energy bill. Roughly, I can 22 describe them as being a requirement, or an 23 exception to that would allow them to avoid that 24 requirement. I believe if they can't find a least 25 cost option that is renewable, or something to 2077 1 that effect, something that is based on cost -- 2 and another piece of it, the other exception is 3 that if it compromises the reliability of the 4 entire system to incorporate too much renewable 5 energy, then that gives them an out. 6 All of these kinds of definitions are 7 usually subject to great deal of interpretation 8 and discussion at the Public Utilities Commission 9 before they are put into effect. 10 MR. WILLIAMS: Now, Senators, I want 11 to do a rare thing from the perspective of someone 12 who advocates on behalf of consumers, and I want 13 to just start from the perspective of a -- from 14 the Excel Energy. And I am assuming that one of 15 the reasons that you have to require Excel Energy 16 to -- or to mandate a certain amount of renewable 17 energy is that, and speaking solely from its 18 perspective, renewable energies such as wind might 19 be less economic than its more traditional sources 20 of power. Would that be fair? 21 SENATOR KUBLY: I am sure that is the 22 way Excel would view it. 23 SENATOR ANDERSON: We know that some 24 of the new bids that Excel has let out for 25 renewable electricity have had wind generation 2078 1 projects come in at the lowest price. And so we 2 know that new wind projects are actually cost 3 competitive, but in general that is, you know, 4 that is Excel's position, that it is more 5 expensive than other forms of energy and that it 6 is not -- they also take the position that it is 7 not a substitute for base load energy. 8 MR. WILLIAMS: Just moving on if we 9 could from Excel's perspective, if we could, and 10 staying on their perspective, from Excel's 11 perspective, leaving aside issues of reliability, 12 from this perspective there is a cost to it in 13 terms of using wind as opposed to its more 14 traditional alternatives. Would that be fair? 15 SENATOR KUBLY: It is difficult to 16 speak for Excel Energy. Neither Senator Anderson 17 nor myself works for them, and I guess I can't 18 really tell you what their perspective is. Maybe 19 Senator Anderson has heard them make some comments 20 but I have not. 21 SENATOR ANDERSON: I was going to say 22 the same thing. I think it would be fair to 23 really ask a representative from Excel to answer 24 those questions. 25 MR. WILLIAMS: Let me put it this way; 2079 1 assuming there is a cost to Excel, or to other 2 utilities, who absorbs those costs? Is it your 3 expectation that will be the investors of that 4 corporation? 5 SENATOR KUBLY: I am sure that Excel 6 Energy, like any other company doing business 7 here, is going to recover any excess cost that 8 they have from their ratepayers. 9 SENATOR ANDERSON: Just to back up, in 10 1994, when we had our first extensive debate here 11 about nuclear waste storage in the States, the 12 first wind mandate was passed into law, and that 13 was a specific mandate for Excel Energy that 14 required that they acquire 825 megawatts of wind 15 and 125 megawatts of biomass power. And it was 16 clear under the law that they were able to pass on 17 the costs of that, as of any other of their 18 electricity purchases, on to ratepayers. 19 MR. WILLIAMS: Thank you very much for 20 those answers. I just have two final ones, one to 21 Senator Anderson first. You indicated that kind 22 of your objective is 15 percent renewable energy, 23 as currently defined, by 2015. And I guess my 24 question to you is, why 15 percent versus 25 20 percent, or 25, or 35 percent? In your view, 2080 1 what are the limitations in terms of renewable 2 energy from your State's perspective? 3 SENATOR ANDERSON: I guess one last 4 piece I needed to answer, and that is I don't 5 believe that Excel has shown any rate increases to 6 ratepayers due to that wind mandate in 1994 that 7 was passed. Just for the record, I would like to 8 make that clear. 9 In terms of the percentage of -- the 10 number that we should use to hang our hats on, the 11 law that we have in place, the renewable energy 12 objective and the requirement for Excel, 13 10 percent by the year 2015, that is essentially a 14 product of political compromise. We passed in the 15 Senate -- the year we originally passed renewable 16 energy objectives in 2001, the Senate actually 17 passed renewable requirement that started out as 18 20 percent by the year 2020. That was my bill. 19 And we compromised a number of times, and then 20 compromised with the House and arrived at that 21 final number. And it whittled itself down. I 22 don't know exactly what the magic number is. What 23 I know is that 2 percent is way too low, and that 24 is where we are at right now, and I think that the 25 10 percent by 2015, as Senator Kubly said, is not 2081 1 as aggressive as I think our wind regime or the 2 competition level of the pricing would support. I 3 think we could do something more aggressive than 4 that. 5 Again, I would look to the experience 6 in Europe to see -- they have developed their wind 7 industry in the space of a few years time. And 8 while it may have been more costly than would be 9 acceptable to us, we have had a lot longer time to 10 develop it, and we also have far more wind 11 resource available here than they do in northern 12 Europe. So I think that the technological limits 13 have not yet been reached of what percent of wind 14 can be incorporated into a reliable electric 15 system. But I don't think that you even begin to 16 have that concern until you are, you know, well 17 above the 20 percent level. 18 SENATOR KUBLY: From my perspective, I 19 think there is growing public support for the 20 renewable development within the State of 21 Minnesota. Even though I kind of hate to admit it 22 at times, I think the legislature tends to follow 23 public support rather than lead. I would rather 24 see them lead, but the reality is that they tend 25 to follow. But with that growing public support 2082 1 out there, in my opinion, it is just a matter of 2 time before we have the kind of support within the 3 legislature to move ahead to a much more 4 aggressive goal than 10 percent by 2015. 5 MR. WILLIAMS: Just so I understand, 6 in your view, is it only politics and political 7 compromise that prevents the renewable energy from 8 assuming a greater percentage, or are there other 9 limitations that you are aware of? 10 SENATOR KUBLY: I think it is 11 primarily the political piece. 12 SENATOR ANDERSON: I would agree with 13 that as well. I think ten years ago we were in a 14 different position, where wind was really in its 15 infancy in Minnesota. Now the technology has 16 reached a point where it is cost competitive. And 17 again, we have examples of where the technology 18 has been incorporated at far higher levels than we 19 have here. So I don't think it is technological 20 or cost barriers at this point. 21 MR. WILLIAMS: So if I were betting on 22 the wind industry in Minnesota, I would have to be 23 betting on the political industry in Minnesota as 24 well; is that correct? 25 SENATOR KUBLY: I guess, once again, I 2083 1 think -- I will say it again -- I think the public 2 support is there, I think the public support is 3 growing, and I think the political will, will 4 follow. 5 SENATOR ANDERSON: It is just a matter 6 of plan and how long it will take. I think we 7 have been told that, for example, if we were to 8 have an aggressive renewable energy mandate, which 9 doesn't have to be a lot stronger than what we 10 have now, but it would have to be a little bit 11 stronger than what we have now, and it would have 12 to be mandatory and not just a good faith 13 objective -- we have been told that manufacturers 14 of wind turbines in Denmark would look to opening 15 a plant here in the State of Minnesota. So we 16 know that there is synergy between the public 17 policy and the private development, so it will 18 have -- you know, once we move forwards more 19 aggressively with those policies, I think the 20 development will quickly follow. 21 SENATOR KUBLY: There were some 22 incentives in the Federal energy bill for 23 renewables as well. I know that in my district I 24 have a company that makes the towers for the wind 25 turbines, and they are saying that if that Federal 2084 1 energy bill had passed that they would have put on 2 another 220 jobs immediately. 3 MR. WILLIAMS: Thank you, Senators, on 4 behalf of my clients. I greatly appreciate the 5 time that you have spent with us this afternoon. 6 SENATOR KUBLY: Say hi to Minister 7 Sale for me. 8 SENATOR ANDERSON: Thank you so much 9 for asking us. 10 THE CHAIRMAN: I am just looking 11 around to see if there are further questions. 12 Ms. Matthew Lemieux will ask questions. 13 MS. MATTHEWS LEMIEUX: Good afternoon 14 Senators. My name is Valerie Matthew Lemieux, and 15 I am the lawyer for the Nisichawaysihk Cree 16 Nation. I just have a couple of questions for 17 you. 18 I just want to try and help everybody 19 in the room here so we can see if we can clarify 20 the definition of 60 megawatts as it pertains to 21 renewables. As I understand it, and correct me if 22 I am wrong, but that definition only relates to 23 the renewable energy portfolio objectives. Is 24 that correct? 25 SENATOR ANDERSON: That is primarily 2085 1 what it is for, the renewable energy objectives, 2 but I don't know, there may be some other 3 cross-references in the statute, I can't say. 4 SENATOR KUBLY: We are under some time 5 constraints here too. We were told that this 6 would take a maximum of 30 minutes. 7 MS. MATTHEWS LEMIEUX: Well, I wasn't 8 the person that set any of those rules, so all I 9 can do is try and go ahead with the rest of my 10 questions, and if the Commission wants to cut me 11 off, I guess they will. 12 SENATOR ANDERSON: If we can be brief, 13 I know I have another meeting that I am supposed 14 to be at. 15 MS. MATTHEWS LEMIEUX: Let's just go 16 to a couple of other questions. You mentioned the 17 Department of Commerce. As I understand it, and 18 again for people here in the hearing room, the 19 Department of Commerce in Minnesota reviews bids 20 and makes recommendations to the Public Utilities 21 Commission; is that correct? 22 SENATOR ANDERSON: I don't know what 23 role commerce has. 24 SENATOR KUBLY: I don't either. 25 MS. MATTHEWS LEMIEUX: Okay. You know 2086 1 that they do, though, review the various energy -- 2 energy resourcing that is required in Minnesota; 3 is that right? 4 SENATOR ANDERSON: I am sure they do. 5 I don't know what their legal involvement in the 6 process is. 7 MS. MATTHEWS LEMIEUX: Okay. 8 SENATOR KUBLY: It is vested in the 9 Public Utilities Commission. 10 MS. MATTHEWS LEMIEUX: You were, of 11 course, chairing a committee meeting last Friday 12 where members of the Department of Commerce 13 attended that committee meeting and indicated very 14 clearly that hydro imports from Manitoba are not 15 in competition with wind. Is that correct? 16 SENATOR ANDERSON: That was his 17 opinion, but we don't agree with that. 18 MS. MATTHEWS LEMIEUX: You may not 19 agree, but that was the Department of Commerce's 20 opinion; correct? 21 SENATOR ANDERSON: Edward Garvey, he 22 said something to that effect, I don't remember 23 his exact words to that effect, but, yes, he 24 indicated that he didn't believe they would 25 jeopardize our development of renewable energy. 2087 1 He also indicated that his view of what would be 2 considered progress in developing renewable energy 3 was not something that I would consider progress. 4 MS. MATTHEWS LEMIEUX: He also 5 indicated at that same meeting last week that 6 Minnesota needs hydro power from Manitoba and will 7 continue to need hydro power from Manitoba to meet 8 Minnesota's energy needs; correct? 9 SENATOR KUBLY: I believe he did. 10 MS. MATTHEWS LEMIEUX: Thank you. I 11 have no other questions. 12 SENATOR ANDERSON: Let me just add to 13 that, I think he was talking about future energy 14 needs. He may have said that, yes, I don't know 15 exactly. But, again, I would have a difference of 16 opinion about whether that is definite or not, it 17 is a matter of opinion. 18 SENATOR KUBLY: That is his opinion 19 and ours is different. 20 MS. MATTHEWS LEMIEUX: Just to clarify 21 also that, again, in terms of your purpose in 22 agreeing to participate in our proceedings here, 23 was to be able to describe your views about 24 renewable energy and your purpose is not to speak 25 for or against the project that is under 2088 1 consideration by the Commission; right? 2 SENATOR KUBLY: My purpose in agreeing 3 to visit with you was to simply talk about the 4 economic impacts that I think the development of 5 renewable energy within Minnesota would have on 6 Minnesota's own economy. And I think there is 7 significant impact that could be developed in that 8 area. 9 SENATOR ANDERSON: I would agree with 10 Senator Kubly, that is my purpose as well. 11 MS. MATTHEWS LEMIEUX: And Senator 12 Anderson, you did state on the record last Friday, 13 though, that your purpose was not to speak out 14 against the Wuskwatim project; right? 15 SENATOR ANDERSON: Yes, I said I was 16 not asked to do that in this telephone call and I 17 am not intending to do so. At the same time, when 18 I answered your question, I want to be clear that 19 I don't necessarily agree that we have to, that we 20 are reliant on imports from Manitoba Hydro for our 21 future, to meet our future energy needs, but I am 22 not speaking in particular to this project. That 23 is not my intention. 24 THE CHAIRMAN: Thank you. Mr. Bedford 25 will ask you questions. 2089 1 MR. BEDFORD: Good afternoon, 2 Senators, my name is Doug Bedford. 3 SENATOR KUBLY: We have to get on our 4 other appointments. We appreciate the fact 5 that -- we would be more than willing to visit 6 with you again, but we both have time constraints 7 here and our next appointments are awaiting. 8 SENATOR ANDERSON: Thank you so much 9 for the opportunity. 10 THE CHAIRMAN: Thank you. 11 SENATOR KUBLY: Goodbye for now. 12 MR. GREWAR: Mr. Chairman, I have been 13 advised by Ms. Whelan Enns that it would probably 14 not be difficult to reconnect with the two 15 Senators at a later time. It is just that there 16 was a limited time today. So I am just offering 17 that as a comment from Canadian Nature Federation 18 to facilitate further questioning by Manitoba 19 Hydro. 20 THE CHAIRMAN: Thank you, Mr. Grewar. 21 The panel will take that into consideration. We 22 will let you know. 23 I think that we have reached a time 24 where we can take a small break. 25 2090 1 (PROCEEDINGS RECESSED AT 3:10 P.M. AND 2 RECONVENED AT 3:20 P.M.) 3 4 THE CHAIRMAN: All right, Mrs. Whelan, 5 you have the opportunity to continue the redirect 6 with Mr. McCully. 7 MS. WHELAN ENNS: Thank you to the 8 Chair. 9 Mr. McCully, did the World Commission 10 on dams review or assess the impacts or 11 transmission systems? 12 MR. McCULLY: In the supporting 13 thematic review on environmental impacts, there 14 was some discussion on transmission systems. 15 There are also maybe -- there is another thermatic 16 review on environmental impact assessments. I 17 would imagine that they discuss it there, but I 18 don't remember. 19 In terms of what they say in the 20 actual report on environmental assessment, they 21 said there should be an assessment of all 22 associated infrastructures, so clearly that 23 includes the transmission lines. 24 MS. WHELAN ENNS: In the earlier 25 questions from -- and I am not sure whether it was 2091 1 Manitoba Hydro or NCN, you were asked questions in 2 respect to communities impacted, benefiting from 3 the development. 4 Does that also apply then to 5 communities impacted from transmission lines, 6 benefiting from the development? 7 MR. McCULLY: Yes, it shouldn't -- 8 this has been a major problem with dam projects, 9 in the past and currently, that people affected by 10 ancillary infrastructure often are treated 11 differently than those, say, displaced by the 12 reservoir. 13 So, the commission recommends that 14 people -- but they talk about the rights and risks 15 approach. Basically, everybody's rights who are 16 at risk with the project should be dealt with as 17 affected stakeholders and should be among those to 18 benefit from it. 19 MS. WHELAN ENNS: Thank you. There 20 was also a question again, which I don't think I 21 can fully paraphrase not being a lawyer. But, 22 there were questions to you in respect to 23 consultations. Again, consultations with affected 24 communities. 25 Are you an expert on the requirements 2092 1 in Canada for consultations with Aboriginal 2 people? 3 MR. McCULLY: No. 4 MS. WHELAN ENNS: Are you 5 knowledgeable about the details that the 6 proponents -- the details of the proponents' 7 consultations, specifically with the people of 8 Nelson House First Nation? 9 MR. McCULLY: No. 10 MS. WHELAN ENNS: Have you at any time 11 been prepared for questions in respect to what I 12 refer to as section 35, consultations with 13 Aboriginal people? This is a reference to our 14 constitution in Canada. 15 MR. McCULLY: No. 16 MS. WHELAN ENNS: And have you had any 17 reason in the past to be expected to know about 18 section 9a consultations? This is a reference to 19 the Northern Flood Agreement in Manitoba and the 20 nations affected by flooding. 21 MR. McCULLY: No. 22 MS. WHELAN ENNS: Thank you. 23 THE CHAIRMAN: No further questions? 24 MS. WHELAN ENNS: Thank you very much. 25 THE CHAIRMAN: Thank you. 2093 1 I now call upon Mr. Rudnicki. 2 MR. GREWAR: Mr. Rudnicki -- 3 THE CHAIRMAN: Mr. Rudnicki, would you 4 introduce yourself and Mr. Grewar will proceed to 5 swear you in. 6 MR. RUDNICKI: Mr. Chair, and members 7 of the Clean Environment Commission, my name is 8 Timothy Rudnicki. I am an attorney and Government 9 Affairs advocate that works on energy, 10 environmental issues and natural resource issues. 11 12 (TIMOTHY J. RUDNICKI: SWORN) 13 14 MR. RUDNICKI: Thank you for allowing 15 me to appear before this commission. I understand 16 you still do still have a full schedule and many 17 more presenters, so I will keep my remarks brief 18 and limit them to three points. 19 The feasibility linchpin, as I will 20 call it, for the proposed Wuskwatim generation 21 project is, as I understand it here, is ultimately 22 the U.S. export market. In some measure then the 23 commission's challenge may include the need to 24 build a bridge -- a cross-border bridge to fill 25 information gaps. I think we may have heard some 2094 1 of them outlined just a few moments ago from 2 Senators Kubly and Anderson. Given what is at 3 stake on both sides of border, I will do my best 4 to help fill some of those gaps. 5 Depending on which U.S. electricity 6 market scenario you work with, you get a different 7 picture of the role local renewable energy sources 8 can play and do play in the Midwest energy future. 9 One scenario is based on business as usual. The 10 other is a current plan. It is an evolving plan 11 for the U.S. Heartland and it includes Minnesota. 12 Based on my review of the 13 justification need for an alternative to the 14 Wuskwatim project documentation, it seems the 15 project proponents rely upon what I would call 16 again as a business as usual scenario. 17 Under that scenario, they conclude 18 that the Wuskwatim project will displace fossil 19 fuel energy sources in the export market. The 20 business as usual for Manitoba Hydro reflects some 21 U.S. energy and environmental policies. It also 22 acknowledges some changes taking place in the U.S. 23 Heartland and it also acknowledges some renewable 24 energy sources that are part of the mix, but it 25 fails to give the complete picture. 2095 1 The analysis must go a step further 2 because the business as usual scenario glosses 3 over the significant role individual states can 4 play and are playing in efforts to further 5 increase the use of local homegrown renewables to 6 generate electricity and decrease carbon dioxide 7 emissions. This alternative energy scenario is at 8 work and it must be acknowledged and it takes us 9 along a path line with more local, renewable 10 energy resources. 11 So, at this point, to help quickly 12 fill some of those information gaps, what I would 13 like to do is review some of the elements that are 14 in a business as usual scenario and then we can 15 talk about some of the alternative energy plans 16 and the role wind energy is playing in Minnesota. 17 I will build upon some of the points Senator Kubly 18 and Senator Anderson made. 19 My focus is on Minnesota rather than 20 other U.S. markets for a couple of reasons. The 21 project proponents' response to interrogatories 22 provide little or no new information about export; 23 market customers, new markets or whether any new 24 power purchase agreements are being negotiated in 25 anticipation of Wuskwatim project. But, one of 2096 1 Manitoba Hydro's largest customers is Excel Energy 2 and Excel Energy serves the Minnesota market. 3 Another reason that I am going to 4 focus on the Minnesota picture is that Minnesota 5 has an abundant supply, if you want to think it 6 that way, of a environmentally benign energy 7 source and that is wind. It appears Minnesota 8 could even become the electricity exporter at some 9 future time. 10 The traditional business as usual 11 electricity scenario is based on a portfolio of 12 standard electricity generating sources. They 13 include coal, nuclear, gas and oil, hydro and some 14 existing renewables. 15 According to "Repowering the Midwest", 16 a report by the Environmental Law & Policy Center 17 in Chicago, the business as usual scenario 18 includes a slight increase in the electricity from 19 Hydro beyond 2010, with a gradual decline some 20 time before 2020. The report doesn't distinguish 21 domestic hydro from imported hydro, but the rise 22 and drop for hydro over a 20-year time line is 23 consistent with the Wuskwatim project proponents' 24 export plan. 25 Under the business as usual scenario, 2097 1 industry forecast -- and I think I got myself 2 ahead of the slide here. I want to share with you 3 the relationship between carbon dioxide emissions 4 and the role of various factors in the equation, 5 such as nuclear power plants and coal plants play. 6 So, using the industry forecasts, the 7 assumption is that natural gas will play a greater 8 role than power plants. It is going to be the 9 primary source of new generation and natural gas 10 plants for meeting future load growth. 11 The existing power plants or the 12 existing coal plants capacity factor based on this 13 business as usual scenario is expected to increase 14 and it is expected to increase as much as 71 15 percent because the existing plants that have not 16 been retired will operate and there will be more 17 new load growth. 18 So, while these older coal plants may 19 be retired, the net impact could be an increase in 20 coal generation over the next 20 years. Thus, 21 under that scenario, the business as usual 22 scenario, where fossil fuels dominate the 23 electricity generation, the Wuskwatim project 24 proponents could reasonably conclude hydro would 25 compete in the market with and potentially 2098 1 displace the use of some fossil fuels, like gas or 2 coal. But, what happens in times of drought? 3 Could Manitoba Hydro be forced to buy electricity 4 from coal fired power plants? 5 I think one other point that I should 6 make clear at this stage is that I am basing a lot 7 of my factual background information that involves 8 a lot of research on the report "Repowering the 9 Midwest" from the Environmental Law & Policy 10 Center in Chicago. 11 Quite frankly, the resources provided 12 to me to investigate this would not have allowed 13 new studies or any type of additional research, 14 but there had been and there are now, many reports 15 like "Repowering the Midwest" already on the 16 shelf. They answer many questions looking 10, 15 17 and 20 years into the future. If you reference -- 18 the website is up on the screen. 19 I think what else is significant, 20 while this may not be a ten-foot long document, 21 there are at least 100 references and they 22 literally do go from A to almost Z. 23 The combustion of the fossil fuels, 24 including the release of more carbon dioxide, with 25 a combination of new low growth in the Midwest, 2099 1 nuclear units being retired and more natural gas 2 generation coming on-line, carbon dioxide 3 emissions are expected to climb. In fact, 4 according to, once again, the ELPC report, the 5 Midwest carbon dioxide emissions under the 6 business as usual scenario could likely rise from 7 about 557 million tons in 2000 to about 726 8 million by 2020. 9 Whether the Wuskwatim generation 10 project and the electricity imports from it could 11 be a solution to the looming carbon dioxide 12 problem in Minnesota and the Midwest is still an 13 open question. That is especially the case, given 14 the availability of abundant wind energy resources 15 in the Midwest and in Minnesota. 16 Now, interestingly, the Environmental 17 Law & Policy Center takes the position that even 18 with this increase in carbon dioxide, domestic 19 Hydro, at least, is not considered part of the 20 mix. They don't consider that a solution to the 21 problem. They don't consider that as a renewable 22 energy resource for a couple of reasons. 23 At least within the states, problems 24 with certain size hydro operations are well-known 25 and Patrick McCully outlined lots of issues about 2100 1 dams and hydro operations generally. 2 Hydro was ruled out as a new source of 3 domestic energy due to limits on its developmental 4 potential in the states and because there are a 5 number of regulations that protect rivers. 6 Further, it is understood and it is 7 viewed that hydro power does impose environmental 8 and other costs on society. The ELPC takes the 9 position that hydro power should also be excluded 10 from emission allowances and carbon dioxide caps 11 and trades policies. 12 It appears the project proponents 13 overlooked another possibility under the business 14 as usual scenario and that is, if the electricity 15 demand levels off due to demand-side management, 16 greater efficiency and operation of coal plants 17 can actually be ramped down. In that case, wind 18 energy can even supply the intermediate needs for 19 electricity generation. 20 So, just a recap on the screen, 21 business as usual. 22 I think another important point to 23 share with you is that there is concern about 24 giving undue emphasis to Hydro and providing it 25 with certain incentives because it is viewed as a 2101 1 mature industry and that is contrasted with local 2 renewables that are in some cases in the 3 developmental stage and in other cases are ramping 4 up. 5 I am going to just leave a little 6 factoid here. If more efficient use of 7 electricity were to take place in, let's say, the 8 Midwest, once again the Environmental Law & Policy 9 Center did some calculations. They found out that 10 we are sitting on a potential 291 billion kilowatt 11 hours. As I understand it, that breaks down into 12 the equivalent of about 100 coal plants, each at 13 about 500 megawatts. So, there is incredible 14 potential for energy savings in the Midwest. 15 With respect to Minnesota, the 16 Department of Commerce has done a number of energy 17 analyses and studies. Their conclusion was there 18 is nearly 1100 megawatts in energy efficiency 19 capability alone within Minnesota. 20 Wind, again, viewed as an option as 21 opposed to fossil fuel. I guess that takes us to 22 our alternative. 23 We have been talking about business as 24 usual. In stark contrast to business as usual 25 electricity scenario, which includes existing 2102 1 imports of hydroelectricity from Manitoba, is this 2 alternative scenario and is aimed at literally 3 repowering Minnesota and the Midwest. The focus 4 under this scenario is to use even more efficiency 5 and local homegrown renewables as energy sources 6 to generate electricity. 7 Now, I will go up to another site and 8 that is from the Regional Economics Applications 9 Laboratory. This is out of the University of 10 Illinois. What they have done is a study, an 11 examination of ten different states and asked 12 questions about -- under various scenarios, what 13 type of annual, economic output increase can be 14 experienced under increased energy efficiency and 15 what type of job growth can take place? 16 As you can see, the numbers are rather 17 staggering. At 2010, it is expected to be an $11 18 billion boost and by 2020, $19.4 billion. That's 19 an increase in annual economic output. 20 The job growth, again is rather 21 staggering. From 120,000 to 209,000, going from 22 2010 to 2020. 23 So, this actually underscores some of 24 the points that Senator Kubly made about job 25 growth and economic potential associated with 2103 1 using local homegrown renewables. 2 I am going to quickly run through five 3 elements of an alternative energy scenario. 4 Again, I am borrowing from the Environmental Law & 5 Policy Center. The elements include aggressive 6 implementation of modern cost-effective energy, 7 efficiency technologies, including the newest as 8 well as the tried and true approaches. 9 The development of an implementation 10 of new, clean, renewable energy technologies, 11 including wind, biomass and solar photovoltaics. 12 The development and implementation of 13 the use of efficient natural gas systems, 14 particularly with respect to combined heat and 15 power, district energy systems and possibly fuel 16 cells. 17 The retiring of older, less efficient 18 coal plants and especially those that are high 19 polluters. And applying sustainable development 20 strategies to aggressively link the environmental 21 components with the policy components and the 22 practical implications for jobs and local and 23 regional economic development. 24 A few of these elements are already in 25 Minnesota law as Senator Anderson pointed out 2104 1 earlier. 2 With respect to the clean renewable 3 energy element taken from this aggressive 4 strategy, Minnesota certainly does have vast 5 renewable energy sources that does include wind. 6 Another important point is that a lot 7 of this information is contained in the Minnesota 8 Energy Planning Report 2001. In that report from 9 the Department of Commerce, it was found through 10 many years of doing anemometer readings and 11 compiling data from a variety of wind researchers, 12 that there are hundreds of thousands of megawatts 13 of wind power in Minnesota. If you look at 14 Minnesota and Iowa, there is about 500,000 15 megawatts. But, the American Wind Energy 16 Association takes a conservative approach and, in 17 fact, for Minnesota, in particular, their numbers 18 show 75,000 megawatts of realizable wind power. 19 Now, what does that mean in terms of 20 Minnesota's demand versus use? I think one of the 21 commissioner's asked that question earlier. 22 It is my understanding, based on the 23 Department of Commerce report, that Minnesota has 24 a demand of roughly ten to 11,000 megawatts. So, 25 as you can see with some quick math here, the wind 2105 1 potential is nearly eight times what Minnesota's 2 electricity demand is to power homes and offices 3 and farms and businesses. 4 The ELPC describes the significant 5 potential just south of the border like this: 6 "However it is measured, the wind 7 energy potential in the Midwestern 8 States is enormous. Even after 9 excluding environmentally sensitive 10 areas and considering only class 3 and 11 better resource areas, several states 12 could theoretically supply all of 13 their electricity demand with 14 indigenous wind resources and still 15 have plenty for export. In addition, 16 many wind areas are quite close to 17 existing transmission lines, making it 18 relatively inexpensive to connect them 19 to the grid." 20 So, what is the point in sharing all 21 of this information with you? Well, there are two 22 things. The proponents have argued electricity 23 from the proposed Wuskwatim project could displace 24 the use of fossil fuel to generate electricity and 25 they have argued that renewable energy sources are 2106 1 out at the margins of being able to meet 2 electricity needs in export markets. 3 I submit to you based on reports and 4 studies that are already on the shelf and have 5 been for a number of years, without doing any 6 further additional in-depth research, that one, 7 subsidized hydroelectricity may be displacing 8 local renewable energy sources; and two, local 9 wind resources -- at least in the Minnesota 10 market -- far exceed the potential generating 11 capacity, assuming adequate water flow for the 12 proposed Wuskwatim project. 13 Furthermore, any economic advantage, 14 that is either direct or indirectly given to 15 mature hydro, actually gives hydro a greater 16 advantage, not over fossil fuels under the 17 business as usual energy scenario, but over new 18 and emerging local renewable energy sources. 19 Perhaps to more fully realize the full 20 advantage of the economic and environmental 21 benefits from -- I will just single out wind 22 energy in the local markets -- we should figure 23 out how to address hidden subsidies for energy 24 sources under the business as usual energy 25 scenario. A wide range of energy sources, 2107 1 including hydro, impose costs on the environment 2 and human health. 3 Other forms of direct and indirect 4 subsidies for traditional energy sources include 5 tax breaks, research and development and 6 protection from accident liability. 7 It is only recently that new renewable 8 energy sources have begun to receive very modest 9 support for research and development and 10 production tax credits. 11 To give you a little better 12 perspective on that, I will give a little context 13 from U.S. government subsidies and for traditional 14 business as usual energy sources. If we look at a 15 continuum from 1943 to 1999, nearly $145 billion 16 has been dedicated as subsidies and of that $5 17 billion essentially is set aside for renewable 18 technologies. Pretty lopsided set of subsidies. 19 A more recent look at fiscal '96, 20 shows $1300 million for traditional energy sources 21 compared with 270 million for all renewable energy 22 technologies. 23 Clearly this commission and the 24 government it reports to needs independent 25 information regarding the Midwest, U.S. energy 2108 1 market, energy sources in the future of new local 2 renewable energy sources and the role those energy 3 sources can play in meeting the need for 4 electricity while lowering carbon dioxide 5 emissions. 6 What I would like to do is briefly 7 give a little bit of statutory framework. I am 8 not going to go through subsections of subsections 9 of statutes, but I would like to share with you 10 the perspective on how Minnesota is moving about, 11 its role as being a leader in terms of energy 12 efficiency and use of local renewables and how 13 that translates into the regulatory process and 14 decisions about what energy sources are viewed in 15 power purchase agreements. 16 There is significant legislation in 17 place to move Minnesota down the path of using 18 even more homegrown local renewables. I think 19 Senator Kubly cited this. It is a Minnesota 20 statute, 216C.051 Subdivision 3. I translate that 21 into paving the way into more renewables because 22 it reads like this: 23 "'To provide Minnesotans with adequate 24 electricity from in-state renewable 25 energy sources for the long term and 2109 1 export to adjacent states.' 2 Toward that end, Minnesota Statute 3 requires among other actions, 'an 4 inventory of energy resources used to 5 generate all electricity sold in 6 Minnesota and an analysis of the 7 social, economic, and environmental 8 benefits and burdens associated with 9 each energy resource.'" 10 Now, one issue that may be relevant 11 here is whether hydro is considered a renewable 12 energy source, at least in the Minnesota market. 13 We heard some comments about that from witnesses 14 earlier. Project proponents indicate that they 15 are favourable tariffs and access to certain 16 markets, either based on precedent in that market, 17 such as Manitoba Hydro's dealings with Excel 18 Energy, or some other recent changes in the law, 19 which I, again, believe Senator Anderson started 20 to reference. 21 To clarify how all of this procedural 22 machination works for looking at energy sources, I 23 think we have to read a couple of statutes side by 24 side. 25 While large centralized energy 2110 1 facilities dominate the businesses as usual 2 electricity scenario, Minnesota continues to move 3 down the local renewable path. Toward this end, 4 if and when the need should arise to refurbish or 5 build more generating capacity in the state, the 6 agency responsible for the governing regulatory 7 process must ensure many factors have been 8 considered before approving what is called a 9 "certificate of need" in Minnesota. 10 Again, there is another statutory 11 reference: 216B.243. It requires specifically an 12 assessment of need and includes an evaluation of 13 accuracy of demand forecasts, relationship to the 14 state energy policy report, increased efficiency, 15 and a combination of energy conservation 16 improvement. So, there is a wholistic look at 17 Minnesota's energy picture before an approval is 18 given to any of these certificates. 19 The governing regulatory body is 20 charged also with ensuring the applicant desiring 21 to refurbish or build a new generating plant has 22 explored the possibility of generating power by 23 means of renewable energy. 24 If we turn to statute 216B.243 25 subdivision 3a -- and I won't go any further than 2111 1 that, hydro is considered renewable, along with 2 wind, solar, geothermal and the use of trees and 3 vegetation. 4 But, what is important to know about 5 this particular statute is that another 6 subdivision makes clear the issues relate to 7 certificates of need for and with respect to 8 citing and constructing large power plants in 9 Minnesota. It is not about construction elsewhere 10 and it is not about imports of hydroelectricity 11 into the Minnesota market. 12 One other important reference for you 13 here is 216B.2422. That statute underscores the 14 point about renewable energy facilities in 15 Minnesota. It is not just about where the 16 electrons are generated. 17 "The commission shall not approve a 18 new or refurbished non-renewable 19 resource facility in an integrated 20 resource plan or a certificate of 21 need, nor shall the commission allow 22 rate recovery for such a non-renewable 23 energy facility, unless the utility 24 has demonstrated that a renewable 25 energy facility is not in the public 2112 1 interest." 2 Some more guidance to the regulatory 3 body, but the statute is again is very clear. It 4 is about an energy facility. It is about the 5 jurisdiction or oversight of the Manitoba Public 6 Utilities commission and it is about renewable 7 energy in Minnesota. 8 Let's assume that hydro would clear a 9 number of regulatory thresholds, renewable -- 10 Minnesota's renewable energy objectives provide 11 additional guidance as what is considered 12 renewable hydro. If we go to statute 216B.1691, 13 there is a subdivision there that defines energy 14 technologies, including hydro and the language 15 specifically states: 16 "Hydroelectric with a capacity less 17 than 60 megawatts." 18 Well, if hydro could pass the 19 renewable definition threshold under the 20 certificate of need process, which specifically 21 goes to Minnesota energy facilities, it still must 22 pass muster under Minnesota statute 216B.2422, and 23 that statute explicitly requires the examination 24 of the social and environmental cost associated 25 with energy resources even beyond the Minnesota 2113 1 border. 2 Now, if Hydro power could enjoy the 3 benefits under the Minnesota renewable energy 4 definition, Hydro power should expect to be 5 scrutinized under all other corresponding 6 environmental statutes and regulations, including 7 the assessment of all externalized social and 8 environmental costs associated with the energy 9 source. 10 On a related matter, I want to share 11 with you, at least as of Friday afternoon, the one 12 billion dollar U.S. power purchase agreement 13 between Manitoba Hydro, that was supposedly 14 concluded in August 2002, is under review by an 15 intermediate court, the Minnesota Court of 16 Appeals. A number of regulatory issues 17 surrounding the energy resource selection and the 18 approval process are still under review by that 19 court. I should give you a little more slide 20 here. 21 While the Wuskwatim project proponents could try 22 to shoehorn generation from the proposed project 23 and supporting hydro system into the Minnesota 24 market, or otherwise rely on business as usual 25 based on formal dealings with Northern States 2114 1 Power Company, now Excel Energy, there is a new 2 reality in Minnesota. In Minnesota there is a 3 commitment to pursing a new path, a new energy 4 path, and that new energy path once again includes 5 using local renewable energy resources. There is 6 a new and keener awareness about energy resources 7 and their impact on ecosystems and human health. 8 The Minnesota externalities law that I 9 referenced moments ago is just one example as it 10 requires the application of social and 11 environmental costs to energy and resource 12 selection decisions. 13 One need only turn to the Minnesota 14 Energy Planning Report 2001 to get a sense for the 15 evolving electricity market in Minnesota, as well 16 as interrelationships with economic and 17 environmental factors. That report from the 18 Minnesota Department of Commerce tackles some 19 difficult issues involving Manitoba Hydro. For 20 instance, the report states: 21 "Many issues have been raised as to 22 environmental and socioeconomic issues 23 stemming from Manitoba Hydro's 24 development of its hydro power 25 resources." 2115 1 The report then goes on to discuss 2 effects from Hydro operations. 3 "While hydroelectric stations have few 4 air emissions..." 5 and that is referring to the criteria pollutants 6 such as sulfur dioxide, 7 "... they can have significant 8 environmental effects related to the 9 altered flow of bodies of water, water 10 quality degradation, effects on fish 11 and aquatic population, blockage of 12 upstream fish migration and flooding 13 of land. In addition, the decay of 14 organic matter in the shallow lakes 15 created as a result of hydroelectric 16 projects results in the production of 17 small amounts of greenhouse gases." 18 The alternative to the business as 19 usual energy path uses even more local renewable 20 energy sources. Now, this may sound idealistic, 21 but the economic and environmental benefits are 22 very real, and you have heard from Senator 23 Anderson and Senator Kubly on that point. 24 Hopefully, you will be able to hear from 25 Commissioner Jim Nichols who can tell you about 2116 1 the tangible benefits in their jurisdiction. But 2 equally important, through the National Wind 3 Energy Coordinating Committee, there have been and 4 there will continue to be significant efforts to 5 work on ensuring that electricity generated from 6 renewable energy sources such as wind will be able 7 to be transmitted to the end users. 8 In closing, it seems what is at stake 9 here involves more than an economic factor for the 10 Province of Manitoba, and it involves more than 11 the Province fulfilling all of its obligations to 12 indigenous peoples. It is about Manitoba's true 13 leadership role with respect to the essence of the 14 Kyoto Protocol. It is about Manitoba's efforts to 15 curb harmful greenhouse gas emissions in ways that 16 can be most effective in the Province and in other 17 markets. Benefits from these efforts, and risks 18 from business as usual, can touch Manitobans and 19 extend well beyond the geopolitical boundaries of 20 the Province. 21 From my vantage point, it appears this 22 Commission has an incredible challenge before it. 23 You have lots of information to synthesize and 24 information on which to make a fully-informed 25 decision about the proposed Wuskwatim Generation 2117 1 Project. Your recommendations will set a 2 precedent for future reviews of Manitoba Hydro 3 development intentions as discussed in their 4 filings in these hearings. In the final analysis, 5 the decision of the Manitoba Clean Environment 6 Commission will have profound effects on North 7 America's environmental and energy future, as well 8 as on the lives of many generations to come. 9 Thank you for your attention. 10 THE CHAIRMAN: Mr. Mayer? 11 MR. MAYER: Good afternoon, sir. I 12 have a couple of, firstly, process questions. You 13 are being presented as a witness on behalf of 14 Canadian Nature Federation. When were you 15 retained, sir? 16 MR. RUDNICKI: I am sorry, I didn't 17 hear the question? 18 MR. MAYER: When were you retained by 19 the Canadian Nature Federation? 20 MR. RUDNICKI: I think it was the end 21 of February we talked about this hearing taking 22 place. 23 MR. MAYER: End of February, you mean 24 like two weeks ago? 25 MR. RUDNICKI: Middle to end of 2118 1 February, yes. 2 MR. MAYER: Is that the first time you 3 have been contacted by them? 4 MR. RUDNICKI: No, I have worked with 5 the Canadian Nature Federation on other issues in 6 the past. 7 MR. MAYER: The reason I raise this, 8 sir, is that there are certain rules regarding 9 pre-filed evidence and expert reports being filed 10 in advance. I take it you wouldn't have had any 11 opportunity to produce the document which we have 12 today any earlier than this; am I correct in that 13 assumption? 14 MR. RUDNICKI: I think that is pretty 15 accurate. 16 MR. MAYER: Now, to a little more -- 17 one other item. We also understand from your -- 18 from the C.V. we have been provided, I take it 19 again by the Canadian Nature Federation, that you 20 have, since 2002, been working with Pimicikamak? 21 MR. RUDNICKI: That's correct. 22 MR. MAYER: What you do for 23 Pimicikamak, sir? 24 MR. RUDNICKI: I am retained to deal 25 with legal and policy issues. 2119 1 MR. MAYER: You are the lawyer for 2 Pimicikamak in Minnesota? 3 MR. RUDNICKI: I am not counsel for 4 Pimicikamak in Minnesota. 5 MR. MAYER: All right. Let me try 6 this again. You are a lawyer? 7 MR. RUDNICKI: I am a lawyer. 8 MR. MAYER: You are an advocate in -- 9 you are a governmental affairs advocate and you 10 have been working with Pimicikamak since 2002? 11 MR. RUDNICKI: That's correct. 12 MR. MAYER: You advise on legal 13 matters? 14 MR. RUDNICKI: I advise on policy 15 issues and general climate of energy and 16 environmental issues. 17 MR. MAYER: I won't go any further 18 than that, I don't want encroach upon 19 solicitor/client relationship, sir. 20 One matter that I have arising out of 21 your report, on page 4 of 9, the second full 22 paragraph in, you refer on the second line to 23 subsidized hydroelectricity. 24 What are you referring to there as 25 subsidized hydroelectricity? 2120 1 MR. RUDNICKI: Well, again, based on a 2 volume of information from a number of sources, 3 including ELPC, it is quite clear that there are 4 certain environmental harms, there are certain 5 social costs associated with various hydro 6 projects. And those are sometimes referred to as 7 externalities, or they are also referred to as 8 subsidies. In other words, there is a 9 displacement of burden on to the environment or 10 people. 11 MR. MAYER: Who do you suggest -- 12 firstly, are you suggesting that the power 13 produced by Manitoba Hydro is subsidized 14 hydroelectricity, sir? 15 MR. RUDNICKI: I am not in a position 16 to respond to Manitoba Hydro operations generally, 17 but I can tell you what I understand about hydro 18 in a variety of venues that there are those 19 problems. I think some of the other witnesses 20 actually provide a lot of substance on that. 21 MR. MAYER: I am trying to get -- I 22 guess, I have to try to get down to your 23 definition of subsidy then. 24 If we assume that the damage, or any 25 damage that is or was created as a result of hydro 2121 1 development was compensated by the utility, and 2 therefore, undoubtedly paid for by the ratepayers, 3 would you consider that subsidization, sir? 4 MR. RUDNICKI: If there are situations 5 where there is environmental damage and harm to 6 people, and all those harms and damage have been 7 fully mitigated, I guess one could argue that the 8 costs have been internalized into the price of the 9 electricity, but that assumes a lot. Again, how 10 does one measure mitigation? How does one measure 11 preventing future harms? 12 MR. MAYER: In taking your definition, 13 sir, and extending it, any project or any method 14 of producing electricity which causes some 15 environmental degradation or some harm to somebody 16 is, by your definition -- unless it has been fully 17 compensated and/or fully mitigated -- is by your 18 definition subsidized power; right? 19 MR. RUDNICKI: I think what has 20 happened is that there is often the call, at least 21 in the States, for the free market to work its 22 power. But for that to happen there would have to 23 be clear and accurate economic signals about, in 24 this case, energy resources. There would have to 25 be clear economic signals about alternatives. And 2122 1 any time society at large bears a burden, whether 2 it is increased health cost due to asthma from the 3 emissions from coal-fired power plants, or whether 4 it is the environment itself through harmed rivers 5 or water quality, those are costs. It's being 6 borne by the people, it is being borne by the 7 environment. Unless those harms are somehow fully 8 captured in the price of electricity, I think it 9 could be viewed as a subsidy. 10 MR. MAYER: So the short answer to my 11 question, in your view, is yes -- or do you 12 remember the question I originally asked? 13 MR. RUDNICKI: Please remind me what 14 the question is? 15 MR. MAYER: I said, sir, in your view, 16 any production of electric energy that results in 17 some environmental degradation or some harm to 18 somebody, that is not fully recognized, 19 compensated for, and/or mitigated, is subsidized 20 power; right? 21 MR. RUDNICKI: Anything that is not 22 fully internalized is subsidy, yes. 23 MR. MAYER: You will have to 24 understand, sir, that having a little bit of 25 knowledge of our softwood problem, your definition 2123 1 of subsidy can be of some concern to us. I have 2 no further questions. 3 THE CHAIRMAN: Mr. Sargeant? 4 MR. SARGEANT: Mr. Rudnicki, in your 5 closing paragraphs you talked about Manitoba's 6 leadership role with respect to Kyoto matters. I 7 noted from the evidence of Senators Anderson and 8 Kubly that they said that at present about 75 9 percent of the indigenous energy, or electric 10 energy produced in Minnesota, is in coal-fired 11 plants and about 20 percent is in nuclear plants. 12 How does a move away from hydro work 13 towards the Kyoto principles, given that state of 14 facts in Minnesota at the present time? 15 MR. RUDNICKI: Well, I guess there are 16 lots of factors to consider there. I don't know 17 that, based on the reports I have seen and the 18 evidence I have heard today, that it is amply 19 clear that there aren't some problems associated 20 with hydro. In other words, there are greenhouse 21 gas emissions, for example. But even putting that 22 aside, if there is an opportunity to develop an 23 energy resource within 10, 15, 20 miles from 24 demand, or even within 100 to 200 miles from 25 demand, concepts regarding distributed energy 2124 1 would suggest that is a much more prudent approach 2 to take than to develop an energy resource that is 3 three, four, five times the distance from the 4 demand centre. 5 So the reason why I -- 6 MR. SARGEANT: Even if that is 7 produced by coal-fired plant? 8 MR. RUDNICKI: Well, I think in that 9 case you are dealing with line loss issues and 10 efficiencies. So I believe that is pretty 11 accurate across the board. 12 MR. SARGEANT: I gather from the tone 13 of your paper, you are suggesting that Minnesota 14 go -- or is headed in the direction of having a 15 huge percentage of its energy generated by wind 16 power. Is that correct? 17 MR. RUDNICKI: What I was trying to do 18 is merely reflect to you what I perceive to be an 19 important market factor that I did not see 20 addressed in the justification need for an 21 alternative to statement. In that statement -- 22 again, you have to keep in mind, we are working 23 with very, very limited resources, and instead of 24 tangling your feet, I was dealing with some CDs, 25 so that was a much more manageable situation. 2125 1 What struck me as an important element 2 that I thought you ought to be aware of and hear 3 and see is the perspective from the other side of 4 the border involving these renewables. Instead of 5 being marginalized, as I thought they were in the 6 justification need for alternative to documents, 7 there is a reality that suggests they are actually 8 vibrant, growing, developing. The policy 9 positions that were articulated to you from the 10 Senators represent their perspectives, but I think 11 more importantly there is already some systemic 12 move, as evidenced by the statutes and as 13 evidenced by the rules that govern the selection 14 process for various energy resources. So, it 15 represents a significant factor, if one is using 16 the business as usual scenario, which downplays 17 the potential versus the reality of the market, 18 which is pretty dynamic. 19 MR. SARGEANT: Senator Anderson told 20 us that for most firms the goal is, or best 21 efforts to be 10 percent by 2015, and for Excel 22 there is a requirement to be 10 percent renewable 23 resources -- renewable source by 2015. In your 24 view, is it going to be higher, or significantly 25 higher proportion of indigenous generation by 2015 2126 1 than 10 percent? 2 MR. RUDNICKI: I don't have the facts 3 with me right now to answer that, but I can give 4 you just a synopsis of what is happening. Right 5 now Excel Energy is charging a premium per month 6 for people who want to buy electrons generated by 7 wind turbines. I think it is something like $2 8 per 200-kilowatt hours per month. That is a way 9 of capitalizing wind projects. 10 There is an another generator, Great 11 River, which also was one of the pioneers in wind 12 power. And what they are finding is that they 13 sell out. If they have a block of 300, 400 14 megawatts, a certain portion of that they can sell 15 quickly because people are willing to pay a 16 premium. Although, there is an argument that says 17 it should be treated like any other resource, but 18 consumers are willing to pay a premium for 19 electricity that they know is generated in an 20 environmentally sound and socially responsible 21 manner. 22 MR. SARGEANT: How do people know that 23 they are getting electricity from a wind plant 24 when it is all coming through a centralized 25 distribution system? 2127 1 MR. RUDNICKI: That's a good question. 2 MR. SARGEANT: That sounds like smart 3 marketing. 4 MR. RUDNICKI: I always get asked that 5 question, and it is not necessarily knowing about 6 one particular electron, but the fact that there 7 is a certain block dedicated to this wind 8 capacity. So I think if the market, if the energy 9 sources used to generate electricity truly 10 reflected what we were talking about moments ago, 11 the externalized costs, the market signals would 12 be quite accurate. Generators, suppliers like 13 Excel, consumers could make fully informed 14 decisions, and you would find a greater share of 15 that market happening through wind without any 16 mandates from the State Government. 17 MR. SARGEANT: Thank you. 18 THE CHAIRMAN: Mr. Rudnicki, just to 19 follow up on this question, you are referring to 20 the -- from what I read or understand of your 21 presentation, there are significant changes 22 occurring in the United States from the usual as 23 you go. But, I distinctly heard Senator Anderson 24 a while ago saying that she had introduced a bill 25 with a provision for establishing a goal of 20 2128 1 percent increase in renewable sources of energy 2 within Minnesota by 2020, I believe. That was 3 defeated. The goal now stands at 10 percent by 4 2015. 5 So how does that make you confident 6 that the scenario that you are painting within the 7 next dozen or 20 years, make it as rosy as you 8 think it might be, when they are not willing to go 9 along that route according to legislation they 10 have adopted? 11 MR. RUDNICKI: Well, two parallel 12 tracks to answer that question. 13 One, I think the British have 14 discovered that you can go up to about 20 percent 15 renewable from wind without having system 16 instability. The Germans are pushing for 30 17 percent wind as the renewable component for their 18 electricity grid system. 19 I think what we will see, and what we 20 have seen is a dramatic drop in the generating 21 cost. First of all, when you think of wind, there 22 is no cost for the fuel. It is the capital 23 investment in the tower and the generating unit 24 and the controlling computers. That, it is my 25 understanding, has dropped dramatically. And from 2129 1 what I have read, Senator Anderson was quite 2 right. When you compare the power purchase 3 agreements between various traditional energy 4 sources and wind, the numbers actually are pretty 5 dramatic. Wind is very competitive. I think that 6 that will drive, despite the mandate being 10 7 percent versus 20, again with accurate economic 8 signals, companies like Excel Energy will find it 9 is in their corporate best interest to use what 10 ultimately is the local home-grown resource. 11 THE CHAIRMAN: But that is a very 12 different scenario from the one that Senator 13 Anderson painted to us. I mean, you are talking 14 about 20 percent energy, 30 percent energy coming 15 from wind sources, and when we hear that they are 16 not even prepared to go to 20 percent over the 17 next almost 20 years, I don't know what gives you 18 that confidence. Where do you draw that level of 19 knowledge to estimate that within the next 10, 15 20 years they are going to reach and surpass that 21 goal? 22 MR. RUDNICKI: I don't know if I would 23 go so far as to say they are going to reach and 24 surpass 20 percent. 25 THE CHAIRMAN: This is 15 -- 10 2130 1 percent the goal is? 2 MR. RUDNICKI: Right. I think once 3 again it goes back to the market. The reality is, 4 there are a number of jurisdictions where world 5 communities see the economic benefit. Once again, 6 the buyers of electricity are seeing the economic 7 benefits. So with accurate economic signals, I 8 would say it is the market, the market will use 9 the economic signals and ultimately surpass the 10 mandate. 11 THE CHAIRMAN: Okay. Senator Anderson 12 also referred to a caveat that the utilities -- 13 there is a policy, and they have to go the route 14 of renewable, but they can resort to a caveat 15 within the statutes. And if they can show it is 16 not in the public interest, for instance, they can 17 show that it is going to increase the rates to the 18 users, they might -- that might be rationale or 19 justification for them not even reaching the 20 stated goals. 21 So, I don't know, I sort of have the 22 opposite feeling, or I sort of see the picture 23 being very different from the one you are 24 portraying. 25 MR. RUDNICKI: I think what you 2131 1 describe is the business as usual scenario. That 2 is my point. As long as the economic signals are 3 lacking, as long as industry and reports and 4 analyses are based on that tunnel vision of 5 business as usual, those are the types of 6 conclusions we will see. 7 What I see, and I am trying to be 8 quite pragmatic, is the leadership from Denmark -- 9 I mean, they are dealing now with the nuances of 10 wind. It is not just, how do we produce virtually 11 all of our electricity from wind, but how do you 12 deal with the flicker effect? In other words, if 13 you have wind turbine and you don't want to have 14 shadows in certain places, how do you orient your 15 tower? I mean, they are dealing with the frosting 16 on the cake, in my opinion. They are leading the 17 way. 18 In comparison purposes, I believe 19 there are 12,000 megawatts that are required, 20 somewhat equivalent to Minnesota, they supply 21 about 25 percent of their electricity from wind. 22 Again, the Germans are doing this. The economics 23 are making sense. The home-grown proximity to the 24 energy source itself is making sense for the local 25 economies, the regional economies. When you begin 2132 1 adding all these factors together, it does point 2 to a new direction. It is the alternative energy 3 scenario, but it has to be understood as the 4 potential that is to be realized. 5 THE CHAIRMAN: I just have one more -- 6 more a comment than a question perhaps, and it is 7 somewhat with tongue in cheek. Because you have 8 referred to costs of mitigating hydroelectricity 9 as being in some way subsidizing, in response to 10 Mr. Mayer's question, I felt like asking you 11 whether the multi millions of dollars of Federal 12 and State monies that were applied for clean-up on 13 the Hudson River, and in Lake Erie, and all the 14 others that haven't been done yet, whether those 15 are subsidies too? What is good for the gander is 16 good for the goose. 17 MR. RUDNICKI: I think the subsidy 18 comes in that, as a taxpayer, I end up taking care 19 of a problem from industry. Yes, that is a 20 subsidy. That is a burden. It is like various 21 energy resources that cause health problems or 22 damaged ecosystems. Somewhere, someone, or some 23 ecosystem is bearing the burden. I think because 24 of that, unless we fully account for those harms 25 on a holistic basis, I think it is very difficult 2133 1 for the market to make prudent decisions. 2 THE CHAIRMAN: The point I am trying 3 to make, it is applicable on both sides of the 4 border, not just on one side. 5 MR. RUDNICKI: Um-hmm. 6 THE CHAIRMAN: I have no further 7 questions. I don't know if other members of the 8 audience have questions. Ms. Kathi Avery Kinew. 9 MS. AVERY KINEW: Good day, sir. I 10 was just wondering, the ratios of the contracts 11 right now, 75 percent coal, 20 percent nuclear, 5 12 percent renewable, and if that goes up to the 10 13 percent, why do you say on page 4 that hydro might 14 be displacing local renewable energy? Because 15 those coal and nuclear contracts must have an end, 16 it must be a fixed term. So why wouldn't hydro 17 being displacing those sources? Why do you assume 18 that they would be displacing renewable? 19 MR. RUDNICKI: Well, I guess the way I 20 look at it, there is an energy pie and there are 21 certain slices. 22 MS. AVERY KINEW: That's the way I 23 look at it too. 24 MR. RUDNICKI: And hydro is in there. 25 I think the argument, as I understand it from the 2134 1 proponents, is that it is assumed any production 2 of hydro will displace a fossil fuel. 3 I think, once again, if we go back to 4 the business as usual scenario, that that may be 5 accurate. The assumption is there will be more 6 coal. That is the assumption -- or from the 7 remaining coal-fired power plants, the capacity 8 factor will be increased, and as a result it could 9 be argued that hydro will be displacing coal. 10 That is the business as usual scenario. 11 Under the alternative scenario, or 12 Repowering the Midwest scenario, there is greater 13 opportunity for the wind resources to literally 14 compete in the marketplace. 15 So I think it may be a bit 16 presumptuous to say that hydro will only be 17 displacing coal, when in reality local wind 18 resources are a viable alternative. 19 MS. AVERY KINEW: I don't see your 20 logic in saying that it would necessarily displace 21 renewable energy. Why wouldn't it just as 22 logically displace coal or nuclear? I just don't 23 see where you end up with that -- that assumption 24 became a conclusion I think. 25 MR. RUDNICKI: If there is 10 percent 2135 1 of the market that will be renewable, or should be 2 renewable wind, that is a slice of the fixed pie. 3 And sometimes the pie is expanding, sometimes the 4 pie is contracting, depending on how we do on 5 demand-side management. Maybe the more important 6 point is, are we talking about local renewable or 7 are we talking about a distant renewable? 8 MS. AVERY KINEW: This was some 9 evidence we heard the other day about how Hydro 10 sees that there is long-term contracts and you 11 have to make a long-term commitment when you are 12 building fossil fuel plants, et cetera, and they 13 feel that those would be the ones that would be 14 displaced. Maybe it is just different evidence 15 that you haven't seen yet. 16 MR. RUDNICKI: You used the word 17 "fuel," and they fuel this. I guess I am saying 18 that is the business as usual scenario, and it 19 doesn't recognize the new paradigm shift that we 20 have been working for maybe 10 or 15 years. 21 MS. AVERY KINEW: I just can't make 22 the link, even with the paradigm shift, that it is 23 not possible to displace nuclear and coal. I 24 can't make the leap of understanding that it is 25 not possible to displace nuclear and fuel, that 2136 1 you assume that it is going to be replacing the 2 increasing renewable. I don't see that. 3 MR. RUDNICKI: Those are fixed energy 4 sources or supplies. 5 MS. AVERY KINEW: They are not fixed 6 forever though, they are time limited contracts. 7 That is the way I understood it. 8 THE CHAIRMAN: Yes. 9 MS. AVERY KINEW: Anyway, thank you. 10 THE CHAIRMAN: Mr. Mayer, one more 11 question. 12 MR. MAYER: I think I am starting to 13 understand. What you call the business, you have 14 determined one scenario as the business as usual 15 scenario, and another one the alternative energy 16 scenario. If this Commission determines that the 17 business as usual scenario is the probable 18 scenario between now and 2020, then I am assuming 19 you are recommending we accept the proponents' 20 proposal; am I correct? 21 MR. RUDNICKI: What I am suggesting is 22 there are some incredible dynamics south of the 23 Canadian border, south of Manitoba, and there is a 24 much bigger story for you to learn and hear and 25 see. And to make a fully informed decision, 2137 1 perhaps those are issues that ought to be 2 researched even more thoroughly and through an 3 independent source. 4 MR. MAYER: Assuming for a moment, 5 sir, we can get by our ignorance as to what is 6 happening south of the border, and we come to a 7 conclusion as a Commission that the business as 8 usual scenario is the probable scenario, then 9 under those circumstances you would recommend 10 approval of the proponents' project, I take it? 11 MR. RUDNICKI: I am not here to 12 provide any recommendation on the project. 13 MR. MAYER: Just to enlighten us? 14 THE CHAIRMAN: Other questions? 15 Mr. Williams? 16 MR. WILLIAMS: Good afternoon, 17 Mr. Rudnicki. My name is Byron Williams, and I am 18 an attorney with the Public Interest Law Centre 19 and I represent the Consumer's Association and the 20 Manitoba Society of Seniors in this proceeding. 21 In hearing your report, I think I 22 heard you say that you were basing a lot of the 23 material in your report on materials provided by 24 the Environmental Law & Policy Center, or ELPC; is 25 that right? 2138 1 MR. RUDNICKI: That's correct. Due to 2 limited resources, it would have been virtually 3 impossible to amass the information that has been 4 collected by them and compiled over the course of 5 many years. 6 MR. WILLIAMS: In fact, I think I 7 recall hearing you on at least two occasions say 8 you were borrowing from their report. Would that 9 be fair? 10 MR. RUDNICKI: I think, as we try to 11 understand a variety of issues, we read, we 12 research, we analyse, and we try to draw some 13 conclusions. So, I have reviewed a number of 14 their reports and shared with you some of my 15 thoughts about those issues. 16 MR. WILLIAMS: Now, I have heard you 17 describe yourself I believe as an attorney and a 18 government affairs advocate. Is that correct? 19 MR. RUDNICKI: That's correct. 20 MR. WILLIAMS: I didn't hear you 21 mention a Ph.D. or Masters in Economics. Do you 22 have one of those? 23 MR. RUDNICKI: No, I don't. 24 MR. WILLIAMS: Would you have a Ph.D. 25 or Masters in Engineering? 2139 1 MR. RUDNICKI: I don't have such a 2 degree. 3 MR. WILLIAMS: How about a MBA? 4 MR. RUDNICKI: I have referenced a 5 number of economic factors that anybody in this 6 room could cite if they were to pick up these 7 reports or look at them on the website. A number 8 of experts have compiled the reports. And again, 9 it is up to the Commission and other members to 10 test that information. 11 MR. WILLIAMS: So, you are relying 12 upon the expertise of others and you have 13 synthesized this material for the Commission; 14 would that be fair? 15 MR. RUDNICKI: I pulled out some 16 significant issues relevant to the export market 17 that the proponents of the project rely upon. 18 MR. WILLIAMS: Do you have a Ph.D 19 or MA in anything? 20 MR. RUDNICKI: I have a Jurist 21 Doctorate degree. 22 MR. WILLIAMS: Now, you indicate you 23 work in government affairs. I have sometimes 24 heard the term lobbyist as a synonym for 25 government affairs. Is that a characterization 2140 1 that you would accept? 2 MR. RUDNICKI: I work in the area of 3 policy matters and legal matters, and I will leave 4 it at that. 5 MR. WILLIAMS: So you don't accept the 6 characterization of lobbyist? 7 MR. RUDNICKI: We could talk at end 8 about the definition of lobbyist. 9 MR. WILLIAMS: You work for PCN, or 10 you have provided some services for PCN; is that 11 correct? 12 MR. RUDNICKI: As an attorney and as a 13 government affairs advocate, a number of clients 14 retain me. 15 MR. WILLIAMS: Can you give me just a 16 sampling of some of those other clients who may 17 retain you who are in the public domain? For 18 example, are any of your clients associated with 19 the wind industry? 20 MR. RUDNICKI: I work with a number of 21 institutional clients, and that's what I can tell 22 you. 23 MR. WILLIAMS: Are you telling me that 24 you don't work with any clients with investments 25 in the wind industry? 2141 1 MR. RUDNICKI: I am not retained by 2 any wind industry clients. What I shared today 3 was information that once again is available on 4 the website, it is available on hard copy. And 5 what is significant is there are a lot of 6 presumptions that I understand in the 7 justification need for and alternative to that the 8 project proponents are using and basing the 9 feasibility of the project on. I guess what I am 10 suggesting is that this Commission might want to 11 test some of that information based on other 12 independent sources and data that is available. 13 MR. WILLIAMS: Now, in looking at the 14 paper that you have provided today, at the bottom 15 of page 3 of 9, you reference a quote from ELPC in 16 terms of the wind energy potential of the Midwest 17 States. I see a reference to considering only 18 class 3 and better resource areas. 19 I wonder if you could define for me 20 what is the definition of a class 3 resource area, 21 sir? 22 MR. RUDNICKI: It relates to various 23 wind speeds for certain amounts of time, and I 24 don't have that specific fact at my fingertips 25 right now. But what the point is in that little 2142 1 paragraph, it is that not maximizing total 2 potential wind capability, there is still a lot of 3 wind, and there is enough wind that some States 4 could be indeed be exporters of electricity using 5 wind power. 6 MR. WILLIAMS: Are you qualified to 7 tell this panel that class 3 wind resources are 8 economically viable at this point in time? 9 MR. RUDNICKI: I can't comment on 10 that. 11 MR. WILLIAMS: I just want to go up 12 one paragraph above the class 3 reference, and you 13 are citing the American Wind Energy Association, 14 placing the number -- the potential wind energy 15 for Minnesota at 75,000 megawatts. Are you aware 16 with the breakdown of that is in terms of class 3 17 resources, class 4, or class 5? 18 MR. RUDNICKI: I think what is 19 significant in this set of research and data that 20 is available is that various government agencies, 21 various federal, state agencies, and industry 22 interests, have done a lot to measure the wind 23 potential under the alternative "Repowering the 24 Midwest" vision for what energy sources could meet 25 our electricity need. There is incredible 2143 1 potential. Whether it is class 1, 2, 3, 4, or 5, 2 whatever it may be, there are certain regions in 3 the State of Minnesota that are very rich 4 resources. 5 MR. WILLIAMS: I will follow up on 6 your comment, but perhaps we could get an answer 7 to my question. The 75,000 megawatts, are you 8 able to provide a breakdown into what is class 1, 9 2, 3, 4, or 5? 10 MR. RUDNICKI: The American Wind 11 Energy Association does indeed have a very 12 detailed mapping -- once again, thanks to 13 anemometer readings that have taken over for many 14 years. So, yes, that is available. 15 There is also detailed information 16 from the Minnesota Department of Commerce, very 17 detailed wind mapping for State of Minnesota. 18 MR. WILLIAMS: Just a final 19 question -- you have talked about State 20 authorities and others -- is the American Wind 21 Energy Association, would I be right in assuming 22 that that is an industry association? 23 MR. RUDNICKI: As the name states. 24 MR. WILLIAMS: It represents the wind 25 industry; is that correct? 2144 1 MR. RUDNICKI: There are a variety of 2 industry associations representing lignite, coal, 3 nuclear, hydro; we have heard about some of those 4 today. And, yes, manufacturers of wind turbine 5 equipment and towers certainly do have an 6 association to represent them. 7 MR. WILLIAMS: Thank you for your 8 assistance, sir. 9 THE CHAIRMAN: Any more questions? 10 Ms. Valerie Matthews Lemieux. 11 MS. MATTHEWS LEMIEUX: Mr. Rudnicki, 12 you have given us some details about various 13 legislation in Minnesota. I am advised that 14 Minnesota also has legislation that indicates that 15 lobbyists have to be registered; is that right? 16 MR. RUDNICKI: That is correct. 17 MS. MATTHEWS LEMIEUX: You are 18 registered as a lobbyist in Minnesota; is that not 19 true? 20 MR. RUDNICKI: I am registered. 21 MS. MATTHEWS LEMIEUX: You are a 22 registered lobbyist for Pimicikamak Cree Nation in 23 Minnesota; is that not true? 24 MR. RUDNICKI: That is correct. 25 MS. MATTHEWS LEMIEUX: Peter Grills is 2145 1 also a lawyer in Minnesota, correct? 2 MR. RUDNICKI: That's correct. 3 MS. MATTHEWS LEMIEUX: You work with 4 Mr. Grills on behalf of Pimicikamak Cree Nation; 5 is that true? 6 MR. RUDNICKI: That's correct. 7 MS. MATTHEWS LEMIEUX: Mr. Grills is 8 also a paid lobbyist under the same legislation in 9 Minnesota; is that right? 10 MR. RUDNICKI: I can't answer that 11 question. 12 MS. MATTHEWS LEMIEUX: You don't know, 13 okay. 14 Some of the activities that you have 15 been involved with on behalf of Pimicikamak Cree 16 Nation in Minnesota are the pursuit of legislative 17 changes; is that correct? 18 MR. RUDNICKI: I have worked with 19 Pimicikamak on a variety of public education 20 initiatives. 21 MS. MATTHEWS LEMIEUX: Sir, I suggest 22 to you that last year in the Senate in Minnesota 23 you were on the record on behalf of Pimicikamak 24 Cree Nation in Senate file 995; is that true? 25 MR. RUDNICKI: That's correct. 2146 1 MS. MATTHEWS LEMIEUX: You were there 2 with Mr. Grills and also Michael Noble of ME3; is 3 that correct? 4 MR. RUDNICKI: That's correct. 5 MS. MATTHEWS LEMIEUX: ME3, could you 6 tell us what ME3 is, very briefly? 7 MR. RUDNICKI: It is non-governmental 8 organization based in St. Paul, Minnesota. 9 MS. MATTHEWS LEMIEUX: One of their 10 major campaigns is the Just Energy Campaign in 11 option to Manitoba Hydro; is that correct? 12 MR. RUDNICKI: I am aware of the Just 13 Energy Campaign, and I don't know that is in 14 opposition to Manitoba Hydro. 15 MS. MATTHEWS LEMIEUX: Sir, you have 16 been with the Just Energy Campaign; is that true? 17 MR. RUDNICKI: I am aware of and work 18 with a number of NGOs, and some NGOs take various 19 positions, and I have no control or interest in 20 what positions they do take. 21 MS. MATTHEWS LEMIEUX: That wasn't my 22 question. My question was whether you have been 23 involved with the Just Energy Campaign? 24 MR. RUDNICKI: I am aware of them. I 25 am not involved in their campaign. 2147 1 MS. MATTHEWS LEMIEUX: Okay. The 2 legislation that was before the Senate last year 3 that you were involved in, that was legislation 4 that would have required a detail accounting of 5 all socioeconomic and environmental effects of the 6 entire hydro system in Manitoba; is that correct? 7 MR. RUDNICKI: I can't recall what 995 8 specifically said. 9 MS. MATTHEWS LEMIEUX: Are you able to 10 agree that was, though, the general thrust of the 11 legislation, if you can't give us exactly what it 12 said? 13 MR. RUDNICKI: I think there is lots 14 of concern about externalities. I believe that 15 Senate file went to the issue of externalities, 16 trying to better understand social and 17 environmental costs of energy resources. 18 MS. MATTHEWS LEMIEUX: Including from 19 Manitoba Hydro, correct? 20 MR. RUDNICKI: I don't know that it 21 distinguished one from the other. 22 MS. MATTHEWS LEMIEUX: Okay. So that 23 Senate bill was defeated; is that true? 24 MR. RUDNICKI: No, it was heard in 25 committee and I believe that is where it stopped. 2148 1 MS. MATTHEWS LEMIEUX: In fact, it is 2 not the law in Minnesota at the moment, is it? 3 MR. RUDNICKI: I am sorry? 4 MS. MATTHEWS LEMIEUX: It is not the 5 law in Minnesota at the moment? 6 MR. RUDNICKI: There are several 7 thousand bills that are introduced in the House 8 and Senate and are not -- 9 MS. MATTHEWS LEMIEUX: Sir, I am just 10 talking about that particular piece of 11 legislation, it was defeated. It is not the law 12 in Minnesota? 13 MR. RUDNICKI: I don't believe it was 14 defeated. It was never put a vote. Again, those 15 are details that would be contained in the Senate 16 record for that particular committee. 17 MS. MATTHEWS LEMIEUX: Just to help 18 everybody else in the room, sir, since they may 19 not be as familiar with the Minnesota processes 20 as you are, the bill was defeated at the Committee 21 stage, it didn't make it to the House; is that 22 correct? 23 MR. RUDNICKI: That is not correct. 24 The Senate and the House in Minnesota have bills 25 that go before them. Those bills are voted on by 2149 1 House or Senate members, depending on what body 2 they are in. Some bills come up and are heard, 3 some are voted on, and others are not voted on. 4 So, I think we could go to the record to verify 5 that. 6 MS. MATTHEWS LEMIEUX: Just to go 7 through a couple of the other functions that you 8 and/or others are performing on behalf of 9 Pimicikamak, in addition to the legislative 10 changes, have you been involved with the minority 11 shareholders resolution at the Excel's shareholder 12 meetings? 13 MR. RUDNICKI: I have been to those 14 shareholder meetings. 15 MS. MATTHEWS LEMIEUX: On behalf of 16 Pimicikamak? 17 MR. RUDNICKI: I think at some point 18 we are bumping against attorney/client privilege, 19 at least in the United States and in Minnesota. 20 MS. MATTHEWS LEMIEUX: You said you 21 were not appearing here as their lawyer and you 22 weren't their lawyer, so I am not sure how you can 23 claim privilege? 24 MR. RUDNICKI: I am an attorney and 25 sometimes under certain situations, the 2150 1 attorney/client privilege arises, although one may 2 not be retained; a client may not have retained an 3 attorney. 4 MS. MATTHEWS LEMIEUX: Okay. In terms 5 of the last area of involvement then, you are 6 also -- you and others have also been involved on 7 behalf of Pimicikamak in Public Utilities 8 Commission proceedings; is that correct? 9 MR. RUDNICKI: That's a pretty vague 10 question. 11 MS. MATTHEWS LEMIEUX: Let's go 12 through it then. You mentioned in your document 13 that you have provided to our Commission that 14 there are proceedings before the Minnesota Court 15 of Appeal, correct? 16 MR. RUDNICKI: That's correct. 17 MS. MATTHEWS LEMIEUX: In fact, it is 18 Pimicikamak that has brought the proceedings 19 before the Minnesota Court of Appeal, correct? 20 MR. RUDNICKI: There may have been 21 multiple parties, but they were one of the 22 parties. 23 MS. MATTHEWS LEMIEUX: They were 24 multiple parties with others including ME3; is 25 that correct? 2151 1 MR. RUDNICKI: I think if we went to 2 the actual filing, we could find out who is on 3 record. 4 MS. MATTHEWS LEMIEUX: I am sure we 5 can do that. 6 You will agree with me that the Public 7 Utilities Commission, in that particular matter 8 that is before the Minnesota Court of Appeal, 9 concluded that its order had properly found that 10 the socioeconomic costs of Manitoba Hydro projects 11 have been adequately internalized by Manitoba 12 Hydro, have been taken into account in this 13 matter, and no further inquiry into the specifics 14 of those costs need be made. That was the finding 15 by the Public Utilities Commission in Minnesota; 16 is that correct? 17 MR. RUDNICKI: I am not familiar 18 enough with the record to answer that question. 19 MS. MATTHEWS LEMIEUX: Okay. Are you 20 familiar enough with the record to be able to 21 confirm for me that, in fact, there was an earlier 22 matter in that same proceeding that went to the 23 Minnesota Court of Appeal and it was ultimately 24 denied by the Court of Appeal? Are you familiar 25 with that? 2152 1 MR. RUDNICKI: You are probably 2 spanning many years here and I am not familiar 3 with all the details. 4 MS. MATTHEWS LEMIEUX: Okay. Your 5 date was since 2002. So, since around 2001, 2002? 6 MR. RUDNICKI: I would need to look at 7 the file. 8 MS. MATTHEWS LEMIEUX: Okay. Now, you 9 referred to the Department of Commerce. Were you 10 in the room when Senators Kubly and Anderson 11 testified? 12 MR. RUDNICKI: Yes, I was. 13 MS. MATTHEWS LEMIEUX: You heard then 14 the questions that I posed to them that the 15 Department of Commerce concluded last week and 16 made a presentation before Senator Anderson's 17 committee that Manitoba -- importation of hydro 18 from Manitoba is not in competition with wind? 19 MR. RUDNICKI: I think there are 20 some -- I understand what you are doing here with 21 your questions, but there needs to a little bit of 22 points of clarification. 23 There are Commissioners in these 24 agencies and the Commissioners are appointed by 25 the Governors. The Commissioners themselves 2153 1 actually appoint their staff and whether or not an 2 individual is speaking in an official capacity for 3 the particular department or agency or Commission 4 is something that I am not in a position to answer 5 here. 6 MS. MATTHEWS LEMIEUX: Okay, fair 7 enough. 8 In terms of the legislation that you 9 were involved in and that you have referred to 10 with the renewable definition, that would be the 11 2001 Energy Security and Reliability Act; is that 12 right? 13 MR. RUDNICKI: I was not involved in 14 2001 legislation. 15 MS. MATTHEWS LEMIEUX: That wasn't my 16 question, though. Your paper refers to -- this is 17 at the bottom of page 5, it talks about a 18 Minnesota statute and then it says "hydroelectric 19 with a capacity less than 60 megawatts." 20 MR. RUDNICKI: You know, we could 21 review the legislative history on that. I don't 22 know what year that goes to. What I did is I went 23 to the statute books under renewable energy 24 technologies and found that reference. We could 25 also find out what year that was modified. 2154 1 MS. MATTHEWS LEMIEUX: Are you able to 2 say whether it is, in fact, that Act? 3 MR. RUDNICKI: Is it what? 4 MS. MATTHEWS LEMIEUX: Is it that Act, 5 the Energy Security and Reliability Act -- the 6 quotation in your paper on page 5? 7 MR. RUDNICKI: Well, you are probably 8 using a chapter title and I don't know. I mean I 9 don't know. 10 MS. MATTHEWS LEMIEUX: Okay. The 60 11 megawatts for hydroelectricity that you are 12 referring to, that relates to the definition for 13 purposes of Minnesota's renewable portfolio 14 objectives; is that not correct? 15 MR. RUDNICKI: That is the guide for 16 determining renewable hydro, correct. 17 MS. MATTHEWS LEMIEUX: The renewable 18 hydro for proposes of the 10 percent goal that is 19 to be achieved, as you have described for us, by 20 2015, right? 21 MR. RUDNICKI: I think that's where 22 there is lots of ambiguity. The legislative 23 history could tell us what the basis was for that 24 number. As Senator Anderson pointed out, there 25 are a number of situations where statutes are not 2155 1 necessarily coordinated with one another. So, the 2 ambiguity here is regarding hydro, it is regarding 3 renewable, it is regarding 60 megawatts. And it 4 is clear there is legislative intent dealing with 5 some sort of size or scale factor on hydro. 6 I think what is also important maybe 7 for the Commission to understand is we are talking 8 about renewable portfolio standards and there is a 9 state issue, there is a federal issue. What is 10 significant is that most of these initiatives 11 regarding the standards are trying to promote 12 greater efficiency. 13 So, whether or not hydro could qualify 14 as a renewable under certain statutes goes to 15 whether or not there are incremental increases in 16 the efficiency for a particular generating site, 17 which is different than talking about new 18 construction or a new system. 19 MS. MATTHEWS LEMIEUX: Are you 20 familiar with a letter that was written by State 21 representative Ken Wolf and State Senator James 22 Metzen to the Premier of Manitoba and the 23 president of Manitoba Hydro in relation to that 24 legislation? 25 MR. RUDNICKI: Do you have an exhibit 2156 1 to show me? 2 MS. MATTHEWS LEMIEUX: I am just 3 wondering, first of all -- I can certainly show it 4 to you. Are you familiar with correspondence that 5 was written in your capacity as Pimicikamak's 6 lobbyist? 7 MR. RUDNICKI: You have multiple 8 questions. What is the first question? 9 MS. MATTHEWS LEMIEUX: I will show you 10 the letter and we will see if you are familiar 11 with it. 12 MR. RUDNICKI: Please. 13 MS. MATTHEWS LEMIEUX: According to 14 the letter, it indicates that the two Senators 15 were the persons that brought forward the 16 legislation in question; is that correct? 17 MR. RUDNICKI: Well, I don't know that 18 it specifically says that they are the authors of 19 the bill. 20 MS. MATTHEWS LEMIEUX: Have you seen 21 that letter before? 22 MR. RUDNICKI: I have seen this one, 23 yes. 24 MS. MATTHEWS LEMIEUX: Okay. I will 25 get it marked as an exhibit, please? 2157 1 2 (EXHIBIT MH/NCN 1011: Letter, May 3 25, 2001) 4 5 MR. RUDNICKI: What is interesting 6 about the letter that I was just shown by 7 counsel -- and I think the Commission ought to 8 know this and you ought to understand -- that 9 there are statutes. There is black letter law and 10 there was some problem with the black letter law 11 for some reason that one Senator and one 12 representative had to sign off on a letter. 13 Now, if there is a statute and you 14 have a House and you have a Senate that voted on 15 the legislation and it went to the Governor for 16 signature and it is black letter, what was it that 17 prompted, what was it that prompted this letter 18 from one Senator and one Representative to 19 supposedly clarify the legislation? I think that 20 is an interesting question that might be worth 21 pursuing. What prompted that letter? Because it 22 is not normal, we should understand -- 23 MS. MATTHEWS LEMIEUX: Maybe -- 24 MR. RUDNICKI: -- it is not normal for 25 a Senator nor a Representative to all of a sudden 2158 1 act as a court of law interpreting statutes. 2 Something had to have prompted that letter. 3 It doesn't just -- I can tell you this way: When 4 a new law is passed, a Senator and representative 5 don't automatically write a letter saying, by the 6 way, I think you ought to know what the meaning of 7 the statute is. That is not common practice. I 8 don't understand the history behind that letter. 9 I have seen the letter, I am aware of the letter 10 and I don't know what prompted that letter. 11 MS. MATTHEWS LEMIEUX: Maybe so that 12 the Commission is also familiar with the letter, 13 what we can do is we will read part of it into the 14 record and the Commission will certainly have the 15 entire copy. I think the first paragraph 16 indicates what the concern was. It says: 17 "As you know, the Minnesota 18 legislature recently passed 19 comprehensive energy policy 20 legislation. As the chief authors of 21 this legislation and chairmen of the 22 committees responsible for setting 23 Minnesota's energy policy, we want to 24 correct certain statements made in a 25 press release by Pimicikamak Cree 2159 1 Nation representatives concerning this 2 legislation. 3 First, we recognize the critical role 4 Manitoba's hydroelectric power plays 5 in supply electricity to Minnesota. 6 Minnesota and Manitoba have both 7 benefited from the long-standing 8 relationship between Manitoba and 9 Minnesota's utilities. As our State 10 and region face tightening energy 11 supplies in the next decade, we hope 12 to continue this beneficial 13 relationship. 14 The 2001 Energy Security and 15 Reliability Act confirms that 16 hydroelectricity is classified as a 17 renewable energy source in the State. 18 In fact, the Act directs utilities to 19 file green pricing tariffs for 20 renewable energy utilizing current 21 statutory definitions of renewable 22 energy, which includes all 23 hydroelectric power." 24 Then it goes on and it talks about the 60 25 megawatts. It says: 2160 1 "The Act also sets goals for the 2 development of eligible energy 3 technologies. This section of the Act 4 focuses on a subset of renewable 5 technologies that currently do not 6 play a major role in utilities' 7 portfolios. This is intended to 8 encourage development of emerging 9 technologies and less economically 10 competitive sources of energy. For 11 this purpose the Act sets a limit of 12 60 megawatts for any hydroelectric 13 eligible energy technology." 14 Then it goes on and it says: 15 "The act specifically defined the 16 emerging technologies in this way to 17 ensure that larger hydroelectricity 18 facilities and other non-eligible 19 technologies would still be considered 20 renewable energy in Minnesota. 21 We hope that this letter answers any 22 concerns regarding this legislation. 23 We look forward to continued trade and 24 a strong working relationship with 25 Manitoba." 2161 1 And it is signed by State Representative Ken Wolf, 2 Chair of the Regulated Industries Committee, and 3 State Senator James Metzen, Chair of the 4 Telecommunications, Energy and Utilities 5 Committee. 6 MR. GREWAR: Mr. Chairman, I would 7 just advise that would Exhibit MH/NCN 1011 and I 8 will ensure copies are provided. 9 MS. MATTHEWS LEMIEUX: I am sorry -- 10 MR. GREWAR: Sorry, the exhibit number 11 MH/NCN 1011. I will get copies for the 12 Commission. 13 THE CHAIRMAN: Would you identify 14 yourself? Is this a point of order you are trying 15 to make? 16 MR. MONIAS: My name is Tom Monias. I 17 am with Cross Lake Band, number 276, the Northern 18 Flood Implementation manager. Madam lawyer -- Ms. 19 Valerie Lemieux was our -- 20 THE CHAIRMAN: Sir are you making a 21 point of order? Is this a motion or is this a 22 question that you wish to ask of the proponents? 23 MR. MONIAS: I don't know how the 24 proceedings work. Just for the record, I want to 25 say this that Valerie Lemieux is our former legal 2162 1 counsel regarding the Northern Flood Agreement. I 2 would like to request the Chairman to also stop 3 this discussion because it is about us, our own 4 affairs. That's what I wanted to say. 5 THE CHAIRMAN: Okay. The point that I 6 have just heard is that the counsel who has just 7 been asking questions is a previous lawyer. 8 That's the point that I have heard. I am not sure 9 I heard the name of the group, PCN, and as such, 10 maybe the point that is being made is they 11 shouldn't be discussing their affairs. 12 MS. MATTHEWS LEMIEUX: I will respond 13 to that question. This is not the first time that 14 this question has come up. In fact, when I 15 appeared in Minnesota on behalf of the 16 Nisichawayasihk Cree Nation in the proceedings, 17 before the Minnesota Public Utilities Commission, 18 I had the pleasure of having the first complaint 19 lodged against me with the Law Society of Manitoba 20 by Pimicikamak following those proceedings. 21 It was ruled on by the Law Society and 22 they found that in fact there was no conflict in 23 relation to those relationships. If it is 24 necessary to do so, since it is my integrity that 25 is at stake, I can provide a copy of the letter 2163 1 from the Law Society of Manitoba. 2 THE CHAIRMAN: On this point? 3 MR. RUDNICKI: On this soliloquy that 4 has just taken place -- 5 THE CHAIRMAN: Just a minute. 6 Mr. Grewar, I will allow the proceeding to carry 7 on. Ms. Valerie Lemieux, if you would eventually 8 please table that letter. 9 MS. MATTHEWS LEMIEUX: I certainly 10 will. 11 12 (UNDERTAKING MH/NCN 42: Produce letter from Law 13 Society) 14 15 THE CHAIRMAN: As soon as possible. 16 You had asked a question of 17 Mr. Rudnicki. We will allow him to respond. 18 MR. RUDNICKI: I think two points to 19 clarify here. There is the market issue in 20 Minnesota, which this Commission can analyse and 21 upon which you can make some decisions based in 22 getting independent evidence and data. Lots of 23 that is on the shelf ready to be looked at now. 24 Whether or not I have worked with a particular 25 client, I really don't think is germane. 2164 1 This is a bizarre situation because if 2 I were represented by legal counsel, I think there 3 would be objections raised here because a lot of 4 these questions are irrelevant. They are 5 irrelevant because the nature of the issue before 6 us is what is that export market, which the 7 Wuskwatim project proponents rely upon for the 8 feasibility of this project? Those are the issues 9 that are here and germane before this Commission 10 now. 11 That particular letter, again, with a 12 Senator and a representative's signature, is most 13 incredible because if there were some PR problems, 14 that is dealt with in a different way. But to 15 have gotten a Senator and a representative to 16 explain legislation that is black letter is highly 17 unusual. In fact, I have never seen anything like 18 that before. That came, by the way, before I was 19 involved in the case. 20 THE CHAIRMAN: In order to ensure that 21 we do not intervene here between client 22 confidentiality and things of that nature, 23 hopefully, we can carry on and maybe ask the 24 questions that are relevant to the presentation 25 made, please? 2165 1 MS. MATTHEWS LEMIEUX: I really 2 have -- I have no other questions, but before we 3 leave this, I do want to clarify, and you will see 4 in terms of the information I will provide, I have 5 never provided advice to Pimicikamak with respect 6 to any of the energy issues in Minnesota or 7 otherwise. 8 THE CHAIRMAN: Thank you. Other 9 questions? Mr. Bedford. 10 MR. BEDFORD: I understand from all 11 you have said this afternoon is that your place of 12 residence and the place where you do most of your 13 work is in the State of Minnesota? 14 MR. RUDNICKI: That's correct. 15 MR. BEDFORD: I know that you 16 undoubtedly already know this, but if you don't, 17 as a Minnesotan and given the kind of work you do 18 to make a living, I am sure you will be interested 19 to know Calpine (ph) Corporation has announced 20 today plans to build a 365-megawatt gas-fired 21 generator at Mankato, Minnesota. When I heard 22 that and I listened to your presentation, I 23 thought that it sounds like the new reality in 24 Minnesota is just like the old reality; would you 25 agree? 2166 1 MR. RUDNICKI: Well, I presented the 2 tip of the icerberg in terms of the new reality in 3 Minnesota and you can characterize however you 4 like. I think the facts can speak for themselves. 5 I provided access to web documents, hard copy 6 documents and I leave it to the commission to do 7 whatever they need to do to make a fully informed 8 decision. 9 MR. BEDFORD: One of the many 10 documents that these commissioners have had to 11 read is a report prepared by the Mid-continent 12 Area Power Pool, otherwise known as MAPP. It is a 13 draft report dated May 28th, 2003. 14 In preparing to come here today, did 15 you have an opportunity to read that report? 16 MR. RUDNICKI: I am not familiar with 17 that specific report. 18 MR. BEDFORD: I assume in your work, 19 however, you are familiar with MAPP? 20 MR. RUDNICKI: I am familiar with 21 MAPP, I am familiar with MISO and I am familiar 22 with the fact that, again, you are talking about a 23 business as usual scenario. 24 What is significant, again, for this 25 commission to know, is that National Wind Energy 2167 1 Coordinating Commission is aggressively working 2 with lignite, coal and wind energy producers to 3 figure out how to deal with transmission issues. 4 That is a rather significant development that I am 5 sure MAPP is not necessarily promoting at this 6 point. 7 MR. BEDFORD: Not a surprise to you 8 then that MAPP's 2003 forecast as presented in 9 this report suggests that for summer 2011, there 10 is a prediction that Excel Energy will have to 11 import in excess of 2000 megawatts of energy from 12 some place? 13 MR. RUDNICKI: I am not familiar with 14 it. 15 MR. BEDFORD: Are you perhaps familiar 16 with the fact that the United States Federal 17 Department Of Energy in its 2004 Outlook has 18 stated that renewable technologies, by which it 19 means wind and biomass, will account for just over 20 5 percent of expected capacity expansion by the 21 year 2025? 22 MR. RUDNICKI: Well, I might be 23 mistaken about this, but I believe that is the 24 basis for the justification need for an 25 alternative to documentation. In fact, project 2168 1 proponents rely extensively upon those very 2 precise documents. They are DOE and there are 3 some state documents. 4 That is the point I am trying to share 5 here. As long as one continues to go back to the 6 industry spokes people, under the business as 7 usual scenario, you will come up with an answer 8 that is reflective of the business as usual 9 scenario. 10 If you want to understand the 11 potential and implications of the Wuskwatim 12 project on this side of the border and that side 13 of the border, one needs to peel back the veneer 14 and see what the reality is. You keep citing to 15 me industry as usual and business as usual 16 scenario information. I am not here to judge the 17 information. I am only trying to convey to you 18 that there is more information. That's all I am 19 suggesting here. There is more information and 20 perhaps you want to find independent sources to 21 provide that information or to validate the 22 information. That's all I am saying. I am not 23 going to even try to get into the U.S. Department 24 of Energy documents and other material. 25 So, that is my only purpose in making 2169 1 my comments. There is more information, it is 2 there for the taking or the finding. 3 MR. BEDFORD: I have no further 4 questions. 5 THE CHAIRMAN: Any further questions? 6 Ms. Gaile Whelan-Enns to redirect. 7 MS. WHELAN ENNS: Thank you. Being 8 not a lawyer or economist or sociologist, I would 9 like to ask you some questions that go to 10 definitions and some of the things that go to your 11 presentation, if I may. 12 If one was fully internalizing 13 environmental and social costs for the Wuskwatim 14 projects, then would the project plan need to 15 fully internalize all of the costs on the 16 transmission lines also? 17 We have, again, been mostly talking 18 about the generation station. So, it is a 19 question about whether then one would be aiming to 20 internalize these external costs, environmental 21 and social, for both -- in relation to both the 22 generation station and these three segments of 23 transmission line? 24 MR. RUDNICKI: Well, I think that 25 would only be reasonable. Again, if we are 2170 1 looking for accurate economic signals or prudent 2 business decisions, that information would seem to 3 be necessary. It is part of the total project. A 4 generating plant, absent transmission lines 5 probably isn't going to be of use to anybody. So, 6 yes, that is part of the equation. 7 MS. WHELAN ENNS: Are externalities -- 8 and we will stay with the Hydro development 9 project as the example we are dealing with here. 10 Are externalities fully valued and internalized in 11 the business as usual scenario? 12 MR. RUDNICKI: No. Again, I think 13 that is the problem. The business as usual 14 scenario fails to adequately account for the 15 social, environmental costs and lost opportunity 16 costs associated with developing new local 17 renewables. 18 MS. WHELAN ENNS: There are a variety 19 of shifts in public policy over the last 20 years 20 or so, which aim to arrive at standards that 21 combine societal or social environmental and 22 economic objectives, standards, including for 23 reviews. I was trying to figure out about 24 Manitoba's Sustainable Development Act while I was 25 listening to your presentation today, which is 2171 1 different than reading the words earlier. 2 Does achieving sustainability 3 objectives or sustainable development objectives 4 in public policy and legislation then point to 5 fully internalizing externalities? Would that be 6 a presumed requirement to reach sustainable 7 development or sustainability goals in a 8 jurisdiction or on a societal basis? 9 MR. RUDNICKI: Well, again, I think 10 that is only reasonable because absent -- it is 11 kind of like having an equation with some 12 variables in it. If you are missing some of the 13 variables, you don't get the full answer. So, it 14 would seem that is just required. 15 Sustainability is an interesting 16 question because we are challenged with meeting 17 our current needs, but also being cognizant of 18 generations yet to come. That's, once again, why 19 I believe under the alternative energy scenario, 20 there is incredible hope for the future. It is 21 recognizing resources approximate to the need. It 22 is finding a compatible balance for use of those 23 resources and the -- in this case, the generating 24 function. 25 But, by having a full cost accounting, 2172 1 by knowing kind of a wholistic picture, it begins 2 to force the internalization. Again, we could 3 find lots of off-the-shelf analyses of this 4 information and I think what we will find if we go 5 to those sources of information is that -- a more 6 complete cost accounting just makes for a better 7 decision ultimately in the energy resources that 8 are used. But, the externalities, I want to 9 remind everybody, extend to health problems for 10 kids, for adults, it extends to damage to the 11 environment and we are talking about past and 12 present harms. 13 MS. WHELAN ENNS: Currently -- again, 14 not speaking as an economist or expert -- 15 currently, because we are in transition certainly 16 right through the western world in respect to 17 sustainable objectives and sustainability, is it 18 an accurate description to say that our current -- 19 some of our current economic indicators including 20 and in relation to Hydro projects such as we are 21 discussing, actually show increases in GNP or GDP 22 without internalizing the societal costs that you 23 are describing, the externalities that you are 24 describing? 25 The classic way of asking that of 2173 1 course is was the Valdez good for the economy? 2 Was Chernobyl good for the economy? I am asking 3 these questions because of a concern on 4 definitions today. If -- I am seeing an objection 5 to that question, so I will turn the page. 6 I would like to ask a chronological 7 question in terms of the question and answer 8 regarding wind industry in Europe. 9 Is it correct that the wind industry 10 in Europe is 10 to 15 years ahead of the 11 start-ups, the first projects -- and we are about 12 to have our first wind project in Manitoba -- here 13 in North America. And the pattern that you were 14 describing in terms of the growth and these 15 targets in Germany, Denmark and so on, are a 16 function of about a 15-year time line? 17 MR. RUDNICKI: From what I have seen 18 in the literature, I think that is pretty 19 accurate. Again, there are number of -- a number 20 of -- what we have touched on, I think, in this 21 brief conversation, there have been a number of 22 disciplines that range from public policy to legal 23 issues to government affairs issues, generally, 24 and we could really get down to particulars with 25 that. 2174 1 Clearly, the Germans and the Danes 2 have pushed for years. They make no bones about 3 it in their initiatives. I think it is in 4 Germany, in particular, that there is clear 5 expression that our goal is to use renewables and 6 we want to meet -- in fact, 100 percent of our 7 electricity need with certain renewables, wind 8 comprising up to a third of that whole package. 9 As a result of that particular vision 10 being set forth, lots of policies follow from 11 that. So, it is an articulated -- it is a clearly 12 articulated vision about the future. 13 MS. WHELAN ENNS: I wanted to ask you 14 about time lines then in respect to the Chair's 15 question, regarding the clean up of the Hudson 16 River and Lake Erie. 17 Is it a reasonable understanding -- 18 and I don't, other than presentations from Mr. 19 Kennedy, I am not knowledgeable about the Hudson 20 River. Is it a reasonable understanding that this 21 example -- it was a good one from the Chair -- is 22 an example of externalities not being valued, 23 being delayed, not being internalized in terms of 24 the combined impacts of development decisions, 25 where then it is basically all of us paying? 2175 1 MR. RUDNICKI: Again, I think that is 2 a perfect example of externalities. What happens 3 is that the ongoing and accumulating harms 4 associated with that burden that is pushed off on 5 to the environment continues to grow. As it 6 continues to grow, people suffer, environments 7 suffer. 8 MS. WHELAN ENNS: Is there a 9 possibility that the business as usual approach in 10 respect to the Wuskwatim projects may, in fact, 11 also delay both valuation and then costs and 12 payment on externalities for the Wuskwatim 13 projects? 14 MR. RUDNICKI: Could you give me that 15 one more time. 16 MS. WHELAN ENNS: Sorry, late in the 17 day for all of us, including me. 18 I am trying to basically ask you 19 whether the business as usual scenario for the 20 Wuskwatim projects then has the potential to -- if 21 mitigation and planning is not, you know, fully 22 right on the dot accurate, including in terms of 23 climate change, is it possible then that we could 24 have delayed costs on externalities from these 25 projects? 2176 1 MR. RUDNICKI: It sure seems like a 2 possibility and I think once again, looking at 3 some of the laws in the United States that deal 4 with the development of hydro, point out some of 5 the problems. There is limitations on development 6 and some of those limitations go to specifically 7 environmental issues. They go to cultural issues. 8 They go to a whole host of factors considered by 9 the Federal Energy Regulatory Commission. 10 MS. WHELAN ENNS: Thank you. One last 11 question, if I may. 12 Would you recommend that Manitoba have 13 a regulatory mechanism to register consultants and 14 lobbyists? 15 MR. RUDNICKI: Does that mean -- 16 MS. WHELAN ENNS: I don't know the 17 procedures and don't understand them fully in 18 Minnesota, but would you recommend that we do that 19 here? 20 MR. RUDNICKI: Let's put it that 21 way -- 22 THE CHAIRMAN: I don't know that that 23 response is pertinent to redirect. 24 MS. WHELAN ENNS: I accept that from 25 the Chair. Again, I was trying to speak to some 2177 1 of the content in the questions. 2 If I may take a small liberty, 3 Manitoba Wildland CNF is on the record in Manitoba 4 in the ministerial correspondence in several 5 departments recommending that we do this as of 6 about three years ago. 7 THE CHAIRMAN: All right. 8 MS. WHELAN ENNS: I am -- thank you. 9 THE CHAIRMAN: Thank you. 10 MR. GREWAR: Mr. Chairman, I just 11 wanted to point out, we neglected to enter as 12 exhibits Mr. Rudnicki's PowerPoint slide 13 presentation, which I would propose as CNF-1004 14 and CNF-1005 would be the actual submission, 15 "Manitoba Clean Environment Commission Hearing, 16 Proposed Wuskwatim Generation & Transmission 17 Project, Presentation by Timothy J. Rudnicki", as 18 CNF-1005. 19 THE CHAIRMAN: Thank you. 20 21 (EXHIBIT CNF-1004: Mr. Rudnicki's 22 PowerPoint slide presentation) 23 24 (EXHIBIT CNF-1005: Mr. Rudnicki's 25 typed submission re Proposed 2178 1 Wuskwatim Generation & Transmission 2 Project) 3 4 THE CHAIRMAN: Thank you, Mr. 5 Rudnicki. 6 MR. RUDNICKI: Thank you. 7 THE CHAIRMAN: With this, we will 8 adjourn for today and reconvene tomorrow at 1:00 9 o'clock. Thank you. This is now 5:21 p.m. 10 11 (ADJOURNED AT 5:21 P.M.) 12 13 14 15 16 17 18 19 20 21