5637 1 MANITOBA CLEAN ENVIRONMENT COMMISSION 2 3 VERBATIM TRANSCRIPT 4 Volume 24 5 6 Including List of Participants 7 8 9 10 Hearing 11 12 Wuskwatim Generation and Transmission Project 13 14 Presiding: 15 Gerard Lecuyer, Chair 16 Kathi Kinew 17 Harvey Nepinak 18 Robert Mayer 19 Terry Sargeant 20 21 Thursday, May 13, 2004 22 Radisson Hotel 23 288 Portage Avenue 24 Winnipeg, Manitoba 25 5638 1 LIST OF PARTICIPANTS 2 3 Clean Environment Commission: 4 Gerard Lecuyer Chairman 5 Terry Sargeant Member 6 Harvey Nepinak Member 7 Kathi Avery Kinew Member 8 Doug Abra Counsel to Commission 9 Rory Grewar Staff 10 CEC Advisors: 11 Mel Falk 12 Dave Farlinger 13 Jack Scriven 14 Jim Sandison 15 Jean McClellan 16 Brent McLean 17 Kyla Gibson 18 19 Nisichawayasihk Cree Nation: 20 Chief Jerry Primrose 21 Elvis Thomas 22 Campbell MacInnes 23 Valerie Matthews Lemieux 24 25 LIST OF PARTICIPANTS 5639 1 2 Manitoba Conservation: 3 Larry Strachan 4 Trent Hreno 5 6 Manitoba Hydro/NCN: 7 Doug Bedford, Counsel 8 Bob Adkins, Counsel 9 Marvin Shaffer 10 Ed Wojczynski 11 Ken Adams 12 Carolyn Wray 13 Ron Mazur 14 Lloyd Kuczek 15 Cam Osler 16 Stuart Davies 17 David Hicks 18 George Rempel 19 David Cormie 20 Alex Fleming 21 Marvin Shaffer 22 Blair McMahon 23 24 25 5640 1 LIST OF PARTICIPANTS 2 3 TREE/RCM 4 Peter Miller 5 Ralph Torrie 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 INDEX OF EXHIBITS 5641 1 2 Number Page 3 4 MH/NCN 1037: Manitoba Hydro's 5 TREE/RCM rebuttal, 6 May 4, 2004 5705 7 8 TREE/RCM 1008: Dr. Peter Miller's 9 presentation to the CEC 10 Wuskwatim hearings 5705 11 12 13 CAC/MSOS 1011: Summary of Manitoba Hydro 14 Calculations of Wind Power 15 Economics, corrected 5810 16 17 MC-1003: Glenboro Rugby Harvey 230 kV 18 Transmission Project Environmental 19 Protection Plan, 20 February 2002 5812 21 22 23 24 25 5642 1 2 INDEX OF EXHIBITS 3 4 Number Page 5 6 MH/NCN 1038: Cross-examination Reference 7 Material CNF/RCM/TREE 1 NFAAT-4 8 REV, Energy Available for Export 9 Medium-Low Load Growth 10 Scenario Median Flow Conditions; 11 Energy Available for Export 12 Medium-Low Load Growth 13 Scenario-Dependable Flow conditions; 14 MH-NCN-NFAAT-S-2a Revised: 15 January 16, 2004 5813 16 17 OTH-1030: Submission by International 18 Brotherhood of Electrical Workers, 19 submitted by Garnet Boyd 5826 20 21 OTH-1031: Presentation of the Assembly of 22 Manitoba Chiefs Secretariat, 23 submitted by Dennis White Bird, 24 Assembly of Manitoba Chiefs 5832 25 5643 1 2 3 INDEX OF UNDERTAKINGS 4 5 UNDERTAKING NO. PAGE 6 7 8 9 TREE-RCM-84: Provide copy of graph 10 and numbers underlying graph in terms of available 11 resources 5756 12 TREE-RCM-85: Provide underlying 13 values for resources available for figure 14 TREE/RCM/CNF 13.1 5757 15 16 17 18 19 20 21 22 23 24 25 5644 1 THURSDAY, MAY 13, 2004 2 Upon commencing at 9:05 a.m. 3 4 THE CHAIRMAN: Ladies and gentlemen, we 5 may be few in numbers but we're here in quality. 6 We're here to proceed this morning with the 7 presentation from Time to Respect the Earth's 8 Ecosystems, TREE and RCM. 9 Before we begin, I know we're going to 10 have a combination of good and bad. Good today and 11 bad before because you reminded me a while ago, Mr. 12 Torrie, that last time you were here, you got the 13 blame for the bad weather. So today we'll give you 14 the blame for the good weather. It's changed 15 considerably so we expect better conditions. 16 MR. TORRIE: I'm always out of season. 17 THE CHAIRMAN: Mr. Grewar. 18 MR. GREWAR: Gentlemen, could you each 19 state your names for the record, please. 20 DR. MILLER: Peter Miller. 21 MR. TORRIE: Ralph Torrie. 22 MR. GREWAR: Gentlemen, are you aware 23 that in Manitoba, it is an offence to knowingly 24 mislead this Commission? 25 MR. TORRIE: I am aware of that. 5645 1 DR. MILLER: Yes. 2 MR. GREWAR: Do you promise to tell only 3 the truth in proceedings before this Commission? 4 MR. TORRIE: I do. 5 DR. MILLER: Yes. 6 7 (RALPH TORRIE: SWORN) 8 (PETER MILLER: SWORN) 9 10 THE CHAIRMAN: Now you may proceed. 11 DR. MILLER: Okay. I am going to start 12 out by saying a little bit of why we've been pursuing 13 the intervention and make just a few largely 14 non-numerical observations and then I'll turn it over 15 to Ralph Torrie for the meat of the presentation. 16 TREE, Time to Respect Earth's Ecosystems, 17 and RCM, Resource Conservation Manitoba, are both 18 concerned with issues of applied sustainability. 19 TREE, however, as its acronym implies, has focused on 20 forest issues. Along with most Manitobans, we share 21 a concern for the health and sustainability of 22 Manitoba's forest ecosystems and values. The guiding 23 principles of both organizations are appended to the 24 written copy of this. Unfortunately, I didn't make 25 enough copies to distribute to everyone but I think 5646 1 Rory has made a few for the Commission and perhaps 2 for Hydro. 3 There are links between forest and energy 4 production obviously and the Pembina Institute study 5 done for the screening of the options pointed out 6 some of these in terms of land use and greenhouse gas 7 production. And the one thing that they omitted was 8 energy conservation and that's the thing that we were 9 pushing the most. 10 Manitoba's northern forests have a great 11 deal at stake from climate change, mitigation efforts 12 because of the projected impacts on that forest from 13 global warming. You've probably all seen charts of 14 how the boreal forests will almost disappear in 15 Manitoba, perhaps surplanted by other forests or 16 increased grasslands. 17 And so obviously for those who care about 18 the forests, mitigation is a very important concern. 19 And the project proposes to contribute to that 20 mitigation effort by producing electricity for export 21 that, at least theoretically, and there's some 22 debate, will displace fossil-fuelled generation of 23 electricity in the United States. 24 From the standpoint of the forest, energy 25 conservation is the preferred alternative. The more 5647 1 energy that is saved by Manitoba consumers, or 2 produced by alternative means, the more that is 3 available for export without the impacts of new 4 impoundment or the swath of new transmission 5 corridors through forests entailed by the 6 hydroelectric development. And of course 7 conservation and alternative generation in markets 8 where the base load is fossil-fuelled will directly 9 reduce greenhouse gas emissions. 10 So these are some of the basic and 11 perhaps obvious links between concern for the forest 12 and concern for energy just to indicate why TREE is 13 here. 14 Another observation is that hydroelectric 15 power, although a renewable resource, is still 16 finite. Manitoba Hydro estimates there are still 17 another 5,000 megawatts of capacity on the Nelson 18 River system. But when that is gone, then what? 19 Will the head be raised at Wuskwatim to realize 350 20 megawatts of capacity? Will the Hayes River be 21 exploited next? What is the end game when the 22 potential for the Nelson and perhaps other available 23 sites has been fully exploited? Dam the remaining 24 free-flowing rivers in Manitoba? Burn more fossil 25 fuel from Alberta or from more remote and sensitive 5648 1 sites offshore and in the Arctic? 2 Even if one were to grant, for the sake 3 of argument, that the impacts of further development 4 on the Burntwood and Nelson systems were tolerable, 5 the imperative to conserve remains. Growth in energy 6 consumption, hence generation, cannot proceed forever 7 nor is it too soon to contemplate that end game. 8 Just checking Manitoba Hydro's website, I 9 saw that 3,700 megawatts of the existing Nelson River 10 capacity came on line in the short space of 16 years 11 from 1974 to 1990. A similar building binge, and 12 we've seen one projected, could complete the job in a 13 comparatively short time. So that establishes a 14 social imperative for conservation. 15 Now, what are the figures? We've all 16 heard of the OECD comparison which indicates that 17 North Americans and Canadians in particular are 18 energy hogs. 27th out of 29 OECD nations in terms of 19 energy use per capita, that's Canada, using almost 20 twice as much as the OECD average. And increasing 21 per capita use at a greater rate than the average 22 OECD increase since 1980. 23 Moreover, Canada is 28th out of 29 in 24 energy efficiency or the term energy productivity has 25 been used in these hearings and Mr. Torrie uses that 5649 1 term. The energy used per dollar of gross domestic 2 product. And that's 33 per cent less energy 3 efficient than our major trading partner, the U.S. 4 and less than half as efficient as the OECD average. 5 This should obviously be a matter of 6 concern for anyone who cares about the environment 7 and the economy and is seeking a path to 8 sustainability. 9 MR. MAYER: Before you go on, are those 10 numbers correct? You call this 27th out of 29th. 11 How could we be so much above the average? Are you 12 sure it isn't 27 out of 29 in terms of energy 13 efficiency? 14 DR. MILLER: Inefficiency. I mean 15 it's -- 16 MR. MAYER: 27 out of 29 in terms of 17 energy use per capita. That sounds pretty good. 18 DR. MILLER: That sounds good? 19 MR. MAYER: That's what it says. 20 DR. MILLER: Well, you want a low figure 21 per capita rather than a high one. 22 MR. MAYER: If I -- 23 THE CHAIRMAN: It's the wording. 24 DR. MILLER: Yeah, okay. 25 MR. SARGEANT: We're 27th worst. 5650 1 DR. MILLER: 27th worst on the scale. 2 MR. MAYER: Okay. That's not what it 3 says. 4 DR. MILLER: Thanks for the 5 clarification. 6 In each case, it's towards the bottom 7 and it means we're 28th out of 29 in energy 8 efficiency which means that there are 27 more 9 efficient than we are. And this record is 33 per 10 cent less efficient than the U.S. 11 It is sometimes argued we live in a cold 12 climate, are spread out over large distances and have 13 attracted energy-intensive industries so that, 14 regrettable as it may be because of the environmental 15 impacts, we should resign ourselves to our standing 16 as energy hogs. Moreover, such resignation may be 17 further excused in Manitoba by the fact that our 18 hydroelectric energy supply makes our Manitoba 19 economy less carbon-intensive than others. 20 On the contrary, I believe that the more 21 energy we consume and the less energy efficient is 22 our economy, for whatever reasons, the more it is 23 incumbent upon us to ask how we can improve that 24 situation. 25 Is it just physical climate and geography 5651 1 or is it a social climate of practices, policies, 2 regulations, standards, incentives, investments, 3 infrastructure and performance measures that is at 4 fault? 5 The fact that we are part of a 6 continental grid also means that our consumption 7 patterns and conservation efforts do indeed affect 8 continental greenhouse gas emissions, which has been 9 an essential part of the Hydro submission. 10 So we can't be unconcerned about these 11 matters in Manitoba. 12 Unfortunately, in Manitoba we've had 13 little opportunity to examine and debate questions of 14 energy policy as a whole. As a province, we 15 developed an array of sustainability policies through 16 public consultation but an energy policy was not 17 among them. 18 More recently, the Climate Change Task 19 Force chaired by my President at the University of 20 Winnipeg, Lloyd Axworthy and Public Utility Board 21 rate hearings have provided two windows on aspects of 22 an energy policy. Consideration of the 23 justification, need for and alternatives to Wuskwatim 24 advancement is a third such window. 25 So that provides our rationale for 5652 1 engaging in this intervention. 2 Okay. Where does Manitoba stand now? 3 Well, Ralph is going to give certainly a more 4 detailed analysis of this but I'd just like to make a 5 few observations. 6 The social imperative is, first, for 7 energy conservation and efficiency measures and, 8 second, for least impact generation options. And 9 where do we stand in Manitoba? 10 In our closing argument to the 2002 PUB 11 intervention, found at Appendix 5 of our compiled 12 written submissions which were distributed a couple 13 of days ago to the people who were intervening in the 14 NFAAT part, we pointed out that the Sustainable 15 Development Act and the Manitoba Hydro Act provide a 16 sound legal base and a legal requirement to respond 17 to the social imperatives of sustainability and 18 efficiency in the policies and practices of Manitoba 19 Hydro including the promotion of end-use efficiency 20 of customers. 21 And these same Acts also provide, the 22 Sustainability Act in particular, that Manitoba's 23 regulatory and review bodies, like the PUB and CEC, 24 are similarly bound. Thus, Manitoba has many of the 25 right principles in place even if performance is 5653 1 sometimes spotty. The challenge is to translate 2 these legal mandates into practice and we still have 3 a ways to go. 4 Looking at Manitoba Hydro's corporate 5 strategy and goals. It is important to get these 6 right because as they indicate in their strategic 7 planning document, that is supposed to guide 8 everything that they do. 9 We note the addition of a new corporate 10 goal of being a leader in implementing cost effective 11 DSM measures and we hope this signals a shift from 12 the position taken by management in the 2002 hearings 13 that DSM is, I'm quoting, "not a social 14 responsibility that we bear." It's a legislated 15 requirement. 16 The Manitoba Hydro Act says otherwise. 17 Identifying the notion of end-use efficiency is one 18 of its purposes. But you need more than just a goal, 19 you need performance measures and we indicated that 20 these were lacking. There have been some exchanges 21 in the interrogatory process which suggests some ways 22 of doing a measurement and comparison. And perhaps 23 with the new end-use data, there can be comparisons 24 between how energy efficient a typical Manitoba home 25 is compared with one in another jurisdiction. So I 5654 1 hope that those will be explored. 2 There is also a need to revise the 3 statement of purpose of the PowerSmart program to 4 include a reference to the environmental and 5 sustainability benefits that it evokes in it's 6 advertising. The branding of PowerSmart through 7 images of children embracing nature suggests that a 8 sustainability purpose directs energy conservation 9 programs. 10 However, when one turns to the corporate 11 purpose for implementing demand-side management, one 12 finds instead two economic objectives: To provide 13 alternative cost effective methods of power supply 14 and to minimize the total cost of energy services to 15 customers. There's nothing about how can the 16 footprint of Manitoba Hydro and of its customers be 17 reduced. And yet, that would seem to be an essential 18 part of the rationale, certainly recognized in the 19 advertising. 20 It could be interpreted as somewhat 21 cynical to say we know our customers have these 22 environmental values and we're going to appeal to 23 them in our advertising but they are not at the core 24 of our program planning. I'm not saying this is not 25 true of many Hydro personnel but I'm just saying 5655 1 institutionally when you identify the purposes of 2 your PowerSmart program, you have to bring in the 3 environmental benefits, the environmental links. And 4 that still needs to be done. I hope that will be 5 done when you revise your next PowerSmart plan. 6 And finally, the purpose of our last PUB 7 intervention and the current one is to look at 8 perverse incentives and so on that might be related 9 to rates. We asked what are the implications of low 10 electricity rates in Manitoba for energy conservation 11 given the general economic principle that lower costs 12 of a product tend to increase its consumption. And 13 we sought to explore rate options that were more 14 favourable to conservation and proposed an inverted 15 rate for the residential sector. And the PUB ordered 16 that Hydro study inverted rates for all customer 17 classes as well as some other measures that might 18 contribute to conservation. 19 In our view, there are a number of 20 factors that depress Manitoba's rates such as those 21 identified in our response to 22 CAC/MSOS/TREE/RCM1-NFAAT-8. We argued that current 23 methods of allocating costs and the system export 24 dividend, which are the foundation of rate setting, 25 are both inefficient and inequitable. 5656 1 They are energy inefficient because low 2 cost power encourages wastage and reduces the 3 incentive to conserve. That principle was 4 uncontested at the hearings. They are 5 environmentally inefficient because the wasted energy 6 is unavailable to displace greenhouse gas producing 7 fossil fuel generation elsewhere on the continental 8 grid thus adding to the global environmental costs of 9 North American electricity. 10 They are economically inefficient because 11 wasted energy is non-productive and using the system 12 export dividend that sales to the States and the 13 profits to subsidize inefficient consumption makes 14 the dividend unavailable for more productive 15 investments including conservation investments that 16 would reduce energy wastage and customer bills and 17 increase the system export dividend to Manitoba. 18 And we argue that these subsidized rates 19 in the present manner of the subsidy are inequitable 20 because higher consuming customers grab more than 21 their share of both the benefits of low cost 22 resources in the system, such as the Winnipeg River 23 generation which doesn't face the long transmission 24 and has depreciated capital costs. And the export 25 dividend earned by a crown corporation and resource 5657 1 belonging to us all. 2 So you get what, to my mind, is the 3 outrageous situation of the entrepreneurial profits 4 from exporting electricity to U.S. markets being 5 redistributed to the bottom lines of other 6 corporations and not to the owners of the 7 corporation, which is the government on behalf of us 8 all. 9 Now the point of these conclusions for 10 the Wuskwatim hearing is that as part of a concerted 11 effort to adhere to the principles of sustainability 12 and the Manitoba Hydro legislated mandate to promote 13 efficient production, distribution and end-use of its 14 product, we have to stop subsidizing the wastage of 15 energy and promote the preferred alternative to 16 Wuskwatim of energy conservation. 17 It is possible to stop subsidizing 18 wastage of energy while still trying to reduce 19 customer energy costs. Two principal ways of doing 20 this are, first, to redirect subsidies from rates to 21 conservation measures and within the rates from the 22 tailblock rates to the initial block rates and fixed 23 charges. That is, the subsidies which lower the 24 costs should be applied not uniformly across the 25 pricing of electricity but to places where they will 5658 1 have -- the subsidies will have less effect on 2 conservation. 3 It is possible to do this in a revenue 4 neutral way that will lower the bills of conservers, 5 raise the bills of larger consumers, bring tailblock 6 rates closer to the marginal cost of energy and thus 7 increase the incentives and cost-effectiveness to 8 consumers of conservation measures. 9 My final observations are about the new 10 PowerSmart standard for new homes. Finally, with the 11 new home program, it encourages building to a new 12 PowerSmart standard. And the intention of this 13 program is to increase the penetration of efficiency 14 measures and new home construction. That's good. 15 But it is disappointing that it falls short of what 16 the DSM report says is the cost effective R2000 17 standard. So we're settling for less than we should. 18 The lower interest rates of recent years 19 have created a new housing boom. It is a failure of 20 regulation and building standards that all of this 21 new construction represents lost opportunities and 22 embodied inefficiency that is not readily corrected. 23 And the PowerSmart New Home Program is supposed to 24 lessen this but it will not eliminate that. And I 25 think we should be able to do better. 5659 1 I note that Hydro indicates in its second 2 rebuttal that the program was developed in 3 consultation with industry advisory teams. Where 4 were the conservation groups, the consumer groups and 5 municipalities in these consultations? Builders have 6 frequently resisted implementation of the highest 7 conservation standards because of incremental initial 8 costs even though these more than pay for themselves 9 in the long run, perhaps not to the builder who 10 doesn't pay the auto utility bills. And so that's 11 just an observation on one of the points in the 12 rebuttal. 13 So those are my initial comments. And 14 for the remainder of the presentation, I'll turn it 15 over to Ralph. 16 MR. TORRIE: Thank you, Peter. And good 17 morning, members of the panel and Commission I should 18 say and everyone else. I now feel responsible for 19 the weather. And it's the second time I've come here 20 and it's had unusual weather events following me it 21 seems, although I was kind of enjoying it. I went 22 for a walk down to the train station last night and 23 just when I got there, the cross-Canada train was 24 making its 45 minute stopover. So there were 25 tourists streaming out of the station with their 5660 1 cameras, getting their pictures taken in the snow of 2 Winnipeg in the middle of May and everybody was 3 having a good time with it. So that will be their 4 memory of their Winnipeg stop on their cross-Canada 5 trip. 6 MR. SARGEANT: I'm glad somebody is 7 enjoying it. 8 MR. TORRIE: Yeah. And the station too, 9 it's really nice what they've done there. It's quite 10 a historic place. 11 What I wanted to do, first of all, is 12 tell you what I'm going to try and do. I'm never as 13 well prepared or as eloquent as my client beside me. 14 But what I would like to try and spend a little bit 15 of time doing is, first of all, addressing the NFAAT 16 question in a general way because I think that 17 probably the single -- in my view at least, the 18 single biggest and most important observation that I 19 have made in my sort of experience with this process 20 and with this proposal, which obviously has not been 21 as intense as yours, is that there wasn't really an 22 NFAAT case on the table and I want to talk about that 23 a little bit. And then I'd like to just highlight 24 some of the analytical work we did. I am not going 25 to go into a lot of detail. 5661 1 There is a rebuttal that had arrived, I 2 don't know exactly when, around a week ago or so from 3 Manitoba Hydro that responded to a lot of the 4 information that we provided in the interrogatory -- 5 in our interrogatory responses and it's about a 36 6 page document. I have had a chance to read that in 7 addition to having read most of the NFAAT case. I 8 read both binders. I think I've read all of the 9 NFAAT interrogatories. I haven't understood them all 10 but I've read them all. Some of them I've read a few 11 times. And so I have a fairly extensive familiarity 12 I guess with the NFAAT part of the case, or at least 13 what was called the NFAAT part of the case. And then 14 I would like to just sort of wrap up with a few other 15 observations. 16 Peter referred, in his opening remarks, 17 to a compilation of our prepared statement from 18 February as well as the interrogatory responses that 19 we put together in order to hopefully facilitate the 20 discussion here today. And there is one small 21 difference between the material and the binder and 22 what you may already have and that is in the main 23 submission, which is the first section in the binder. 24 At the end of each of the sections, there is an 25 indication which of the interrogatory responses also 5662 1 relates to that particular question. 2 So it's a cross-referencing system, in 3 other words, where you can quickly find at the end of 4 each response in the main document where else you can 5 read material in the interrogatory responses that is 6 relevant to that point. 7 And the other thing that we did just by 8 way of leafing through this document. If you haven't 9 already noticed, if you take a look at the appendices 10 1, 2, 3 and 4, in each case, both the header and the 11 footer have information that tells you which appendix 12 you're in. So for example, Appendix 1, you can see 13 right away, as you're leafing through, that it's the 14 Canadian Nature Federation questions because it 15 starts with CNF. And you can also see which 16 interrogatory you're looking at because the 17 interrogatory number is also right in the header and 18 the footer. So we've tried to do a couple of things 19 like that to make it a bit quicker to leaf back and 20 forth between the cross-references in the main text 21 and the interrogatory responses that they are 22 referring to. 23 We came into this exercise about a year 24 ago, not even a year ago really, and agreed to 25 undertake what we thought would be an analysis of a 5663 1 full-fledged Need For and Alternatives case by 2 Manitoba Hydro. So I had certain expectations about 3 what I was going to find. And when it wasn't in the 4 main submissions, and I'll be more specific in a 5 moment about what I'm talking about, we tried to ask 6 interrogatories to see if perhaps it was there but 7 just not well-reflected in the main submissions. And 8 the interrogatories confirmed that what I would call 9 a Need For and Alternative analysis was never really 10 done in the preparation of this proposal. And it's 11 not even clear from the responses from Manitoba Hydro 12 that they know what it means, at least as an 13 organization. 14 What I mean at least, and perhaps I'm 15 being presumptuous because there are obviously a lot 16 of interpretations of what NFAAT is, but it seems to 17 me that central to the concept of Need For and 18 Alternatives in environmental assessment, and more 19 generally in planning, is that requirement that you 20 stand back from what it is that you're doing, 21 identify what the fundamental purpose of that 22 undertaking is and define and analyze other ways that 23 you could achieve that fundamental objective. That's 24 what NFAAT analysis is all about. 25 In a slightly different way, that's what 5664 1 the witness, I think it was Mr. Harper, have I got 2 his name right, yesterday, for the Consumers 3 Association, was talking about when he said you need 4 to be doing full portfolio analysis for this kind of 5 an investment decision. And it's not there in the 6 Hydro case. 7 And so the first thing that I did then, I 8 guess from a legal point of view, one could have just 9 thrown up their hands at that point I suppose and 10 say, well, there is no NFAAT case on the table so 11 there's nothing to talk about. But we were 12 determined to try and go further than that with the 13 resources that TREE and RCM had from the funding 14 process. So we set out to try and illustrate what a 15 NFAAT case might have looked like, one example or 16 maybe a couple of examples if it had been put 17 forward. 18 And even before you can start that 19 exercise, you really have to make sure that you have 20 that central definition of the objective and the need 21 of the undertaking clear in your mind. 22 And it actually is not as easy as it 23 might have been to pull it out of Manitoba Hydro's 24 evidence on the Need For and Alternatives. One would 25 expect it to be right there and labelled as such. 5665 1 But the passage that it seems to me most concisely 2 summarizes the need that should have been the focus 3 of an NFAAT analysis is this passage from I believe 4 Volume 1. It's right out of our main submission and 5 the full reference is in the written material. But 6 the word "primary" is highlighted because I think 7 here we have it, perhaps it's obvious to everybody, 8 and I think there is agreement on this point that the 9 primary objective of this particular proposal is to 10 maintain current export revenues and profits. That's 11 the primary objective. 12 I don't think there's anything else that 13 comes close to it in terms of the motivation for why 14 we're all here right now. I know there are a lot of 15 other things that are listed as justifications for 16 building the dam but this is what I think should be 17 the focus of an NFAAT discussion, is what are the 18 other ways that you could maintain current export 19 revenues and profits? And what are the other ways 20 that one could identify for investing the type of 21 money that is being -- that will be required to bill 22 Wuskwatim in those alternatives. 23 It's not the same thing as saying that a 24 particular investment stays profitable or doesn't 25 stay profitable under different sensitivity analyses. 5666 1 That's not an NFAAT analysis. You can call it one 2 but that doesn't make it one. You know, if it's not 3 a duck, you know, calling it one is not going to make 4 it quack. And when you look at what we got from 5 Manitoba Hydro over and over and over again on the 6 question of NFAAT, it was always but it will make 7 money no matter what else happens. And that may be 8 true but it's not the central issue in an NFAAT 9 analysis. 10 What we would have expected and hoped to 11 see is a full portfolio analysis starting with an 12 integrated look at the end-use structure of the 13 future demand for energy starting in the market, in 14 other words, and developing one's business plans and 15 strategies from the market. And that's what we 16 didn't get. 17 And there was a passage in one of the 18 interrogatory responses that we received, number 32b, 19 and I had a bit of an ah-ha moment when I read this 20 because I think it really epitomizes what was lacking 21 in some ways in the approach that was taken by 22 Manitoba Hydro to the NFAAT question. They state 23 quite clearly here that they don't start with the 24 market, that they really start by assessing a project 25 that's been defined with respect to how it would fair 5667 1 under different conditions in a market-place. 2 And that's a tried and true way of 3 running an electric utility, make no mistake about 4 it. But it also represents a supply-oriented and 5 somewhat anachronistic approach to planning in the 6 21st century. We would have hoped to have seen a 7 more services demand-oriented market-based philosophy 8 pervading the NFAAT question as opposed to the more 9 engineering project-specific orientation that we 10 found and which is reflected -- and which is a 11 reflection of a philosophy that is apparent in this 12 passage from Manitoba Hydro's evidence. 13 So I mean I know it's probably too late. 14 I guess it's too late. I've never really understood 15 what all the rush was about around this dam but, you 16 know, I'm not from here. But perhaps it's too late 17 at this point for an NFAAT analysis to be required of 18 Manitoba Hydro and it's not obvious that you could 19 get it because it's not clear that the capacity is 20 there to do it yet. 21 But this is not going to be good enough 22 as we look forward to the future of energy and 23 resource and sustainable planning for the 21st 24 century. We've got to move on to a much more 25 integrated market-based and end-use approach to the 5668 1 way that we think about our energy system and the way 2 we evaluate particular investments in it. 3 So I wanted to say that first because I 4 guess I've been starting to think about what will be 5 the lessons learned hopefully or what will be the 6 recommendations at least that I would make for what 7 needs to happen in the NFAAT area with regard to 8 energy planning in general and Manitoba Hydro in 9 particular and I think that it still has a way to go 10 in that regard. 11 Faced then with that basic starting 12 point, and you know with not a lot of resources 13 compared to the mountain of evidence and analyses 14 that we had to try and assimilate and understand, 15 what we decided to do was to take almost an auditor's 16 perspective, if you like, towards the quantitative 17 analyses that had been presented and the data that 18 had been presented by Manitoba Hydro on the question 19 of the demand for electricity. And we did this in a 20 series of steps. And I'll say I'd like to highlight 21 a little bit about what we did in each of those 22 steps. But I will tell you what they wear first or 23 remind you what they wear. 24 The first thing that we did is we tried 25 to take the load forecast. In our case, it was the 5669 1 2002 load forecast which still did not have the 2 Winnipeg service area integrated into the totals. 3 And that presented us with a significant problem that 4 we had to solve. Starting with that load forecast in 5 one hand and the consultant studies that were done on 6 the DSM market potential in the other hand -- 7 actually you can't hold all three of them in one 8 hand, you'll break your arm -- but starting with 9 that, we constructed a description of electricity use 10 both in a base year and out to the year 2018, 11 2017/18, we work on the fiscal year systems on this, 12 in which the forecast could be described in an actual 13 end-use model. Not just for the residential sector 14 which Manitoba Hydro already does, but also for what 15 gets lumped together into the general service class 16 in the load forecast and which includes all 17 industrial and commercial electricity use in the 18 province. And so we spent quite a bit of time trying 19 to tune, if you like, our end-use spreadsheet type 20 models to the 2002 load forecast. 21 And what an end-use model basically does 22 is it represents let's say electricity use as the 23 product of an activity variable and an electricity 24 intensity variable. And there's two or three others 25 that come into it. But essentially, it says the 5670 1 electricity use in Manitoba will be the number of 2 single family detached houses multiplied by the 3 electricity use per refrigerator, multiplied by the 4 number of refrigerators in each house. And then you 5 repeat that calculation for apartments and you repeat 6 it for other appliances and you repeat it for the 7 houses and the buildings and the industries 8 themselves. And you build from the bottom up a 9 description of the electricity use, both now and in 10 the forecast, that is rooted in an actual physical 11 description. So you have square metres of commercial 12 floor area multiplied by electricity use per square 13 metre in the commercial sector. And in the 14 industrial sector, we worked with electricity per 15 dollar and dollars of output, as did the Manitoba 16 Hydro consultants in that case. 17 And essentially then, you need this to do 18 a DSM analysis because to do a DSM analysis, you need 19 to go back and look at that line, for example, that I 20 just was describing that tells you how much 21 electricity is being used in refrigerators in single 22 family dwellings and you do an analysis about what 23 you can do about that, how much more efficient can 24 you make those refrigerators. 25 So end-use models are particularly useful 5671 1 and I would say even necessary to do good market 2 planning for DSM. 3 And when you try to do this, almost 4 invariably, I don't know if I've ever seen a utility 5 load forecast successfully tuned or calibrated, if 6 you'd like, to an end-use model where you didn't end 7 up having to make some assumptions that didn't seem 8 right in order to get the end-use model to agree with 9 what the utilities load forecast was putting out 10 there as the future demand for electricity. 11 And this is what you would expect because 12 it's a completely different way of thinking about the 13 future of electricity use and it forces you to try 14 and imagine some kind of a real future that would use 15 the amount of electricity that your forecast is 16 telling you is going to be used in a particular 17 economic case. 18 And what we found when we did this with 19 the Manitoba Hydro 2002 forecast, a couple of things. 20 First of all, in order to tune our end-use model to 21 the 2002 load forecast, we had a problem in the 22 commercial sector and we had a problem in the 23 industrial sector. We accepted all of the Manitoba 24 Hydro consultant's assumptions about electricity use 25 per square feet metre of floor area and all of that. 5672 1 But we -- and we accepted -- well, we didn't have 2 quite the same floor area profile but, you know, we 3 basically didn't disagree with any aspect of the 4 commercial reference projection, I think it's called 5 in the DSM studies, except that in order to tune up 6 to what we thought at the time was, and I don't think 7 we're actually that far off, was the total commercial 8 electricity use in Manitoba in 2002. A number which 9 by the way does not appear in the load forecast. You 10 have to deduce it. At least you used to have to 11 deduce it. 12 You know, we have a whole lot of new 13 evidence that's come in this rebuttal which needs to 14 be examined and we won't have an opportunity to do. 15 But what I would say is that we found that the growth 16 rates of the commercial building types that you would 17 have to have in terms of how a floor area would have 18 to grow in order to keep up with the forecast even 19 with the efficiency improvements that were being 20 assumed by the DSM consultants were just not 21 believable. 22 And this is the point that we discussed 23 when we were here to cross-examine Manitoba Hydro and 24 I just distributed a table directly from their 25 evidence showing the rates of growth of commercial 5673 1 floor area that are necessary in order to tune up to 2 the forecast. 3 And so that was one area where we think 4 that the end-use model was basically telling us that 5 the commercial electricity probably was not going to 6 be as high as the forecast was suggesting. 7 And then the other one was the industrial 8 sector. And in this case, we were thrown off the 9 trail for a long time because of the errors in the 10 industrial sector DSM report which got corrected 11 incorrectly. So it was really -- you know, it was a 12 real drag for us the amount of additional time that 13 it took to sort through that, but these things 14 happen. 15 In the end what we found there, however, 16 is that the -- we adopted the same business as usual 17 improvement in electricity productivity as had been 18 used in the DSM potential study report. I didn't 19 think we had at first but when we finally got the 20 correct information from Manitoba Hydro, it became 21 apparent to me that it wasn't the industrial 22 electricity productivity that we disagreed with, it 23 was again the rate of output growth. And the output 24 growth rates of industries in the industrial DSM 25 market potential study are way out of line with the 5674 1 output growth rates in Manitoba Hydro's economic 2 outlook. They are not even close. They are taken 3 for reasons that I don't -- I cannot fathom from a 4 federal greenhouse report of some sort that had some 5 economic scenarios in it for the provinces. And I 6 don't think there's any direct connection with 7 Manitoba Hydro's own economic outlook there. But I 8 would love to be stand corrected on that. 9 So this was a difficult issue for us 10 because we didn't have something like floor area or 11 physical barrier to work with, we only had dollars of 12 output and growth in that. So what we did is we did 13 an analysis of Manitoba Hydro's GDP over the past 15 14 or 18 years and we used Statistics Canada data to do 15 this. And we looked at what the relative growth 16 rates were of the different economic segments within 17 Manitoba over that same period. And it turned out 18 that I think it was a 15 year historical growth rate 19 in GDP in Manitoba, industrial GDP, was about the 20 same as what was in the economic forecast of Manitoba 21 Hydro. 22 So what we decided to do was make the 23 assumption that if you indeed did have another 15 24 years of industrial output growth, like you just had 25 the last 15 years, the same rate, that we would also 5675 1 assume that the structure stayed the same. So the 2 growth is there in all of the energy intensive 3 industries which grow faster than the average because 4 that's what happened in that past 15 years in 5 Manitoba. 6 So the underlying driver of our 7 industrial forecast is still quite aggressive on 8 electricity intensity industry in Manitoba and I 9 think it's still quite aggressive, and by that I mean 10 toward the high side, on the question of industrial 11 output growth in general. 12 But it still means that when you combine 13 it with the electricity use per dollar of output 14 characteristic of those industries, with only a 0.9 15 per cent per year improvement assumed as a background 16 sort of level before DSM programs, and that's quite 17 modest, that you still end up with electricity use in 18 the industrial sector that comes out below the load 19 forecast. 20 So I think it's important. And in all of 21 the highlights that I wanted to touch on with you 22 today with respect to the analysis that I did, please 23 remember that none of this was done with the 24 resources that could have and should have been 25 brought to bear on these questions by Manitoba Hydro. 5676 1 And secondly, that it's not really the responsibility 2 of an organization like TREE or RCM to have to try 3 and be the one that comes to a hearing like this and 4 shows what an NFAAT analysis would have looked like. 5 And all we can do with the resources that -- you 6 know, we should have been here responding to one. So 7 all we can do with the resources we had -- you know, 8 we came to assess an NFAAT argument, not to make one. 9 So all we could do with the resources 10 that we had was pretty quickly, as these things go, 11 sketch out some scenarios of what it would look like 12 because we thought if we could sort of almost draw a 13 picture of what we're talking about, that maybe we 14 could finally connect with Manitoba Hydro where 15 there's been such a disconnect throughout the hearing 16 on what is meant by an NFAAT analysis. So that's why 17 we were doing it. 18 So when I talk about the first step, 19 which was to critically assess the load forecast, we 20 may not have found everything that could be found in 21 a more thorough analysis and we may very well have a 22 base year starting number which is too low. This was 23 one of the points that was raised in Manitoba Hydro's 24 most recent rebuttal. 25 It's a very complicated thing to really 5677 1 know but it would have -- I should say it's a 2 complicated thing to change. And I'll come back to 3 this question of the base year number in a moment. 4 But the bottom line was that we felt that just even 5 starting with the base forecast for 2002 and not the 6 medium low forecast but accepting the population and 7 the economic growth assumptions of the base forecast 8 but examining the end-use structure of the system, we 9 felt that the Manitoba Hydro load forecast was too 10 high for those economic inputs. And I still do. 11 I think that I would just like to remind 12 you about the discussion that we had when I was last 13 out here in helping to cross-examine Manitoba Hydro 14 and we were talking about the load forecast. And a 15 load forecast, in a nutshell, involves having some 16 assumptions about the future rate of economic growth 17 and how electricity demand is going to be affected by 18 that. And when Manitoba Hydro creates the medium low 19 and the medium high variations on their base 20 forecast, they do so by assuming different 21 demographic and economic futures. 22 We didn't do that. We kept the 23 demographic and economic assumptions that are in 24 Manitoba Hydro's economic outlook and reflected in 25 their base forecast. What we did, and this was the 5678 1 issue that we talked about last time I was here, is 2 we went in and looked at the relationship between the 3 economic growth and electricity use and how that was 4 changing and how that was likely to change. And that 5 led us on the basis of this analysis I was mentioning 6 a moment ago in the commercial and in the industrial 7 sectors to create what I call an adjusted version of 8 the base forecast that you see in a lot of our 9 evidence. 10 So the way that all of this comes into 11 the NFAAT discussion, this is a famous graph that is 12 a reproduction of the original by the artist known as 13 Manitoba Hydro. But this is basically, I think it's 14 figure 5.5 from volume 1 of NFAAT if I'm not 15 mistaken. And this is not my idea, this is the 16 graphical method by which Manitoba Hydro made its 17 case in Volume 1 of NFAAT for why there was a need 18 for building, not only building but advancing 19 Wuskwatim. 20 And I don't think there's much need to 21 even summarize what this means because I think this 22 figure has been pretty thoroughly discussed here. 23 But that large blue block goes down directly in 24 relation to the load forecast going up. It 25 represents the amount of power that would be left for 5679 1 the export market after domestic demand is met under 2 medium flow conditions, et cetera, et cetera. 3 And the turquoise represents the power 4 that would be delivered if Wuskwatim was brought on 5 line. And I think this one is still showing 2009/10 6 for start-up. 7 And at that 10,500 gigawatt hour line 8 represents the estimated on-peak export market 9 which, as you know, is constrained by operational and 10 technological factors to that level at this time. 11 And when we were finished this analysis 12 that I was telling you about just now and we adjusted 13 the forecast, it had the effect of moving that blue 14 block up, pushing Wuskwatim over the 10,500 line, if 15 you like, and moving the domestic need date out to 16 the year 2035. And it's very similar to the impact 17 of assuming the low -- medium low forecast. It's in 18 the same order of magnitude but we got there by a 19 completely different route which did not make any 20 assumptions about lower economic growth or lower 21 population growth as I was just saying a moment ago. 22 This might be an appropriate time since 23 this really is an illustration of the adjusted or the 24 reference projection if you'd like. I'm sorry, this 25 is the one with the medium low. Well, that's 5680 1 interesting actually. The one I was showing you is 2 what happens if you assume the medium low load 3 forecast according to Manitoba Hydro's numbers. 4 There are some errors in the 5 representation of the medium low forecast in the 6 Hydro evidence and I only discovered that very very 7 late in my work. And I don't know how widespread it 8 is and whether that issue has been cleared up or not, 9 but there are some places where the numbers in the 10 Manitoba, and I point this out in a footnote to one 11 of the interrogatories where there's definitely been 12 some kind of an error made in the representation of 13 the medium low and the medium high forecast. 14 But presuming that this is true, then 15 this is the effect of the medium low. And this 16 graph, which looks very similar, is the result of the 17 adjustments that I was just discussing. 18 Now, this might be an appropriate time to 19 respond to this issue of the base year of electricity 20 use which is raised in Hydro's recent rebuttal that 21 has been provided to us. And I don't know if this 22 has an exhibit number or not, does it? Maybe it 23 should if we're going to be talking about it today. 24 Would that be appropriate or how does that work? 25 THE CHAIRMAN: It will be given an 5681 1 exhibit number immediately after your presentation. 2 Or we could do it now, Mr. Grewar, if you wish. 3 MR. GREWAR: Sorry, Mr. Chairman, we have 4 some other items. Perhaps at the end. 5 MR. TORRIE: Just for the record, I'm 6 referring to something called Manitoba Hydro's 7 TREE/RCM rebuttal. And it's actually undated. And 8 that may just be a fault of my printer but I think it 9 came out about a week or so ago. And there's -- 10 MR. MAYER: The last page is dated. 11 MR. TORRIE: Is it? Oh, okay. Great, 12 that's right. There we go. 05/04/2004, which is the 13 month and which is -- 14 MR. MAYER: I would suspect that's May 15 4th. 16 MR. TORRIE: Right, okay. Do you have 17 that document today? 18 MR. MAYER: Yes. It was our homework 19 last night, Mr. Torrie. 20 MR. TORRIE: Oh, yeah. If you turn to 21 page 30 of that document, table 1.7, you will find a 22 comparison or an attempt at a comparison of our 23 reference projection for electricity use. And that's 24 this adjusted forecast that I've been talking about. 25 And historical electricity use for various years, 5682 1 some fiscal, some not. And I mean like I say, we 2 haven't had resources to really go into this in the 3 detail that one would like but there's a couple of 4 things that I'd like to draw to your attention. 5 First of all, the top half of that table is the 6 numbers don't include Winnipeg Hydro. And I think it 7 might not have been as clear as it could have been, 8 the reason that those numbers for 2002 sales only add 9 up to 16,400. And then down on the bottom, you see 10 2003 sales at 19,206. Well, sales did not go up by 11 3,000 GWh in one year in Manitoba, what happened is 12 the Winnipeg Hydro numbers are integrated in the 13 numbers in the bottom part of the table and are not 14 integrated in the numbers in the top part. That's 15 one thing I just wanted for clarity. I hope I'm 16 right about that. It's not my document but that's 17 what it looks like to me. 18 And then what they've done in the bottom 19 half of the document, I have to say this annoys me, 20 they have attributed growth rates to our reference 21 projection by taking something called an actual 2003 22 sales number, and I understand that's a calendar 23 year. I don't know if it's weather corrected or not. 24 I presume it is. 25 Part of the problem, and this is a more 5683 1 generic problem that we have with this document, is 2 there is considerable information we've never seen 3 before coming out here and some of it we don't 4 totally understand and some of it I think we might 5 wish to challenge, but I don't know how one deals 6 with that this late in the process. 7 But what they have then in the column 8 beside that actual 2003 sales figure is the 9 electricity use in 2017/18 in our adjusted forecast. 10 And then they used those two numbers to come up with 11 reference growth rates for our projections. Well, 12 these are not the reference growth rates for our 13 projections, these are the growth rates that you get 14 if you splice a different starting year onto our end 15 year and recalculate the growth rates. And it's not 16 a valid method. It makes a certain point but you 17 can't turn around and say that Torrie is saying that 18 the reference projection in the commercial sector is 19 negative .4 per cent. We were plus 1.1 per cent I 20 think in the commercial sector. 21 So notwithstanding the question that -- I 22 mean the issue that is underneath this is that the 23 actual electricity use in the year that we used for 24 the base year, which was actually not the one 25 portrayed here but the year before that, actually it 5684 1 was fiscal 2002/03. So it was mostly 2002 with the 2 first three months of 2003. 3 We were possibly in our reference 4 projection too low, maybe by 300 or 400 gigawatt 5 hours. I don't know. It's not a simple thing to 6 know for sure because in order to really change that 7 year, you'd have to recalibrate the whole model. And 8 it would also change one's DSM estimates. 9 So there is a discussion over the 10 appropriate base year number in all of this but 11 please don't refer to this as indicating that our 12 reference projection had negative growth rate. It 13 did not. And it's a misrepresentation to suggest 14 that. 15 And I am in no way suggesting it's 16 deliberate. Frankly, I don't think Manitoba Hydro 17 has done a lot of end-use calibration of their 18 forecasts. And this is probably somewhat new to 19 them. But what you need to recognize in end-use 20 analysis is that the dynamic of a particular scenario 21 or forecast is a somewhat separate thing from its end 22 points. And we had positive growth rates in all of 23 the sectors in the dynamics of our reference 24 projection. We could not have because we were using 25 Manitoba Hydro's activity economic forecast to drive 5685 1 the thing. And there isn't much electricity 2 efficiency improvement embedded in Manitoba Hydro's 3 forecast as we know. 4 However, I did, after reading this, I 5 took a look like here, for example, on the screen, 6 you're looking at the effect of introducing the 7 adjusted forecast on how that Need For graph appears. 8 And this is what it looks like. I had done a 400 9 gigawatt offset and it does substantially lower 10 everything obviously and but I can't respond in any 11 more detail to this because it's just come at me. I 12 do know that the year that's the calendar year 2003 13 that's represented in this comparison was not our 14 base year and shouldn't be used to calculate growth 15 rates for the work that we did. 16 Once we had the forecast that we've felt 17 comfortable with -- you see, the dilemma that you've 18 got when you are doing this kind of work is you have 19 to -- if you're using an end-use model, to then go in 20 and start estimating where the DSM opportunities are, 21 you have to have a believable starting point. And if 22 the schools in your model are growing at 10 per cent 23 per year, because that's what they have to to agree 24 with the forecast, you can't, it's crazy. We know 25 they are not. So that's the kind of adjustment that 5686 1 we did. 2 And then we proceeded to take a look at 3 the economic potential for DSM. And here, the 4 exercise was, as I said earlier, more one of an 5 auditor than starting with a clean piece of paper and 6 doing a completely independent analysis. So we did 7 go through and identified some technologies and made 8 arguments for why we felt the threshold was too low 9 and produced a different estimate of the economic 10 potential for DSM from Manitoba Hydro's. 11 And if you look at CNF -- hang on. I 12 lost track of my place here, sorry. If you look in 13 the appendix that has the CNF interrogatory 14 responses, I believe it's Appendix 1 -- I'm sorry, I 15 can't find the table I needed. 16 MR. WILLIAMS: Might it be number 9, page 17 2? 18 MR. TORRIE: CNF 9, 2? 19 MR. WILLIAMS: Try that one. 20 MR. TORRIE: Yeah, I'm looking for the 21 one that compares the DSM estimates. And you know 22 what, it may be one of the responses to you, to the 23 Consumers Association. You're right, CNF 9.1 on page 24 2 of that interrogatory response. It's called table 25 TREE/RCM/CNF 9.1. Thank you, Mr. Williams. 5687 1 And if you look at the third column of 2 numbers, the one labelled economic potential DSM, and 3 at the very bottom, if you look at the totals, the 4 one that's labelled Manitoba Hydro (MPS), that's 5 Market Potential Study, is at 3,500 gigawatt hours of 6 DSM. We ended up lowering that number after we 7 adjusted the forecast because you can't save 8 electricity in schools that don't exist. 9 So one of the effects of adjusting the 10 forecast down is that it reduces the amount of DSM 11 that you will have in your economic potential 12 assessment even without changing any of Manitoba 13 Hydro's assumptions about which technologies are in 14 or out. And then we added back in the technologies 15 that are discussed in the evidence that we thought 16 should be included. And that brings us up to our 17 estimate of 4,500 gigawatt hours. 18 And so there is a difference there. I 19 frankly don't think that it's a turning point issue 20 in this hearing because the quantity, regardless of 21 whether it's 3,000 or 4,500, is so much higher than 22 what the utility is intending to mobilize that. The 23 much more important question is, is the gap between 24 any of those numbers and the likely effect of the DSM 25 activities. 5688 1 So that in a nutshell, I think in that 2 table, gives you a sense of the perhaps the range of 3 difference on this question. And I am not going to 4 spend more time detailing how we did that because 5 it's described in the evidence and no doubt there 6 will be more that comes out under cross-examination 7 on that. 8 Again, referring to the second rebuttal 9 of Manitoba Hydro. In their critique in here of our 10 assessment of DSM potential, there are a number of 11 responses that are made which, in many cases are -- 12 well some of them are not really responsive. And if 13 you're a sharp reader, you see those for yourselves. 14 But there's some which are only partial responses. 15 And where the point that is made in response is 16 actually quite secondary to the main point to which 17 it's supposedly responding to. 18 For example, on the question of 19 commercial buildings, you know, I really think that 20 the electricity savings that are available as the 21 result of recommissioning and retrofitting of natural 22 gas-heated buildings is quite a significant item that 23 I don't think has been properly assessed in the 24 potential. 25 And I guess what we'll probably try and 5689 1 do is provide an itemized list of responses to the 2 rebuttal. I mean we're running on empty a little bit 3 at this point but there's so many of these little 4 things that need to be addressed that we'll provide a 5 written list of comments on the rebuttal. 6 The next thing that we did in our 7 approach then, having assessed the load forecast and 8 assessed the economic potential for DSM is we then 9 took a look at Manitoba Hydro's actual DSM or 10 PowerSmart activities and programs and planning 11 processes with a view to asking ourselves whether or 12 not the achievability which they seem to have been 13 satisfied with in the past or, for that matter, in 14 their existing plan really represents what could be 15 and perhaps should be the targets for a public 16 utility like Manitoba Hydro. 17 So in order to do this, we did spend some 18 time looking at practices in other jurisdictions, 19 something that we do on an occasional basis in any 20 event as part of the work that we do. And one of the 21 things that is important to understand with regard to 22 this whole question of DSM achievability is that that 23 industry has been on one heck of a roller coaster for 24 the past 10 years, past 15 years really. And by that 25 I mean the electric power industry. And the changes 5690 1 have manifested themselves in different ways in 2 different jurisdictions. But everywhere, DSM 3 investment took a huge dive in the mid-1990s. It was 4 a very very dramatic falling off of billions and 5 billions of dollars of investment in DSM and it 6 happened very quickly over only about an 18 month 7 period from when the curve started to fall until it 8 sort of started to slow down a little bit. So it 9 basically went into free fall. There's a number of 10 ways that you can explain this, depending on what 11 lens you look through. 12 For me, fundamentally what happened is 13 that the electric utility sector in the 1970s and 14 1980s, they just failed to read their market 15 properly. They just didn't see it coming. And this 16 was true everywhere. And it was true not only of the 17 electric utility industry but of all the energy 18 commodity supply industries including the solar 19 industry, including the -- remember the synthetic 20 fuels industries and all the crazy ideas that were 21 getting all kinds of money thrown at them in the late 22 seventies and early 1980s because if everybody 23 thought that if OPEC Oil was going to go up and up 24 and up in price, we needed to find alternative 25 sources of supply. 5691 1 So the nuclear industry and the solar 2 industry and the energy commodity industry in general 3 responded to the first round of price shocks with 4 huge plans for scaling up mega project investments of 5 all sorts from the tar sands to the north sea from 6 Ontario's nuclear program to the hydroelectric 7 developments of Quebec. All of this was part of a 8 huge wave of investment that was committed in the 9 belief that the only way that one was going to be 10 able to have energy security in an OPEC world was by 11 having more and more diverse and alternative sources 12 of supply. And obviously there's some truth in that. 13 But it wasn't any of those mega projects 14 that really saved the day, it was what happened on 15 the demand side. Between the early seventies and the 16 mid 1980s, the energy productivity of all of the OECD 17 countries increased by 30, 35 per cent, including 18 places like Denmark which were already highly 19 efficient to start with. 20 And that increase in energy productivity 21 delivered more energy security to us and is still, to 22 this day, continuing to deliver more energy security 23 to us in the western world than all of the new oil, 24 gas, hydro, nuclear, coal, everything else added 25 together. That's how big it is. And that's what 5692 1 broke the back of OPEC. It wasn't the North Sea, it 2 wasn't the Gulf War, it wasn't the tar sands, it was 3 what happened on the demand-side. 4 But the flip side of that, and it's 5 actually quite a good news story for the western 6 mixed economies. But if you were one of those energy 7 commodity producers or electric utilities that made 8 large investments in gearing up for a demand curve 9 that never materialized, then the consequences could 10 be fairly severe. 11 And that's what happened in the electric 12 utility sector throughout North America. They went 13 into a very significant investment overshoot from 14 which they never really recovered in the form that we 15 were in before. And that, in some ways, triggered 16 the restructuring and re-regulation of that industry 17 that has been going on now for the last 10 or 15 18 years. 19 And DSM was a casualty of the 20 restructuring and re-regulation activities that were 21 occurring. But it was also the case that many many 22 utilities found themselves in surplus supply 23 situations even without finishing all of the projects 24 that they started in the seventies and eighties. 25 So DSM took a dive. And some North 5693 1 American entities stayed in, Manitoba being one of 2 them. Manitoba is playing on the weekend, if you 3 want to use a sports analogy when it comes to DSM, 4 but many dropped out altogether. The ones that did 5 stay in, there were dramatic reductions in what they 6 were doing. They retreated into a lost opportunity 7 at best sort of mode. And we saw the rate of 8 improvement begin to languish as a result, 9 improvement in electricity efficiency. 10 DSM is now on a resurgence. It's 11 coming out of the ashes, if you like, in different 12 forms, depending on what sort of re-regulation and 13 restructuring history a particular jurisdiction 14 has been through. So in some places, where there 15 no longer is a large electric utility with a 16 monopolistic control on the market-place, the DSM 17 activity is being sponsored through things like 18 public benefits charges where the operator of the 19 wire system in the jurisdiction puts a charge onto 20 all of the users of the transmission system that 21 is applied to investments in DSM and green power, 22 for example. 23 What's extraordinary about the 24 situation here is that Manitoba Hydro has survived 25 as a public utility. That by itself actually is a 5694 1 fairly rare thing, even in Canada, when you stop 2 to think about it. A lot of our big public 3 utilities are not quite so public as they used to 4 be. But you still have that. 5 You also have gas and natural gas 6 within the same corporate structure. And it seems 7 to me that this means that there are opportunities 8 for DSM to be developed in this Province which are 9 probably greater than they are in many places 10 where a lot of the capacity that you still have 11 has been dismantled, and where there isn't still 12 as much of a commitment to the types of values 13 that we associate with Winnipeg and with Manitoba 14 which are so much a part of a community-based 15 energy efficiency and sustainable development that 16 we're talking about. 17 So I think that the bar for this 18 Province should be set very high when it comes to 19 achievability. And I think that that means 20 looking at not this silly question that there's 21 been this debate going on, Manitoba Hydro said 22 they were the best or they were among the best. 23 And we said, well, maybe, maybe not. And they 24 said oh, we are too. I mean, you know, in the 25 rebuttal, for example, they say don't compare our 5695 1 2001 numbers to the American 2001 numbers, compare 2 our 2004 numbers about what we're going to do with 3 the American 2001 numbers. I mean, come on. 4 The fact is, however, that Manitoba 5 Hydro, it's there. I wouldn't put it in the lead 6 group. But, you know, if you want to say you are 7 in the lead group, you know, if it helps -- I 8 don't want to have that argument anymore. 9 But more importantly is what are the 10 most effective approaches that can be taken to 11 getting as much of that economic potential as 12 possible into place. And I think the answer to 13 that can often be found not even among -- well, 14 among some of the best practitioners today, but 15 also by looking at some of the best programs as 16 they existed or as they were conceptualized during 17 the first round of DSM. Because we're not even 18 back there yet. We're not even close to being 19 back to the levels of investment in DSM that were 20 occurring in the late eighties and early nineties. 21 And even at the rate it's growing, it won't be 22 back there for some time. 23 So there was a lot going on back then. 24 And there was some very advanced approaches, 25 including here, that probably need to be revised 5696 1 and dusted off and put forward as models. 2 So in the end, you know, I don't think 3 that a program that would double the DSM is 4 particularly out of line at all. I think that a 5 three times DSM scenario would be an achievable 6 stretch target in Manitoba. So I don't think that 7 there's much question that if there had been, you 8 know, a full NFAAT analysis done in this case, 9 that would obviously have included an attempt to 10 look at whether or not you could achieve the 11 objective of maintaining export revenues through 12 different strategies and advancing Wuskwatim, then 13 a much larger DSM program would have revealed 14 itself than the one Manitoba Hydro has, you know, 15 and hasn't updated now for a couple of years. 16 It's interesting, by the way, that we 17 keep getting told not to worry, building Wuskwatim 18 won't affect anything we do on DSM. We're going 19 to do all the DSM we can. But I'm sure when I was 20 out here this winter, somebody asked, why don't we 21 have an update to the PowerSmart program? And 22 people say, well, we've been too busy with 23 Wuskwatim. And I thought, man, it's already 24 having an affect, you know. 25 The preparation of a new DSM strategy 5697 1 has taken second place to the priority that's been 2 given to the Wuskwatim proposal. We'll get around 3 to it later. 4 I think that what we then did at the 5 end of all of this, and there's a number of these 6 different scenarios in the written evidence, is we 7 just played with them and we did a lot of these. 8 And I am not going to go through even all of the 9 ones that are in the evidence book. But what we 10 found was that the scale of the numbers that we 11 are talking about, even within the disagreements 12 that exist over base years and growth rates, puts 13 us within the range where there would be a surplus 14 of power available for export over and above the 15 estimated on-peak market most of the time without 16 advancing Wuskwatim. It's not an insane concept. 17 It's not something that is so completely off the 18 wall it's not even worth considering. It should 19 have been considered. And if it had been, I think 20 that Manitoba Hydro would have found all kinds of 21 pleasant and positive surprises about the business 22 attractiveness of a strategy which puts supply 23 expansion in second place and puts the focus on a 24 market-based energy services, DSM oriented 25 strategy that can deliver sooner and more cheaply 5698 1 and with less risk than expansion on the supply 2 side. 3 And this particular one that's up on 4 the screen now shows the same chart we were 5 looking at earlier only with 500 megawatts of 6 wind, eventually by the middle of the 20 teens, 7 and three times the current DSM which is the 8 target that I was referring to a moment ago, and 9 building it on a forecast which conforms to our 10 adjusted basic. 11 I did take a look at adding another 12 400 gigawatt hours onto the adjusted forecast as a 13 way of at least getting a sense of the impact and 14 adjustment to our base year would have. And here, 15 for example, is the way the previous chart looks 16 with that kind of an offset. And it does -- 17 obviously everything sinks by that amount, but we 18 found still within quite plausible ranges that 19 there were actually definable alternatives to 20 Wuskwatim that could have been brought before the 21 Commission by the proponent and compared with 22 Wuskwatim and Wuskwatim advancement, but were not. 23 And we think they are very interesting 24 scenarios. We've pointed out in our evidence many 25 of the benefits we think would flow from them. 5699 1 They are the types of scenarios that are 2 consistent with the principles that Dr. Miller was 3 describing in his opening comments and in which 4 both TREE and RCM subscribe, which is that we need 5 to start now to put ourselves on a footing toward 6 sustainable energy futures. And they are more 7 effective and more equitable in their distribution 8 when it comes to issues such as job creation and 9 economic impacts. And they allow the supply-side 10 expansion, when and if it might occur, to be built 11 on a much more solid base of efficient electricity 12 use, which of course reduces again the risk and 13 strengthens the case for future investment plans 14 on the supply side. 15 So I think it was a missed 16 opportunity. And I think that there was an 17 opening represented by all the effort that went in 18 to applying for permission to build this dam, 19 there was an opportunity there to move the power 20 planning process forward to a more integrated and 21 market-based philosophy, customer-oriented 22 philosophy, if you like, and sort of missed the 23 boat. 24 It's not as big a dam as it could be. 25 The risk of these things goes up in proportion to 5700 1 the size of the project. But that might actually 2 be another reason why this is the project that 3 ought to have been used to develop the type of 4 NFAAT analyses that we are going to need if we are 5 going to navigate through the very difficult 6 climate change/energy/environmental nexus that 7 we're facing. 8 So, I mean, I could go on about this 9 but I think I would like to wrap up now before 10 people start nodding off in boredom. But just to 11 reiterate, I think that, number one, I did not 12 find what I would consider an adequate NFAAT 13 analysis in the Hydro material. I just don't 14 think it's there. Number two, I think that if 15 they were practicing a more intensive and end-use 16 oriented planning within the organization, that 17 they would be able to -- that they would find that 18 their load forecasting could be improved by doing 19 that as I think it has been in the residential 20 sector. And they would find that it would give 21 them the tools to do the type of marketing and 22 business planning which is going to be essential 23 if we are going to sort of turn the corner on 24 sustainability. 25 Maybe since I started off by 5701 1 preaching, I'll come back to that, but I spent 2 most of my time, in one way or another, trying to 3 think of ways of making sustainable development 4 actually happen. I was part of a group that sort 5 of got involved in this about 20 years ago and I'm 6 way beyond -- I'm at the stage now where I really 7 had been trying to work on practical strategies 8 for getting this, in the case of my specialty, 9 energy onto a more sustainable pathway. And I had 10 been particularly involved in the climate change 11 issue. 12 And I've just spent the last two days, 13 in fact your Minister was at the same meeting, 14 Minister of Energy -- and I think the Premier was 15 supposed to be but got snowed in because the 16 meeting was in Toronto -- of an invited group of 17 about 70 people from around the world to spend a 18 couple of days taking stock of where we stand on 19 the climate issue. And we had one of the world's 20 leading authorities on what's going on with the 21 science of climate change there to brief us on the 22 latest information and findings in that regard. 23 And a number of large corporations were 24 represented, who are achieving very large 25 reductions in their emissions and energy and are 5702 1 feeling that this is the economic future. This is 2 an initiative which has got a lot of support from 3 the British government, because Prime Minister 4 Blair I think has particularly recognized the 5 economic opportunity by pursuing the environmental 6 technologies and the emission reduction targets. 7 But what's clear to me is that if and 8 when we get serious about responding to the 9 climate change issue, and we have not yet, 10 notwithstanding the framework convention and 11 notwithstanding the Kyoto protocol, the types of 12 emission reductions that we are going to have to 13 achieve within this century, if we are going to 14 stop this problem from getting completely out of 15 control -- and it's going to be a rough enough 16 ride as it is now, the types of strategies and the 17 types of effort that it will take are so far 18 beyond what we're contemplating now that you need 19 to -- that you can -- the potential is there to 20 repeat history in the sense of missing what is 21 going to have to happen on the demand side in the 22 energy economy. 23 If we successfully address climate 24 change, there will be a transformation on the 25 demand side of the energy economy the likes of 5703 1 which will make our heads spin. Because that's 2 the only way that you can get to the low emission 3 future. You need the 100 mile a gallon car and 4 you need the energy efficient office buildings and 5 you need the R-2000 and better housing, and you 6 need the Energy Star appliances, and you need all 7 of that to happen. And what's holding us back is 8 not an absence of technology, and it's not an 9 absence of economic technology. That's the other 10 thing that's becoming very clear from all the 11 analysis that's been done. 12 We've shown in Canada, for example, 13 the possibility of a 50 per cent reduction in 14 greenhouse gas emissions using technologies that 15 we can point to which are either economic or on 16 the cusp of being economic. So that's not the 17 issue. The issue, just like it is with DSM here 18 in Manitoba, is achievability. It's mobilizing 19 the institutional and financial innovations and 20 solutions that can unlock that potential. 21 And I think that I wanted to end by 22 saying that that's another reason and perhaps a 23 more important reason why finding a way to make 24 sure that Manitoba Hydro becomes an instrument for 25 the transition to sustainable development is so 5704 1 important, because the challenge is really an 2 institutional and a financial one. And it begs 3 out for the type of mixed economy, public 4 investment, perhaps public utility type approach 5 which has worked so well here in Manitoba for so 6 long. Thank you. 7 THE CHAIRMAN: Thank you, Mr. Torrie. 8 Thank you, Mr. Miller. We shall take a 15 minute 9 break at this point, be back at five to 11:00. 10 11 12 (PROCEEDINGS RECESSED AT 10:43 A.M. 13 AND RECONVENED AT 11:04 A.M.) 14 15 MR. GREWAR: Mr. Chairman, if we might 16 just enter two exhibits while we're waiting for 17 everyone to get organized. The exhibit that Mr. 18 Torrie referred to is actually a Hydro exhibit. 19 It would be the Manitoba Hydro's TREE/RCM 20 rebuttal, Time to Respect Earth's 21 Ecosystem/Resource Conservation Manitoba rebuttal. 22 And that was actually submitted to the Commission 23 several days ago, and it would be MH/NCN 1036. 24 That's MH/NCN 1036. 25 And the only other item that I think 5705 1 we would enter would be Dr. Miller's presentation 2 to the CEC Wuskwatim hearings and that would be a 3 TREE exhibit, TREE/RCM 1008. 4 MR. MAYER: Mr. Grewar, I could have 5 sworn we did Hydro 36 yesterday? 6 MR. GREWAR: I will check. 7 DR. MILLER: One is a TREE rebuttal 8 and the other is TREE/RCM rebuttal. 9 MR. GREWAR: You certainly are sharp, 10 Mr. Mayer. It is true. We did 1036 yesterday 11 late afternoon. And so this would be, once again 12 to correct, Manitoba Hydro's TREE/RCM rebuttal 13 would be MH/NCN 1037. My apologies. 14 (EXHIBIT MH/NCN 1037: Manitoba 15 Hydro's TREE/RCM rebuttal, May 4, 16 2004) 17 (EXHIBIT TREE/RCM 1008: Dr. Peter 18 Miller's presentation to the CEC 19 Wuskwatim hearings) 20 THE CHAIRMAN: Thank you, Mr. Grewar. 21 We'll now go to the questions. Mr. Mayer? 22 MR. MAYER: Mr. Torrie, although this 23 Hydro exhibit I'll call 37 appears to have been 24 produced on May 4th, we got it yesterday with 25 clear instructions from Secretary Grewar that that 5706 1 was our homework to read for last night, and I 2 did. And I did note with interest on page 4 of 36 3 in response to TREE's allegation that the Hydro's 4 DSM program lacks continuity and characterizes the 5 program as on again/off again. And Hydro's 6 response was hardly a response in that it admitted 7 that it was on again/off again. It was on when 8 Conawapa was going to be built. It was off after 9 Conawapa wasn't going to be built. It went on 10 again. That appears to be a clear admission. 11 However, you made reference about a 10 12 per cent growth in schools and how that would be 13 totally unrealistic. Can you refer me to which 14 piece of this document -- and I am assuming you're 15 referring to this document, Exhibit 36 -- deals 16 with a 10 per cent growth rate in schools? 17 MR. TORRIE: First of all, I didn't 18 have the correct figure in front of me. It's not 19 10 per cent. I don't know what it is. I was just 20 trying to illustrate a point that we got into 21 during the cross-examination of Hydro earlier this 22 winter when we were looking at the growth and 23 floor area of different building types that would 24 have to take place in order to tune up to the 25 level of commercial electricity use in the 5707 1 forecast. And it resulted in floor area growth 2 rates which were high, especially for some of the 3 sectors which are related more closely to 4 population than to economic output, like for 5 example, schools. And there was a table that was 6 used that day. I'm just trying to see if I can 7 lay my hands on it. 8 MR. MAYER: Table 1.4 on page 25 of 36 9 deals with growth rates, growth percentages by 10 building type. It shows school is 3.8, college is 11 0.9. Table 1.5 deals with load forecast by 12 building type, no percentage. But if I calculate 13 the numbers, it certainly doesn't come out to 10 14 per cent a year although it may come out to 10 per 15 cent over the 20 years, which doesn't sound as 16 unreasonable to me as you suggested it should. 17 MR. TORRIE: Right. I'm sorry, I 18 shouldn't have even said 10 per cent. I was only 19 trying to illustrate that we found growth rates 20 that seemed large, 3.8 per cent. Is that what you 21 are seeing there? 22 MR. MAYER: I saw that at one page. 23 MR. TORRIE: And that's an annual 24 growth rate? 25 MR. MAYER: I'm not entirely sure. 5708 1 MR. TORRIE: I don't think it's for 2 floor area, because Hydro doesn't generally -- I 3 think it's probably for electricity use, isn't it? 4 Which page was it? 5 MR. MAYER: I was looking at page 25 6 of 36. 7 MR. TORRIE: These are growth rates 8 and electricity use you're looking at. And the 9 issue that I was referring to was that in our 10 reference projection where we were trying to tune 11 our model to Ontario Hydro, to Manitoba Hydro's 12 load forecast, we found that the only way we could 13 do it was by using growth rates in commercial and 14 institutional building floor areas that seemed 15 quite high. And that was one of the adjustments 16 we made in doing the adjusted forecast. 17 MR. MAYER: All right. I was 18 concerned about this 10 per cent growth rate of 19 schools, because I could see 10 per cent over time 20 with the introduction of computers. We could not 21 see a 10 per cent annual growth rate, nor can I 22 find it in any of Hydro's materials. 23 MR. TORRIE: Fine, thanks. 24 MR. MAYER: I have only one other 25 question, Mr. Torrie. Exactly when did we break 5709 1 the back of OPEC? I am now paying 86.9 cents a 2 litre for my gas. 3 MR. TORRIE: Yeah. Well, then some 4 other things happened later. 5 MR. MAYER: I have no further 6 questions. Thank you, sir. 7 THE CHAIRMAN: Mr. Torrie, I just 8 wanted a sense of, in general terms, what your 9 position is in regards to the viability of the 10 proposal made by Manitoba Hydro/NCN in terms of 11 they have made a commitment to 250 megawatts of 12 wind power, twice DSM along with this 200 megawatt 13 project. I'm not sure if it's 250 megawatt 14 wind-generated energy or 200. But are you saying 15 that if all of these targets are achieved, this 16 puts Hydro in a situation where it has surplus 17 power for sale and that, as a result, increases 18 the risk to an extent which is beyond the hurdle 19 rate which is what we've heard here today or since 20 the hearings are on? 21 MR. TORRIE: I think if I understand 22 your question that my answer is yes. That the 23 general impression that one gets from the Manitoba 24 Hydro evidence is that they don't think that 25 there's any credible scenario in which they would 5710 1 not be able to sell most, if not all, of their 2 power into that high priced market. And I think 3 that there are some scenarios that should have 4 been looked at in which you could get over that 5 line. And if you advance Wuskwatim, I think it 6 becomes even more likely that you could get over 7 that line, but presumably we'll be on a down again 8 DSM curve if that starts to happen. 9 THE CHAIRMAN: Mr. Sargeant. 10 MR. SARGEANT: A question for Dr. 11 Miller. In your opening comments, you made a 12 somewhat passing reference to the cold climate and 13 the large distances in the country. And I'm just 14 wondering how much our climate does contribute to 15 the fact that Canadians -- and I have read 16 anecdotally Manitobans are very high users of 17 electricity or energy -- how much does our 18 climate, given the fact that our winters are 19 pretty cold, our summers can be pretty hot, how 20 much does that contribute to our excessive use or 21 apparent excessive use of energy? 22 DR. MILLER: Well, I certainly am not 23 in a position to break out the numbers. I mean, 24 this was basically a response that we encountered 25 that of course our energy consumption is up there. 5711 1 And I mean, it's not unreasonable to think that 2 that is a significant contributor to it. But what 3 we were looking at is, you blame the climate for 4 everything, then that suggests that there's 5 nothing that we, as a society, could or should do 6 about it, that it's inevitable. And I think first 7 of all, on the climate issue itself, it's been 8 pointed out that in the States, the heat, 9 particularly in the southern states, is such that 10 the air conditioners are on for many more months, 11 or equivalent months anyhow, of what our heating 12 season would be. And so there are climate factors 13 on the other side as well. But the question is 14 whether this is exacerbated. 15 I mean, if we live in a cold climate, 16 one would expect peak standards of conservation, 17 right? But the reflexive response has been, keep 18 the energy rates low. And this is done sometimes 19 by, as in earlier years, cutting back on 20 investments in conservation. It's done by, I 21 believe this is the case, not attaching a 22 Provincial sales tax to energy consumption for 23 heating. It's done by the fact that we have a 24 Crown corporation which doesn't have to pay 25 dividends to anyone. It wasn't considered 5712 1 extraordinary. It made a lot of people angry, 2 which the Provincial government did on a one-time 3 basis to deal with the budgetary problem, but why 4 shouldn't there be a regular dividend built into 5 the structure? 6 MR. MAYER: Some of us agree with 7 that. 8 DR. MILLER: And just to point out 9 that there are different ways of dealing with 10 windfall profits from a Provincial resource. 11 Alberta created a Heritage Fund out of its 12 windfall, achieved in different ways, through 13 royalties, of energy sales. And that goes to 14 social investment. An Albertan to buys gas at the 15 tank, they don't have the sales tax, but they are 16 basically paying market rates to fuel their car, 17 they are paying market rates I believe for their 18 electricity. 19 MR. MAYER: But we had a rebate on 20 natural gas, a direct rebate from the Heritage 21 Fund a couple of years ago. 22 MR. SARGEANT: Which would correlate 23 to the policy decisions of Manitoba to keep Hydro 24 rates low for -- 25 DR. MILLER: Except that's a one time 5713 1 event versus a continuous subsidy to the program. 2 MR. SARGEANT: But, I mean, it's 3 arguable that that may or may not be a legitimate 4 policy decision, to keep the rates low for all 5 Manitobans. 6 DR. MILLER: But in my brief I was -- 7 MR. SARGEANT: I don't really want to 8 debate that point. 9 DR. MILLER: Okay. 10 MR. SARGEANT: Mr. Torrie, in your 11 concluding comments, well throughout your 12 presentation but in your concluding comments, you 13 made the point that in your view, Hydro has not 14 made a very good case for the NFAAT. 15 Now, if they had made a good case, in 16 your view, would it have shown that there was no 17 need -- or if they had made a better case, it 18 would show that there is indeed a need for 19 Wuskwatim? 20 MR. TORRIE: I think that, to be 21 careful, to make sure we're using the terms the 22 same way on this, the need for Wuskwatim has to be 23 defined before I can answer your question. And if 24 the need for Wuskwatim is to maintain export 25 revenues and profits at their current levels, if 5714 1 we accept that as the need, then -- there may be 2 some Manitobans that don't agree with that, but 3 that's where I started from. I said all right, we 4 just accept that's the need, because there isn't 5 any need in a more cogent sense for this dam. 6 There's no way it's needed by Manitobans for their 7 own electrical needs, for example, any time soon. 8 And you don't need, I suppose, to increase or 9 maintain your export revenues either. 10 But if you take that as the need, then 11 I think what the analysis would have shown is that 12 there are different ways that you could do it, and 13 they might be better ways. I think that they 14 might be. That's my hunch, because I think that 15 so many of the benefits of the DSM/distributed 16 generation type of approach would reveal 17 themselves if you did the type of sophisticated 18 portfolio analysis of that kind of a scenario, 19 where you get to see the effect it has on your 20 cash flow and how quickly you can cycle your 21 capital, and the extent you can get that 300 or 22 400 million dollar triangle that opens up on that 23 chart we were looking at, which Wuskwatim can't 24 touch because it can't be built fast enough. And 25 you start to bring all of those things into the 5715 1 quantification of the benefits of, for example, a 2 DSM/DG alternative, then, yes, I think an NFAAT 3 analysis might have very well concluded that 4 Wuskwatim advancement was not the best way to meet 5 the need that has been identified here. 6 MR. SARGEANT: Without oversimplifying 7 all of the work that you've done, your bottom 8 line, at least as I understand it, is that to 9 realize that need to keep up export revenues could 10 be done better by other means than building 11 Wuskwatim. 12 MR. TORRIE: Yes. 13 MR. SARGEANT: Thank you. 14 MR. TORRIE: That's the question that 15 at least should have been explored. 16 MR. ABRA: Dr. Miller, Mr. Torrie, my 17 name is Doug Abra. I'm counsel to the Clean 18 Environment Commission. With me is Jean McLellan 19 who is from Price Waterhouse Coopers and is one of 20 the consultants on the NFAAT issue that's before 21 the Commission. 22 Firstly, Mr. Torrie, I'm not 23 attempting to challenge your qualifications at 24 all, but I do want to ask you some questions 25 related to your experience related to certain 5716 1 aspects. In particular, in your initial filing, 2 you gave a background on your experience and so 3 forth as it relates to DSM, and what roles you 4 had, or at least who you had served with as far as 5 DSM and so on is concerned. But what exactly, 6 sir, have you done in that regard? Have you 7 actually planned DSM programs -- or you've 8 obviously spent a significant amount of time on 9 DSM, but what role have you played in that regard? 10 MR. TORRIE: My direct experience with 11 DSM has been never from inside utility designing 12 programs and never from within a government 13 either, I've been self-employed for my whole life, 14 so as a policy consultant in this particular case 15 and as a technical consultant. So I've done quite 16 a bit of analytical work on DSM, very often as the 17 material on my qualifications indicates, from the 18 perspective of evaluating or assessing a utility 19 or government strategies. 20 I introduced the so-called supply 21 curve concept of costing electricity conservation 22 to Canada. We did the first -- you know, this 23 "cost of save the electricity method" that you see 24 throughout the DSM reports that were done by 25 Manitoba Hydro consultants, I introduced that 5717 1 approach to Canada back in the mid-1980s as a way 2 of trying to bring a more symmetrical approach to 3 comparing demand and supply-side options. So I've 4 been there in terms of my engagement in the issue, 5 but it's been primarily in an analytical mode. 6 MR. ABRA: Okay. What about load 7 forecasting, have you actually done load 8 forecasting yourself, or what experience do you 9 have as far as analyzing load forecasting is 10 concerned? Because one of the basic precepts of 11 your report is the load forecast that Hydro has 12 done. 13 MR. TORRIE: Well, I have a lot of 14 experience constructing quantitative analyses of 15 energy futures. And I'm sorry to not just say 16 load forecasting, but part of the point, I guess, 17 of the perspective that I tried to bring to this 18 is that the load forecasting approach to thinking 19 about the energy future is part of the problem. 20 I have done it, and I have done a lot 21 of work over the years of critical analysis of 22 load forecasting exercises. 23 MR. ABRA: By various utilities? 24 MR. TORRIE: Yes. 25 MR. ABRA: Okay. What about wind 5718 1 generation, wind development and so on? 2 MR. TORRIE: I don't know very much 3 about wind generation. I would not portray myself 4 as an expert on that by any means. I try to keep 5 current of what I need to know to integrate it 6 into bigger energy planning, and scenarios and 7 studies, but -- 8 MR. ABRA: We heard evidence from Dr. 9 Higgin yesterday on behalf of CAC/MSOS that 10 because of what he identified as being fairly 11 significant risks with respect to the development 12 of wind, that he didn't think that it was an 13 option that really Hydro should be looking at on 14 its own, as far as alternatives are concerned. Do 15 you agree or disagree with that, or do you not 16 want to comment because you don't have much -- 17 MR. TORRIE: I have not reviewed that 18 transcript. Someone did describe in a little bit 19 more detail the point that you're making. And as 20 I understood it, that the risk that he was 21 referring to was the business risk of a large 22 electric utility getting into the wind investment 23 business. It wasn't technical risk. 24 MR. ABRA: No, that's right, yes. In 25 essence, what he was saying was that something 5719 1 should be done by private enterprise as opposed to 2 by a public utility? 3 MR. TORRIE: Right. I don't have a 4 particular perspective on whether it would be 5 better or worse for Manitoba Hydro from a business 6 perspective to get into the wind business or to 7 have someone else do it. And neither do I know 8 whether it would be a more effective way to 9 develop wind power in Manitoba if it were done 10 privately rather than through the public utility. 11 I haven't examined that question. 12 MR. ABRA: Okay. One of the aspects 13 that you didn't touch upon in your report in 14 describing your own experience in qualifications 15 is whether you've actually testified before 16 commissions such as this, or public utilities 17 boards or whatever as an expert and given opinions 18 of the nature that you've given to CEC here? 19 MR. TORRIE: Yes. I've been -- I 20 could provide a list if it would be useful, but 21 I've been an expert witness before administrative 22 tribunals, parliamentary committees, environmental 23 assessment hearings. I mean, I don't do it for a 24 living but I've done more of it than some people, 25 including the select committee on Ontario Hydro 5720 1 affairs on a number of occasions and hearings in 2 the Province of Quebec surrounding the Great Whale 3 proposals. 4 MR. ABRA: So you do have significant 5 background of giving evidence of the nature that 6 you've given to CEC before various, as you say, 7 types of commissions? 8 MR. TORRIE: Yes. 9 MR. ABRA: And committees and public 10 utilities boards and so on? 11 MR. TORRIE: Yes. 12 MR. ABRA: Thank you. And on the 13 issue of the needs for and alternatives, well, not 14 alternatives to but needs for and justification, 15 when you did your analysis, I am assuming from all 16 of your reports and your responses to the IRRs and 17 your evidence here today that you are looking at 18 the needs as far as Hydro alone is concerned? You 19 are looking at it from the perspective of Manitoba 20 Hydro and you haven't considered the involvement 21 of NCN in the joint application to the CEC? 22 MR. TORRIE: That's correct. 23 MR. ABRA: Now, in your various 24 submissions to the Commission, you've used the 25 term "distributed generation" and you've used "DG" 5721 1 I think periodically. But I had thought 2 originally that that was wind. That was what we 3 sort of have concluded. Are we correct or are we 4 wrong? What is distributed generation? 5 MR. TORRIE: Wind can be a form of 6 distributed generation, but distributed generation 7 is a broader term than just one particular type of 8 hardware. It refers to the -- it refers to the 9 scale of the generation as much as it does to the 10 type of technology, because the idea of 11 distributed generation is that you get your power 12 from a network of many, many, many small sources 13 that are evenly distributed on the grid rather 14 than from a small number, or maybe in addition to 15 from a small number of centralized power plants. 16 And the network becomes more like a 17 telecommunications network than a traditional 18 electricity grid in terms of the distribution of 19 the nodes and the lengths and wind power. When 20 it's developed on a relatively small scale is 21 definitely distributed generation. 22 The point, in fact it was made, if I 23 am not mistaken, in this most -- in Exhibit 37, 24 this most recent rebuttal from Manitoba Hydro. It 25 was made that if wind is developed in very large 5722 1 farms, some of the characteristics of distributed 2 generation would no longer be there. Some of them 3 still are because the individual generators, even 4 on a wind farm, are quite small increments of 5 power capacity. And that by itself means that 6 some of the qualities of distributed generation 7 would apply. For example, if one of them fails, 8 it's no big deal. 9 And that's one of the characteristics, 10 one of the advantages of the whole distributed 11 generation concept is that any network will have a 12 higher level of security if it has a greater 13 number of nodes contributing and they are evenly 14 distributed, than a network that has only a small 15 number of supply nodes in it. 16 MR. ABRA: Your original filing, page 17 21 of 21, you said beginning at line 10. 18 "It is also well known that dollar for 19 dollar, DSM investment produces 20 several times more jobs than power 21 plant investment especially when the 22 multiplier effects of the recirculated 23 savings from lower power bills are 24 included in the calculation. Northern 25 and First Nation employment levels 5723 1 achieved by Wuskwatim advancement 2 could be surpassed in a DSM/DG 3 scenario and lead to versatile skills 4 that could form the basis of 5 sustainable economic activities in 6 northern communities." 7 On what basis do you make that 8 statement, sir? Firstly, how is DSM going to 9 assist Manitobans generally economically? And 10 then in particular, how is it going to assist 11 First Nations people such as NCN? 12 MR. TORRIE: Okay. Well, there are 13 two -- there are, as your partitioning of the 14 question suggests, a couple of separate points 15 being made in that passage that you quoted. With 16 respect to the generation of employment per dollar 17 of investment, the size or the number of jobs, if 18 you like, that gets created are related both to 19 the capital intensity, if you like, of that 20 particular activity. And there, as is elaborated 21 in the interrogatory responses, number 16 in the 22 CNF set and number 12 in the CEC set, and also 23 number 12 in the Manitoba Hydro/NCN set, it's 24 fairly well established and has been for some time 25 that you will have more direct jobs created per 5724 1 dollars invested through the types of activities 2 that constitute DSM than you will through the 3 activities that are required to build a power 4 plant. 5 And in fact, investment in the 6 electric power sector is usually just about at the 7 very bottom of the list of any list of industries' 8 effectiveness at creating jobs per dollar 9 invested. 10 But that's not really as big an effect 11 as what can occur when the savings from the 12 reduced energy bills are re-spent in the economy. 13 And I haven't done that. That analysis varies 14 from one place to the next, depending on the 15 particular circumstances, the re-spending effect 16 will be more or less important. 17 And I'm not sure how it will play out 18 here. Maybe somebody has done it. I'm not aware 19 of it. But it will be important, for example, if 20 we had had an NFAAT analysis with the DSM/DG 21 alternative to find and analyze to have a very 22 complete analysis of both the direct and the 23 indirect multiplier effects of the DSM investment 24 strategy. 25 The point about the community 5725 1 development and the northern and Native community 2 development benefits of this type of generation is 3 also elaborated on in the interrogatory responses 4 that I referred to in the first part of -- in the 5 answer to the first part of this question. But 6 the connection between the two parts of the 7 question again is the recirculating of money 8 within the community. 9 And in the years following the first 10 oil price shocks in the 1970s and 1980s, a number 11 of communities sat down and took a look at the 12 amount of money that was leaving their community 13 to buy electricity and to buy fuel and to buy gas, 14 and considered whether or not, if they could 15 implement energy conservation and efficiency 16 programs within their community, whether they 17 couldn't keep more of that money circulating in 18 the community. 19 And out of that initial set of 20 initiatives, there's developed a whole branch of 21 community economic development around the 22 centerpiece of developing a higher level of energy 23 efficiency and self-reliance at the community 24 level. 25 And there is a sub-branch of that 5726 1 which specifically has to do with the many 2 situations where Aboriginal and Native communities 3 have used local energy strategies with an emphasis 4 on DSM and DG type technologies as a lever for 5 community economic development. 6 Beyond that, as we move into the more 7 advanced, what we sometimes call third generation 8 approaches to DSM, and the true community 9 collaborations between utilities and community 10 groups and business groups that characterize 11 advanced approaches to DSM, the effort, and this 12 is not only true of DSM but of many environmental 13 issues as well, the effort that it takes to work 14 together to get high achievability of DSM is a 15 community building effort. 16 And you can see this, for example, in 17 the New England that the NEEP, the New England 18 Energy Efficiency something or other, it's 19 referred to in our interrogatory responses on 20 advance DSM, is that the very nature of the 21 collaborative which is driving the technology is 22 building stronger community bonds among all of the 23 organizations and its constituencies that are 24 participating. 25 So in contrast, the building of mega 5727 1 projects, whether they be hydro dams or nuclear 2 power plants or coal-fired stations, or whatever, 3 tends to bring an extremely large amount of 4 capital investment into a community which, in many 5 cases, is quite small relative to the size of the 6 investment. 7 And so the need for this project has 8 nothing to do with local community needs. In this 9 case, I guess it has to do with the electricity 10 consumption patterns of Minnesotans. And very 11 often, the scale of the undertaking is also out of 12 proportion to the local economy. And very often, 13 after the initial construction is finished, 14 whatever job creation impacts from the 15 construction that might have prevailed suddenly 16 disappear and you can be back down to very low 17 levels of permanent direct employment from the 18 project. 19 And so it doesn't have the same 20 ability to really act as an engine for sustainable 21 community economic development that the DSM/DG 22 alternative can. And that was the point that this 23 was referring to. And there are references in the 24 interrogatory responses that I've mentioned which 25 provide additional supporting documentation of 5728 1 both the employment and the community development 2 benefits of the DSM/DG scenarios. 3 MR. ABRA: All right. Well, I think 4 we all understand that the obvious purpose of DSM 5 is to save people money which in turn they are 6 going to use on something else which, as you've 7 said, is going to have some impact on the economy. 8 I must admit I interpreted your 9 statement to mean that there's going to be more 10 specific jobs arising from DSM than there is from 11 the building of Wuskwatim. 12 Are you saying that there will be or 13 there won't be? And if there will be, will those 14 jobs be in Manitoba? 15 MR. TORRIE: Well, the percentage of 16 jobs from DSM that would be located within the 17 province would probably, I would think almost 18 certainly, be higher than the percentage that's 19 the case with the Wuskwatim investment. But I 20 have not done the analysis to confirm that. But 21 we have done that kind of work in the past. 22 And generally, I mean, the numbers 23 about the per cent of the jobs that stay in the 24 province and in the north are referred to in the 25 interrogatory responses that are referred to again 5729 1 earlier in this discussion we're having. 2 But on the question of whether DSM 3 will create more jobs than Wuskwatim, we don't 4 know how much DSM there's going to be. So I can't 5 -- I couldn't say for sure. But dollar for 6 dollar, no question, you will get more job 7 creation from an investment in DSM than you will 8 from an investment in Wuskwatim. 9 MR. ABRA: In Manitoba? 10 MR. TORRIE: Yes. This is 11 retrofitting houses, this is recommissioning 12 buildings, this is very labour-intensive, at least 13 some aspects of the DSM agenda. And the 14 employment is distributed, not where energy is 15 produced but where it's used. So it's inherently 16 a very even distribution of the employment 17 benefits. 18 DR. MILLER: I wonder if I might 19 supplement Mr. Torrie's response? 20 MR. ABRA: Yes, certainly. 21 DR. MILLER: Certainly one of the 22 commendable features of the Wuskwatim proposal is 23 the partnership with NCN and the joint planning 24 and all of that. And I certainly wouldn't want to 25 detract from it. But what if, as Mr. Torrie was 5730 1 suggesting, the similar levels of investment plus 2 Federal dollars for training, plus Hydro dollars 3 for training, Provincial dollars for training, 4 were to be spent in teaching people to retrofit 5 and build homes? And this could very well start 6 in the north where the question of electrical 7 costs are perhaps a very significant factor. It 8 would improve the quality of the housing stock and 9 create, on a more sustainable and continuous 10 basis, training in trades that would be expected 11 to continue because housing will continue. 12 To get the same effect, Hydro talks 13 about a succession of dams. So although very few 14 people entering the trades will get their papers 15 by the time Wuskwatim is begun, and maybe not by 16 completion, there are the other dams down the 17 road. 18 Well, you only have a certain number 19 of those. But people are always having to upgrade 20 their homes and replace them and build new ones. 21 And so it seems to me that the training and the 22 continuity of jobs is, at least intuitively to me, 23 much more significant with investments in 24 something that goes on even when energy power 25 plants are not being built. 5731 1 MR. ABRA: Well, intuitively, Dr. 2 Miller, you may very well be right. The bottom 3 line is we're talking in terms of $900 million for 4 Wuskwatim. How much DSM can be achieved by that 5 same $900 million? Has there been any analysis 6 done in that regard? 7 MR. TORRIE: That is a beautiful NFAAT 8 question. That's the first question that I would 9 have been looking for the answer to when I picked 10 up those two volumes last spring. 11 MR. ABRA: And you didn't find it? 12 MR. TORRIE: It's not there. 13 MR. ABRA: And you didn't do an 14 analysis of that nature, I gather? 15 MR. TORRIE: I'm trying to remember if 16 we actually -- I think we did do an estimate of 17 the job creation per dollar investment. 18 MR. ABRA: If you did, we didn't see 19 it. 20 MR. TORRIE: I might have backed off 21 because the multiplier effect is so important and 22 I don't know what that would be in Manitoba given 23 the export situation. 24 DR. MILLER: While he's looking for 25 that, we did ask Hydro to provide an answer to 5732 1 that question. And they said, well, we can't 2 because we haven't updated our program which is 3 where the costs are attached to particular 4 measures. So I think it would be the 5 responsibility of Hydro to do that. And as Mr. 6 Torrie says, that should have been part of a NFAAT 7 presentation. 8 MR. SARGEANT: Can I just ask a 9 question following on? Is there a limit to the 10 amount of DSM that can be achieved? I am sure 11 there must be. I mean, if you retrofit every 12 house in Manitoba and -- 13 MR. TORRIE: The thing about DSM that 14 makes it a little -- one of the things that makes 15 it different from a supply side resource is there 16 isn't any theoretical limit for starters to it. 17 MR. SARGEANT: There is not? 18 MR. TORRIE: There is a thermal 19 dynamic limit to the efficiency with which 20 electricity can be used and which energy can be 21 used by humans, but we're not even in the same 22 ballpark with that number. 23 What I meant was is that every time 24 somebody has an idea for how something can be done 25 with less electricity, the resource grows. So 5733 1 it's not something that's sitting in the ground 2 and it's not ever going to get any bigger like oil 3 or gas or, for that matter, the flow of water and 4 rivers. It's an information intensive resource. 5 And every time someone has a bright idea, it gets 6 bigger. And every time somebody figures out how 7 to -- well, I'm just repeating myself. So in that 8 sense, it is in a way limitless. 9 Now having said that, there are 10 practical constraints that you will run up against 11 in any area. But again, that number lies well 12 beyond the economic potential identified by 13 Manitoba Hydro and the economic potential lies 14 well behind the achievability target. So it 15 becomes a little bit of an academic point whether 16 the limit is out there because we're not even in 17 its orbit. 18 MR. SARGEANT: Thank you. 19 MR. MAYER: While we're waiting, I 20 have a couple of questions arising out of Mr. 21 Abra's comments. I want to go back to page 21 of 22 21 on your original submission. And I understand 23 it's a different page in the document you gave us 24 today because it's probably page -- no, I think it 25 might be page 21. 5734 1 MR. TORRIE: It's point 21 and it 2 starts on page 21 but it ends on page 22. 3 MR. MAYER: But I'm looking at the 4 second line of point 21. There is no disagreement 5 that DSM/DG wind option represents the lowest 6 environmental impact strategy for meeting end-use 7 service needs. I have a couple of questions 8 arising out of that. 9 Firstly, very obviously there, you 10 have indicated to us that by distributed 11 generation, you mean wind, correct? 12 MR. TORRIE: Yes. 13 MR. MAYER: So we're excluding mini 14 hydro, for example? You're talking only wind when 15 you make that comment? 16 MR. TORRIE: Yes. 17 MR. MAYER: Secondly, where do you 18 arrive at the conclusion that there is no 19 disagreement that DSM and wind represents the 20 lowest environmental impact strategy for meeting 21 end-use service needs? That is not the evidence 22 we have before us. There appears to be some 23 disagreement. 24 MR. TORRIE: Are you referring to the 25 lifecycle analysis? 5735 1 MR. MAYER: I'm referring to a number 2 of things. We have evidence of what a wind farm 3 requires. Firstly, it also requires transmission 4 lines. I'm going to compare it to Wuskwatim 5 project in particular. Wind generators have to be 6 built where there is wind. If that means in the 7 middle of the boreal forest, we've got to take out 8 the boreal forest. I have no idea how you would 9 build a wind farm in a boreal forest without 10 taking out a good chunk of the boreal forest. In 11 any event, you have to take some kind of land out 12 of production to develop wind generation. I'm 13 correct in that; am I not? 14 MR. TORRIE: Yeah, the tower has a 15 footprint. 16 MR. MAYER: And a wind farm has a 17 larger footprint? 18 MR. TORRIE: Yes. 19 MR. MAYER: Larger than one-half a 20 square kilometre, sir? 21 MR. TORRIE: I don't know. 22 MR. MAYER: But then how can you tell 23 us that there is no disagreement that the lowest 24 environmental impact strategy is distributed 25 generation and DSM? 5736 1 MR. TORRIE: Well, Peter wants to 2 comment, but I would just say first of all that 3 the reason that I said there was no disagreement 4 was that if you read the language -- and I guess 5 what I really meant was that Manitoba Hydro has 6 not challenged that because if you read their, 7 unless they've changed their position, when you 8 read their scoping chapter from the NFAAT volume, 9 they are pretty clear on this, that wind is -- 10 they come to the conclusion that wind is at least 11 no worse than Wuskwatim. 12 And you may disagree with them, in 13 which case I'm wrong to say there's no 14 disagreement. And I certainly could understand, 15 based on the questions you were just asking, why 16 you might. 17 But the other comment I would make is 18 that if you really want to look, I mean, at the 19 environmental -- compare the environmental impact 20 of Wuskwatim with wind, surely it's not only, or 21 even perhaps primarily about the square metres of 22 surface area that it takes for the wind farm 23 versus the square metres of flooding that would be 24 behind the dam. 25 5737 1 I mean I'm not here as an environmental 2 impact expert today. But from what I do know about 3 it, that would not be a sufficient metric to come to 4 any conclusion about which of the two options was 5 environmentally preferable. 6 MR. MAYER: I recognize that it is only 7 an example, Mr. Torrie, that I gave you. But when 8 somebody opens with a bald statement, there is no 9 disagreement that such is an issue. I learned a long 10 time ago that's where you start your challenge. 11 MR. TORRIE: Thank you. I will take that 12 into consideration and I'll program my Word Processor 13 not to let me do that again. 14 THE CHAIRMAN: Mr. Miller. 15 DR. MILLER: If I might respond to the 16 same question. I believe the Pembina Study indicates 17 a marginally higher greenhouse gas emissions from a 18 wind farm per kilowatt hour but a substantially lower 19 land use footprint than the hydroelectric end power, 20 because I guess primarily of the transmission line. 21 And the second one is a wind farm, as we 22 heard -- we did hear evidence that you plow around 23 it. And I guess the third point would be the wind 24 potential is in the prairie areas, not in the forest 25 areas. So we've heard evidence of all of that I 5738 1 think. 2 So I'd have to treat your question as 3 more hypothetical than based on, you know, the 4 instantiation of wind farms as they have been 5 proposed in this hearing. 6 MR. MAYER: But Dr. Miller, all wind 7 farms need not necessarily be built on prairies and I 8 understand Hydro is still studying it as a number of 9 monitoring areas that don't all -- their initial 10 results are that somewhere down in Southeastern 11 Manitoba, which isn't by the way all prairie, at 12 least not some of the stuff I've seen having been 13 down there a few times, is not, by definition, built 14 on farmland, is it? 15 DR. MILLER: Not by definition, no. 16 MR. MAYER: I think I made the point. I 17 don't wish to pursue it. 18 DR. MILLER: Yeah, the theoretical point. 19 THE CHAIRMAN: Mr. Abra. 20 MR. ABRA: Thank you, Mr. Chair. I'd 21 like to go back just to the quotation of page 21 of 22 your brief, just carrying on the balance of that 23 paragraph. 24 "The DSM/DG technologies are also 25 sunrise technologies. There is a fast 5739 1 growing global demand for 2 environmentally sustainable solutions 3 for providing energy services. And 4 those economies and societies that 5 excel in this field will enjoy a 6 significant and competitive 7 advantage." 8 What do you mean by that statement, sir? 9 MR. TORRIE: Well, I am not sure which 10 part of that is not clear. The reason that the 11 competitive advantage comes to those economies that 12 succeed in finding solutions for both the technology 13 and the deployment in financing and institutional 14 solutions for mobilizing DSM and DG technologies is 15 that they will then be able to sell those solutions 16 to those economies which are not as far along the 17 curve. 18 We have seen this, for example, with the 19 automobile and the way that the more efficient and in 20 some ways more user-friendly Japanese designed 21 automobiles of the 1970s and eighties were successful 22 in achieving a significant international competitive 23 edge for the Japanese economy. And we are beginning 24 to see a similar phenomenon in the wind energy 25 certainly. 5740 1 I mean tiny little Denmark is a world 2 power in this industry just because they got there 3 first and they figured it out some time ago. And 4 Germany is coming on very strong as are other 5 countries. But the wind industry is experiencing 6 explosive growth and the people that got in -- the 7 economies that got in early are going to clean up. 8 So we can go on. There are other 9 examples. And this has been I think recognized even 10 at the highest levels of national, industrial and 11 competitive policy in some countries. The U.K. right 12 now, for example, has identified the pursuit of lower 13 greenhouse gas emissions as a key economic and 14 competitive issue for the U.K. in a positive way. 15 They see being on the leading edge of knowing how to 16 do that as being one of the keys to being an 17 economically -- an economic winner, if you like, in 18 the 21st century and they are quite serious about it. 19 So that's what I'm talking about, that 20 this is a fast growing field. And those that get in 21 early will enjoy competitive advantage. I don't know 22 if that's the part you wanted me to -- 23 MR. ABRA: No, that's fine. 24 DR. MILLER: I can give a brief local 25 example on the DSM side, Loewen Windows. You know, 5741 1 we have manufacturers who produce some of the most 2 energy efficient windows available and I believe they 3 export a significant amount of those. So that would 4 be on the DSM side. 5 MR. TORRIE: It has to be said, and this 6 is something that everybody in Canada who worries 7 about these things needs to be aware of, that there 8 has always been a down side to cheap energy which is 9 you can fall behind what's going on on the demand 10 side. And this is something that many of our points 11 have addressed with respect to electricity in 12 Manitoba. 13 MR. ABRA: Sir, in the interrogatory 14 response CAC/MSOS/TREE/RCM-1 NFAAT-3, you had the 15 diagram Wuskwatim Advancement with Adjusted Basic 16 Forecast. And then you, this morning, put a 17 variation of that diagram on the screen taking into 18 consideration the information that you got from 19 Hydro's response where you took into consideration 20 the 400 megawatts from DSM. I wonder if you can put 21 that diagram back up on the screen. I want the one 22 that shows going above the line. That's right, the 23 10,000 gigawatt hours and showing -- 24 MR. TORRIE: This is it here. 25 MR. ABRA: That's the one. Now, you 5742 1 have, as you said, done an adjustment to that 2 particular diagram as a result of information that 3 you received from Hydro in their response. But the 4 way I understand that diagram is that the 10,000 5 gigawatt hours is basically the capacity that can be 6 exported based upon the tie-line capability; I am 7 correct in that? 8 MR. TORRIE: Well, you're certainly in 9 agreement with me, 10,500 actually. 10 MR. ABRA: Okay. 11 MR. TORRIE: We might both be wrong, 12 though. 13 MR. ABRA: But that's what you understand 14 it to be? 15 MR. TORRIE: That's what I understand, 16 yes. 17 MR. ABRA: Is that as a result of 18 information that you received from the filing and so 19 on? 20 MR. TORRIE: Yes. 21 MR. ABRA: Okay. Now, the way I 22 understand that document is that effectively what 23 you're saying is that if Hydro proceeds with 24 Wuskwatim and its 200 megawatts and then proceeds 25 with its projection of 200 or at least of DSM and 5743 1 proceeds with its wind generation, that in fact, they 2 may have more power than they are capable of 3 exporting; am I correct in that? Is that the purpose 4 of that diagram? 5 MR. TORRIE: That's one of the purposes. 6 May I just say something though? 7 MR. ABRA: Certainly. 8 MR. TORRIE: About what some of the other 9 reasons for doing this are? 10 MR. ABRA: But am I correct in that 11 regard, that you're saying that Hydro may very well 12 have more power available to it in the years 2007 13 through 2014 than in fact they are capable of 14 exporting? 15 MR. TORRIE: Yes. And that is also my 16 understanding of the reason why this type of diagram 17 was used in the first place in the NFAAT evidence 18 presented by Manitoba Hydro is because of the way it 19 illustrates precisely that point. And they use it in 20 their case to show the effects of advancing Conawapa, 21 for example, instead of Wuskwatim, is to place a 22 great deal of generation capacity above that line. 23 MR. ABRA: Okay. 24 MR. TORRIE: Above that 10,500 gigawatt 25 hour line. Or you may very well still be able to 5744 1 sell it, but where you start to get into questions 2 about how much you could sell it for. 3 MR. ABRA: Okay. But you said there was 4 other purposes of the diagram other than that point? 5 MR. TORRIE: Well, the primary purpose of 6 all of the series of diagrams and all of this work 7 was to try and actually draw a picture of what an 8 NFAAT case would have looked like. And what I would 9 like to avoid is that the TREE/RCM NFAAT "Case" that 10 we've thrown together for the sake of illustrating 11 how this kind of thing would look if it had been done 12 shouldn't then become the subject of a determination 13 of the NFAAT question at this hearing. 14 In other words, this is, to a very large 15 extent, illustrative work. Nevertheless, it's rooted 16 in Manitoba Hydro's numbers. We've tried to develop 17 NFAAT scenarios which are within the realm of 18 plausibility, and therefore, ought to have been more 19 thoroughly analyzed and considered. 20 This adjustment, I should also add, that 21 we're looking at is not a full scale response to the 22 criticism that is implied in the rebuttal document in 23 which Manitoba Hydro points out that the actual sales 24 in calendar year 2003 are quite a bit higher than 25 they were forecasting back in the 2002 forecast. So 5745 1 I would like to take another look at that. But I 2 don't think the resources will be there to do it. 3 So all I did here was adjust the existing 4 resources that are available after meeting the basic 5 forecast down by 400 gigawatt hours because I have a 6 hunch that that's kind of the range that we'd be 7 looking at. But really what I would need to do to 8 properly respond to this point would be to 9 recalibrate the whole scenario and I have not done 10 that. 11 MR. ABRA: You've made comments of that 12 nature throughout much of your evidence today that 13 you just haven't had the opportunity to do this and 14 so on. Is it your position that the Commission 15 doesn't have enough information about alternatives to 16 make recommendations at this juncture? 17 MR. TORRIE: Yes. 18 MR. ABRA: For the reasons that you've 19 given? 20 MR. TORRIE: Yes. 21 MR. ABRA: Now, I wonder if you could put 22 up on the screen that document that you had up 23 earlier, which in particular is figure 13.6 from 24 CNF/TREE/RCM-1 NFAAT-13. 25 That may not have been the one you put up 5746 1 earlier, I'm sorry, but that's the one I'd like you 2 to put up. If you have it on your computer. If you 3 don't, then the members of Commission actually have 4 it with them. 5 MR. TORRIE: Is it 13.2 or 13 -- 6 MR. ABRA: 13.6 is the one that -- 7 MR. TORRIE: Is there a particular reason 8 you're selecting that one? 9 MR. ABRA: Well, we could do any of them. 10 And basically I want you to explain exactly what the 11 diagrams represent. The reason we chose that 12 particular one is because it's the most 13 representative of what Hydro in fact is planning, 14 that being two times DSM, 250 megawatts of wind with 15 Wuskwatim on line as well. 16 MR. TORRIE: Right. I might have it. I 17 didn't plan to use it. 18 MR. ABRA: If you don't, don't worry 19 about it because the members of the panel have it 20 with them. 21 MR. TORRIE: Here it is. Is that the 22 one? 23 MR. ABRA: Yes, that's right. Now, I 24 wonder if you could just go through that diagram and 25 explain exactly what it represents? And then of 5747 1 course we can use that as a basis for analyzing the 2 rest of them that you've given to us. 3 MR. TORRIE: Well, the large block at the 4 bottom of the diagram which is blue on the slide 5 that's being presented and which is sort of a light 6 shaded colour in the black and white copies in the 7 briefing material, that represents the gigawatt hours 8 per year that are available for exporting, or 9 anything else I suppose, after meeting the basic 10 forecast prediction of electricity demand in Manitoba 11 year by year. 12 And in this particular diagram, which is 13 13.6 from TREE/RCM, a response to CNF's question 14 number 13, the blue block or the large block 15 represents how much will be left over after meeting 16 our adjusted version of the basic forecast. 17 If instead we had kept Manitoba Hydro's 18 version of the basic forecast, the blue bar would 19 be -- the blue block would not be as high. The 20 overshoot above the 10,500 gigawatt hour line would 21 not be as great, and in some cases, it would fall 22 below the line depending on the scenario. 23 And it's the same block which is on the 24 base of Figure 5.5 in Volume 1 of the NFAAT evidence. 25 It's calculated exactly the same way. I used the 5748 1 same tables of numbers that Manitoba Hydro uses but I 2 used my adjusted forecast. So it includes whatever 3 DSM has embedded in the forecast. But it doesn't 4 include all of the DSM which is external to the 5 forecast and as a result of the incentive in the 6 targeted programs that you've heard so much about. 7 And that is represented in the slide by a yellow 8 sliver of gigawatt hours. 9 And in this particular diagram, we've 10 used the phrase "2 X DSM." And what we mean by that, 11 in the context of all of our slides is two times the 12 amount of DSM which is in the current Manitoba Hydro 13 PowerSmart program. 14 MR. ABRA: Right? 15 MR. TORRIE: So it's 670 gigawatt hours 16 by 2018 times -- yeah, it's 670 gigawatt hours by 17 2018. The two times level, by my calculations, would 18 be about a third of what Manitoba Hydro has 19 identified as the economic potential. It only 20 represents about 27 per cent of what we came out with 21 for the DSM economic potential. So the two times DSM 22 number doesn't represent as vigorous an achievability 23 accomplishment in our estimate of economic potential 24 as it does in Manitoba Hydro's, if you see what I 25 mean. 5749 1 And the green sliver is fairly 2 straightforward. That is the contribution that will 3 be available from 250 megawatts of wind power 4 assuming a 35 per cent load factor. 5 And all of these diagrams work with that 6 basic type of concept. And it's exactly the same 7 technique that's used in Volume 1 of the NFAAT. And 8 it's a way of illustrating other ways of meeting what 9 we said the need was, which how could you maintain 10 export and how could you maintain export revenues and 11 profits? 12 And I interpreted that for the sake of 13 having a manageable analysis and not having to run 14 the splash model and everything else, I interpreted 15 that as meaning staying above the 10,500 gigawatt 16 hour line. I think that is a shorthand way of 17 stating what the Wuskwatim advancement proposal is 18 all about. 19 MR. ABRA: Do I understand you to be, in 20 essence, saying that you're not disputing the 21 ultimate need for Wuskwatim but it's the advancement 22 that you object to, that it's simply not necessary at 23 the present time? 24 MR. TORRIE: I'm not objecting to the 25 advancement. I'm not advocating or objecting. It 5750 1 probably does -- obviously my perspective comes out 2 in the language I use. I don't think that the -- 3 from what my analysis shows me, I just don't think 4 that the case has been made at all that advancing 5 Wuskwatim is the best alternative for maintaining 6 export revenues and profits between now and 2020. I 7 remain unconvinced of that after having reviewed the 8 NFAAT evidence. 9 MR. ABRA: Well then that leads really to 10 my last question. What recommendations would you 11 make to the Commission or what recommendations do you 12 think they should be making to the Minister in that 13 regard? 14 MR. TORRIE: Well, it's obviously the 15 only question that really matters at the end of the 16 day at this hearing I suppose. But it's also one 17 that's pretty scary because you have got a lot of 18 momentum, it seems to me, behind this proposal. You 19 know, there's $50 million spent before we even start 20 to sit down and talk about it. So the pressure, as I 21 understand it, to proceed must be quite high. 22 MR. MAYER: Not on us. 23 MR. TORRIE: Well, I don't mean that in 24 the narrow sense of the word. But if you accept the 25 central argument that there is a triangle of lost 5751 1 opportunity that's going to start opening up between 2 the export market and the amount of power that 3 Manitoba Hydro will have available for it, the peak, 4 the on-peak market, and that that will have 5 accumulated to some $300 or $400 million by 2009 in 6 the absence of a successful effort to close that gap, 7 then as Manitobans, you are going to feel some 8 pressure because I would like to say send them back. 9 Make them do an NFAAT analysis. But that's another 10 year delay right there. 11 And so I can certainly understand why you 12 would be reluctant, not because somebody is picking 13 up the phone and bugging you but because you feel 14 responsibility not to delay something that could have 15 significant economic advantages for the people of 16 Manitoba. 17 So on the other hand, it's also possible 18 that the alternatives that didn't get identified 19 would reveal even better ways forward than spending 20 the next billion dollars on this dam. And you're 21 going to have to make your decision without knowing 22 that unless you send Hydro back to do a proper 23 portfolio analysis which I think would take them six 24 months. You know, I don't really know how long it 25 would take them. They are amazing. There's a lot of 5752 1 them and they are really smart once they put their 2 mind to something but it's a big job. 3 So the most difficult thing is weighing 4 that trade-off. And I don't feel confident to know 5 all of the factors that you have to weigh in your 6 position in order to know what the best 7 recommendation for you would be. 8 From a pedantic point of view, and not 9 worrying at all about another delay, I would say send 10 them back, make them get it right because the stakes 11 are going to be a lot higher next time if there is a 12 next time. And you don't want the learning curve to 13 be on the next project. 14 MR. ABRA: That's in essence the point 15 that I think Dr., and I'm not trying to put words in 16 anybody's mouth, but the way I understood Dr. Higgin 17 and Mr. Harper's testimony yesterday or their 18 recommendation was that they, in essence, were not 19 recommending against this particular project but were 20 basically saying that before you come back with 21 another project in the future, you should do an awful 22 lot more homework. 23 Are you in essence saying the same thing 24 or you think it should be delayed even for this one 25 to be studied more? 5753 1 MR. TORRIE: I certainly agree with that 2 statement as far as it goes. I'm not sure that this 3 isn't the project where the portfolio analysis and 4 the full scale NFAAT analysis shouldn't be put 5 together. But I can only repeat what I said a moment 6 ago. If it were purely a matter of taking a narrow 7 almost legalistic approach to the situation and I was 8 sitting in judgment of this evidence, I would say you 9 haven't complied with the requirement to identify and 10 assess alternative ways of meeting the need. Go back 11 and do it. 12 So that's what I would recommend if this 13 was a court or something and to heck with the real 14 world consequences. But I'm just saying that I'm 15 sensitive to the fact that you are in a position and 16 I'm only speaking here personally. Peter is probably 17 going to want to come on and he's the one who 18 probably should be answering this really because 19 essentially you're asking for a judgment call that is 20 beyond the scope of what the analysis shows. 21 The analysis, in my view, shows that the 22 NFAAT case has not been properly done and I think 23 that it makes your decision a lot riskier. 24 MR. MAYER: Peter will get his chance in 25 summation in argument. 5754 1 DR. MILLER: All right. 2 MR. ABRA: Dr. Miller, Mr. Torrie, thank 3 you very much. That completes my questions. Thank 4 you for your help. 5 THE CHAIRMAN: Thank you, gentlemen. We 6 will adjourn for lunch and be back at quarter after 7 one. 8 9 (PROCEEDINGS RECESSED AT 12:16 P.M. 10 AND RECONVENED AT 1:00 P.M.) 11 12 13 THE CHAIRMAN: All right. Ladies and 14 gentlemen, we will carry on with the questioning 15 of the witness. At 3:00 o'clock we will have to 16 make it a break and go to some of the 17 presentations that are scheduled for this 18 afternoon, and come back, if we are not finished, 19 towards the latter part of the afternoon to finish 20 or proceed with the questioning. 21 That having been said, Mr. Williams, 22 would you get going? 23 MR. WILLIAMS: That was rather sharp, 24 Mr. Chairman. I will get going. 25 I did want to advise you that back 5755 1 over checking me out again is Ms. Gloria Desorcy 2 from the Consumers Association. She is back 3 listening with great interest. 4 I did have a couple of thank you's 5 before we started out. First, I wanted to thank 6 both Mr. Torrie and Mr. Abra, because thanks to 7 their fine work this morning, my cross-examination 8 notes are considerably reduced. 9 Secondly, I did want to, on behalf of 10 my clients, extend their appreciation, both to 11 you, Dr. Miller and to Mr. Torrie, because they 12 value the input that your point of view has 13 brought to this proceeding. It has helped them in 14 developing theirs, and so they look forward to 15 seeing you at the PUB hearing in a couple of weeks 16 as well. 17 Mr. Torrie, you provided today a 18 revised graph dealing with available resources 19 adjusted by 400 GWh. I wonder if you could do my 20 clients the service of providing them with, number 21 1, a copy of that graph; and number 2, the numbers 22 underlying that graph in terms of available 23 resources, and by that I mean the annual values 24 used for resources available? Would that be 25 possible? 5756 1 MR. TORRIE: That is possible. There 2 isn't much to it that differs from the one that it 3 is a perturbation of. And I am not very happy 4 with -- I wasn't even going to do it, but I wanted 5 to try and illustrate what the magnitude of a 400 6 gigawatt offset would look like in terms of the 7 overall balance. And the reason that I had picked 8 400 was, I had spent quite a bit of time going 9 back and looking at the 2002 load forecasts, the 10 2003. I know this is way beyond what your 11 question was, and the short answer is, yes, so 12 maybe I should leave it at that. I just wanted to 13 say that this is not an adequate response to what 14 I would like to be able to do on this issue of the 15 base year. 16 17 (UNDERTAKING TREE-RCM-84: Provide copy of graph 18 and numbers underlying graph in terms of available 19 resources) 20 21 MR. WILLIAMS: I understand that, Mr. 22 Torrie, but I do appreciate that comment. 23 Would it also be possible, I am not 24 sure it is on the record, in terms of TREE figure, 25 from interrogatories for response CNF/TREE 13, 5757 1 would it also be possible to get the underlying 2 values for resources available for that one as 3 well? 4 MR. TORRIE: Yes. 5 MR. WILLIAMS: That would help with 6 the comparison. 7 MR. TORRIE: They are all coming out 8 of a spreadsheet, so it is not an onerous task at 9 all. 10 MR. WILLIAMS: I appreciate that. 11 12 (UNDERTAKING # TREE-RCM-85: Provide underlying 13 values for resources available for figure 14 TREE/RCM/CNF 13.1) 15 16 DR. MILLER: Which one is that? 17 MR. WILLIAMS: Dr. Miller, your 18 question was which figure, and I am speaking to 19 figure TREE/RCM/CNF 13.1, which is the first one 20 in that interrogatory response. It is titled 21 "Wuskwatim Advancement with Adjusted Basic 22 Forecast." 23 Mr. Torrie, moving on, I thought in 24 your comments this morning I heard echoes of the 25 comments of Mr. Harper yesterday, in terms of the 5758 1 need for an alternative analysis presented by 2 Hydro. And one of the statements that you made 3 was kind of looking forward, and you said that 4 type of approach is not going to be good enough as 5 we look forward. And by that I took you to mean 6 that whatever the outcome of this proceeding, you 7 would be looking for some recommendations from the 8 Commission in terms of how a need for an 9 alternative analysis should be properly 10 constructed, in your view, in future proceedings, 11 regardless of the outcome of this hearing. Would 12 that be right? 13 MR. TORRIE: Yes. 14 MR. WILLIAMS: I know it is kind of 15 spread through your interrogatory responses, but I 16 thought it might be helpful for my client's final 17 recommendations to get a sense of how you might 18 approach that analysis. And just for your 19 reference, and I don't think that you need to turn 20 to it, but I know in your response to CEC 21 interrogatory 10, you say the scenarios presented 22 in CNF 13 constitute the type of alternatives to 23 Wuskwatim advancement that should have been, and 24 still should be identified and analyzed by 25 Manitoba Hydro with respect to their overall rate 5759 1 and financial impacts, risk factors, and other 2 costs and benefits. 3 I wonder if I could get you to 4 discuss, first of all, what kind of economic 5 analysis you think should be done, once you have 6 constructed these scenarios or portfolios, to 7 determine, in terms of determining its return. 8 For example, would you recommend an approach like 9 Hydro does in terms of internal rate of return, or 10 how would you do that? Once you have constructed 11 the scenarios, what is your approach in terms of 12 economic analysis? 13 MR. TORRIE: I think that a lot of it 14 would be very similar to the type of cash flow 15 analysis, internal rate of return analysis, 16 investment scheduling analysis, that was carried 17 out for the various perturbations of the Wuskwatim 18 advancement proposal and the sensitivity analysis. 19 One would want to see the alternatives integrated 20 into that same framework that is represented in 21 all of those tables and tables of numbers in the, 22 I believe it is attachment 6 in volume 1 of the 23 NFAAT analysis. 24 I don't think there is anything 25 particularly novel about the qualitative type of 5760 1 analysis that those options would be, or those 2 scenarios and those alternative ways of meeting 3 the need would be subjected to. It is important 4 to look carefully at the overall impact on 5 corporate finances of the DSM/DG scenario, because 6 it will be somewhat different from, quite 7 qualitatively different from the Wuskwatim pattern 8 in so far as the investments start to pay back 9 much quicker, they are much more -- they are 10 grainier and more distributed, so to speak, and 11 they have a different type of risk associated with 12 them than the one egg in one basket approach that 13 tends to characterize the supply side. 14 We have touched earlier today also on 15 the economic and social and employment multipliers 16 and benefits of the elements that would be in 17 different packages for meeting the need that 18 Wuskwatim advancement has been proposed to meet. 19 Those would also be important things to include in 20 a full work-up of the relative merits of the 21 different ways of meeting that need. 22 MR. WILLIAMS: You mentioned corporate 23 finances, and presumably you would be looking at 24 its impact on the corporation's ability to borrow 25 and issues like its creditworthiness as well? 5761 1 MR. TORRIE: Yes. 2 MR. WILLIAMS: And also the rate 3 impacts on customers, that would be another aspect 4 of the financial -- 5 MR. TORRIE: Yes, I mentioned that in 6 the initial summary. The rate impacts on 7 customers are quite important, and so is the 8 context in which that analysis takes place, 9 because one of the hallmarks of a services 10 oriented approach to energy is, or a demand 11 oriented approach is that the shift, including the 12 shift in the business strategy and the business 13 planning, moves from the kilowatt hour over to the 14 service being provided. And that is an easy thing 15 to say, it is even a relatively easy thing to tell 16 a utility to do by changing their mandate or 17 mission statement, but it is a very, very 18 difficult transition to actually effect in an 19 organization that, you know, just spent 100 years 20 in the business of making and selling kilowatt 21 hours, and designing its business strategies 22 around the cents per kilowatt hour that they can 23 get for that commodity. 24 So the whole analysis of rate impacts 25 is not just a question of cut and dried 5762 1 arithmetic, but a reassessment of how you can get 2 the economic return, that we know is there from 3 the DSM investments, returning to the utility at a 4 level that allows them to get to the higher 5 achievability levels that we know are possible, 6 but which could result and would result in 7 pressure on the price of electricity in the 8 Province. 9 MR. WILLIAMS: Thank you for that 10 answer, Mr. Torrie. 11 Moving to a bit of a different 12 subject, and again you don't need to turn to it, 13 but you certainly, in your direct evidence and 14 also in response to questions from Mr. Abra, 15 referred to your work in the late '80's and early 16 '90's in terms of Ontario Hydro's demand supply 17 plan. Again, I have the reference here if you 18 require me to provide it, but I just wanted to get 19 from you a sense of the magnitude of the capital 20 programs that were involved in that review? And I 21 am just going to refer to Torrie Smith & 22 Associates Sustainable Development and Electric 23 Power Plan, which is a very good document from 24 1995. 25 As I understand it, in the context of 5763 1 that hearing, Ontario Hydro was seeking specific 2 approval for, among other things, two CANDU 3 reactors of 3,524 megawatts in terms of nuclear 4 generating stations; is that about right? 5 MR. TORRIE: It is actually eight 6 reactors located in two four unit groupings. 7 MR. WILLIAMS: Okay, four 881 megawatt 8 reactors. 9 MR. TORRIE: And that was one option. 10 There were other options that included even larger 11 nuclear components. 12 MR. WILLIAMS: And another element of 13 that analysis would be the installation of 2,000 14 megawatts in terms of hydraulic generating 15 facilities; would that also be correct, sir? 16 MR. TORRIE: If you are quoting from a 17 report that I wrote, it must be true. 18 MR. WILLIAMS: I certainly have the 19 references here, if you require them. 20 MR. TORRIE: No, that sounds about 21 right. There wasn't just one set of numbers on 22 the table, it was a large integrated resource 23 strategy for Ontario Hydro that spanned a period 24 of I think 30 years, and was years and years in 25 the making. It wasn't just a proposal for one 5764 1 project, it was a future vision for the utility. 2 MR. WILLIAMS: Exactly, and also, if 3 you will accept, again subject to check, also 4 being considered was the installation of 5 5,668 megawatts of capacity in the form of large 6 combustion turbine units. Would you accept that, 7 subject to check? 8 MR. TORRIE: Yes, sure. It was big. 9 MR. WILLIAMS: You also mentioned in 10 your direct, and I believe in cross, your work on 11 Great Whale. And if I try to get a scope of the 12 size of this, again going to that reliable source, 13 Torrie Smith & Associates, your analysis of the 14 project of -- 15 MR. TORRIE: Where did you find those 16 things? 17 MR. WILLIAMS: It took a lot of 18 digging. But just to get -- and they are good 19 documents -- 20 MR. TORRIE: Thank you. 21 MR. WILLIAMS: -- very helpful. My 22 understanding of Great Whale was that Hydro was 23 planning to build a hydroelectric generating 24 capacity in the Grande-Riviere de Baleine, I guess 25 the whale, of 3,212 megawatts. Would that be 5765 1 about right, sir? 2 MR. TORRIE: That sounds right. 3 MR. WILLIAMS: And that was a project 4 consisting of three generating stations, 5 associated river diversions, reservoirs, et 6 cetera. So it was a pretty mega -- it put the 7 mega in the word mega project? 8 MR. TORRIE: Giga projects even. 9 MR. WILLIAMS: And the third one, and 10 it wasn't referenced in your evidence, but I guess 11 one of the other contributions that you made in 12 other regulatory proceedings related to the Lower 13 Churchill hydroelectric project in Labrador, and 14 again going to your excellent report on 15 electricity conservation and efficiency potential, 16 it sounds like that was a project of about 17 3,088 megawatts in terms of capacity in totality. 18 Does that sound right? There were two facilities, 19 one at Gull Island and another one at Muskrat 20 Falls. 21 MR. TORRIE: If you add them together, 22 I guess it was in that range. 23 MR. WILLIAMS: That would be again 24 what you call a giga project instead of -- you 25 will agree with me that certainly Wuskwatim is a 5766 1 big project, but relative in scale to those ones, 2 it is not nearly of that magnitude economically; 3 would that be fair? 4 MR. TORRIE: Well, it certainly is a 5 smaller dam. It's size economically I guess 6 depends on the economy that it is in. 7 MR. WILLIAMS: Well, Churchill River, 8 if memory serves me right, was about an $11 9 billion project in the Province of Newfoundland, 10 and that was in 1990 dollars. So you would 11 compare that to Wuskwatim, which is in a 12 comparable size or perhaps a bit bigger. 13 MR. TORRIE: If you are trying to 14 establish that Wuskwatim is smaller than those, 15 there is no disagreement from me. But in terms of 16 how big a particular project is relative to the 17 economy that it is situated in, that is not as 18 straight forward a question. And while it is true 19 that the Churchill Falls project on the surface 20 might appear to be in Newfoundland and Labrador, 21 from an electric utility system's point of view, 22 it is in the Quebec/New England world, and it 23 represented an increment in that whole system all 24 of the way down to New York, or it would have if 25 it had gone forward, or will if it some day does. 5767 1 That is the only thing that I would caution. 2 MR. WILLIAMS: And that is a helpful 3 context, I appreciate that. 4 I did want to turn just very briefly 5 to a last issue, and I am sure to the shock of 6 both Mr. Mayer and Sargeant, I will be 7 considerably under my time estimate. It is a rare 8 event, Mr. Torrie, so we should applaud it. 9 MR. TORRIE: My next answer is going 10 to be at least half an hour long. 11 MR. WILLIAMS: I was going to say, be 12 nice to me on this one. 13 My understanding is that certainly in 14 terms of the screen that Manitoba Hydro used, in 15 the range of 6 cents for its CCE calculation, you 16 suggested that didn't capture the full benefits of 17 DSM, and that you used as a screen, for at least 18 part of your analysis in terms of the consultant's 19 DSM report, a figure of 8 cents, which you 20 consider to be a partial reflection of the 21 benefits not captured in the Hydro figure; is that 22 right? 23 MR. TORRIE: Yes. 24 MR. WILLIAMS: Perhaps you could, for 25 my benefit, turn to -- I just want to go to CEC, 5768 1 your response to CEC interrogatory 5, and in 2 particular to page 2 of that one? 3 MR. TORRIE: My number 5 in that set 4 is just a referral to other answers. 5 MR. WILLIAMS: Excuse me, I misspoke, 6 CNF 5, my apologies. 7 MR. TORRIE: Okay. 8 MR. WILLIAMS: At least in my copy on 9 the top right-hand side, you discuss limits on the 10 CEC measure, and you -- this is a first full 11 paragraph -- and you identify what I take to be 12 three limits. Namely, that it does not capture 13 any of the benefits to the end user beyond the 14 financial value of the kilowatt hours saving, or 15 to any of the system-wide benefits of increased 16 DSM, or three, any of the social and environmental 17 benefits of DSM. Did I summarize that fairly 18 accurately, sir? 19 MR. TORRIE: Well, you left out the 20 parenthesis on the second point which are maybe 21 worth stating. Yes, it leaves out system-wide 22 benefits unless they are captured by the original 23 method that was used to come up with the 6.15 24 cents, which was not a simple method, as you know. 25 There was a simulation that did capture some of 5769 1 the system effects of the DSM increment, as I 2 understand it. 3 MR. WILLIAMS: For clarification of my 4 analysts, and for my clients as well, we recognize 5 that the 8 cent figure that you use, it is not 6 kind of a, you know, kind of a -- it is a rough 7 number, an attempt to capture the partial 8 benefits -- I don't mean rough in a pejorative 9 term, just that it is an approximation. I guess 10 what I was asking is, within that kind of 11 additional 1.85 cents, does it capture all three 12 of the elements that are identified, or is it an 13 attempt to at least try and capture those three 14 elements, or what does it try and capture? 15 MR. TORRIE: I don't think that there 16 is any way -- I don't think that we know really, 17 because we are talking about environmental 18 externalities, for one thing, and because some of 19 the social and environmental benefits are very 20 difficult to quantify. And some of the other 21 benefits that relate to the easing of risk, for 22 example, from a program that emphasized this 23 stuff, you wouldn't be able to really see those 24 unless you did a full scale portfolio assessment 25 of an investment program. And then you might find 5770 1 out, boy, this stuff is actually worth a premium 2 to us. So I think that -- and in fact, you know, 3 it didn't make that much difference. We didn't 4 really do a very rigorous or thorough examination 5 for technologies between 6 and 8 cents, that were 6 outside of the consultant studies themselves. And 7 going up to 8 cents doesn't add a whole lot in, as 8 you may know. The data bases for this kind of 9 thing are kind of funny, because they are more 10 related to what the going price is than what the 11 technological possibilities are. 12 So I think, to be honest, what we were 13 trying to do here was simply indicate that it may 14 look like using the cost of saved electricity is a 15 move that suddenly puts supply and demand on an 16 equal and symmetrical footing for this kind of 17 analysis. 18 Like I said earlier, I did this before 19 anyone else in Canada, so here I am sort of 20 offering some observations about the shortcomings 21 of a method that I have also been a great advocate 22 for, because it gives you a way of assessing 23 demand side investments opportunities in a way 24 that gets them into cents per kilowatt hours. But 25 at the same time, thinking back to Dr. Miller's 5771 1 opening comments and the types of values that the 2 clients that I have in this job hold, and also 3 thinking to the synergistic and unexpected 4 benefits that always seem to flow from DSM 5 investments, we just felt it was important to 6 point out that you are not actually getting all 7 that this is worth by picking a number that is 8 that cut and dried. 9 MR. WILLIAMS: I appreciate that and 10 that is a helpful answer. If I am trying to get 11 my head around this, the kind of growth from 6.15 12 to 8 cents, that would be representative of the 13 kind of three values that you don't feel were 14 appropriately captured in the simple 6.15? 15 MR. TORRIE: Yes. 16 MR. WILLIAMS: Mr. Chairman, subject 17 to a check with my friend Mr. Harper, I think 18 those are all of my questions. 19 THE CHAIRMAN: Other registered groups 20 that have questions? Mr. Bedford? 21 22 (OFF THE RECORD DISCUSSION) 23 24 MR. BEDFORD: I won't be as reckless 25 as Mr. Williams in promising you that I will be 5772 1 very short. 2 Dr. Miller and Mr. Torrie, good 3 afternoon. Mr. Torrie, I don't recall whether we 4 were formally introduced when you were here in 5 March. You do know my name is Doug Bedford and 6 you obviously know that I work for Manitoba Hydro. 7 I would like to start by I hope 8 establishing that there is something that we can 9 certainly agree upon, and that is that demand side 10 management, DSM as everyone calls it, is a good 11 thing in life. 12 MR. TORRIE: If you want an 13 acknowledgment, yes, it is right up there with 14 motherhood. 15 MR. BEDFORD: And when Mr. Kuczek, one 16 of my colleagues at Manitoba Hydro, tells me that 17 the current objective is to double the company's 18 plans for DSM, we are at least moving in the right 19 direction? 20 MR. TORRIE: Yes. 21 MR. BEDFORD: It puts us in a better 22 place I gather than some Canadian utilities that I 23 am told even today have no DSM programs, policies, 24 or plans, not even on the weekends? 25 MR. TORRIE: Not even on the weekends? 5773 1 MR. BEDFORD: I heard that somewhere. 2 I am correct and I have been informed 3 correctly, Mr. Torrie, that there are indeed some 4 Canadian utilities, to your knowledge, that don't 5 have any DSM plans? 6 MR. TORRIE: It wouldn't surprise me. 7 As I was saying earlier, there was a 8 collapse in the DSM marketplace and, you know, 9 Ontario came out of it in pretty rough shape, for 10 example. And some Canadian utilities were so far 11 behind that they didn't stop their DSM because 12 they never got started in the first place. I 13 would say in the scheme of things -- maybe this 14 will even allow you to not ask as many questions 15 to make the point that you might be seeking -- 16 that Manitoba would definitely in Canada rank 17 among a very short list of Provincial electric 18 public utilities that stayed in the DSM game 19 throughout that period and didn't get out 20 altogether, probably partly because it is a public 21 utility and the policy mandate was always there. 22 But when it was nothing more than a business 23 decision, we saw a lot of the investment interests 24 evaporate in the mid '90's. 25 MR. BEDFORD: Thank you. 5774 1 Dr. Miller, I listened with interest 2 to your comments on training and jobs as they 3 relate to the proposed Wuskwatim projects, and you 4 offered up some thoughts on the subject of 5 training and jobs. Can I suggest to you, does not 6 the Wuskwatim generation project provide the 7 opportunity to individuals living in the north, I 8 am thinking particularly of First Nations persons, 9 Aboriginal persons, to obtain that critical level 10 of training and job experience, so that after 11 Wuskwatim they could move on to the kinds of jobs 12 that you suggested to all of us would be healthy 13 and worthwhile in our society, such as upgrading 14 homes and businesses, with DSM objectives in mind? 15 DR. MILLER: I imagine many of the 16 skills would be transferrable, but there may be 17 others that aren't, I don't know. And the 18 proportions might be different. I mean, moving 19 heavy equipment and excavation and so on might be 20 a less useful skill than home building. And home 21 building is different than just building forms for 22 concrete. So I don't know the degree of 23 transferrability, or the appropriateness -- the 24 most appropriate would seem to be working on homes 25 to acquire the specific skills for continuing to 5775 1 work on homes. 2 MR. MAYER: They also have to build 3 roads, Mr. Miller. 4 DR. MILLER: Not too many I hope. 5 MR. MAYER: Tell that to the 6 communities that are not yet connected to the road 7 system. 8 DR. MILLER: I will talk to them. 9 MR. BEDFORD: I know Mr. Torrie has 10 confirmed that he has read the NFAAT filing, and I 11 recollect that he mentioned the appendices. 12 Dr. Miller, have you as well had the 13 opportunity to read the NFAAT filing and the 14 appendices attached to it? 15 DR. MILLER: I certainly read the 16 filing. Frankly, I get lost in some of the 17 appendices. 18 MR. BEDFORD: Then I am going to take 19 about 40 seconds and commend to your attention 20 that portion of the appendices that deals with the 21 extensive thought and effort that has gone in to 22 the subject of training, particularly with NCN 23 members in mind, but beyond NCN members, other 24 northern Aboriginals. And my thanks to my 25 colleague, Ms. Matthew Lemieux, for reminding me 5776 1 that this was written some time ago. And I quote: 2 "There are also community based work 3 experience projects for designated 4 trades, carpentry and electrical 5 trainees, and local contractors are 6 provided with a $4.00 an hour 7 'contribution to contractor costs' for 8 the additional administrative and 9 supervisory work needed to manage 10 trainees on the work site." 11 And I won't belabour the point by taking you 12 through all of the charts, but I thought that 13 addressed directly the subject that you raised 14 that perhaps there are other sorts of work 15 experience and training for individuals at Nelson 16 House and other northern communities, and indeed 17 to me it seems obvious that thought has been given 18 to that very subject, and it is in place indeed in 19 connection with training for the Wuskwatim 20 project. 21 Now, I am not seeking for you to agree 22 or not. I said at the outset I would commend that 23 to your attention. 24 DR. MILLER: I am aware of the 25 training programs, both from reading and from your 5777 1 earlier presentations. I think that is an 2 extremely commendable feature of the whole 3 proposal. The only question is, can you do the 4 same for an aggressive northern DSM program? That 5 is the only question. 6 MR. BEDFORD: Mr. Torrie, at one point 7 this morning you succeeded in agitating a number 8 of those fine people who work for Manitoba Hydro. 9 You made a reference to one of the documents in 10 the NFAAT filing, I think it is an answer to a 11 TREE interrogatory 32b. And I am going to ask my 12 able assistant, Mr. Wojcznski, to pass out copies 13 of that, and I will take you through what has 14 caused the consternation. 15 Mr. Torrie, if you would look at the 16 second of the third pages, the problem -- or 17 perhaps I will better characterize it as a 18 misunderstanding -- that I gather occurred is you 19 were making a general characterization regarding 20 the planning that is done overall at Manitoba 21 Hydro, and you quoted from lines 7 to 11 of page 22 2, that suggests Manitoba Hydro does not approach 23 economic analyses in the way that someone like you 24 I guess would prefer. And what the document says 25 is, instead Manitoba Hydro's economic analyses use 5778 1 a more direct project specific approach. 2 Again, the concern that has bothered 3 some of my colleagues at Manitoba Hydro is that 4 you used the reference to criticize generally how 5 planning is done at Manitoba Hydro. They draw my 6 attention, and now I draw your attention and 7 others to the fact that those comments were 8 actually made in a narrow context with respect to 9 DSM planning, and how in the DSM field one looks 10 for a project specific analysis as to whether I 11 understand a particular proposal for DSM is 12 suitable or not suitable for Manitoba Hydro. 13 My able assistant reminds me that it 14 is the marginal cost look at each DSM project that 15 is of importance to us. 16 Do you stand corrected, or have I 17 misquoted you? 18 MR. TORRIE: Well, you have been 19 quoting yourself or Manitoba Hydro for most of 20 your question. I am not sure which -- can you 21 tell me what it is that you are suggesting that I 22 am in error on more concisely, please? Could you 23 summarize? 24 MR. BEDFORD: My colleagues understand 25 that you took the words from lines 7 to 11 and 5779 1 applied them out of context as a criticism to the 2 overall planning done at Manitoba Hydro. 3 MR. TORRIE: Well, first of all, they 4 are located physically in the very context which 5 you are claiming that I am taking them out of. So 6 I think that the reason that I sort of jumped when 7 I saw that paragraph, and as I tried to explain as 8 I was using it to illustrate a bigger point this 9 morning, is that whether or not in this particular 10 case it was intended for a narrower application, 11 and perhaps it was -- and perhaps that also was 12 part of my criticism -- the way that the point was 13 made here to me illustrated what I feel is a 14 pervasive philosophy throughout the NFAAT evidence 15 provided by Manitoba Hydro, and which I think goes 16 a long way to explain why every time we would ask 17 questions in this area, we would get back answers 18 that to us were non-responsive. Because there is 19 a tendency throughout the whole two volumes and 20 all of the interrogatories to focus everything on 21 the dam, and look at what might affect the dam, 22 and it doesn't trace back to the fundamental need 23 and the identification of alternatives. 24 So, I mean, I can see what you are 25 saying, but I remember when I read the paragraph 5780 1 and thought how beautifully it does represent what 2 I regard as part of the limiting problem here, I 3 went back and I did read the context, and at that 4 time, I thought, no, that is a fair passage to use 5 to illustrate the point that I am making. So I 6 don't really feel that it is out of context, I 7 think it is in context. 8 MR. BEDFORD: With respect to the 9 general criticism you've advanced, which other 10 consultants which have come here have also 11 advanced regarding the whole way in which the 12 NFAAT was prepared and has been presented, can I 13 suggest to you that the obvious alternatives to 14 building Wuskwatim are DSM, supply side 15 enhancements, some include wind, some have said 16 NUGs, those are the obvious alternatives? 17 MR. TORRIE: To you, those are the 18 obvious alternatives? Those would certainly be 19 elements of the alternatives, but in my mind, I 20 think of the alternatives as packages. So I 21 wouldn't single out a particular technology as an 22 obvious alternative. The need, as we were 23 discussing it earlier today, was to maintain 24 exports and profits therefrom. And that is not 25 done by technologies, that is done by revenue. So 5781 1 I would tend to define the alternatives at a 2 higher level than you are suggesting. 3 MR. BEDFORD: But the things that I 4 suggested, DSM, supply side enhancements, wind, 5 NUGs, those are components of these packages, some 6 of them have called them portfolios? 7 MR. TORRIE: Sure, yes. 8 MR. BEDFORD: Those are what the 9 portfolios are made up of. And I listened 10 yesterday when Mr. Harper and Dr. Higgin testified 11 and acknowledged that they share what I understand 12 is the identical concern that you have expressed 13 to us today, but they also said that they drew 14 some comfort from the fact that Manitoba Hydro has 15 stated publicly, as part of the NFAAT submission, 16 that it intends to pursue DSM, intends to pursue 17 wind development, intends to pursue supply side 18 enhancements, and I will concede that perhaps none 19 of them to the extent that you or to the extent 20 that some other intervenors have pressed us to do, 21 but we do intend to proceed with them. Does that 22 not modify to some extent your concern as to the 23 way in which the NFAAT was prepared and has been 24 presented? 25 MR. TORRIE: Well, yes and no. I 5782 1 mean, good intentions are found throughout the 2 document, and particularly in the area of DSM. It 3 always seems like what you are about to do is 4 going to be what you should be, you know, what you 5 suggest you should be evaluated against instead of 6 your track record, or instead of the utility's 7 track record. So intentions at least indicate 8 that there is a will to go in a certain direction, 9 but I think there is a limit to how much comfort 10 one can take from intentions if, when you analyze 11 deeper, you see possibilities for a repeat of a 12 similar cycle to the one the last time the good 13 intentions were there on DSM. 14 So, of course, we are all happy that 15 DSM is on the rise again at Manitoba Hydro. I am 16 sure that that would be the sentiment of the 17 clients that I have been working for. We have 18 never seen such a concentration of new programs 19 announced. I have seen this before when a utility 20 is trying to get permission to build something. 21 But I am not suggesting that they won't be 22 followed through on. But I guess I have lived 23 through too many cycles of utility promises that 24 weren't delivered on in DSM to take a great deal 25 of comfort from them. 5783 1 MR. BEDFORD: Can I suggest to you 2 that it strikes me your concern about the way in 3 which the analysis has been done, and the 4 thoroughness, or in accordance with your criticism 5 the lack thereof with respect to some alternatives 6 like DSM, would be far more decisive if what the 7 proponents of the Wuskwatim projects were saying 8 to these five Commissioners is it is an either/or 9 choice, we can either do Wuskwatim or we can do 10 some other alternative? 11 MR. TORRIE: Sorry, I must be getting 12 a little bit tired, I didn't quite understand the 13 question. Can we try again? I will try and 14 concentrate more here. 15 MR. BEDFORD: I think it is simply a 16 variation of what I have already put to you, that 17 the criticism coming from you of lack of 18 thoroughness in the way in which alternatives were 19 analyzed in the NFAAT, would be a far more 20 decisive criticism and far more valid if what the 21 proponents were saying is it is an either/or, 22 either we do Wuskwatim or we do something else, 23 But it is not an either/or, is it? 24 MR. TORRIE: The concern that I was 25 trying to get at this morning, in the context of 5784 1 NFAAT, was that if the need for Wuskwatim, and 2 particularly Wuskwatim advancement, is to maintain 3 exports and export revenues, and particularly 4 between now and 2020, my concern is that different 5 ways of doing that was not at the centre of the 6 NFAAT evidence. And it doesn't really have 7 anything to do with the either/or, the description 8 of the either/or choice that you are describing, 9 it is another point altogether. 10 We did a number of scenarios, some of 11 which had -- we did dozens of these when we 12 started playing with it. We had Wuskwatim 13 advanced by five years in some of them, we had it 14 not advanced at all in many of them. Our concern 15 was looking for ways of meeting the need, which 16 was maintaining export revenues and profits. And 17 in that regard you could almost say that we have 18 been presented with an either/or analysis by 19 Manitoba Hydro, because there is only one way of 20 doing that that has been put before the hearing. 21 MR. BEDFORD: I would like to move to 22 the subject of exports, so I am again going to ask 23 my able assistant to distribute a little package 24 that we put together. It is going to be very 25 familiar to you because one of the documents comes 5785 1 from one of your IR answers, and another document 2 comes from something that we distributed at the 3 outset of the hearing. 4 I am going to go through each of these 5 rather briefly. Mr. Mayer is correct, we have all 6 seen this before. 7 The first one indeed, Mr. Torrie, 8 comes from material that you have presented. And 9 in my simple way, I understand, I hope as you do, 10 that some of the key things we should draw from 11 this picture is the thick black line on top of 12 which rests the word "estimated on peak export 13 market." And I understand that that is a picture 14 or a representation of the tie line capacity 15 leading out of Manitoba which limits the amount of 16 energy that Manitoba can export -- we can say 17 Manitoba Hydro; am I correct? 18 MR. TORRIE: Yes, that is my 19 understanding, it is a combination of 20 technological and operational constraints. 21 MR. BEDFORD: If you will turn now to 22 the second picture -- the second picture, I can 23 remind everyone, comes from materials that were 24 filed at the outset of the hearing. Again, we see 25 that same thick black line, which in my simple 5786 1 understanding I gather represents that same 2 constraint, if I can call it that, a limit to the 3 amount of energy that presently can be exported 4 out of Manitoba, and it remains constant into the 5 future for purposes of trying to understand this 6 project. 7 What I also gather is of importance, 8 when one looks at this picture, are those words in 9 bold at the centre of the page near the top, 10 "median flow conditions." And I can remind us all 11 that this picture was initially presented in order 12 to set out what the picture would look like if 13 Manitoba Hydro were to become more aggressive on 14 the subject of DSM, and that this represents what 15 the energy production would look like if Manitoba 16 Hydro did five times DSM. And in effect, median 17 flow conditions stands as a surrogate when you run 18 a sensitivity for doing five times the current 19 level of DSM. That is my understanding. Is that 20 yours as well, Mr. Torrie? 21 MR. TORRIE: That is my understanding 22 of the way that Manitoba Hydro portrays it. But I 23 have to say that to me the very fact that rather 24 than actually doing the DSM scenario work, they 25 would put out the median low forecast as a 5787 1 surrogate, is reflective of almost the secondary 2 status that the whole DSM option gets in this 3 exercise. The median low forecast, you will 4 recall, is generated by assuming a reduction in 5 economic growth in the Province primarily, and a 6 more sophisticated -- and therefore, yes, you will 7 get less electricity demand, but you will not get 8 the same kind of drop, probably either in -- you 9 will get less electricity demand in a scenario 10 where there is less economic output. But it is 11 not really a good substitute for understanding the 12 lower demand that might come about even with the 13 higher economic growth, but with changed relations 14 between the economy. 15 And you could say, what is the 16 difference? It stills give you a line on the 17 graph. And in that regard my answer is yes, this 18 is put forward as a way of showing what happens to 19 the existing resources if the demand is lower than 20 it is in the basic forecast. And it does do that, 21 and that is the same exercise that we used in 22 looking at scenarios as well. 23 MR. BEDFORD: I know that the 24 proponents used this picture that we are looking 25 at to run, as I said, a sensitivity. The last 5788 1 page of the four-page package is simply again a 2 reproduction that comes out of the NFAAT 3 materials, and it is the sensitivity analysis. 4 And I remind us all that if you go right to the 5 bottom of the page and you look at the BB 6 sensitivity, there is the words repeated "median 7 low load growth," that the result is a very small 8 minus 0.3 percent effect on the economics for 9 Wuskwatim. And I know that you have seen that and 10 looked at that, and you and I won't disagree that 11 is the purpose of preparing the picture and then 12 running the sensitivity, to establish, as you have 13 acknowledged, that the proponents approached this 14 whole Wuskwatim proposal by suggesting that under 15 a variety of different sensitivities the Wuskwatim 16 projects will still make money? 17 MR. TORRIE: Yes, and that is actually 18 a really good illustration of why I felt the 19 passage that you quoted earlier, and which you 20 suggested that I was taking out of context, 21 actually reflects the kind of thinking that goes 22 on in these things within the organization in many 23 other more general ways, because it certainly 24 describes the approach to the analysis of 25 Wuskwatim that is reflected in the sensitivity 5789 1 analysis, which is very much supply oriented and 2 project focused. 3 MR. BEDFORD: One of the things they 4 didn't teach me in law school, but I have had to 5 learn, having joined Manitoba Hydro recently, is 6 that the really valuable commodity for sale in the 7 electrical energy world is something called firm 8 power, long term firm power -- I haven't learn the 9 lesson quite well enough yet. Sometimes, at least 10 sometimes I understand it as dependable energy, 11 and I have been told it relates to this 5 by 16 12 product, five days a week, 16 hours a day when 13 demand is high in the world for electrical energy. 14 Have I more or less got it right? 15 MR. TORRIE: I think you just named 16 three somewhat different things. Dependable 17 energy is more a concept that relates to the 18 supply of power. Firm energy is almost a 19 contractual term, as I understand, that relates to 20 the conditions under which power will be supplied. 21 It can also be sometimes used to refer to -- I 22 think that is the context in which you were using 23 it, it is a contractual firmness, if you like, a 24 guarantee over a long term. And the 5/16 power 25 could be provided on a firm basis, and could come 5790 1 from dependable sources. It would have to if it 2 was a long term contract, but it is not 3 synonymous, I don't think, with firm power. 4 MR. BEDFORD: Long term firm power, it 5 is the valuable product, it is the one that 6 commands money in the export market? 7 MR. TORRIE: Especially if it is in 8 that 5/16 peak time period. 9 MR. BEDFORD: And I have also learned 10 since joining Manitoba Hydro that the real 11 limiting constraint to Manitoba Hydro in 12 calculating and deciding how much of that valuable 13 long term firm power it has for sale is what the 14 low flow conditions are historically on the rivers 15 in Manitoba. Have I got that right? 16 MR. TORRIE: You have the same 17 understanding of it that I have, in any event. 18 MR. BEDFORD: And indeed, we have just 19 experienced, as most Manitobans know, very low 20 flow conditions in the last year. And so I've 21 been told that it would have been stupid for us to 22 have ever tried to market in a long term firm sale 23 years ago, or more recently, an amount of load 24 that would have exceeded what can be produced in 25 low flow conditions. Does that make sense to you? 5791 1 MR. TORRIE: I understand that 2 philosophy, that business strategy, as the way you 3 described it, and I believe that is the way that 4 Manitoba Hydro does business. It tries not to 5 commit power into long term firm contracts unless 6 it is dependable power, unless it is power that 7 they would even have in a low flow year. 8 MR. BEDFORD: And I have also been 9 told that if we didn't have intelligent people, 10 like Mr. Cormie and Mr. Wojcznski, working for us, 11 but if we had foolish people who did try and 12 market long term firm sales based on something 13 beyond what is generated in low flow conditions, 14 that the buyers in the market to which we sell 15 wouldn't be fooled by that, that they are 16 sophisticated enough to also know that they ought 17 not to buy from us sales of energy that would 18 exceed what our low flow conditions can generate. 19 Is that consistent with your understanding of the 20 market place? 21 MR. TORRIE: I think so, yes. 22 MR. BEDFORD: Which takes me to a 23 question that I heard you ask us all a few hours 24 ago. And the question that you posed, which I 25 gather is fundamental to the way that you've 5792 1 looked at the NFAAT and the Wuskwatim projects, 2 was, how can you maintain exports and profits? 3 And the answer I give to that question to you is, 4 you make sure that you have enough firm power to 5 fill your tie line capacity. And the answer you 6 gave wasn't quite the answer that I have given, 7 you do take us to the tie line capacity, but I 8 repeat my answer to your question is you maintain 9 enough firm dependable power to maintain the tie 10 line capacity. Do you follow what I am saying? 11 MR. TORRIE: I think so, yes. 12 MR. BEDFORD: Which now takes me to 13 the third picture. The third picture you will see 14 is an illustration of what the dependable energy 15 on the Manitoba Hydro system is with Wuskwatim. 16 And you will see the same thick dark line that 17 appears on the other pictures, which is the tie 18 line capacity. And you will understand now why I 19 had the third picture prepared, which was to 20 illustrate that even with Wuskwatim, there is a 21 long way to go before we fill up that tie line 22 capacity, based on dependable energy. 23 I can also tell you that I am assured 24 that this picture includes in the blue where it 25 says "existing resources" that same surrogate for 5793 1 five times DSM. 2 MR. TORRIE: Are you asking a 3 question, or are you making an argument, or what 4 is going on here? 5 MR. BEDFORD: I am obviously making an 6 argument through a picture, but I would like you 7 at this stage, because I do have a question coming 8 out of this, if we can turn the projector on and I 9 can ask you to bring up your picture that 10 illustrates, I think it was three times DSM, two 11 times wind, and other existing resources without 12 Wuskwatim, and there is a nice big blue area. 13 Mr. Abra had you look at that picture as well. 14 If we can all, Mr. Torrie, look at the 15 big area of blue on your picture, can you please 16 confirm for me that not all of the energy in that 17 big area of blue is long term firm power or 18 energy? 19 MR. TORRIE: Again, do you mean 20 dependable energy? 21 MR. BEDFORD: Yes? 22 MR. TORRIE: I used median flow 23 conditions for this whole series, I didn't use 24 dependable flow conditions. So, yes, all of the 25 charts that we presented were based on median flow 5794 1 conditions. And I think that is the answer to 2 your question. 3 MR. BEDFORD: I would like you now to 4 go back to the third picture that I presented to 5 you, that I didn't ask you a specific question 6 about, but if I look at that picture and I look at 7 the year 2018 -- 8 MR. TORRIE: I need to know -- the 9 third picture, okay. That is the one based on 10 dependable energy? 11 MR. BEDFORD: Dependable flow 12 conditions, and I am looking at 2018, and I am 13 looking at that big stretch of white between the 14 top of the dark green Wuskwatim, in order to get 15 up to the tie line capacity. And by my very 16 simple-minded calculation, knowing this already 17 includes five times DSM, my conclusion is one 18 would have to do something approaching 12 times 19 DSM in order to get up to that tie line capacity 20 and fill it with dependable energy long term firm 21 sales. Is my estimate more or less in the 22 ballpark? 23 MR. TORRIE: I take your word for it. 24 MR. BEDFORD: Now, knowing that, and 25 knowing that the terms of reference for this group 5795 1 of five Commissioners is to advise the Minister 2 on, amongst other subjects, whether or not the 3 Wuskwatim projects have been selected upon 4 reasonable grounds, I suggest to you that even if 5 we were as captivated by the subject of DSM as I 6 know you obviously are, that to propose as an 7 alternative that Manitoba Hydro pursue 12 times 8 its present targets for DSM could not by anyone's 9 conclusions be considered reasonable, could it? 10 MR. TORRIE: Did I propose that? No. 11 MR. BEDFORD: What is your proposal 12 for a DSM target? 13 MR. TORRIE: I would like to see, you 14 know, the full work-up of the alternative, the 15 NFAAT analysis before really saying for sure what 16 that would be. 17 THE CHAIRMAN: Excuse me, Mr. Bedford, 18 you said that this, in this diagram, it included 19 five times DSM? Because this doesn't show that. 20 MR. BEDFORD: Mr. Chairman, the words 21 you will see in the heading just below the top 22 "median low load growth scenario," I guess 23 logically for me it is better to describe it as a 24 surrogate for five times DSM. 25 Mr. Torrie, can I correctly assume 5796 1 that your recommendation for an appropriate DSM 2 target would be something less than 12 times the 3 current DSM planning that is being used by 4 Manitoba Hydro? 5 MR. TORRIE: Yes. 6 MR. BEDFORD: Mr. Torrie, I can tell 7 you that I listened with much sympathy to the plea 8 with which you concluded your presentation 9 regarding the unhappy direction that the world has 10 gone, certainly in the last 100 to 200 years with 11 our greenhouse gas problem. I know that Dr. 12 Miller was addressing exactly the same subject in 13 his remarks. And listening to each of you, I 14 thought to myself, as a good citizen of the world, 15 not just of Manitoba or Canada, it would be 16 appropriate for us to consider all of our options, 17 and I think you are both urging us to do that. Am 18 I correct? 19 MR. TORRIE: One should always 20 consider all of one's options and then make a 21 choice. 22 MR. BEDFORD: And I thought to myself 23 that one of the good things about the Wuskwatim 24 projects that has been said over and over is that 25 they do displace fossil burning energy plants in 5797 1 that big country to the south of us. I am sure 2 you agree with that, do you not? 3 MR. TORRIE: In fact, when I was out 4 here earlier this winter, I had the opportunity 5 to -- I had to wait a couple of days for my turn. 6 And I've also noticed in the transcripts a number 7 of references to the greenhouse gas benefits of 8 Canadian Hydro power, Manitoba Hydro power going 9 into the U.S. And you know, I do a lot of work on 10 the greenhouse gas issue, and this kind of almost 11 opportunistic statement, while true, represents a 12 very narrow kind of window into what is happening 13 on the climate change file. And it reminds me a 14 lot of the phenomenon that I was talking about 15 earlier today, where after the first oil price 16 shocks, all of the supply side guys were there 17 saying, I am your man, nuclear power, I am your 18 man, price of oil is going up, don't worry about 19 it. In Ontario, Ontario Hydro said they would 20 build 65 nuclear reactors by 2010 or something 21 like that. Wind power, I am your man. Solar 22 power, I am your man. What they didn't do is 23 really take a broader and a deeper look at what 24 was going to happen on the demand side in response 25 to those shocks. 5798 1 I see the same thing going on with 2 regard to the Kyoto and the greenhouse gas 3 reduction field, where everyone -- Manitoba Hydro 4 is no different, and I wouldn't be too harsh about 5 it, it is fair game -- is saying, great, we can 6 take advantage and make a contribution because our 7 hydro power doesn't emit greenhouse gas emissions. 8 It is true as far as it goes, but it doesn't go 9 very far. 10 What will happen if North America in 11 particular makes a serious commitment to bringing 12 its greenhouse gas emissions down to stable levels 13 is that there will be an incredible transformation 14 on the entire, across the entire spectrum of fuel 15 and electricity consumption patterns. And there 16 is -- to give the point, I think that in that 17 scenario probably there will emerge very high 18 value added opportunities for hydro-electricity, 19 that probably even go beyond the kinds of things 20 that you are contemplating by just selling it to 21 the Americans. 22 That is the kind of analysis that I 23 think ought to be part of the type of scenario 24 work that I was describing earlier, because 25 otherwise you are not, as Wayne Gretsky would say, 5799 1 you are not necessarily skating to where the puck 2 is going to be. 3 MR. BEDFORD: That is rather where I 4 am going. If we leave aside for the moment 5 whether dependable energy should come from even 6 more hydro, or as I know you have been advocating, 7 more DSM, I thought to be a good citizen of the 8 world, Manitoba Hydro really ought to be looking 9 at expanding that thick dark line on those 10 pictures, the tie line capacity. Because if we 11 improve tie line capacity out of this Province, 12 and indeed across this country, does that not lead 13 us to where the puck ought to be going, to 14 transfer those DSM benefits that I know you and 15 Dr. Miller would really like to see us pursuing in 16 Manitoba, and which we are, so that we can help 17 those to the south of us -- and to the east, and 18 apparently to the west. 19 MR. TORRIE: And west? Do you want to 20 start with the west? Do you want to start with 21 Alberta? 22 I don't think that the expansion of 23 the tie line was something that came up anywhere 24 in Manitoba Hydro's evidence. Is this being 25 introduced now as something that is on the table 5800 1 for consideration? Because it is not something 2 that -- I have in a general way, in looking at 3 possible low emission futures for Canada, 4 concluded that a stronger east/west flow of hydro 5 power could be part of a low emissions scenario, 6 but it was in the context of a scenario that 7 included no additional hydro-electric development 8 in either Manitoba or Quebec -- not because it was 9 ruled out, but because the demand scenario that 10 goes along with a low emission future results in 11 such an increase in the efficiency of electricity 12 use that the demand for new mega projects remains 13 very, very soft for a long time to come in that 14 future. 15 So I took, frankly, quite a bit of 16 flack from my friends in the environmental 17 movement because they said, you know what is going 18 to happen, all of the pro-mega project folks in 19 Manitoba and Quebec are going to -- and this may 20 be what is about to happen right now -- are going 21 to start saying, you think it is a great idea to 22 build these inter-ties. While we did include 23 increased east/west flows, it was in the context 24 of a sustainable electricity future, not an 25 unsustainable one. And that makes all of the 5801 1 difference. 2 MR. BEDFORD: I am going to finish by 3 making my client very nervous for a minute or 4 two -- 5 MR. TORRIE: You will succeed where I 6 have failed then. 7 MR. BEDFORD: I am going to pretend, 8 Mr. Torrie, that I am not a Manitoba Hydro lawyer, 9 but I am going to remain what I otherwise am, and 10 that is someone who has practiced law in this 11 Province for more than 20 years now. And perhaps 12 more than anyone else in this room, I can relate 13 to your obvious irritation at having received a 14 week ago a 36-page rebuttal document full of, some 15 of it new information. It takes time to assess 16 and interpret that and challenge it, and you 17 didn't have that time. And I repeat, I have been 18 a complainer about having received the same 19 treatment in reverse from time to time. But as I 20 observed and heard your irritation, I recalled 21 quickly that this Commission set some deadlines in 22 advance of the hearing, and I thought to myself, 23 had Mr. Torrie's answers to interrogatories been 24 filed by the deadline that the Commission set, 25 which was before the hearing began, the rebuttal 5802 1 that had to be filed by my client would have been 2 filed, as stipulated, before the hearing 3 commenced, and there would have been ample 4 opportunity for you to have explored with the 5 NFAAT panel the concerns that you've expressed 6 about the information that is in that rebuttal 7 document. And I firmly believe -- and remember 8 that I am pretending not to be a Manitoba Hydro 9 lawyer for a moment -- that this kind of process 10 benefits greatly when intelligent and 11 well-educated consultants like yourself have a 12 real chance to have a go at those competent 13 Manitoba employees, you can ferret out where these 14 numbers come from, and whether there is any 15 sleight of hand, and I am not suggesting there is, 16 but you can satisfy yourself as to whether there 17 is any sleight of hand in the numbers. 18 So, accordingly, over the last two 19 months, I have occasionally been the whiner and 20 complainer who asked when your interrogatories 21 were going to be filed. Because after 20 years of 22 experience, I could see that we would end up with 23 this dilemma, that the rebuttal would come so late 24 in the day that you wouldn't have a reasonable 25 opportunity to, in effect, rebut the rebuttal. So 5803 1 I must say to you -- and this isn't a question -- 2 that you are the author of your own misfortune. I 3 am done. Thank you. 4 MR. TORRIE: Well, you know, fair 5 enough, but I think actually the problem -- this 6 is something that the Commission I am sure has 7 been thinking about -- the problem is not just 8 timing. The problem is that -- and I apologize 9 that the interrogatories were late, but at the 10 same time, we don't really want to open the 11 question of fairness here, Mr. Bedford, because I 12 don't think that your client would come out on top 13 in the big picture on that. 14 But setting that aside, it is more 15 than just timing. It is not the right process for 16 really getting to the bottom of some of these 17 kinds of back and forth issues. And Dr. Miller 18 may want to say something about this as well, 19 because he and I have had a couple of lengthy 20 dinner conversations about the difficulty of using 21 a rather rigid process like this to resolve things 22 like, well, what is the appropriate base year 23 number for a load forecast, for example? So I 24 think that -- and there are some ideas out there 25 for other mechanisms that an organization like the 5804 1 Clean Environment Commission might be able to use 2 that would be both more effective and probably a 3 lot cheaper than a hearing, but still would be 4 more than just an informal get together as well, 5 some kind of a working workshop format perhaps, 6 where you would make a lot more progress a lot 7 more quickly, and perhaps a lot more efficiently 8 than that interrogatory process that became the 9 tail that wagged the dog in this whole hearing. 10 I won't say any more about that right 11 now, except that there is a really worthwhile 12 conversation and bit of thought that ought to be 13 done on the question of whether there are 14 alternative mechanisms that could be used for some 15 aspects of this type of hearing. 16 I think today, for example, we have 17 made, I feel pretty good about the use we have 18 made of what is very, very expensive time. I was 19 worried that if sat here and started going down 20 deep in to the numbers, and lost everyone else in 21 the room, I would have gone home thinking, my 22 gosh, there is thousands and thousands of dollars 23 a hour for two people to have a technical debate, 24 there has to be a better way. So I am glad that 25 we avoided doing that. But there are still 5805 1 unresolved issues that would be worth getting to 2 the bottom of. 3 Whether the rebuttal would have been 4 earlier or not might not have really mattered, 5 because as is so typical of the NGO position and 6 their consultants in this type of exercise, we 7 have been running on empty for some time now. So 8 the issue with the rebuttal coming in only a week 9 ago -- really I think I said at the time, you 10 know, I didn't mean to be too harsh about that. 11 In fact, I was pleased to have it in advance of 12 getting here, because I thought maybe I wouldn't 13 see any response from Hydro before final argument, 14 so it helped me prepare to have it in advance, but 15 it was all over the line time. And any additional 16 time that I might put in, whether it was this past 17 week or a month ago, would also have been over the 18 line in terms of the resources that we had. You 19 know, we did a lot of work. And the choice that 20 an NGO has, and the consultants that they hire 21 have in these kinds of exercises is you agree at 22 the outset to undertake something for a fixed 23 price, you don't really know what you are getting 24 into, you haven't even seen -- in the case of 25 Manitoba Hydro, they also filed most of the bulk 5806 1 of their evidence in the form of interrogatory 2 responses. It was months after the grants were in 3 place before we really knew what the body of 4 evidence would look like. Yet we were still, you 5 know, you are there, you have got your fixed 6 resources to do whatever you can do. So we can't 7 go back to our board for more money when the 8 hearing gets expensive and drags out. 9 So we can go on, but there is a long 10 agenda of issues that go to the issue of fairness, 11 that go well beyond the rather small point that 12 Mr. Bedford was making. Thank you. 13 THE CHAIRMAN: Anything more? Dr. 14 Miller. 15 DR. MILLER: Can I just add to that? 16 A couple of comments, our other consultant in the 17 PUB interventions is an economist from Washington 18 State, Jim Lazar, and they seem to frequently have 19 negotiating, more informal negotiating sessions 20 and things like that to kind of hammer out what 21 would be an appropriate compromise. And I believe 22 that the Public Utilities Board is empowered to do 23 those things, and I believe your mandate is pretty 24 broad too, so that you can do investigations on 25 particular issues. 5807 1 The other thing is, you know, I draw 2 on my background with Manitoba model forest, which 3 was designed basically to get an alternative way 4 of addressing issues. And I and several other 5 folks who have environmental interests have been 6 meeting since 1999 with Hydro staff, and learned a 7 great deal from that, and had some great 8 conversations amongst ourselves and with Ryan 9 Kostyra, and individual presenters who would come 10 in. But, again, it wasn't a multi-stakeholder 11 forum. 12 One of my comments in my opening 13 remarks was, how did we get the current PowerSmart 14 new home standards? Well, Hydro sat down with the 15 builders who have I believe traditionally objected 16 to, you know, setting the bar higher. And if I 17 was in the room, would it come out any different? 18 I don't know, but it might have, you know, and 19 maybe we could have found a way to set the bar 20 higher, and do it better, set better objectives in 21 Manitoba. 22 So I think it is important, not just 23 to meet with one stakeholder group at a time, but 24 to have sessions in which issues can be hammered 25 out jointly, looking at the legislated principles, 5808 1 the sustainability principles that at least in 2 very general terms, we have all committed 3 ourselves to. That is my observation on that. 4 THE CHAIRMAN: I thank you both for 5 those comments. I can assure you that the Clean 6 Environment Commission is -- and including with 7 the partnership with PUB here -- is for us anyways 8 the first time we are involved in a Manitoba Hydro 9 proposal. And I have heard some of my colleagues, 10 and expressed some myself every day, there has to 11 be a better way. So you can be sure that we will 12 be exploring all such avenues, and we appreciate 13 your input in that. 14 Mr. Williams. 15 MR. WILLIAMS: I have an undertaking 16 that we had made, Mr. Chairman, but I will wait 17 until you've dealt with the TREE panel, as you so 18 desire. 19 THE CHAIRMAN: I see. Were there 20 other questions? 21 Again, I really reiterate our 22 appreciation for the work done here, thank you. 23 And we appreciate the suggestions that have been 24 made and welcome you to make others in the future 25 if you are inclined to do so. 5809 1 MR. TORRIE: Thank you very much. 2 DR. MILLER: Thank you. 3 THE CHAIRMAN: While the gentlemen are 4 going back to their places, Mr. Williams, you may 5 proceed. 6 MR. WILLIAMS: Mr. Chairman and 7 members of the panel, just so you are aware, if my 8 clients are ever given an opportunity to comment 9 on the same issue, they will have some thoughts as 10 well, but we won't share them now. 11 What I am providing with gratitude to 12 Mr. Wojcznski is exhibit CAC/MSOS 1008 now titled 13 "corrected." And I will just highlight for the 14 panel what I believe are six changes to it. If 15 you go down under parameters to the capital cost 16 reduction 2002 to 2009, there are two changes. 17 Under the first column, the 250 MW total, it 18 previously had read 5 percent per year, and it now 19 reads 5 percent to 2009. If you go over two more 20 columns under the 250 megawatts, there had been a 21 typographical error there and it said 5 percent 22 per year. It now says 2.5 percent per year. If 23 you go down to parameter power resource plan, 24 there has just been a wording change under the two 25 right-hand columns, both had originally said "no 5810 1 Wusk," then a comma, SSE, DSM, and it had left the 2 impression that there was no SSE or DSM as well. 3 So that has just been reworded to say it has SSE, 4 DSM, and no Wusk. And that is for the last column 5 there, 450 megawatts. 6 As you all learned yesterday, there is 7 no discount rate with IRR, so the actual parameter 8 IRR had had an "at a 10 percent discount rate," so 9 that has been removed and put where it belongs 10 under LEC, and that has been moved there. 11 So those are the changes. And again, 12 thank you to Hydro for assisting us with those 13 changes. I should add that the bottom line in 14 terms of IRR results or LEC do not change. They 15 were just typographical or grammatical changes. 16 MR. GREWAR: Mr. Chairman, if we might 17 just assign a corrected exhibit number, Summary of 18 Manitoba Hydro Calculations on Wind Power 19 Economics corrected, as CAC/MSOS 1011. 20 21 (EXHIBIT CAC/MSOS 1011: Summary of 22 Manitoba Hydro Calculations of Wind 23 Power Economics, corrected) 24 25 MR. GREWAR: Mr. Chairman, I believe 5811 1 that Mr. Strachan has an undertaking to come 2 forward as well. 3 THE CHAIRMAN: Yes, proceed 4 Mr. Strachan. 5 MR. STRACHAN: Thank you, 6 Mr. Chairman, one undertaking and one information 7 item. The undertaking is MC-81, produced 8 May 2002, updated Woodland Caribou Conservation 9 Strategy, or advise why not, and advise if an 10 update is contemplated for May of 2004. 11 I have inquired and have been informed 12 that a 2002 was not prepared, but a 2004 update 13 has been prepared. It is in the final review 14 stages in the department and will be released 15 shortly. 16 MR. MAYER: I appreciate that. 17 MR. STRACHAN: The information item is 18 in response to the Commission's interest in 19 environmental protection plans, and I thought 20 might be helpful to file for your information a 21 copy of the Environmental Protection Plan that was 22 required and developed under the Environment Act 23 license for the Glenboro Harvey line in November 24 of 2002. So it will give you an appreciation of 25 the context and the detail that can be contained 5812 1 in an environmental protection plan. So I can 2 leave that with your information, if you so 3 desire, Mr. Chairman. 4 THE CHAIRMAN: Yes, thank you, and Mr. 5 Grewar will file it. 6 MR. GREWAR: Thank you, Mr. Chairman. 7 Then I guess we would assign Glenboro Rugby Harvey 8 230 kV Transmission Project Environmental 9 Protection Plan, February 2002, Manitoba Hydro, as 10 MC-1003. 11 12 (EXHIBIT MC-1003: Glenboro Rugby 13 Harvey 230 kV Transmission Project 14 Environmental Protection Plan, 15 February 2002) 16 17 THE CHAIRMAN: Thank you. We have a 18 scheduled presentation from the Industrial 19 Electrical Workers at 3:00 o'clock, and that will 20 be followed by a presentation by the Assembly of 21 Manitoba Chiefs. So right now I think is the 22 appropriate time to have the break. We will be 23 back here at 3:00 o'clock. 24 (PROCEEDINGS RECESSED AT 2:45 P.M. 25 AND RECONVENED AT 3:00 P.M.) 5813 1 2 MR. GREWAR: Mr. Chairman, we were 3 waiting for an indication from Hydro as to whether 4 or not an exhibit number should be assigned to one 5 of the graphs that was presented just of late 6 during the cross-examination, which is the energy 7 available for export, medium low load growth 8 scenario, and the question as to whether or not 9 that was any different from documents previously 10 filed or whether that required a new exhibit 11 number. 12 MR. BEDFORD: I would suggest that you 13 just make the package a new exhibit. Most of it 14 comes from other places, but the third graph 15 doesn't, it is new. 16 MR. GREWAR: It is new, that is what 17 we were thinking. Mr. Chairman, then, if we could 18 assign an exhibit number to this document and we 19 will call it a package of cross-examination 20 documents to be listed as MH NCN 1038. 21 22 (EXHIBIT MH/NCN 1038: Cross-examination Reference 23 Material CNF/RCM/TREE 1 NFAAT-4 REV, Energy 24 Available for Export Medium-Low Load Growth 25 Scenario Median Flow Conditions; Energy Available 5814 1 for Export Medium-Low Load Growth 2 Scenario-Dependable Flow conditions; 3 MH-NCN-NFAAT-S-2a Revised: January 16, 2004) 4 5 THE CHAIRMAN: I now call upon 6 Mr. Garnet Boyd of the International Brotherhood 7 of Electrical Workers. 8 MR. BOYD: That's correct. Thank you 9 for allowing me to attend this afternoon on short 10 notice. 11 THE CHAIRMAN: Mr. Grewar will swear 12 you in and then you can -- 13 MR. GREWAR: Sir, if you could just 14 state your full name for the record, please. 15 MR. BOYD: Garnet Boyd. 16 MR. GREWAR: Mr. Boyd, are you aware 17 that in Manitoba it is an offence to knowingly 18 mislead this Commission? 19 MR. BOYD: Yes, I do. 20 MR. GREWAR: Do you promise then to 21 tell only the truth in proceedings before this 22 Commission? 23 MR. BOYD: I do. 24 MR. GREWAR: Thank you, sir. 25 5815 1 (GARNET BOYD: SWORN) 2 3 MR. BOYD: I'm Garnet Boyd, business 4 manager with the International Brotherhood of 5 Electrical Workers, local 2034, and we represent 6 the field employees on the electrical side of the 7 business with Manitoba Hydro. 8 As everyone here is aware, Wuskwatim 9 is a 250-megawatt hydraulic generating station 10 that is being built with a low head design. This 11 design will keep flooding to a minimum. From 12 reports that I have read in the areas going back 13 through it, it is anticipated that we are looking 14 at 10 acres, therefore limiting the environmental 15 damage. 16 There has been a lot of discussion 17 whether Manitoba Hydro should build Wuskwatim 18 Generating Station or consider alternative 19 sources. Alternative sources of wind power, of 20 looking at gas turbines, those areas of other 21 environmental concerns. 22 Throughout the years Manitoba Hydro 23 has incorporated many different initiatives which 24 they still have today, looking at PowerSmart 25 programs where there is incentives that date back 5816 1 to whether it is in the industries, to helping 2 them conserve energy, to the residents of 3 Manitoba, going back into the areas as well, for 4 residential areas on conserving energy. And there 5 is only to a point that you can work on them. It 6 is now coming to a time for us to maintain our 7 rates as we have in Manitoba that we need to look 8 at moving on with those areas, along with 9 continuing with the programs. 10 As I mentioned there are many 11 environmental alternative energy sources, but if 12 you are looking at the wind generation which has 13 been one of the big topics in Manitoba in the last 14 while, there are also many environmental concerns 15 here as well. And to look at the size that we 16 would have to look at for production in those 17 areas, just due to the sheer number of wind 18 turbines that would be required, there is 19 environmental concerns, and the other concern that 20 we have not seen anything coming back on reports 21 is the efficiency of the turbines, especially in 22 our extreme climate weather. 23 We are all aware that previous 24 projects that Manitoba Hydro, and the union in 25 particular have been involved with have created 5817 1 systemic barriers. And we want to ensure that 2 this does not happen again. To ensure this we all 3 have to work together. So this review that we are 4 having today and that has been ongoing, along with 5 the partnership of NCN and the local communities 6 on this project, are pivotal. IBEW local 2034 and 7 Manitoba Hydro have negotiated incentives to 8 address training and employment opportunities with 9 Manitoba Hydro. We have Aboriginal pre-placement 10 training programs where we bring people in to the 11 areas going back through it, they are 10 month 12 programs going through, they have opportunities to 13 see what alternatives of work and opportunities 14 that are within Manitoba Hydro. We have also 15 included into the one, the technical trades, 16 Aboriginal placement training programs. We have 17 construction work associated with northern 18 Aboriginal communities allowing employment of 19 local residents. And the latest venture that we 20 are moving in to is we have put together a 21 Gull/Wuskwatim employment task team. This 22 initiative working with the local communities in 23 those areas and working with NCN and the technical 24 training centre, looking at establishing in Nelson 25 House, which works with our indentured training 5818 1 programs that we have a number of our members 2 working with through Manitoba Hydro, and in those 3 areas that are tied together with Red River 4 Community College, ACC and Keewatin in The Pas. 5 The initiatives that I have just 6 spoken to, along with the Allied Council 7 Agreements that will be in place in building 8 Wuskwatim, will ensure that the Aboriginal 9 communities will receive the education, training 10 and employment, not only on the construction but 11 also in the operation and maintenance of the 12 generating stations. Once the construction is 13 completed it will require administration staff, 14 utility workers, storekeepers, mechanical techs, 15 electrical technicians, station operators, 16 supervisors and managers to operate the generating 17 station. 18 There also have been many 19 presentations addressing concerns of this project 20 being financially viable. Once Wuskwatim is 21 completed, it will be in operation for decades. 22 Therefore, it will more than pay for itself. 23 There has been different initiatives put into 24 building Wuskwatim and these additional dollars 25 spent on training initiatives is an investment in 5819 1 the local communities. We have to remember our 2 biggest pool of employees for all Manitoba 3 employers, and not just Manitoba Hydro, is our 4 Aboriginal communities, and we must work with them 5 to ensure that they are afforded every opportunity 6 to receive the education and training to be able 7 to fill the void we have in our labour force. 8 We know all projects, no matter what 9 is being constructed or built, have pros and cons. 10 And I believe the positives of this project far 11 outweigh the negatives, because this is a joint 12 venture. One that minimizes flooding due to its 13 design, will start addressing systemic barriers 14 through education, training and employment of 15 local residents, this is including the local 16 communities as major stakeholders, and will help 17 maintain Manitoba Hydro rates for all Manitobans 18 as the lowest in North America. 19 Energy is in great demand, as was 20 demonstrated by the blackout that we had in 21 Ontario and the northeast coast of the United 22 States. Hydraulic generation is a clean and cheap 23 producer of electricity and hydroelectricity 24 power, and hydroelectric power is one of our 25 greatest resources. This is a resource that we 5820 1 have the opportunity to work with to compete with 2 the other provinces, and through those areas going 3 through hydraulic generation, is far advantageous 4 than going to what Ontario may be moving towards. 5 We have all heard reports that they may be going 6 back to the area of bringing back their nuclear 7 generation. There are many environmental concerns 8 that are through those areas, and Manitoba has an 9 opportunity through this construction and 10 potentially future construction to address energy 11 concerns that we have in North America and that is 12 beneficial to all Manitobans. Thank you. 13 THE CHAIRMAN: Thank you, Mr. Boyd. 14 Mr. Sargeant. 15 MR. SARGEANT: Mr. Boyd, does 2034 16 represent construction electricians? 17 MR. BOYD: We have a few construction 18 electricians working with us, but that is mainly 19 2085, IBEW local 2085 for the inside wiremen. 20 MR. SARGEANT: So you can't speak to 21 2085 concerns or issues -- I think one of the 22 issues that has come up before us in our hearings 23 has been the availability of jobs on the project 24 itself, on the construction project itself, 25 particularly for northern residents and 5821 1 particularly Aboriginal northern residents? 2 MR. BOYD: I can't speak directly for 3 local 2085, but I know Manitoba Hydro in working 4 with the Allied Council Agreements and are looking 5 at putting that in place in the agreement on the 6 construction going back through there that will be 7 employing local residents. 8 MR. SARGEANT: I think the Allied 9 Local Council is coming before us in a week or two 10 and we can talk to them about it. Thank you very 11 much. 12 THE CHAIRMAN: Mr. Nepinak. 13 MR. NEPINAK: Mr. Boyd, it is 14 encouraging to hear that the barriers I guess will 15 come down for First Nations people should this 16 project go ahead. My question is, and maybe you 17 have answered it already on a question, but I 18 didn't quite understand, is your local the main 19 union in all hiring, in all aspects of the 20 project? 21 MR. BOYD: No, it isn't. Our local 22 represents the employees, field employees for 23 Manitoba Hydro on the electric site. We say the 24 field employees, and there is the acquisition of 25 Centra Gas, so that is separate from. But on the 5822 1 electrical side, the field employees, they are 2 IBEW local 2034. We will have some inspectors on 3 the original construction of the job. But we 4 will -- members that we will have and representing 5 there will be those that are hired to fill the 6 positions once the construction is completed. 7 MR. NEPINAK: How many would you say 8 have First Nations or Aboriginal people in your 9 union at this time, present time, if any? 10 MR. BOYD: I would be giving an 11 estimate on the numbers going back through there. 12 I would say we would be in the neighborhood now of 13 approximately 2350 members, so we would likely be 14 sitting at 10, 15 percent. 15 MR. NEPINAK: Okay. The list that you 16 named here for three or four different groups, how 17 many people do you see -- how many of these, again 18 how many members -- you identified First Nations, 19 but how many in total would benefit from the 20 project? 21 MR. BOYD: If we can get the training 22 available into the areas, we know the project 23 itself is a six year project in building 24 Wuskwatim. Training programs going through in the 25 areas are four years upon graduation in the 5823 1 trades. We have a number right now that are 2 already hired with Manitoba Hydro working through 3 the programs. There is a number to still hire for 4 total jobs likely at Wuskwatim, being a smaller 5 generating station than compared to say Limestone 6 in that area, but we are still likely looking at 7 20 full time positions in there. And most of 8 those will be coming from new hired positions that 9 will be going into them. So if we can get people 10 trained into those areas, they can fill them all. 11 There is that opportunity to get there to do that. 12 But as I said, some of them will take training. 13 We have a number right now that are sitting in 14 positions to be able to move into them now and 15 graduating. 16 MR. NEPINAK: NCN has stated that 17 25 percent or a percentage is open to non-NCN 18 First Nations members for employment, for training 19 in this area. Non-NCN members, do they need to be 20 union or how do they get to -- 21 MR. BOYD: We are a little different 22 ourselves as being a utility. As a utility local 23 union we do not do any hiring. We are not the 24 same as a hiring hall that will be there with 25 construction. With our line construction section 5824 1 that we have the jurisdiction for, there we work 2 as a hiring hall where a contractor will phone us 3 and say we need X number of linemen to come to 4 work. When these positions will be filled, all 5 hiring is 100 percent by Manitoba Hydro. Once 6 they are hired, they will then move into the 7 respective bargaining unit or union that is there. 8 So with Manitoba Hydro we do absolutely no hiring. 9 MR. NEPINAK: Thank you. 10 THE CHAIRMAN: Ms. Avery Kinew? 11 MS. AVERY KINEW: Mr. Boyd, I was 12 wondering is your union part of the Allied Workers 13 Council? 14 MS. AVERY KINEW: Yes. 15 MR. BOYD: We hope we will be on 16 building the new downtown tower. But at the 17 present time that is with the building and 18 construction trades. 19 MS. AVERY KINEW: I was wondering for 20 the purposes of the Burntwood agreement and 21 updating it for the Wuskwatim project, is your 22 union part of that? 23 MR. BOYD: Could you repeat that, 24 please? 25 MS. AVERY KINEW: There is what is 5825 1 called the Burntwood Nelson agreement that is the 2 master agreement for hiring and for how the 3 construction will go. 4 MR. BOYD: That's right. 5 MS. AVERY KINEW: Is your union part 6 of that? 7 MR. BOYD: No, we are not. That would 8 be involved with the building trades, that would 9 be IBEW local 2085 that is there with the 10 construction electricians. 11 MS. AVERY KINEW: I also wondered, I 12 just had the opportunity to go out west and was 13 hearing about some of the things that Syncrude has 14 done, and one of which is one of the closest First 15 Nations, they hire every First Nation graduate 16 from high school and they offer them a permanent 17 job. Would the union have any objection to that 18 kind of approach with Manitoba Hydro? 19 MR. BOYD: Going back through in the 20 area, there is the opportunities there in hiring. 21 We have absolutely no say in hiring. If Manitoba 22 Hydro wanted to go 100 percent Aboriginal that is 23 their choice. We have no say in how Manitoba 24 Hydro hires employees. 25 MS. AVERY KINEW: Thank you, sir. 5826 1 MR. BOYD: We just want to be sure 2 that we represent everybody fair and equally and 3 equitably after they are hired. 4 THE CHAIRMAN: Other questions? 5 Seeing none, thank you very much, Mr. Boyd. 6 MR. BOYD: Thank you. 7 MR. GREWAR: Mr. Chairman, if we might 8 enter the brief of the International Brotherhood 9 of Electrical Workers as OTH-1030. 10 11 (EXHIBIT OTH-1030: Submission by 12 International Brotherhood of 13 Electrical Workers, submitted by 14 Garnet Boyd) 15 16 THE CHAIRMAN: I now call upon Chief 17 White Bird of the Assembly of Manitoba Chiefs. 18 MR. GREWAR: Yes, sir. Could I ask 19 you to please state your name for the record. 20 CHIEF WHITE BIRD: My name is Dennis 21 White Bird. I am from the Rolling River First 22 Nation. I'm currently the Grand Chief of the 23 Assembly of Manitoba chiefs. 24 MR. GREWAR: Sir, are you aware in 25 Manitoba it is an offence to knowingly mislead 5827 1 this Commission? 2 CHIEF WHITE BIRD: I do now. 3 MR. GREWAR: Knowing that, do you 4 promise to tell just the truth in proceedings 5 before this Commission? 6 CHIEF WHITE BIRD: I do. 7 8 (CHIEF DENNIS WHITE BIRD: SWORN) 9 10 THE CHAIRMAN: You may proceed. 11 CHIEF WHITE BIRD: Tansi, 12 commissioners, ladies and gentlemen. As I have 13 stated before, I am the Grand Chief of the 14 Assembly of Manitoba Chiefs. My name is Dennis 15 White Bird, a citizen of the Rolling River First 16 Nation. 17 As Grand Chief I speak in support of 18 the rights of First Nations in Manitoba, rights to 19 our homelands and livelihood, to nurture our 20 youth, support our elders and to ensure our future 21 as peoples and nations. Nisichawayasihk Cree 22 Nation seeks to exercise those rights, as do all 23 First Nations. I am here to support them. And 24 the Executive Council of the Manitoba Chiefs 25 support them through resolution moved by consensus 5828 1 on April 28, of this year. And I would like to 2 read the resolution into the record. 3 "Motion number 2, decision reached by 4 consensus at the Assembly of Manitoba 5 Chiefs, Executive Council of Chiefs 6 meeting, held on April 28, 2004; moved 7 by Chief John Thunder and seconded by 8 Chief Ron Evans. That the Executive 9 Council of Chiefs support the 10 Nisichawayasihk Cree Nation with 11 regard to the Wuskwatim project." 12 13 The Lake Winnipeg/Churchill/Nelson River project 14 has had devastating impacts to First Nations and a 15 way of life. First Nations had little voice in 16 the decision to go ahead with this massive system 17 of projects, little say in the future and no 18 control over huge impacts to their homelands. 19 In the present context of 20 environmental regulations, tribunals, entrenched 21 treaty and Aboriginal rights, case law and First 22 Nation leadership, the Lake Winnipeg/Churchill 23 Nelson River may never have proceeded. But 24 nevertheless it did go ahead and affected all 25 First Nations. And affected First Nations have 5829 1 been negotiating a way of life ever since - a way 2 to exercise rights and to gain livelihood in a 3 transformed economic and environmental setting. 4 There has been compensation, but not 5 enough to restore First Nations already impacted 6 by colonialism and loss of livelihood. Economic 7 recovery is the imperative for all First Nations. 8 I urge the Commission to give this due weight and 9 consideration. Economic recovery is what 10 Nisichawayasihk seeks, a future of economic 11 independence, as do all First Nations. 12 Nisichawayasihk should have that opportunity. 13 I respect the Commissioners for 14 undertaking their serious mandate in assessing 15 these projects, these proposed projects and making 16 recommendations. I would encourage you to think 17 in terms of making your recommendations to the 18 citizens of Nisichawayasihk Cree Nation, the 19 ultimate decision-makers on these projects, as 20 they should be in the homelands of Nisichawayasihk 21 Cree Nation. If Wuskwatim is a sound project, the 22 Nisichawayasihk should have the opportunity to 23 decide whether to proceed. 24 I commend Nisichawayasihk for the 25 participatory process that they have followed in 5830 1 reaching difficult decisions in a trail breaking 2 venture, through a participatory process guided by 3 the teachings and the great traditions of the Cree 4 Nations. Empowered with the decision on 5 Wuskwatim, Nisichawayasihk will seek consensus 6 through a participatory decision making process 7 guided by the teachings and great traditions of 8 the Cree Nation, as it should be in the homelands 9 of the Nisichawayasihk Cree Nation. 10 The CEC hearings themselves have been 11 an intrusive process that has placed First Nations 12 in yet another adversarial multi-stakeholder 13 forum. I encourage you to consider the impacts of 14 this process in ways in which future project 15 reviews and decision making can be improved. 16 Nation to nation relations guided by rights and 17 the imperative of First Nation economic recovery 18 should be a standard for resource use decision 19 making in Manitoba. 20 Past Hydro development has left a 21 legacy of outstanding issues that must be 22 addressed. Incremental decision making and 23 project by project reviews do not address these 24 broader issues. I recognize that this goes beyond 25 the scope of your terms of reference, but we need 5831 1 a broader forum. I hope that you will recommend 2 that Government deal with the broader issues that 3 you can not address, but which are so evident in 4 these hearings. Add your voice to the many 5 commissions and courts that have called for 6 modernizing relations to honour the original 7 spirit and intent of our treaty relationship in 8 contemporary terms. Add your voice to the call 9 for correcting past injustices and address 10 contemporary needs. 11 We have an opportunity to pursue this 12 with the assistance of the Treaty Relations 13 Commission that the Crown of Canada and First 14 Nations in Manitoba have jointly commissioned. I 15 would encourage you to honour our treaties and 16 honour for the Crown. First Nations are not 17 finished with Hydro or other resource users in our 18 homelands. Resource revenue sharing and access to 19 lands, water and resources are issues that need to 20 be addressed and another area that the CEC might 21 touch on. 22 I encourage you to add your 23 recommendations to those of the Royal Commission 24 on Aboriginal People which recognizes that, 25 "Before Canadians can expect to see an 5832 1 end to the enormous waste in human and 2 financial resources that accompanies 3 the economic and social 4 marginalization of Aboriginal peoples, 5 they must come to terms with a 6 redistribution of this country's land 7 and resource base." 8 And if Nisichawayasihk Cree Nation can 9 blaze a trail in restoring sustainable First 10 Nation economies, I congratulate them. Meegwetch. 11 Dennis Whitebird. 12 THE CHAIRMAN: Thank you. Questions? 13 I see none. So we appreciate you taking the time 14 and thank you for your presentation and 15 suggestions made to the Commission. Thank you. 16 MR. GREWAR: Mr. Chairman, if we might 17 enter as exhibit OTH-1031, the presentation of the 18 Assembly of Manitoba Chiefs Secretariat. 19 20 (EXHIBIT OTH-1031: Presentation of 21 the Assembly of Manitoba Chiefs 22 Secretariat, submitted by Dennis White 23 Bird, Assembly of Manitoba Chiefs) 24 25 THE CHAIRMAN: Are there other 5833 1 presenters at this time? I don't see anyone, but 2 I understand that maybe Hydro may have some 3 undertakings? 4 MR. THOMAS: Mr. Chairman, with 5 response to undertaking number 69, there was a 6 question asked whether elders were involved in the 7 definition of traditional knowledge, and I 8 provided an undertaking to get the answer for 9 that. 10 NCN defines traditional knowledge very 11 broadly. NCN members have accumulated traditional 12 knowledge during the course of their lives from 13 experience and interaction with friends, 14 relatives, including elders. Speaking personally, 15 I have learned many things from older relatives 16 and other NCN elders during the course of my life. 17 When NCN future development team members sat down 18 with Intergroup Consultants to put down a formal 19 definition of traditional knowledge on paper, they 20 drew on their life experiences, they drew on 21 knowledge they had acquired from NCN elders and 22 others. 23 There were no elders from South Indian 24 Lake that were present at that time. However, 25 there was an NCN community consultant from South 5834 1 Indian Lake who was present. She participated in 2 the process of putting a formal definition of 3 traditional knowledge into words. She drew on her 4 life experience, including many things that she 5 had learned from elders living at South Indian 6 Lake. Therefore in a very meaningful way, elders 7 of South Indian Lake contributed indirectly to the 8 definition of traditional knowledge. Some elders 9 were interviewed during the course of the 10 Wuskwatim studies. Among other things some elders 11 from South Indian Lake attended an elders' 12 retreat. The NCN view of traditional knowledge 13 helped shape the general study process. 14 It should also be noted that many NCN 15 members at Nelson House have spent time at South 16 Indian Lake and vice versa. Some individuals who 17 live at one location today, grew up at the other 18 location. 19 Most NCN members at Nelson House have 20 relatives living at South Indian Lake. NCN elders 21 at Nelson House and those at South Indian Lake are 22 not completely different. They are often friends 23 and relatives. They do have some differences, but 24 they also have very many things in common. We 25 also have a number of people from the community of 5835 1 South Indian Lake who are NCN members who have 2 decided for their own reasons to relocate to NCN, 3 to Nelson House, and they have been with us. We 4 have a number of them in Nelson House, and they do 5 participate in our forums and our open houses, in 6 our surveys. So from that context, we do have 7 input of their traditional knowledge as well. 8 In addition we do use one of our 9 elders who is originally from South Indian Lake, 10 and he is Sam Dysart. He is a very well known 11 resource user and very knowledgeable about our 12 traditions as hunter, fisher and trapper, from 13 that respect, of our way of life. So he 14 participates in our sessions as well. So to that 15 extent we do have South Indian Lake elders 16 involved, although they weren't there specifically 17 to address putting down in words the definition of 18 traditional knowledge itself. Thank you. 19 THE CHAIRMAN: Thank you, Mr. Thomas. 20 I might add that he also tells me he is the 21 champion bannock maker, and I believe him. Are 22 there other undertakings to be filed today? 23 MR. BEDFORD: If you can give us five 24 minutes we might be able to hand it in. 25 THE CHAIRMAN: We can do it tomorrow. 5836 1 MR. BEDFORD: Someone has to review it 2 obviously, and once the review is done, then we 3 can photocopy it and hand it in. 4 THE CHAIRMAN: We will wait for 5 tomorrow. I will ask again, are there some people 6 in the room who haven't had the opportunity to 7 make a presentation with their views on the 8 project and wish to do so? Mr. Grewar, do we have 9 other business to undertake today? 10 MR. GREWAR: No, Mr. Chairman, nothing 11 that I have. We have scheduled presentations, of 12 course, for tomorrow. The Manitoba Metis 13 Federation will be here to conduct their 14 cross-examination of Hydro/NCN on the EIS, which 15 will then be immediately followed by the 16 presentation of their evidence and appropriate 17 cross-examination, and that should likely take us 18 throughout the morning. In the afternoon we are 19 endeavoring to set up one or two presenters as 20 well, MKO being one of the ones that we believe we 21 have confirmed for tomorrow afternoon. That 22 concludes today. 23 24 THE CHAIRMAN: Thank you, Mr. Grewar. 25 That being the case, we will adjourn at this point 5837 1 and reconvene at 9:00 o'clock tomorrow morning. 2 3 (ADJOURNED AT 3:40 P.M.) 4