1 1 MANITOBA CLEAN ENVIRONMENT COMMISSION 2 3 VERBATIM TRANSCRIPT 4 Volume 1 5 6 Including List of Participants 7 8 9 10 Hearing 11 12 Wuskwatim Generation and Transmission Project 13 14 Presiding: 15 Gerard Lecuyer, Chair 16 Kathi Kinew 17 Harvey Nepinak 18 Robert Mayer 19 Terry Sargeant 20 21 Monday, March 1, 2004 22 Radisson Hotel 23 288 Portage Avenue 24 Winnipeg, Manitoba 25 2 1 LIST OF PARTICIPANTS 2 3 Clean Environment Commission: 4 Gerard Lecuyer Chairman 5 Terry Sargeant Member 6 Harvey Nepinak Member 7 Kathi Avery Kinew Member 8 Doug Abra Counsel to Commission 9 Rory Grewar Staff 10 CEC Advisors: 11 Mel Falk 12 Dave Farlinger 13 Jack Scriven 14 Jim Sandison 15 Jean McClellan 16 Brent McLean 17 Kyla Gibson 18 19 Nisichawayasihk Cree Nation: 20 Chief Jerry Primrose 21 22 23 24 25 3 1 LIST OF PARTICIPANTS 2 3 Manitoba Conservation: 4 Larry Strachan 5 6 Consumers Association of Canada/Manitoba Society of Seniors: 7 Byron Williams 8 9 Manitoba Hydro: 10 Ed Wojczynski 11 Ken Adams 12 Elvis Thomas 13 Carolyn Wray 14 Ron Mazur 15 LLoyd Kyczek 16 Cam Osler 17 Stuart Davies 18 David Hicks 19 George Rempel 20 Campbell MacInnes 21 David Cormie 22 23 24 25 4 1 INDEX OF EXHIBITS 2 3 Number Page 4 CEC-1000 - Correspondence dated April 5 25th, 2003 to the Chairman of the 6 Environment Commission from the 7 Minister of Conservation 8 Steve Ashton 14 9 10 MC-1000: Mr. Strachan's overhead 11 transparencies from Manitoba 26 12 Conservation 13 14 15 MH/NCN-1000: Presentation transparencies 51 16 17 18 19 20 21 22 23 24 25 5 1 MONDAY, MARCH 1, 2004 2 Upon commencing at 9:11 a.m. 3 4 THE CHAIRMAN: Good morning, ladies and 5 gentlemen, and welcome. Just before calling the 6 public hearing on the Wuskwatim Generation and 7 Transmission Projects to order, I wish to begin by 8 thanking all of the participants for their 9 involvement and the efforts they have put in this 10 process leading up to this event. 11 The interrogatory process alone has resulted 12 in a significant amount of information being made 13 available to the participants, to the panel and the 14 public which would not likely have been possible 15 during the public hearing alone. 16 My name is Gerard Lecuyer. I am a member of 17 the Manitoba Clean Environment Commission and the 18 panel chairperson of this Commission, Wuskwatim 19 Generation and Transmission Projects review. With me 20 today are four other commissioners serving on this 21 panel. Ms. Kathi Avery Kinew, Mr. Robert Mayer to my 22 right, Mr. Terry Sargeant, Mr. Harvey Nepinak. And 23 of course you have heard that Mr. Terry Sargeant here 24 has been appointed recently as Chairperson of the 25 Manitoba Clean Environment Commission. 6 1 In addition to the panel, I would like to 2 introduce staff and advisors that are assisting us 3 with this review including the Commission Secretary, 4 Mr. Rory Grewar, sitting at the table to my left, the 5 Commission Administrative Secretary, Ms. Joyce 6 Mueller who we don't see. She's at the registration 7 table near the entrance. Commission counsel, Mr. 8 Doug Abra sitting right here of the firm Hill, Abra, 9 Dewar. And from our technical advisory team, Ms. 10 Jean McLellan, Ms. Kyla Gibson of Price Waterhouse as 11 well as Mr. Brent McLean. They are all sitting at 12 the table over there. Mr. Dave Farlinger and Mr. Jim 13 Sanderson of Energy Consultants International sitting 14 in the back. Dr. Robert Hecky with the University of 15 Waterloo and Mr. Mel Falk of Environmental 16 International sitting here. 17 Before continuing, I would like to explain 18 that the Manitoba Clean Environment Commission is an 19 arm's length provincial agency that encourages and 20 facilitates public involvement in environmental 21 matters and offers advice and recommendations to the 22 government. 23 The Commission exercises its mandate through 24 public hearings, investigations, mediation and 25 education. Please see our website at 7 1 www.manitobacec.ca for information about the 2 Commission and this public hearing. 3 The Commission operates under the authority of 4 the Manitoba Environment Act. It is also directed by 5 procedural guidelines to ensure that the hearings 6 remain fair and open forums for the exchange of 7 information and ideas and that they provide full 8 opportunity for public involvement and the 9 environmental assessment process in Manitoba. 10 We are here today at the request of the 11 Minister of Conservation to conduct an integrated 12 public hearing respecting the Manitoba Hydro and 13 Nisichawayasihk Cree Nation proposal for the 14 development of the Wuskwatim generation station and 15 associated transmission lines. 16 These two words have been in the air for quite 17 some time. Even I can now say them. I sure couldn't 18 a few months back. 19 The Commission was mandated to conduct the 20 hearing to consider firstly the justification, need 21 for and alternatives to the Wuskwatim proposals. And 22 secondly, the potential environmental socioeconomic 23 and cultural effects of the construction and 24 operation of the Wuskwatim proposals. 25 The Commission has requested to conduct the 8 1 hearing in general accordance with the process 2 guidelines respecting public hearings which include 3 procedures for prehearing meetings or conferences and 4 proprietary information. 5 Following the public hearing, the Commission 6 shall provide the report to the Minister of 7 Conservation pursuant to section 7 subsection 3 of 8 the Environment Act. 9 Before continuing, I would like to call on Mr. 10 Rory Grewar to read for the record the scope of the 11 Commission's review of the Wuskwatim projects into 12 the public record. 13 MR. GREWAR: Thank you, Mr. Chairman. 14 Correspondence dated April 25th, 2003 to the Chairman 15 of the Environment Commission from the Minister of 16 Conservation, Steve Ashton. I'll read the 17 correspondence. 18 "The Environmental Approvals 19 Branch of my department is in the 20 final review stage of the Environment 21 Act Proposals from Manitoba Hydro for 22 the proposed Wuskwatim Generating 23 Station and associated transmission 24 facilities (Wuskwatim proposals). 25 A copy of the Terms of 9 1 Reference for the public hearing is 2 enclosed. If possible, the report on 3 the hearing should be submitted to me 4 on or before December 1, 2003. 5 Mr. Larry Strachan, Director of 6 Environmental Approvals Branch will 7 coordinate department participation in 8 the hearing." 9 The background and terms are as follows: 10 Mandate of the hearings. 11 "The Commission shall conduct 12 an integrated public hearing, in 13 appropriate locations in Winnipeg and 14 Northern Manitoba as determined by the 15 Commission, to consider: 16 - Firstly, the justification, 17 need for and alternatives to the 18 Wuskwatim Proposals; and 19 - Secondly, the potential 20 environmental, socio-economic and 21 cultural effects, of the construction 22 and operation of the Wuskwatim 23 Proposals. 24 The Commission shall conduct 25 the hearing in general accordance with 10 1 its Process Guidelines Respecting 2 Public Hearings which include 3 procedures for Pre-Hearing Meetings or 4 Conferences and Proprietary 5 Information. 6 Following the public hearing 7 the Commission shall provide a report 8 to the Minister of Conservation 9 pursuant to section 7(3) of The 10 Environment Act. 11 The Commission may, at any 12 time, request that the Minister of 13 Conservation review or clarify these 14 Terms of Reference." 15 I'll read into the record, Mr. Chairman, the 16 scope of the review. 17 18 "For the justification, need 19 for and alternatives to the Wuskwatim 20 Proposals component of the hearing, 21 the Commission shall: 22 - Consider whether all 23 alternative resource options have been 24 considered and whether the Wuskwatim 25 Proposals have been selected on 11 1 reasonable grounds, including economic 2 viability as an export market driven 3 project and relevant technical 4 factors. The review of economic 5 viability shall consider the Wuskwatim 6 Proposals in their entirety. 7 - Include the effect, if any, 8 of the Wuskwatim Proposals on Manitoba 9 Hydro customer rates and the 10 Corporation's financial stability. 11 The partnership between the 12 Nisichawayasihk Cree Nation and 13 Manitoba Hydro and the associated 14 arrangements for such partnership are 15 to be described to the degree such 16 information is required to understand 17 the financial analysis. 18 - Give consideration, at a 19 conceptual level, to the 20 environmental, socio-economic and 21 cultural effects of the Wuskwatim 22 proposals relative to available 23 alternative resources. 24 - Consider Manitoba Hydro's 25 electricity generation capability, 12 1 market prospects and risks as they 2 pertain to the Wuskwatim proposals 3 including: 4 - load growth in export 5 jurisdictions; 6 - energy supply situation in 7 the export jurisdictions; and 8 - energy pricing trends and 9 industry restructuring. 10 For the potential environmental, 11 socio-economic, and cultural effects 12 of the Wuskwatim Proposals component 13 of the hearing, the Commission shall 14 consider the Environmental Impact 15 Statement, and public concerns, and 16 with consideration of the evidence 17 received on the justification, need 18 for, and alternatives for the 19 Wuskwatim Proposals, provide a 20 recommendation on: 21 - Whether Environment Act 22 Licences should be issued to Manitoba 23 Hydro for the Wuskwatim Proposals. 24 Should the Commission recommend the 25 issuance of Environment Act Licences 13 1 for the Wuskwatim Proposals, then 2 appropriate recommendations should be 3 provided respecting: 4 - Measures proposed to mitigate 5 any adverse environmental, 6 socio-economic, and cultural effects 7 resulting from the Wuskwatim proposals 8 and where appropriate, to manage any 9 residual adverse effects; and 10 - Future monitoring and 11 research that may be recommended in 12 relation to the Wuskwatim Proposals. 13 The Clean Environment Commission's 14 recommendations shall incorporate, 15 consider and directly reflect, where 16 appropriate, the Principles of 17 Sustainable Development and Guidelines 18 for Sustainable Development as 19 contained in Sustainable Development 20 Strategy for Manitoba." 21 That's the direction from the Minister and the 22 scope of the hearings as contained in the terms of 23 reference for the Clean Environment Commission public 24 hearings on Manitoba Hydro Wuskwatim Proposals, Mr. 25 Chairman. And with your leave, I'd like to enter 14 1 those as an exhibit. 2 A word of explanation in terms of the exhibit 3 procedure. The Commission will issue the prehearing 4 Exhibit list later this week and that will include 5 all of the exhibits that were filed as part of the 6 prehearing process. For the purposes of the 7 proceedings today and forward, we would like to begin 8 with numbered series 1000 and beyond. And so this, 9 as the first exhibit, will be CEC-1000. And it's the 10 correspondence as dated and read and terms of 11 reference as attached. 12 13 (EXHIBIT CEC-1000 - Correspondence dated April 14 25th, 2003 to the Chairman of the Environment 15 Commission from the Minister of Conservation 16 Steve Ashton) 17 18 THE CHAIRMAN: Thank you, Mr. Grewar. The 19 Commission is convening the hearing in Winnipeg over 20 a three week period between March 1st and 17th. We 21 will then travel up north to continue the hearing in 22 Thompson on March 22nd and 23rd and in The Pas on 23 March 25th and 26th. The hearing will then reconvene 24 in Winnipeg on April 6th for closing statements. And 25 it is our expectation that the proceedings will wrap 15 1 up on April 7th. 2 We will begin today with opening remarks by 3 Mr. Larry Strachan of Manitoba Conservation on the 4 environmental assessment and review process 5 undertaken to date and the licensing process to 6 follow the public hearing. There will be no 7 cross-examination of Mr. Strachan at this time. This 8 will occur later on in the process, I believe on the 9 15th when the public administration team makes its 10 overview presentation. 11 The co-proponents Manitoba Hydro and 12 Nisichawayasihk will then give a presentation on 13 their need for and alternatives for the Wuskwatim 14 Generation and Transmission Projects and the 15 environmental impact statements to the project. This 16 will be followed by cross-examination or questioning 17 of the co-proponents by the Commission and/or its 18 counsel, then by the registered participants 19 according to alphabetical order and by any member of 20 the public in attendance. This process might well 21 take a number of days. 22 After the full cross-examination of the 23 co-proponents has concluded, the project 24 administration team consisting of members of the 25 Province and the Federal Governments will then make a 16 1 presentation on the results of the cooperative 2 environmental assessment process and then will be 3 available for cross-examination. 4 We will then proceed to hear the presentations 5 prepared by the various registered participants who 6 will present in alphabetical order unless prior 7 arrangements have been made with the Commission 8 secretary to do otherwise. 9 Throughout the proceedings, the co-proponents 10 and their counsel will lead cross-examination or 11 questioning followed by the Commission and/or its 12 counsel and then in alphabetical order, by each 13 registered participant and/or their counsel. 14 Following this, an opportunity will be provided for 15 any member of the public in attendance to ask 16 questions of the presenter. All presenters at the 17 end of their cross-examination will have an 18 opportunity to re-examine their witnesses. 19 And just before I make my final comments, I 20 would like to go back to Mr. Grewar. I believe 21 you've already presented your items on the public 22 record? 23 MR. GREWAR: Yes, Mr. Chairman. It was just a 24 clarification on the exhibit process. 25 THE CHAIRMAN: Thank you. So just a few more 17 1 words to do with the housekeeping issues. Firstly, 2 in regards to registration. Please ensure that you 3 register and indicate if you will be giving a 4 presentation. All registrants will be provided with 5 a copy of the report of this public hearing. 6 Secondly, please provide 30 copies of your 7 presentation to Mr. Grewar. The copies are needed by 8 the panel members, technical staff and for the public 9 record. Submissions will also be shared with the 10 participants. And if you have not the required 11 copies, the Commission staff can assist you with the 12 preparation of copies. All you have to do is see Ms. 13 Mueller at the registration desk to help you with the 14 preparation of the required copies. Ms. Joyce 15 Mueller has a schedule of the proceedings with the 16 names of the presenters and will provide copies to 17 the media and to others who may require it. 18 Fourthly, please use the microphones, identify 19 yourselves clearly for the record when you give 20 presentations or ask questions. If you don't, I will 21 simply have to interrupt you and ask you to do so. 22 Verbatim transcripts of each day of the 23 proceedings will be posted on the Internet the 24 morning following each session. The website is 25 www.reidreporting.com. And that is Reid spelled 18 1 R-E-I-D. I repeat www.reidreporting.com. You can 2 also make arrangements with the transcription service 3 to purchase copies of the transcripts in various 4 formats. Reid Reporting Services can be contacted by 5 calling 947-9774 here in Winnipeg, 947-9774. 6 And finally, at the conclusion of the 7 hearings, the Commission will make a report, will 8 prepare a report containing advice and 9 recommendations for the Minister of Conservation. 10 The Environment Act allows 90 days following the 11 closure of the hearing for this report to be 12 submitted. Following submission of the report, the 13 Minister will determine the date upon which the 14 report will be released to the public. 15 And lastly, just before we begin these 16 deliberations, I want to call upon the Great Manitou, 17 God, the Divine Master, whatever you call Him, to 18 look favourably upon this meeting to help us think 19 clearly, to help us speak the truth, to guide us into 20 use of proper decorum and respect of our fellow 21 participants and to help us come forward with the 22 decisions that are in the best interests of 23 Manitobans for today and for future generations. And 24 I would like to call upon Elder Sam Dysart to come 25 and speak, to bring blessings upon this gathering. 19 1 ELDER DYSART: Thank you. Please stand. 2 First thing I would like to say, it's an honour for 3 me as an Elder from Nelson House. My name is Sam 4 Dysart. I had been standing here for the last 30 5 years. I was first on the Northern Flood Agreement, 6 now on the Future Development Agreement. And I had a 7 lot of fights and I had a lot of good times with 8 people and I had a lot of griefs. But I hope that 9 this will come in better for my children, 10 grandchildren and great-grandchildren and I pray that 11 we have a very good meeting today for it's a nice day 12 outside. Let's be happy, let's be honest with each 13 other and let us tell the truth for the truth is the 14 only thing that is survival in our community and in 15 life. Let us pray in our language and let us ask God 16 to help us in Manitoba, in the whole world. 17 18 (PRAYER) 19 20 ELDER DYSART: Thank you. 21 THE CHAIRMAN: I now call upon Mr. Strachan, 22 Larry Strachan of the Environmental Approvals, 23 Manitoba Conservation to come and present an 24 assessment process overview. Mr. Grewar. 25 MR. GREWAR: Could you please state your name 20 1 for the record. 2 MR. STRACHAN: Larry Strachan. 3 MR. GREWAR: Mr. Strachan, are you aware that 4 it is an offence in Manitoba to knowingly mislead 5 this Commission? 6 MR. STRACHAN: Yes, I am. 7 MR. GREWAR: Do you promise to tell only the 8 truth during proceedings before this Commission? 9 MR. STRACHAN: Yes, I do. 10 MR. GREWAR: Thank you, sir. 11 MR. STRACHAN: Good morning, Mr. Chairman, 12 commissioners, participants, ladies and gentlemen. 13 As Rory just indicated, my name is Larry Strachan. 14 I'm employed as the Director of the Environmental 15 Approvals Branch for Manitoba Conservation. And 16 through that process, it's my responsibility to 17 administer the environmental assessment and licensing 18 process under the Environment Act. 19 For this particular public hearing and review 20 for the Manitoba Hydro NCN proposals, I also, as 21 Chair of the project administration team, to 22 administer the cooperative process. I am going to 23 talk and give you a brief overview of the cooperative 24 environmental assessment process that Manitoba and 25 Canada carried out on the proposals under review. 21 1 As you know, there are two projects under 2 review. There's a generation station and associated 3 transmission lines. Under the Environment Act, they 4 are two separate development proposals and so we 5 sought two separate development applications from the 6 proponents. We agreed to review the two proposals 7 concurrently under the Environment Act and we also 8 developed information in that regard. 9 Manitoba Environment licences are required for 10 both proposals. And under the federal legislation, 11 there is what is known as a comprehensive study 12 report and review required for some aspects of the 13 generation station and some of the stream crossings 14 of the access road to the generation station. 15 Because both Manitoba and Canada had approving 16 authorities, we agreed, pursuant to a cooperative 17 agreements we have with Canada, to enter into a 18 cooperative environmental assessment process for the 19 two proposals. I must stress it's a cooperative 20 process because it's only cooperation between the two 21 levels of government. At the end of the day, there 22 are separate and independent decisions required by 23 both Manitoba and Canada for the proposals. 24 To administer and guide the proponents through 25 the process, we developed and formed what is known as 22 1 a project administration team under the agreement. 2 The team consists of representatives of both Manitoba 3 and Canada. And as I indicated, I chaired the team. 4 One of my staff, Mr. Trent Hreno participated, Mr. 5 Dan McNaughton from the Canadian Environmental 6 Assessment Agency was on the team and Ms. Beverly 7 Ross from Fisheries and Oceans Canada was also on the 8 team. 9 Ms. Ross is the federal responsible authority 10 for the generation project and she must take 11 decisions under the federal legislation for the 12 generation station. 13 To generate the information required in the 14 cooperative process, we agreed to use the Manitoba 15 Environment Act provisions, Section 11 and Section 16 12. To further guide the proponents, we developed 17 two sets of draft environmental assessment 18 guidelines; one for the generation station, one for 19 the transmission line project. 20 We then asked the Clean Environment 21 Commission, your body, Mr. Chairman, to hold meetings 22 on the draft guidelines and provide some advice to 23 the department and the Minister following the 24 meetings. This was done and then we finalized the 25 guidelines and that formed the guidance documents for 23 1 the proponents to prepare the information on the two 2 proposals and the environmental assessment 3 documentation. 4 We also subjected the guidelines, not only at 5 the public review but to technical government review 6 where he sought information from both levels of 7 government to insert information from their 8 perspective into the guidelines. 9 The process formally started with the filing 10 of proposals in December of 2001. As I indicated, we 11 developed the environmental assessment guidelines and 12 they were actually finalized in April of 2002. It 13 took about a year for the proponents to prepare the 14 environmental assessment documentation and that 15 documentation on both the needs and alternatives for 16 the generation station and the environmental 17 assessment documentation was filed with the 18 department in April of 2003. 19 Under the Environment Act, we seek advice by 20 distributing material to both the public venue and to 21 a technical advisory committee venue. Normally, the 22 public venue is administered by the department 23 without a public hearing but because we are now 24 before a public hearing for these proposals, we are 25 relying very strongly on the Commission process for 24 1 the public input on the proposals. However, the 2 technical review was conducted through what is known 3 as a technical advisory committee. It's a committee 4 composed of a number of federal and provincial 5 government representatives and they review the 6 information provided to them and provide advice back 7 to myself and the Minister on the information under 8 review based on their area of expertise, their 9 experience and other information they have available 10 to them. 11 As a result of the public and technical review 12 of the documentation, we required two supplemental 13 filings from the proponents to further clarify and 14 get more information on issues that were under review 15 and identified by mainly our technical reviewers. I 16 must say the public input to our process was quite 17 minimal and I expect that is because of the Clean 18 Environment Commission process and people were 19 waiting to participate in your process, Mr. Chairman, 20 to provide that public input to the information under 21 review. 22 One of the challenges of environmental 23 assessment in Canada is that there are requirements 24 of both the provinces in Canada for environmental 25 assessment matters and the legislation, although 25 1 complimentary in some areas, is quite different in 2 other areas. And one of the areas that is quite 3 different is the specific requirements that Fisheries 4 and Oceans require to carry out their 5 responsibilities under both the Federal Environmental 6 Assessment Legislation and the Federal Fisheries Act. 7 And as a result, they require a lot more real 8 specific information than the province generally does 9 in these matters. And so they generally go forward 10 independently and seek and work out that specific 11 information with the proponents. 12 And they are doing that in this case. They 13 have requested a number of specific information 14 documents and the proponents have provided that to 15 Fisheries and Oceans Canada and that documentation is 16 currently under review. And it will be considered, 17 at the end of the day, in the federal decision-making 18 process. 19 As a result of our technical review of the 20 information, we determined in October of 2003 that in 21 respect of the initial documentation filed and the 22 supplementary filed information filed as a result of 23 our request for further information, we were 24 satisfied that the documentation at that stage 25 addressed the intent and scope of the two sets of 26 1 guidelines that we provided for the generation 2 station and the transmission line. 3 We recognize that there will be further 4 information generated through the public hearing 5 process and we also recognize that, as I just 6 indicated, that the Fisheries and Oceans information 7 would be forthcoming as the process unwound. 8 We, therefore, made a determination at that 9 point in time that the documentation would be 10 sufficient for you to consider through this public 11 hearing process, Mr. Chairman, and that is the stage 12 of the process that we are now in. 13 I just want to conclude by indicating that as 14 part of our process and in fact as part of the 15 federal process, the public information and advice 16 from this public hearing is a very important 17 component to our final decision making. We are 18 looking for a full and complete public hearing 19 process and we will very strongly consider your 20 advice and recommendations following the conclusion 21 of your deliberations. Thank you, Mr. Chairman. 22 THE CHAIRMAN: Thank you. 23 MR. GREWAR: Mr. Chairman, if we might enter 24 Mr. Strachan's overhead transparencies as Exhibit 25 MC-1000 from Manitoba Conservation. 27 1 THE CHAIRMAN: Thank you, Mr. Grewar. 2 3 (EXHIBIT #MC-1000: Mr. Strachan's overhead 4 transparencies from Manitoba Conservation) 5 6 THE CHAIRMAN: I realize there's a number of 7 people standing in the back and hopefully we'll find 8 a way of providing relief in terms of chairs somehow 9 during this process. And I don't know that we can 10 address that this morning but we'll make an attempt 11 to do that for the ongoing process this afternoon. 12 We will take a break sometime around 10:30 13 but we are a long ways from there. At this point, I 14 call upon the proponents to get started with their 15 presentation of their proposal. 16 MR. PRIMROSE: Good morning, everybody. Good 17 morning, Mr. Chairman. My name is Jerry Primrose. 18 I'm Chief of the Nisichawayasihk Cree Nation. I 19 would like to thank you and the Commissioners and the 20 other participants to hear the opportunity to make 21 our presentation on the Wuskwatim Generation and 22 Transmission Project. I would also like to 23 acknowledge the other interested people from the 24 public and various groups attending this hearing. 25 Today we are here with Manitoba Hydro, my 28 1 colleague, Ken Adams. I speak with pride today for 2 the people of Nisichawayasihk Cree Nation, the 3 descendants of our Cree ancestors who have lived in 4 Northern Manitoba for 7,500 years. I would like to 5 give you some background about our people. 6 Until the 20th century, our people had a 7 thriving lifestyle supported by fishers, hunters and 8 gatherers. Over the past 100 years, our once 9 thriving way of life was almost eliminated by groups 10 who had no respect for our environment and our 11 traditional ways and also our culture. Reserves were 12 created and Indian agents controlled our day-to-day 13 lives. Our children were taken away to residential 14 schools. Lobbyists destroyed the fur trade, an 15 economy that sustained us. And finally, the 16 Churchill River Diversion flooded our lands. 17 We have suffered but slowly we are putting the 18 past behind us through new treaties and agreements 19 and by taking responsibility for our own destiny. In 20 1908, Nelson House Indian Reserve was created as a 21 result of the adhesion by the Nelson House First 22 Nation to Treaty number 5. We were then an isolated 23 community but fully dependent on the surrounding land 24 and resources. 25 Until the late sixties and early seventies, 29 1 our community didn't have electricity or telephones 2 nor running water. But when we got them, we embraced 3 these modern conveniences with open arms. I still 4 remember in the late sixties when we first got 5 electricity, looking out at the lights in our small 6 community. I remember the first time I phoned my mom 7 from high school in Portage La Prairie. When I first 8 got there, I phoned at home. This is 1974. 9 Prior to 1977, our people continued to depend 10 on our traditional economy but the massive flooding 11 caused by the Churchill River diversion meant people 12 could not fish and hunt as they used to. 13 In the early eighties, the fur lobbyists began 14 its campaign and the price of fur plummeted, taking 15 our industry with it. It didn't take long for social 16 chaos to set in with an increase in alcohol 17 consumption, suicides and other related social 18 problems. 19 In 1977, the Northern Flood Agreement was 20 signed and it brought a lot of hope to our people. 21 But the implementation of this agreement was slow and 22 very frustrating. By the fall of 1992, we felt we 23 had to decide to look for a new approach in order to 24 bring benefits for our community. Our community took 25 charge. We appointed a local negotiation team from 30 1 Nelson House and we hired consultants and advisors. 2 We worked to find solutions. We didn't listen to 3 people who had never even visited our community but 4 who still thought they knew what was best for us. 5 We looked after our own best interests. We 6 entered into comprehensive negotiations and finally 7 in 1976, we settled our negotiations and developed a 8 compensation package which not only provided economic 9 support but gave us control over development of 10 resources in our traditional lands. We will never be 11 fully compensated for our losses but we have moved 12 forward to create a better future for our children 13 and our grandchildren. 14 We cannot forget the past but we must focus on 15 our future. With close to 5,000 members, we have a 16 rapidly growing population. Over 60 per cent of our 17 people are under 30 years. Half of our members are 18 of school age. One-third of our adults have less 19 than a grade 9 education. Our rate of unemployment 20 is five times the provincial average. We must 21 address these issues. 22 Today is an important step in this process. 23 What we have gained through long negotiations and 24 hard work over the past few years has given us the 25 ability and the means to be in a position to jointly 31 1 develop the proposed Wuskwatim Generation and 2 Transmission Project with Manitoba Hydro. We are 3 very proud that our proposed development respects the 4 environment and our traditional way of life while 5 providing opportunities that will offer a brighter 6 future for our people and be good for Manitoba's 7 economy. And we believe this project proposed to be 8 built within our traditional territory will help 9 provide after our own interests towards 10 self-sufficiency. It will also provide for our young 11 people as opportunities they deserve to have basic 12 opportunities other Canadians take for granted. We 13 believe this project will be among the things that 14 will help us fulfil our dream of self-sufficiency. 15 We also believe this project will be safe for 16 our water, lands, plants and animals and for the 17 people of Northern Manitoba where we live. This is 18 important to us because the north is our home, our 19 backyard. Just as the south where your cottages and 20 lake homes provide you with a spiritual place to be, 21 the north is our spiritual place. 22 So in approaching this project, we have been 23 especially concerned to do it right. We have made 24 our decisions independently to serve the interests of 25 Nisichawayasihk people whom we represent. Since we 32 1 began this process, we have heard more radical 2 opponents to the projects speak of environmental 3 terrorism, racism and a new colonialism implying that 4 we are incapable of looking after our own interests 5 towards self-sufficiency. 6 Whatever the motivation for proposing this 7 development, I think these groups are engaged in what 8 is for us economic terrorism. The Nisichawayasihk 9 Cree Nation stands to lose a once in a lifetime 10 opportunity to be self-sufficient because of the 11 interference of these outside sources. 12 Big corporations are not exploited in the 13 Nisichawayasihk Cree Nation as some opponents of this 14 project have alleged. We have firsthand experience 15 with hydroelectric developments. We understand what 16 can happen when the environmental issues are not 17 fully considered and provisions aren't made for 18 people to prosper with training and job 19 opportunities. Everything gained from our experience 20 is part of where we are today. We have been 21 cautious. We have been very careful and I'm sure to 22 Hydro's frustration, sometimes we have not just 23 accepted Hydro's plans, in many ways we have modified 24 their plans in important ways. 25 As an example, our First Nation was 33 1 influential in the decision for the low-head design 2 chosen for Wuskwatim. It is a design that would 3 create the least amount of flooding of any 4 hydroelectric project ever developed in Manitoba. 5 Less than one-half square kilometre. Or for people 6 in the city that understand maybe same size as an 7 average golf course. 8 We played a direct role in undertaking 9 environmental impact assessment studies which are at 10 the centre of this Clean Environment Commission 11 hearing. Not only did the assessment involve the 12 latest scientific methods but the process 13 incorporated the traditional knowledge of our elders 14 and resource users and other Aboriginal people in the 15 area. Our spiritual beliefs and culture are part of 16 this traditional knowledge. 17 For example, two possible routes for an access 18 road to the generating station were eliminated 19 because one was too close to a spiritual site while 20 the other route would have been too close where there 21 was an area where Caribou had been sited. Like any 22 development project anywhere, there will be change. 23 But our studies prepared cooperatively with Manitoba 24 Hydro show the project will have little impact on the 25 lands, plants and animals. 34 1 I am thankful our First Nation and our Cree 2 people were shown this respect for our knowledge and 3 for our culture. That was a crucial factor in our 4 decision to proceed to participate in this project. 5 Because based on the our past experience resulting 6 from the Churchill River Diversion, we are not 7 prepared to move ahead at any cost although we 8 believe we are a very progressive First Nation, 9 economically and socially. We face many of the same 10 challenges of other First Nations in Manitoba and 11 across Canada, poverty, inadequate health care and 12 social services, poor housing and lack of training, 13 skills and jobs. So we need to find ways to develop 14 and sustain a secure economic base for our First 15 Nation that provides the social and community 16 services we need along with meaningful well-paying 17 jobs and opportunities for our people and especially 18 for our youth. 19 For us, economic support is not abstract. Its 20 absence is a daily soul-destroying reality. This 21 development gives us an opportunity to become a 22 partner with up to 33 per cent ownership of a project 23 in our resource area that will provide us long-term 24 stable revenues. It is a tangible step into a 25 brighter future. 35 1 The new Atoskiwin Training & Employment Centre 2 of excellence in our community is already a direct 3 benefit of the development process leading to 4 Wuskwatim. The centre offers training for jobs and 5 skills needed in the north. Whether or not Wuskwatim 6 goes ahead, it provides our people with the 7 opportunity to participate in the broader economy of 8 Manitoba and of Canada. So the centre, people have 9 already completed training and are engaged in work 10 experience. Once it is fully operational, it will 11 become part of the post-secondary training program 12 for Northern Manitoba with a capacity of 100 students 13 per year. 14 Our NCN members and northern Aboriginal people 15 will have the required skills, will be given 16 preferences for the jobs on the project. Jobs will 17 include heavy equipment operators, carpenters, 18 electricians, labourers, clerical, catering and 19 others. Apprenticeships and journeyman opportunities 20 will provide for long-term skills that will serve our 21 members long after Wuskwatim is built. The project 22 also offers contract opportunities for new and 23 existing First Nation businesses to supply products 24 and services needed for the project. 25 This may provide incentives for NCN 36 1 entrepreneurs to establish businesses that provide 2 income and create jobs for others. As Chief in 3 Council of NCN, we establish a future development 4 portfolio, currently held by Councillor Elvis Thomas 5 and also our own future development team that was 6 assembled to work towards the development of this 7 project. We lead and direct our own independent 8 legal team, communication consultants and technical 9 and scientific advisors to ensure the project is 10 environmentally responsible. Any partnership with 11 Hydro is equitable and beneficial to our people. 12 In 2001, a majority of NCN members voted to 13 approve an agreement in principle to development 14 Wuskwatim with Manitoba Hydro and we have worked with 15 Hydro to prepare and submit what we believe to be 16 possibly the most comprehensive environmental impact 17 statements ever undertaken in Manitoba. We have also 18 just completed a Summary of Understanding or SOU 19 which is like a preview of the final project 20 development agreement. 21 Even though we are here today at the CEC with 22 Hydro, our people will still have the opportunity to 23 vote on the final project development agreement in a 24 secret ballot referendum to decide if NCN will 25 participate. It will be their decision. The 37 1 planning and cooperative work that has gone into this 2 project between Manitoba Hydro and ourselves 3 represents a ground-breaking positive approach that 4 we believe will change the way resource development 5 is done in Manitoba forever. We wanted to dispel the 6 issues of the Churchill River Diversion and replace 7 litigation, confrontation with cooperation, 8 understanding and trust. 9 In conclusion, we believe this is a good 10 project and an opportunity for our First Nation, 11 everyone in the north and all of Manitobans. We ask 12 that you consider the hopes and aspirations of our 13 people when you hear from the groups opposed to this 14 project. They may be well-intentioned but in my 15 mind, they are misguided if they think they represent 16 our best interests. 17 The evidence we present you with today will 18 demonstrate that the extensive joint planning 19 undertaken by NCN and Manitoba Hydro can positively 20 impact resource development to the benefit of all 21 Manitobans. 22 Wuskwatim can create the conditions to allow 23 our people to bring their full talents to the world. 24 This will help everyone in Manitoba. It can be our 25 gift and our legacy to our children and grandchildren 38 1 and their children for many generations to come. 2 That is my vision and a dream of our council 3 and of my people. With that, Mr. Chairman, I thank 4 you. 5 THE CHAIRMAN: Thank you very much. 6 MR. ADAMS: Good morning, Mr. Chair, 7 Commission members, ladies and gentlemen. My name is 8 Ken Adams and I'm the vice-president of Power Supply 9 of Manitoba Hydro. I am the member of Manitoba Hydro 10 Senior Executive Team and I have primary 11 responsibility for the projects that are under 12 consideration today. 13 Today we are pleased to present for your 14 review the Wuskwatim Generating and Transmission 15 Projects. We look forward to what I'm sure will be a 16 very vigorous discussion and we are confident that 17 when we're finished, we'll be able to demonstrate the 18 essential merits of the project and be able to 19 proceed with it. 20 Assuming that we do proceed with these 21 projects, it will be the first northern generating 22 station that we have started construction in nearly 23 20 years. And in that 20 year period, we have 24 thoroughly reviewed our approach to such development. 25 Our new way of cooperating with local Aboriginal 39 1 people and our commitment to environmental 2 stewardship is embodied in our present plans. 3 In 1992, Manitoba Hydro became one of the 4 first major companies in Canada to adopt its own 5 Principles of Sustainable Development. These 6 principles enlisted in the Sustainable Development 7 Report included in the April 2003 need an alternative 8 submission. Along with our corporate vision and 9 mission statement, our Sustainable Development 10 Principles provide the backdrop against which we 11 evaluate all potential projects and programs. 12 Hydro has an extremely rigorous internal 13 decision-making process. In part, it's designed to 14 measure a project against these criteria and in part, 15 it's designed to ensure that any recommendation 16 regarding major investments that we, as the executive 17 management team, make to our Board is in the best 18 overall interest of our customers. 19 Manitoba Hydro operates in a complex 20 continually evolving business environment that 21 reflects the changing and diverse perspectives of our 22 customers, our owners and other stakeholders 23 throughout the province and throughout the rest of 24 North America. 25 Our business environment is also affected by 40 1 unfolding events throughout North America such as the 2 structural changes in the electricity industry and by 3 global issues such as climate change. The Wuskwatim 4 project we are proposing has been shaped by all of 5 these influences. 6 We firmly believe that the Wuskwatim 7 development is an excellent project when reviewed 8 from each of the environmental, the financial and a 9 social perspective. That is the concept of the 10 so-called triple bottom line that is prominent in 11 most areas of corporate governments these days. 12 I personally have worked in the hydro power 13 industry for nearly 40 years and I'm convinced that 14 this project is a prime example of sustainable 15 development action. It reflects the core values and 16 strategic priorities recommended by the World 17 Commission on dams in 2000 and is fully consistent 18 with the International Hydro Power Association 19 sustainability guidelines just released. 20 As I noted earlier, Wuskwatim marks the 21 introduction of a fundamentally new and different 22 approach to development of Manitoba's hydroelectric 23 resources. 24 I would like to emphasize five aspects. The 25 first is that we're proposing to advance its 41 1 inservice date by about ten years from what would 2 have been required if we were building only to meet 3 Native Manitoba customers. This will help us 4 continue to participate in the highly competitive and 5 very lucrative export market. Continued success in 6 this export market is needed to allow us to continue 7 to offer low electricity prices in Manitoba. 8 The financial success of the project requires 9 us to construct it on schedule, to operate it in 10 accordance with the various licences and agreements 11 and to continue to sell the electricity it produces 12 profitably to wholesale customers in other provinces 13 and in the United States. Collectively with a lot of 14 experience in all of these areas and I'm confident 15 that our managers and their staff are fully capable 16 of ensuring that the project will be a success. 17 The second aspect is that based in large part 18 on what we learned through our consultations, 19 Wuskwatim has been deliberately designed as a low 20 impact project. As Chief Primrose said, the original 21 design was revised to reduce the size from about 350 22 to 200 megawatts to virtually eliminate any new 23 flooding. Its operation will be restricted to daily 24 run of river in order to limit water level 25 fluctuations both upstream and downstream. Also 42 1 through the consultation process, we have selected 2 transmission line, access road and construction camp 3 locations that respect environmental, cultural and 4 local community values. 5 The third aspect is the unprecedented extent 6 of the consultation that has taken place. Five years 7 ago, we initiated monthly meetings with members of a 8 number of Manitoba environmental organizations to 9 discuss issues and concerns related to potential new 10 Manitoba Hydro developments. 11 While these meetings were not part of the 12 formal consultation process for the Wuskwatim 13 project, they provided an excellent forum for 14 exchanges of information and perspectives on future 15 energy development and they have helped shape our 16 approach. 17 We started consulting with NCN in 1998. 18 Subsequently, in 2001, well starting in 2001, 19 Manitoba Hydro and NCN have consulted with every 20 community in the project area whether they are in the 21 immediate vicinity, upstream, downstream, near the 22 proposed transmission facilities or just in the 23 region and interested in the project. 24 There has been unprecedented website access 25 for all interested parties since 2002. More recently 43 1 all of the materials that have been filed for this 2 review have been placed on the website. In January 3 2003, we participated in an ENGO forum and an open 4 house in Winnipeg. 5 In June 2003, approximately six months after 6 filing with this Commission, we held a three day 7 workshop with the federal/provincial TAC. And in 8 July, we held another workshop with a number of 9 participants in this review. 10 Excluding our meetings with NCN members and 11 excluding the meetings with the regulatory 12 authorities and excluding proceedings in front of 13 this Commission, we have participated in almost 100 14 meetings with various interested parties. And to 15 date, we file binders with over 10 lineal feet of 16 written material explaining the project. 17 I doubt there has ever been a comparable 18 project in Canada with such a comprehensive community 19 consultation and public participation process. 20 The forth difference from previous projects is 21 that we have worked with the provincial and federal 22 governments and the community situated along the 23 Burntwood and lower Nelson rivers to establish a job 24 training program well before the project starts. 25 This program will ensure that Northern Aboriginal 44 1 people can develop the skills needed to qualify for 2 the higher skilled, higher paid jobs that will be 3 available on this project and on any future projects 4 that we or others may undertake in the region. It 5 will also help in prepare for long-term employment in 6 the operation and maintenance of our facilities and 7 at other locations. 8 The fifth aspect of this project which makes 9 it fundamentally different from any that we have ever 10 done before and the one for which we are the most 11 proud is our partnership arrangement with 12 Nisichawayasihk First Nation. As Chief Primrose 13 explained, NCN has participated as a full partner in 14 all of the planning activities, the public and 15 community consultation process, the open houses, the 16 environmental assessments and all other aspects of 17 the project. We look forward to a long and mutually 18 beneficial association with NCN. 19 Before we move to the detailed presentation of 20 the Wuskwatim project, it is appropriate for me to 21 confirm Manitoba Hydro's intentions with regard to 22 certain other potential sources of electricity 23 supply. We will continue to pursue energy 24 conservation and demand management, or PowerSmart as 25 we call it, to the maximum extent at which they are 45 1 economically and financially viable. We have 2 developed the best possible estimates of what is 3 achievable and we have provided for the attainment of 4 these in our financial plans. But if it turns out we 5 can do better, we will pursue them with vigour and we 6 will achieve what we can. 7 We will continue to pursue system efficiencies 8 in our existing system or supply site enhancement in 9 our terminology again to the maximum level of which 10 it is economically viable. We have upgraded most of 11 our older facilities over the last 15 years or are in 12 the process of upgrading a few of them. And we are 13 reaching the point of diminishing returns. But 14 again, if there's a megawatt hour to be gained or 15 saved in the existing system and it is financially 16 viable, then we will invest to achieve it. We 17 continue to explore the possibility of 18 non-traditional or returned energy sources and we 19 have assumed that over the next five years, we will 20 be able to purchase or construct at least 250 21 megawatts worth. If and when we're presented with or 22 if we can identify a technically and economically 23 viable option, we will pursue it. And again, if 24 higher amounts prove to be economic, we won't stop at 25 the 250 megawatts. In fact, we don't see these 46 1 energy sources as competitors to the Wuskwatim 2 project but rather as complimentary. They are not 3 mutually exclusive. 4 Returning to Wuskwatim, Hydro is fully aware 5 of the importance of these activities in Manitoba and 6 that our actions today will leave a legacy for future 7 Manitobans. So are the people we engage to undertake 8 the designs, the evaluations and the assessments of 9 our projects. 10 And I'd like to spend a few minutes to talk 11 about these people. The overwhelming majority of 12 people involved in the preparation for the Wuskwatim 13 project are Manitobans. They are very highly 14 qualified principled professionals. They are 15 accountable for their work to their peers, to their 16 colleagues, to their friends and relatives and to 17 future Manitobans. And in most cases, they will be 18 responsible for delivering on the programs and 19 projects that they recommend and they will ultimately 20 be responsible for dealing with the consequences. 21 They do not take these responsibilities 22 lightly. However, recognizing that in some areas we 23 need assistance, we do, where appropriate, engage 24 experts from other parts of North America to ensure 25 that the best available minds have been brought to 47 1 bear on all aspects of our deliberations. 2 Manitoba Hydro and Nisichawayasihk Cree Nation 3 are confident that individually and collectively, 4 their staff and consultants have performed their work 5 very well. We are confident that in its entirety 6 over the next few weeks, the body of work will 7 demonstrate Wuskwatim will provide a clean source of 8 renewable energy that will displace fossil fuels 9 elsewhere in central North America. It will provide 10 financial and reliability benefits to Manitoba 11 Hydro's domestic customers and it will be profitable 12 to both Manitoba Hydro and NCN. 13 We suggest the work will also demonstrate that 14 the environmental effects of the project are not 15 significant. And in fact, when viewed on a global 16 basis, there is a net environmental benefit. We will 17 demonstrate that the project will provide an economic 18 stimulus to Manitoba, particularly in northern 19 Manitoba. And we will show that the risks associated 20 with the proposed development are relatively low and 21 readily manageable. 22 At this point, I will turn the presentation 23 over to Councillor Elvis Thomas of NCN who holds a 24 future development portfolio amongst others. And Ed 25 Wojczynski who is Manitoba Hydro's Division Manager 48 1 of Power Planning and Development. Ed has the 2 responsibility for directing all of Manitoba Hydro's 3 development planning activities and is the corporate 4 executive responsible for overseeing our 5 participation in this review. Ed and Councillor 6 Thomas will chair and coordinate NCN and Hydro's 7 presentation of the project. 8 Mr. Chairman, I thank you. 9 THE CHAIRMAN: I thank you, Mr. Adams, and 10 Chief Primrose. And maybe this is a convenient time 11 for us to have this first break for a few minutes, a 12 ten minute break, while your colleagues get ready to 13 continue with the presentation. Thank you very much 14 again. 15 16 (PROCEEDINGS RECESSED AT 10:16 A.M. AND 17 RECONVENED AT 10:30 A.M.) 18 19 THE CHAIRMAN: I will ask the members 20 of the presenting panel to introduce themselves to 21 be sworn in. 22 MR. WOJCZYNSKI: Thank you, 23 Mr. Chairman. I'm Ed Wojczynski, I'm the division 24 manager of power planning and development at 25 Manitoba Hydro, and Councillor Elvis Thomas and 49 1 myself are going to call forward and introduce the 2 witnesses, if that is suitable. Mr. Ken Adams, 3 the vice president of power supply is one of our 4 witnesses, Ken; and Carolyn Wray, division manager 5 of treasury and business analysis; Lloyd Kuczek, 6 division manager of energy management and 7 conservation; Dave Cormie, manager of power sales 8 and operations. 9 THE CHAIRMAN: Maybe you want to call 10 the witnesses as they will come up to testify, or 11 do you want them all up at the front now? 12 MR. WOJCZYNSKI: Mr. Grewar had 13 suggested that we have them all up at once and 14 have the swearing in of all witnesses at one time, 15 Mr. Chairman. 16 THE CHAIRMAN: Thank you. 17 MR. THOMAS: For the other witnesses, 18 we are calling on Dave Hicks who is in charge of 19 N.D.Lea. They are the advisors for the 20 transmission part of the project. I have got 21 George Rempel, who is also sitting here in front 22 with TetrES. And we will call upon Cam MacInnes 23 who works for UNIES in particular with regard to 24 providing us with engineering advice. We have got 25 Cam Osler, who is with Intergroup, and we have got 50 1 Stuart Davies with North/South Consultants, and 2 then you have myself and Ed Wojczynski. 3 In terms of the swearing in ceremony, 4 I will be holding an eagle feather while we do the 5 swearing in ceremony. The eagle feather 6 represents truth, honour and respect in our 7 culture, and when we do something like this in 8 public, this is one of the things that we do as 9 First Nations people. So I'm going to be holding 10 one while you swear us in. Thank you. 11 MR. GREWAR: I wonder if I could have 12 clarification, is Ron Mazur there, please? 13 I will read the names and then I will 14 ask you to affirm your truthfulness. Ken Adams, 15 Elvis Thomas, Edward Wojczynski, Carolyn Wray, Ron 16 Mazur, Lloyd Kuczek, Cam Osler, Stuart Davies, 17 David Hicks, George Rempel, Campbell MacInnes, 18 David Cormie. 19 20 Ken Adams, Elvis Thomas, Edward 21 Wojczynski, Carolyn Wray, Ron Mazur, 22 Lloyd Kuczek, Cam Osler, Stuart 23 Davies, David Hicks, George Rempel, 24 Campbell MacInnes, David Cormie: 25 SWORN 51 1 2 MR. WOJCZYNSKI: We would like to 3 distribute copies of the presentation now, if that 4 would be acceptable. We have copies for the 5 Commission, and we have copies for everybody in 6 the audience. We have put a binder together, a 7 cerlox binder that has the presentations for the 8 whole day, for everybody's convenience. 9 Particularly, recognize that in the 10 back it will be kind of hard to see the projector, 11 so we thought that might make it a bit easier for 12 everybody. So we are just distributing copies. 13 If you don't want one, please just indicate that 14 when the people are coming around. 15 MR. GREWAR: We will enter this as a 16 single exhibit, as the presentation transparencies 17 or overhead projections, and it will be assigned 18 number, Manitoba Hydro NCN 1000, so MH/NCN-1000. 19 20 (EXHIBIT MH/NCN-1000: Presentation 21 transparencies) 22 23 THE CHAIRMAN: Thank you, Mr. Grewar. 24 You may now proceed. 25 MR. WOJCZYNSKI: Thank you, Mr. Chair. 52 1 I would like to introduce the 2 presentations that we are making today. As you 3 know, Manitoba Hydro and Nisichawayasihk Cree 4 Nation have prepared a great deal of information, 5 over ten feet of binder material. Today we can't 6 possibly present everything that we have prepared, 7 but we can summarize and illustrate for you the 8 most important things that we have learned in our 9 work. 10 We are going to do four presentations 11 today. The first presentation will be a 12 description of the Wuskwatim developments. It 13 will give you an overview of what the developments 14 are, and what they would look like and where they 15 would be located. After that, after we have shown 16 you the what and where of the Wuskwatim 17 developments, we are going to explain how the 18 Wuskwatim development fits into the Manitoba power 19 system and its operation. We expect to complete 20 these presentations by lunch time. 21 After lunch we will be moving to the 22 need for and alternative justifications for 23 developing Wuskwatim at this time. We will then 24 provide an overview of major issues that we 25 addressed as our environmental assessment of the 53 1 proposed Wuskwatim development. Finally, we will 2 provide a short conclusion and we expect and hope 3 to have this done by the end of the day. 4 I would like to now introduce you to 5 the first presenter, and that's George Rempel from 6 TetrES Consultants, who will be presenting the 7 project on behalf the NCN and Manitoba Hydro. 8 MR. REMPEL: Thank you, 9 Mr. Wojczynski. Is this mike turned on? 10 I'm going to be describing the two 11 projects. We have in this Wuskwatim development 12 two projects, the generation project and the 13 transmission project. Each of these have been 14 described in very substantial detail in the 15 individual environmental impact statements and, in 16 fact, in each of the EIS's there is a supporting 17 document which describes the project in greater 18 detail. What I'm going to be doing is providing 19 you an overview of the two projects, as the 20 project description is a very important step in 21 the environmental assessment. In fact, it is 22 typically the first step, you try to understand 23 how the project will be constructed, how it will 24 be operated, and then you look at potential 25 environmental effects. So I'm going to give you 54 1 this overview today. 2 Firstly, I will begin by providing 3 some context. This is a map of Manitoba which 4 shows some of the key features of the Manitoba 5 Hydro system. We have a Hydro system here that is 6 primarily hydroelectric based, over 90 percent of 7 the power generation comes from hydroelectric. 8 And much of this is dominated by three plants in 9 the lower Nelson, three plants on the lower 10 Nelson, 3600 megawatts of power in three plants in 11 the lower Nelson. They are primarily fed from 12 outflows from Lake Winnipeg into the Lower Nelson, 13 and those are regulated somewhat by Lake Winnipeg 14 to better conform, better shape the outflows to 15 the demand of Manitobans. 16 We also have a Churchill River 17 Diversion, a good portion of the flows in the 18 Churchill were diverted into the Rat/Burntwood 19 system in the early '70's to help feed flows, 20 deliver flows to these large plants in the Lower 21 Nelson. 22 The proposed Wuskwatim generation will 23 be placed on the Burntwood system, below Notigi, 24 which is a control structure for the diversion. 25 It will be 200 megawatts, so it will be about 55 1 4 percent of the overall Manitoba Hydro system 2 capability. 3 As I mentioned, 200 megawatts is the 4 capacity of this station. It will be Taskinigup 5 Falls on the Burntwood River. It will have an 6 associated access road, it is a critical part of 7 the construction of the project. It will also be 8 a permanent access road in that will help service 9 the plant after it is in operation. There will be 10 a construction camp. That camp will be dismantled 11 after construction and the site rehabilitated. 12 And there will be other infrastructure which we 13 will describe later. A six year construction 14 schedule is contemplated which would result in 15 first power some time in 2010. 16 In terms of the transmission project, 17 with new power comes a need to develop -- to tie 18 this into the existing distribution system. So we 19 have the project here. It will involve bringing 20 power from Thompson to the site for construction, 21 and then lines will be constructed to tie this 22 plant into the existing lines near Thompson, Snow 23 Lake and The Pas. About 350 kilometers of 24 transmission line will be required to tie this 25 into the existing system. 56 1 I'm going to turn now to a bit more 2 detail on the generation project. This is a 3 picture of the site showing the outlet of 4 Wuskwatim Lake and Wuskwatim Falls, and below 5 these falls are Taskinigup Falls, and this is 6 where we are proposing to build this dam. There 7 is about a one and a half kilometer distance 8 between these two falls, and the area that Chief 9 Primrose referred to for new flooding will be 10 associated in this immediate forebay that we are 11 talking about here, where the water will be raised 12 about 7 meters with the construction of the dam, 13 resulting in some peripheral flooding along the 14 existing shore line. I will talk about this in 15 greater detail later. 16 This project is located just 17 downstream of Wuskwatim Lake, Taskinigup Falls. 18 It is about 37 kilometers from the community of 19 Nelson House. This is the resource management 20 area of Nelson House. This shows the community of 21 Nelson House, the community of South Indian Lake, 22 and this distance here is about 37 kilometers, I 23 believe it is, from Nelson House to the station, 24 and the distance from this station to Thompson is 25 about 45 kilometers. 57 1 Further downstream we have communities 2 on Split Lake, the York Factory First Nation, 3 Tataskweyak Cree Nation, and further downstream we 4 have Gillam. 5 Now, this plant proposed here for 6 Wuskwatim will capture about 22 metres of drop or 7 head. When we referred to a low head before, we 8 were talking about the drop that is encountered 9 across these two falls, and this dam will capture 10 that head or energy and convert it into 11 hydroelectric power. 12 As the Chief and Ken Adams mentioned, 13 this project has been deliberately designed to be, 14 to have minimal flooding, it is a low head design. 15 We will tell you a bit more what that means. What 16 it does is it minimizes environmental effects 17 because the flooding is reduced to about a half a 18 square kilometer. 19 This low head design, as I mentioned, 20 has capacity of about 200 megawatts. Earlier 21 options that were considered, considered power 22 capacity up to 350 megawatts. So a lot more power 23 with this high head design, but it also came with 24 a lot more flooding, about 140 square kilometers, 25 54 square miles. So that design was rejected and 58 1 we now have a low head design which in fact has 2 the smallest amount of flooding of any existing 3 Hydro plant in the system. 4 I would like to discuss the water 5 level changes with this low head design. I have a 6 graphic here that shows the typical water profile 7 below Notigi control structure. That is the 8 control structure that controls flows from the 9 diversion downstream into the Rat/Burntwood 10 system. 11 So the brown is the shore line, or the 12 lake bottom or the river bottom, and we have the 13 blue showing the typical water line profile, 14 Threepoint Lake tumbling down the Early Morning 15 Rapids. Then again we have falls, Wuskwatim 16 outlet, Taskinigup Falls, and we have some 17 additional falls as the river proceeds downstream, 18 Opegano Lake, and we have Thompson, Birchtree 19 Lake and then Thompson over here. 20 What will happen with the new project 21 is that there will be a dam built in this area 22 here, and this will increase the water levels 23 between Taskinigup Falls, and this area here, 24 shown in the heavy blue. So you will have this 25 immediate forebay, this is where the flooding will 59 1 occur, the half square kilometer, and will also 2 stabilize the water levels on Wuskwatim Lake. 3 They will be stable in the high end of where they 4 have been in the last 25 years. The water level 5 influence will stop below Early Morning Rapids. 6 This is what we call a hydraulic break, in that 7 this water level here will not influence water 8 levels further upstream either in winter or 9 summer. 10 This is again the site that we have 11 shown earlier, but I'm showing more detail here. 12 Here is Taskinigup Falls. This is where the main 13 dam will be built. There will be a powerhouse 14 built over here which will comprise three 15 turbines, fix play design, there will be a 16 spillway as well. So the flows will now be 17 diverted, shunted over to here where the turbines 18 will be located, and the flows will typically go 19 through one or two or three turbines, depending on 20 how much flow is being taken down the system. If 21 the flows exceed the capacity of the turbines, the 22 three turbines, the spillway will bypass the high 23 flows and take them down into the river here. 24 In building this project, most of the 25 material actually comes from the site. When this 60 1 excavation is done here, that will yield rock, 2 soil, clay and silt that will be used for the dam, 3 and the rock will be used for cofferdams, crushed 4 for gravel or concrete aggregate. The only thing 5 that will be brought into the site in terms of 6 construction material, rock or earth, will be 7 granular material, aggregate from an area close by 8 the access road. The rest of it will be found on 9 site. In fact, there will be extra material 10 deposited in this area here. There will be 11 excavation done here to ease the flow from 12 Wuskwatim Lake into this immediate forebay to make 13 it easier for the flow to get to the powerhouse. 14 When this dam is built, there will be 15 an increase in water level, I mentioned about 7 16 metres increase in this area here, that will 17 result in a band of flooding here of about 25 to 18 300 metres, depending on the steepness of the 19 slope here along this shore line. The shore line 20 will be cleared in advance of this flooding, and 21 this is where the half square kilometer of 22 flooding will occur. This is a computer rendition 23 of the same development showing the channel 24 excavation, the excavated materials being placed 25 here. We now see the spillway a bit better here. 61 1 This is where the powerhouse is, and here you see 2 the three turbines. So the water will typically 3 go through those three turbines, either through 4 one or two or three. Almost always the flow will 5 be entirely directed through these turbines. Only 6 occasionally will there be a need to spill some 7 water over the spillway. 8 I would like to turn now to the 9 operation of the Churchill River Diversion. 10 Wuskwatim will not change the operation of the 11 Churchill River Diversion. The designing and 12 planning of this plant is assumed that the 13 patterns that have existed for the last 25 years 14 will continue in the future, and that includes the 15 annual modifications that are made to the interim 16 licence, where slightly additional flows are 17 allowed to be diverted from the Churchill River on 18 the Rat/Burntwood system. That has been in place 19 since 1979, and the design assumes that that will 20 continue. 21 There will be no change to the CRD 22 flow patterns. The amount of flow that is 23 diverted varies, depending on how much 24 precipitation and snow melt occurs in the 25 Churchill River and the Rat/Burntwood systems. So 62 1 those flow patterns that vary annually will 2 continue, and the only difference will be that 3 there will be some daily flow shaping in the local 4 area associated with the Wuskwatim Generating 5 Station. So in the local area there will be small 6 changes to the water level regime, but not on the 7 diversion in general. 8 The flows will normally equal, the 9 flows in will normally equal the flows out over a 10 24 hour period. So on a given Tuesday, Wednesday, 11 whatever, whatever flow arrived at Wuskwatim Lake 12 will also have left the lake. 13 Further on operation, the Wuskwatim 14 Lake will now be kept pretty much all of the time, 15 about 97 and a half percent of the time, at about 16 234 metres above sea level. Right now the lake 17 levels varies from 232.6 to 234.3, about a 1.7 18 metre variation; and that is dependent on the 19 different flow patterns along the diversion 20 itself. With this project, it will be held pretty 21 constant at 234, the higher end of what it 22 experiences now. 23 The generation station will operate in 24 what we call a modified run-of-the-river mode. A 25 true run-of-the-river mode means that all flow, as 63 1 it arrives at the station, would be sent out the 2 station. By modified run-of-the-river, we mean 3 there will be various units on or off during the 4 day. And that is to take advantage of the 5 efficiency of the turbines. It is something like 6 running your car, depending on the speed that you 7 are going, either you are in first gear, second 8 gear, or third gear. Depending on the flow that 9 arrives here, there will be either one, two, or 10 three units operating, there will be intervals 11 during the day when there might be say three units 12 operating, that is the best efficiency, and other 13 times it will be two units. And that will reflect 14 in small changes in the Wuskwatim Lake water level 15 and further downstream. Downstream the plant 16 level and flows will vary depending on how many 17 turbines are in operation. 18 I'm going to take some time to show 19 you where those variations will occur using this 20 map. And just for future reference or later 21 reference, this is the same map that you see here 22 on a different scale. Just to give you some 23 orientation, Notigi is actually over here, off the 24 map. Here we have Threepoint Lake, there is 25 Footprint Lake and the community of Nelson House. 64 1 As we proceed downstream on the Burntwood River, 2 we have the Early Morning Rapids that we showed 3 earlier. Here are some ancillary lakes to 4 Wuskwatim, Sesep, Cranberry. Here is Wuskwatim 5 Lake itself. There is the generating station 6 proposed site, and then we have the Burntwood 7 River continuing through Opegano Lake, Birchtree 8 Lake and Thompson. And this distance here is 9 about 45 kilometers, this distance here is about 10 37, to give you some scale. 11 I would like to show you on this map 12 then how this station here, placed at this site 13 here, will affect water levels in this area. 14 Firstly, there will be no changes in the water 15 level fluctuations on Threepoint Lake or Footprint 16 Lake. These areas are upstream of the Early 17 Morning Rapids, that is a control point, so there 18 will be no change in water levels as have been 19 experienced in the last 25 years in that area. 20 Going further downstream from this 21 site here, going up to Early Morning Rapids, that 22 is where the water level will be held very 23 constant, almost always at the upper end of its 24 present range, 234 metres. There will be small 25 daily fluctuations, depending again as to when 65 1 one, two, or three turbines are in place, and when 2 they are switched on or off. So that will be 3 about 5 inches or so, that is excluding wind and 4 wave effects. So it will be a very stable water 5 regime upstream of the site itself. 6 Just downstream, that is where you are 7 going to see more variation, because it is a 8 narrow river system here, and again it will depend 9 on what units are in operation. There the 10 variation will be about 1.3 metres under normal 11 open water operating conditions. And that begins 12 to dissipate as you go down through the falls and 13 to Opegano Lake. At Opegano the median daily 14 water level variation will be about 4 inches, .1 15 metres, and the maximum of 1 and a half feet or 16 .45 metres. As the river flows go further 17 downstream, by the time you get to Birchtree Lake, 18 the daily water levels will not be noticeable in 19 terms of variation. It will be about .1 metres 20 again excluding wind and wave effects, that is 21 about 4 inches of daily variation. 22 In terms of the access road, that is 23 an important component of this development. It 24 will involve 48 kilometers of a permanent access 25 road, a robust road, a key part of the structure 66 1 construction, it will continue in operation 2 permanently. There will be a construction camp 3 that will house at the peak about 625 people, that 4 will be a temporary one. 5 The preferred locations for the camp 6 and the access road were identified by 7 representatives of Hydro and NCN, and a lot of 8 consideration went into it, the Chief mentioned 9 various alternatives were ruled out because of 10 sacred sites or sensitive areas for the 11 environment -- environmental effects were 12 considered, the benefits and drawbacks, whether 13 access would be improved as a benefit or if it 14 would be a drawback. Effects on the cost and 15 schedule were obviously considered. Traditional 16 knowledge, as I mentioned, was a big factor. And 17 overall, the road and camp were selected in terms 18 of sustainability. 19 This shows the location of the access 20 road, this is PR 391. There is a 48-mile access 21 road to the site through largely uninhabited area. 22 We have aggregate sites in this area here. They 23 are not unique to the area, but there are located 24 in a good area, a good site to access those and 25 bring them on to the site for construction 67 1 purposes. 2 There has been a lot of interest in 3 controlling access because it is putting a road 4 into a new area. Hydro and NCN have prepared an 5 access management plan which identifies ways that 6 you can maximize the positive sides of this 7 access road and minimize the concerns. This plan, 8 as I say, has just been developed. It will 9 specify how access will be managed, it will be 10 relatively easy to do this during construction, 11 but it will also consider the operation aspects. 12 And the intent is to keep the benefits, which will 13 include providing access for resource harvesting, 14 but with it there are some concerns about 15 overhunting, overfishing, maybe vandalism. And 16 this management plan will describe how that can be 17 mitigated. 18 I would like to turn now to the 19 Transmission Project. As I mentioned, with new 20 power comes a need to connect this generation 21 source into the existing system. We have Thompson 22 over here, there is an existing station there, a 23 switching station. We have existing stations at 24 Snow Lake, and at Ralls Island at The Pas. What 25 is contemplated is that there will be a new 68 1 station built just south of Thompson called the 2 Birchtree Station, and there will be lines built 3 firstly to bring power in, and then to connect the 4 station into these new and existing sites. So we 5 will have about 350 kilometers of new transmission 6 line built that will connect into the very 7 substantial infrastructure that exists in this 8 area, improve reliability, and get the power out 9 for export as well. 10 Transmission lines are actually quite 11 flexible. They have to connect to the stations, 12 but in between there is a large amount of 13 flexibility, and picking the routes for these 14 transmission lines is a big part of the 15 environmental assessment process. This route 16 selection balances the biophysical, 17 socio-economic, technical and cost perspectives, 18 and public input is a very big part of this 19 process. That public input has involved local 20 First Nations, Aboriginal people, elected 21 officials, environmental groups, resource users, 22 and a general public in firstly identifying 23 potential routes, and then the selection of the 24 preferred route. The whole aim is to reduce the 25 environmental affects, avoid sensitive areas, and 69 1 try to take advantage of benefits where those come 2 about with the line. 3 Alternative routes were compared based 4 on traditional knowledge, and the Chief gave a 5 number of examples of that this morning. Local 6 input, they were compared based on the effects on 7 people and their activities, effects on the 8 environment, and as I mentioned, the technical 9 limitations and costs. Routes were compared, and 10 ultimately a preferred route was selected which 11 would minimize disruption to the people and the 12 environment, and meet the technical and cost 13 considerations. 14 This map shows the preferred routes. 15 Again, we will start at Thompson. This shows the 16 proposed Birchtree new station. Here is the 17 Wuskwatim site with a new station at the site. 18 Then we have the Snow Lake location with the 19 Herblet Lake existing switching station, and the 20 station at The Pas. The first leg of transmission 21 lines will be built from Thompson into the site, a 22 230 kV, that is 200,000 volts transmission line 23 between Wuskwatim and the station. It is about 24 45 kilometers long. It will be the first line 25 built. We will take power into the site. And it 70 1 will consist of steel structures, about 38 metres 2 high, about 4 per mile, a right-of-way of about 60 3 metres, which is cleared. Some revegetation is 4 allowed, but it is trimmed to avoid contact with 5 the lines. There will also be a 230 kV line from 6 Snow Lake to The Pas, 165 kilometers. Again, the 7 same kind of single tower line. And there will be 8 another line, double line actually in this area 9 here between the station and Snow Lake. So the 10 right-of-way here is a bit larger, 110 metres. 11 These lines are serviced by helicopter in terms of 12 maintenance. And this line will be about 13 137 kilometers, so we have about 350 kilometers of 14 line in total. 15 To give you some idea of costs, the 16 projected in-service costs, considering capital 17 cost and interest during construction, are about 18 800 million for the generation facility, and about 19 180 million for the transmission works. That does 20 not include the Herblet Lake to Ralls Island line 21 which will be required in any event. So we have 22 about a billion dollars of construction, and that 23 clearly relates to a lot of economic activity, and 24 we will be discussing that this afternoon. 25 That concludes an overview of the 71 1 project description, and I will turn it back to 2 Mr. Wojczynski, unless there is questions of 3 clarification. 4 MR. WOJCZYNSKI: Mr. Chairman, if it 5 is acceptable to you, I would like to introduce 6 the system operations presentation by Dave Cormie. 7 Should I proceed? 8 We have seen issues raised in the 9 process, in our review process and in our 10 consultations about system operations and the 11 potential for changes that may result from 12 Wuskwatim operation -- pardon me, from changes in 13 the Manitoba Hydro system operation with the 14 addition of Wuskwatim. By potential changes, 15 parties have referred to the water regime changes, 16 or that is changes in the water level and water 17 flows, resulting from the operation of the 18 Manitoba Hydro power system, with the addition of 19 Wuskwatim. The issues here go to describing how 20 will we, Manitoba Hydro, operate the system. More 21 specifically in the context of the Wuskwatim 22 project, as just described by George Rempel, we 23 are talking about potential changes in the water 24 regime, again the levels and the flows, outside 25 the Wuskwatim water regime study area that George 72 1 has described. In other words, as George had 2 indicated, there will be changes from Early 3 Morning Rapids down to here, and that was studied, 4 but now David is going to be talking about the 5 changes outside of that area. So David is 6 going be -- David Cormie is going to be discussing 7 the regime change outside of the study area that 8 George had talked about. 9 As George had indicated, the Wuskwatim 10 development is not expected to cause any 11 perceptible changes in the CRD water regime 12 outside of the study area; and secondly, is not 13 expected to cause any perceptible changes in the 14 water regime associated with the Lake Winnipeg 15 Regulation operation. 16 In response to questions about these 17 conclusions that we discussed earlier in the 18 process, Manitoba Hydro carried out a more 19 detailed review of possible system issues related 20 to the operation of the power supply with 21 Wuskwatim, and we met in the past year with 22 Pimicikamak advisors and others to discuss the 23 results of this review. 24 This review was lead by Mr. Cormie, 25 who is the division manager responsible for 73 1 operation of the Manitoba Hydro's power system and 2 for its export marketing. He will provide you now 3 with a summary of our review. These details have 4 been reported elsewhere in our filings, and the 5 supplemental filings provided in August and 6 October of 2003, and also are addressed in the 7 subsequent interrogatory responses that we have 8 already filed. I give you Mr. Cormie. 9 MR. CORMIE: Thank you, Ed. 10 As Mr. Wojczynski had indicated, the 11 addition of Wuskwatim is not expected to lead to 12 any perceptible changes in water regimes beyond 13 the study area. In order to help understand why 14 we came to that conclusion, I want to take the 15 opportunity this morning to take you through a 16 description of the Manitoba power system. I want 17 to discuss how we matched the electricity supply 18 to the demand on a daily and hourly and seasonal 19 basis. I want to talk about the major factors 20 that lead to water levels, water level changes. 21 In particular, I want to speak about the operation 22 of the Churchill River Diversion and the Lake 23 Winnipeg Regulation projects. I also want to talk 24 about what our expectation is for water level 25 change as a result of Wuskwatim, and cumulative 74 1 effects. And I will wrap up my presentation in 2 discussing some conclusions. 3 The Manitoba power system has 16 4 generating stations, 14 hydro, two 5 thermal-electric power plants, with the installed 6 capacity of 540 megawatts. Wuskwatim will add 7 200 megawatts to our production capability. It 8 will represent approximately a 4 percent increase 9 in production capability. 10 The 14 hydro stations in the Manitoba 11 Hydro system have an installed capacity of around 12 4,900 megawatts. The stations were installed over 13 the last 100 years. So approximately 14 500 megawatts of generating capacity on the 15 Winnipeg River in southern Manitoba, so 16 approximately 500 megawatts at the Grand Rapids 17 Generating Station at the outlet of Saskatchewan 18 River as it flows into Lake Winnipeg, 19 approximately 500 megawatts between Jenpeg and 20 Kelsey on the upper Nelson River. There is 10 21 megawatts of capability at the two Laurie River 22 stations, on the Laurie River which feeds into the 23 Churchill River, but by far the largest capacity 24 is on the lower Nelson at three large stations 25 with the combined capacity of around 75 1 3,600 megawatts. 2 On the lower Nelson, Manitoba Hydro 3 has 80 percent of its production, hydro production 4 capability. That hydro production is brought 5 south to serve the Manitoba load and the export 6 load primarily through a 600-kilometer high 7 voltage direct current transmission system that 8 collects the generation from the Lower Nelson 9 plants and brings it south to Winnipeg, to our 10 terminal station at Dorsey. At that point the 11 power is converted from direct current into 12 alternating current and is fed into the North 13 American electric grid at that point. 14 A key control point for the Manitoba 15 water system and for the flows on the Nelson River 16 is the Jenpeg control dam. 75 percent of the 17 water that flows down the Nelson River comes from 18 Lake Winnipeg. The dam at Jenpeg allows Manitoba 19 Hydro to control that flow in order to match the 20 supply of energy to the expected demand. It takes 21 approximately 4 to 6 weeks for water released at 22 Jenpeg to work its way down along the Nelson 23 River, through the lakes and along the river, 24 before it arrives at the Lower Nelson plants. So 25 water has to be released in advance of the power 76 1 need, four to six weeks in advance, in 2 anticipation for the demand of power at the Lower 3 Nelson stations. 4 The second critical component of the 5 water management system that feeds the northern 6 generating stations is the Churchill River 7 Diversion. There is a control structure at Notigi 8 which controls the flow of water, controls the 9 diversion of water from the Churchill River, from 10 the Southern Indian Lake reservoir, into the 11 Burntwood River, as it flows towards the Lower 12 Nelson station. There is a control dam at the 13 Missi Falls, at the northern outlook of Southern 14 Indian Lake. That dam operates to block the flow 15 and allow the water to be diverted south into the 16 Nelson River. 17 Similar to the Lake Winnipeg project, 18 it take several weeks, three to four weeks, for 19 water that is released from the Notigi dam to work 20 its way down the Burntwood River and arrive at the 21 Lower Nelson generating stations. 22 In a normal water year, the 23 hydroelectric plants in Manitoba are fully capable 24 of meeting the entire demand of the province and 25 fulfilling all of our obligations in the export 77 1 market. We don't always have high water years. 2 In times of drought, Manitoba Hydro has two, 3 operates two thermal plants at Brandon and 4 Selkirk, and these plants provide 500 megawatts of 5 generating capacity that is independent of the 6 water flows, the rainfalls, and can be operated -- 7 we burn coal and natural gas at the Brandon and 8 Selkirk stations. They operate as backup plants 9 to the hydroelectric system. 10 A critical component of the Manitoba 11 Hydro system are our interconnections to 12 neighboring markets, to Ontario to the east, to 13 Saskatchewan to the west. The prime connection is 14 to the United States. We have 2,000 almost 15 2,200 megawatts of interconnected capability with 16 with the U.S. market. Over 50 percent of Manitoba 17 Hydro's production capability can be sold into the 18 neighboring markets. Not only do these 19 interconnections provide us with an outlet for our 20 surplus power, they also provide for an energy 21 supply during low flow years. And a good example 22 is what we have done this year, become a major 23 importer of power to serve our needs during this 24 low flow period. 25 This chart shows the history of water 78 1 flows, beginning back in 1912 up to present. It 2 is expressed as percent of the long term average 3 flow. I have indicated on this chart -- the 4 lowest flow period on record, extreme drought, 5 when the water supply was as low as 56 percent of 6 the long term average. I have also shown the 7 highest flow years, record flood conditions in 8 1974, when the water supply is as much as 9 142 percent of the long term average; also showing 10 the flood of the century in 1997 -- it wasn't a 11 record, but it was very close to the record of 12 1974 -- and also indicating the flows that we have 13 experienced in the last year where water supply 14 was just above 60 percent of the long term 15 average. What you can see from this chart is that 16 the water supply varies over time, ranging from 17 very low to very high. Manitoba Hydro must be 18 able to meet its obligations to serve its 19 customers even under the lowest flow conditions. 20 And we described those low flow conditions as the 21 dependable flow. It is the flow that we can 22 depend upon to serve our firm power demands. 23 This bar chart shows the production 24 capability of the Manitoba power system as it 25 varies between minimum flows, or the dependable 79 1 flow condition, to the highest flows, as occurred 2 in 1974, and in the middle bar shows what the 3 average production capability of the system is. 4 We described the energy capability of 5 the system in units of kilowatt hours. In a 6 normal water year, the power system will generate 7 around 32 TWh of electricity. In the higher flow 8 years, it increases up to around 36. In the 9 dependable flow condition, the power system is 10 capable of producing 28 TWh hours of electricity. 11 We have talked about the need to be 12 able to serve our firm low requirements even under 13 dependable flow conditions. The red bar indicates 14 that for loads lower than 28, we describe those as 15 firm loads, if the power supply is greater than 16 the dependable capability, we will sell that as 17 interruptible power. It is not there under all 18 flow conditions, so we need the right to interrupt 19 it. We will serve firm loads from the dependable 20 capability. When Manitoba Hydro has insufficient 21 dependable capability to serve its load, at that 22 time we need to consider the construction of new 23 resources. 24 This next chart shows the variation in 25 the demand for power over a year, typical year. 80 1 The power demand varies continuously. There are 2 moment by moment variations in the demand. 3 Customers turn their lights on, they turn them 4 off. We need generating stations that can produce 5 more power when you turn your lights on, we need 6 generating stations that can back down when you 7 turn your lights off. There is an hourly pattern, 8 there is a daily pattern, there is a weekly 9 pattern, and there is a seasonal pattern to the 10 power demand. 11 The hourly and daily matching of the 12 power demand is primarily done at the three Lower 13 Nelson generating stations. The seasonal 14 variation in power demand is also done at the 15 Lower Nelson stations, but it is done by managing 16 the fuel supply, by regulating the flows on the 17 Nelson River with Lake Winnipeg Regulation. What 18 I have shown here is how the power demand on 19 average in the summertime is lower, shown here at 20 an average of around 50 GWh per day. During the 21 fall season the power demand picks up until it 22 reaches a peak in the winter time, in December and 23 January, when people's furnaces are running much 24 more often. That additional energy supply that is 25 needed to serve the load is controlled by 81 1 releasing, is met by releasing more water from 2 Lake Winnipeg, by using our ability to move water 3 from the summer season, when there is a large 4 surplus of water available, to the winter when 5 there is a greater demand for electricity. 6 In addition to matching the demand for 7 Manitoba customers, matching is also required for 8 our export sales. The next chart shows how we 9 expect to match the Wuskwatim output to export 10 sales. If we had an export customer who could 11 take the production of Wuskwatim on a moment by 12 moment basis, as it was produced, there would be a 13 perfect match between our ability to generate it 14 and the export sale. So if Wuskwatim output 15 equals the export sale, there would be no change 16 in overall system operation. The power would be 17 generated, it would flow through the transmission 18 grid, and it would go to the export customer. 19 We don't expect and we don't plan that 20 there will be a perfect match between the 21 production at Wuskwatim and the export sale. 22 There will be an hourly and a daily mismatch. 23 Wuskwatim will produce power at nighttime. 24 Manitoba Hydro intends to store that production at 25 nighttime, concentrate that electricity production 82 1 in the daytime by increasing the generation at the 2 Lower Nelson generating stations. We will not use 3 the Churchill River Diversion or the Lake Winnipeg 4 Regulation project to create the match on a hourly 5 and daily basis. That match will be done at the 6 Lower Nelson stations. 7 The seasonal mismatch between 8 Wuskwatim production and the export sale will be 9 done though with Lake Winnipeg Regulation. It is 10 expected that in the summertime primarily 11 Wuskwatim will produce more power than will be 12 sold to the export customer, and so the additional 13 Wuskwatim generation has the potential to be