2998 1 RP-1999-0044 2 3 THE ONTARIO ENERGY BOARD 4 5 IN THE MATTER OF the Ontario Energy Board Act, 1998; 6 7 AND IN THE MATTER OF an Application by Ontario Hydro 8 Networks Company Inc., for an Order or Orders approving 9 year 2000 transmission cost allocation and rate design. 10 11 12 B E F O R E : 13 R.M. HIGGIN Presiding Member 14 P. VLAHOS Member 15 B. SMITH Member 16 17 18 Hearing held at: 19 2300 Yonge Street, 25th Floor, Hearing Room No. 2 20 Toronto, Ontario on Thursday, March 9, 2000, 21 commencing at 0905 22 23 24 25 HEARING 26 27 VOLUME 16 28 Les Services StenoTran Services Inc. 613-521-0703 2999 1 APPEARANCES 2 JENNIFER LEA/ Counsel to Board Staff 3 MICHAEL LYLE/ 4 5 HAROLD THIESSEN/ Board Staff 6 NABIH MIKHAIL/ 7 COLIN SCHUCK/ 8 KATHI LITT 9 10 DONALD ROGERS/ Ontario Hydro Networks 11 BRYAN BOYCE Company Inc. (OHNC) 12 NAOMI MARTIN 13 14 DAVID BROWN Independent Power Producers 15 Society of Ontario (IPPSO); 16 Ontario Natural Gas 17 Association (ONGA) 18 19 JAMES FISHER/ Association of Major Power 20 KEN SNELSON Consumers in Ontario (AMPCO) 21 22 MICHAEL JANIGAN Vulnerable Energy Consumers 23 Coalition (VECC) 24 25 ROBERT WARREN Consumers Association of 26 Canada (CAC) 27 28 Les Services StenoTran Services Inc. 613-521-0703 3000 1 APPEARANCES (Cont'd) 2 BRUCE CAMPBELL/ Ontario Power Generation 3 JOEL SINGER/ (OPG) 4 JOHN RATTRAY 5 6 LLOYD GREENSPOON NorthWatch 7 8 DAVID POCH Green Energy Coalition (GEC) 9 10 MARK MATTSON/ Energy Probe 11 MIKE HILSON/ 12 TOM ADAMS 13 14 PETER BUDD TransAlta Energy 15 16 MURRAY KLIPPENSTEIN/ Pollution Probe 17 JOANNA BIRENBAUM 18 19 RICHARD STEPHENSON Power Workers Union 20 21 MARK RODGER Toronto Hydro Electric 22 System Ltd. 23 24 PAUL DUMARESQ Ontario Association of Physical 25 Plant Administrators 26 27 SHARON WONG Imperial Oil Ltd. 28 Les Services StenoTran Services Inc. 613-521-0703 3001 1 APPEARANCES (Cont'd) 2 ERIK GOLDSILVER Electrical Contractors 3 Association of the Ontario; 4 Collingwood Public Utilities 5 Commission 6 7 ROGER WHITE Energy Cost Management Inc. 8 9 RICHARD KING Five Nations Energy Inc.; 10 Detroit Edison Co. 11 12 KENNETH LIDDON Suncor Energy Inc. 13 14 GEORGE VEGH/ Amoco Canada (BP Amoco); 15 JEAN-PAUL DESROCHERS Toromont Energy 16 17 KEITH RAWSON/ TransCanada Energy 18 BONNIE ANDRIACHUK 19 20 PAUL VOGEL/ The Chiefs of Ontario 21 CAROL GODBY 22 23 ALAN MARK/ Municipal Electrical 24 KELLY FRIEDMAN/ Association (MEA) 25 MAURICE TUCCI 26 27 28 Les Services StenoTran Services Inc. 613-521-0703 3002 1 APPEARANCES (Cont'd) 2 WENDY EARLE/ Brampton Hydro, Cambridge 3 JAMIE SIDLOFSKY and North Dumfries Hydro, 4 Guelph Hydro, Niagara Falls 5 Hydro, Oakville Hydro, 6 Richmond Hill Hydro, 7 Pickering Hydro and Waterloo 8 North Hydro 9 10 RICK COBURN INCO Limited; Ontario Mining 11 Association 12 13 TED COWAN Ontario Federation of 14 Agriculture 15 16 ALECK DADSON Enron Capital Corp. 17 18 19 20 21 22 23 24 25 26 27 28 Les Services StenoTran Services Inc. 613-521-0703 3003 1 Toronto, Ontario 2 --- Upon resuming on Thursday, March 9, 2000 3 at 0905 4 THE PRESIDING MEMBER: Thank you. Please be 5 seated. 6 Good morning, everybody. Are there some 7 preliminary matters to start with? 8 PRELIMINARY MATTERS 9 MR. BROWN: Dr. Higgin, I have one. When 10 Mr. Fagan appeared before the Board last week, Board 11 staff counsel asked for him to give an undertaking which 12 was F13.3. Mr. Fagan has prepared a response to that 13 undertaking which I would like to file this morning. I 14 gave copies to Board staff and I hope they have passed 15 them up to you. 16 I believe that was the only undertaking given 17 by the IPPSO group. 18 THE PRESIDING MEMBER: Okay. We will look at 19 it. You don't have anything to highlight at this point 20 that you would like to draw our attention to. 21 MR. BROWN: I think the issue was what in his 22 view would be a reasonable minimum bill for networks. 23 At the bottom of the third page, and it all must be read 24 in context but at the bottom of the third page, you see 25 the paragraph "A workable option as a minimum network 26 service bill". Then he gives the formula which he would 27 think would be reasonable. 28 THE PRESIDING MEMBER: Okay. Les Services StenoTran Services Inc. 613-521-0703 3004 Preliminary Matters 1 MR. BROWN: Then really the reasoning leading 2 up to that recommendation is found in the preceding 3 pages. 4 THE PRESIDING MEMBER: Yes. Okay. That's 5 good. Thank you for that. 6 MR. BROWN: And certainly, Dr. Higgin, if the 7 Board has any questions with respect to this undertaking 8 response, Board staff only need contact me and I can 9 forward any questions to Mr. Fagan. 10 THE PRESIDING MEMBER: Okay. That's helpful. 11 Thank you very much. 12 Are there any others? Yes, Ms Wong. 13 MR. WONG: Good morning, Dr. Higgin. 14 This arises out of an answer to an undertaking 15 that Mr. Fisher filed last day on behalf of CXY 16 Chemicals. 17 THE PRESIDING MEMBER: Yes. 18 MR. WONG: It was Undertaking F13.1 which was 19 to advise whether or not CXY Chemicals' contract was a 20 surplus power contract or an LRER contract. 21 THE PRESIDING MEMBER: Yes. 22 MR. WONG: After I saw the transcript, I spoke 23 to Mr. Fisher and asked him to clarify if he could 24 whether or not CXY was an LRER contract under the 25 deferral generation category or the non-deferral. You 26 will note there are two categories. 27 THE PRESIDING MEMBER: Yes. I know. 28 MR. WONG: Mr. Fisher agreed to do that. Les Services StenoTran Services Inc. 613-521-0703 3005 Preliminary Matters 1 Unfortunately I don't see him here today, so I just 2 wanted to make a note of that on the record and hope 3 that he can provide that answer by letter after the 4 close of the hearing perhaps. 5 THE PRESIDING MEMBER: Okay. So he is going 6 to make that inquiry and them come and tell us which 7 category it falls in. 8 MR. WONG: That was my understanding from our 9 conversation. 10 THE PRESIDING MEMBER: Yes. Okay. 11 MR. WONG: And if he can't do that orally 12 today, then I will ask him to do it in writing. 13 THE PRESIDING MEMBER: Right. Thank you. 14 MR. WONG: Thank you, sir. 15 THE PRESIDING MEMBER: Thank you. 16 Any other preliminary matters? No. 17 Okay, then. We will resume with Mr. Boland. 18 Welcome back. I am sure there are other 19 places you would rather be right now. Anyway, you are 20 here. I guess your counsel will introduce the two 21 undertakings that you are going to speak to and then we 22 will go from there. 23 Mr. Campbell. 24 MR. CAMPBELL: Thank you, Mr. Chairman. Mr. 25 Boland is back today to speak to Undertaking F10.1 and 26 F12.1. F12.1 was circulated by e-mail to all of the 27 intervenors and to the Board yesterday. There are 28 copies available over on the side should anyone wish to Les Services StenoTran Services Inc. 613-521-0703 3006 Preliminary Matters 1 pick them up. 2 In bringing Mr. Boland back, I have advised 3 Mr. Boland that he remains under oath under these 4 proceedings. 5 PREVIOUSLY SWORN: BRUCE BOLAND 6 FURTHER EXAMINATION-IN-CHIEF 7 MR. CAMPBELL: With that, I am going to ask 8 him first to again return to the white board and give an 9 illustration comparing the two approaches, OPG's and 10 OHNC's, to the matter of export and wheel-through, using 11 one of the examples that's found in F10.1. 12 MR. BOLAND: What I'm going to use as an 13 example just to illustrate the differences in the 14 methodologies under the two proposals is refer to 15 Undertaking F10.1. On page 4 there's a series of 16 scenarios. That illustrates basically the amount 17 involved under the two different proposals. I am going 18 to use just for purposes of illustration scenario two. 19 If you want to turn that up. 20 I will attempt to illustrate the workings of 21 the various methodologies. I will start with the OPG 22 method. First and foremost, this method relies on the 23 role of the IMO and the transmission rights clearing 24 account that is established in the market rules. 25 That transmission rights clearing account has 26 three fundamental components to begin with. One is the 27 proceeds from the option of the transmission rights. 28 Those options again are going to take place from time to Les Services StenoTran Services Inc. 613-521-0703 3007 OPG PANEL 2, in-ch (Campbell) 1 time by the IMO. To begin with, they are expected to be 2 auctioned off essentially on a quarterly basis and a 3 monthly basis. They will be for periods of time of 4 different duration. 5 That option will take place from time to time. 6 That will create proceeds. The successful bidders in 7 that auction will pay money in. The IMO will record 8 that in the TR clearing account. 9 Now, in this particular example, scenario two, 10 the amount of the TR payment, column F, those are the 11 payments being made into the IMO by the successful 12 bidders, is $180. It's $180 from column F. That's an 13 inflow of money into the TR clearing account. 14 Now, in addition to that, there is the real 15 time operation of the market, the successful bidders 16 over the intertie, and congestion that can happen at any 17 point in time on that hour by hour basis. The 18 congestion payments from the successful exporters are 19 also recorded by the IMO into the TR clearing account. 20 So that's a second component that is operating here in 21 the TR clearing account, the congestion payments from 22 the successful exporters. 23 In the example we have here in scenario two, 24 the export volume shows in column G as 120 megawatt 25 hours, so there is the volume here of 120. The 26 congestion amount shows on column D as $4. So that 27 amount of $480 is also paid into this account. This 28 again is also a positive entry into the transmission Les Services StenoTran Services Inc. 613-521-0703 3008 OPG PANEL 2, in-ch (Campbell) 1 rights clearing account. 2 Now, there is a third fundamental component of 3 the transmission rights clearing account. That is these 4 successful bidders of the TR options have a right to 5 receive their hedge payment, which is the amount of 6 congestion in reverse for the amount that they purchase 7 TRs. In this particular example, scenario two, the 8 illustration shows that the TR purchase in column E was 9 for 60 megawatts. 10 Again, the amount of the congestion is $4. 11 That's $240. In this case this is an outflow of funds 12 from the TR clearing account. So there's $240 being 13 paid out, and this time to the TR holders, so this 14 amount is going to the TR holders. That's what they are 15 entitled to. That is basically the right that they 16 purchased and that's why they bought the TR. 17 What the rules call for is that the balance in 18 this account will be assessed by the IMO Board of 19 Directors from time to time and will be cleared out. 20 The amount in that fund will be paid to the transmission 21 customers in Ontario. It will be credited back to their 22 bills. 23 In this case, the balance in this account is 24 $180 positive from the TR option, $480 from the actual 25 congestion payments that the successful exporters had to 26 pay into the IMO, less the amount that had to be paid 27 out to those successful TR holders and $240 flowing out. 28 That leaves a balance in that account of $420. That Les Services StenoTran Services Inc. 613-521-0703 3009 OPG PANEL 2, in-ch (Campbell) 1 shows up in the undertaking, scenario two, under column 2 H. That's the net congestion payment. That's the 3 balance in the account, $420. 4 Now, what the rules calls for is that those 5 three things would be added up and from time to time the 6 IMO will assess the balance in that account and make a 7 payment out. This is the clearing. They will clear it 8 from time to time. That account will be cleared and 9 that goes to the transmission customers in Ontario. 10 That's what the rules call for. So this goes to the 11 transmission customers in Ontario and on the assumption 12 that the IMO clears out the account fully at this point 13 in time, there would be $240 out, paid out to the 14 transmission customers in Ontario and the account would 15 now have zero balance at that point in time. 16 That's fundamentally the workings under the 17 market rules. 18 MR. CAMPBELL: I think you have $240 going 19 out. I thought your balance was $420. 20 MR. BOLAND: $420. I have a transposition 21 there. Thank you. 22 Now, let's layer on top of that the OPG 23 proposal and then in turn the OHNC proposal and indicate 24 what additionally has to be done. 25 The basis of the OPG proposal is essentially 26 to rely on this mechanism and say this is the most 27 efficient way to encourage export and wheel-through 28 transactions to the benefit of everyone, but because of Les Services StenoTran Services Inc. 613-521-0703 3010 OPG PANEL 2, in-ch (Campbell) 1 the concerns that were expressed that you don't know 2 what this balance is going to lead to in the end, let's 3 ensure, let's make a commitment and that's the 4 fundamental philosophy behind the OPG proposal, let's 5 make a commitment that that balance will be at least a 6 dollar per megawatt hour relative to the amount of trade 7 taking place. 8 So this balance by the IMO, they are going to 9 have to track this on an exporter-by-exporter basis. 10 They have to do that in order to be able to settle and 11 make the proper payments to each exporter, so that will 12 exist. 13 In our simple example here we just have one 14 participant, so that makes it easy. We don't have to 15 worry about it. 16 What we are introducing is this notion of a 17 top up, that the IMO will assess on a monthly basis 18 where each of the exporter is relative to that $1 19 minimum commitment. 20 Now, in this case, the balance, the fourth 21 clear, the balance, is $420 and the amount of trade is 22 $120. So dividing that through, this participant would 23 have sitting in that account the equivalent of $3.50 per 24 megawatt hour. 25 Under the OPG proposal, it would be the IMO's 26 obligation to compare that balance to $1 per megawatt 27 hour. If it was less than $1 per megawatt hour, the 28 exporter would be obliged to make an additional payment Les Services StenoTran Services Inc. 613-521-0703 3011 OPG PANEL 2, in-ch (Campbell) 1 into this account. 2 In this particular case no additional payment 3 is needed because we have already exceeded the $1 4 minimum, but in theory you could, in addition, and this 5 is the addition of what would be required under the OPG 6 proposal, you could have this top up or OPG fee being 7 applied, and then that would become an additional 8 account within the TR clearing account. That's the 9 additional mechanism that would be needed. 10 Just to explain that on a going forward basis 11 in terms of how that would operate, our proposal is that 12 this assessment for each exporter would be done on a 13 monthly basis. There would be, basically, a cumulative 14 running tab of where every exporter is relative to that 15 $1 minimum standard. And if at any time it dropped 16 below $1, they would have to make that top up into the 17 account. 18 Now, how is that different from the OHSC 19 proposal? The OHSC proposal does not rely on the top-up 20 mechanism and it does not rely on the actual working of 21 the TR clearing account. So it doesn't have this. This 22 is strictly related to the OPG proposal. 23 What instead the OHNC proposal does is it has 24 a mandatory $1 fee for the exporter. So a successful 25 exporter does pay a $1 fee. That is collected by the 26 IMO, but it's outside of the TR clearing account, but 27 that $1 fee would be paid in to the IMO. So there's a 28 $1 per megawatt hour fee here and that shows on column Les Services StenoTran Services Inc. 613-521-0703 3012 OPG PANEL 2, in-ch (Campbell) 1 "I", the $120 on column "I". 2 That would be remitted to OHNC on a monthly 3 basis and in this case with $120 of trade, there would 4 be $120 remitted monthly. 5 What OHNC is also requesting the IMO do is 6 send them a list of the record that the IMO has of the 7 holders of the TR. Who were the people that the IMO has 8 on record as holding the TRs? They would send that 9 list. In this case we have only got one exporter. If 10 that exporter is a generator, they would be entitled 11 potentially to receive a credit up to the $1 that they 12 have now paid. 13 Now, in this particular case, the information 14 relates -- I shouldn't say in this particular case. In 15 every case under the OHNC proposal the mechanism is 16 based on the account, this one subaccount within the TR 17 clearing account, what's happening within the TR auction 18 account, and it needs information about who those 19 holders are to determine whether or not they get a 20 credit. 21 So, in this case, assuming that the person 22 holding the TR is the generator and hence entitled to -- 23 an Ontario generator and hence entitled to the credit 24 under the OHNC methodology, OHNC would now compare these 25 two amounts and rebate the lesser of the two amounts. 26 In this case the lesser of the two amounts is the $120. 27 So what they would do is they would have $120 28 being paid to the Ontario generator who held the TR and Les Services StenoTran Services Inc. 613-521-0703 3013 OPG PANEL 2, in-ch (Campbell) 1 did the trade. In this particular case they have 2 received $120. They have paid in this case the full 3 $120 to the generator. There is no remaining funds for 4 them to distribute, but if there were remaining funds, 5 the remaining difference that they still had, the $120 6 less what they paid to the Ontario generators, would be 7 credited back against their following year. They would 8 do this on an annual basis, their following year's 9 revenue requirement and reduce the fees of the 10 transmission customers in Ontario would pay in that 11 subsequent year. So in this particular case that is 12 zero. 13 As I understood from reading the transcript of 14 Dr. Poray in describing this, the costs associated with 15 operating this account would be tracked separately and 16 deducted out before the credit was made, so that the 17 costs would be collected and paid out. In this case 18 there is no payment going back, but notionally the costs 19 would -- if this was $10 and the cost was $3, there 20 would be $7 to go back to the transition customers. 21 MR. CAMPBELL: And as I understand it, in the 22 example that you have given, Mr. Boland, that $120 that 23 goes out to generators under the OHNC proposal would 24 actually be a cheque cut or a payment made to those 25 generators? 26 MR. BOLAND: That's correct. 27 MR. CAMPBELL: If I could get you back to your 28 regular mic I just have two more questions. Les Services StenoTran Services Inc. 613-521-0703 3014 OPG PANEL 2, in-ch (Campbell) 1 Now, have you had the opportunity to discuss 2 these two proposals with IMO representatives? 3 MR. BOLAND: Yes, I have. Yesterday I had a 4 discussion with Mr. Amir Shalaby of the IMO. He's the 5 Manager of Regulatory Affairs at the IMO. 6 MR. CAMPBELL: Could you outline for the 7 Board, please, what his view was? 8 MR. BOLAND: Yes. First, let me explain I 9 talked to Mr. Shalaby and indicated that I was appearing 10 here today and wanted to be in a position to be able to 11 convey impressions back from him, from the IMO, to this 12 Board in terms of their perspective on these two issues. 13 What he said is a series of things. First, 14 the work that they are currently doing in terms of 15 developing the software does not envision an EWT charge 16 of any kind. So whatever methodology is developed, 17 whether it's the OPG, the OHNC or some other direction 18 from the Board with respect to an EWT charge, that would 19 be incremental work beyond the software that they are 20 currently developing. 21 From his perspective, he was desirous of an 22 early decision, so he knew what the decision would be so 23 that they could get moving and that seemed to be his 24 primary driver. 25 In terms of the administration costs of the 26 OPG proposal to the OHNC proposal, the implications of 27 that for the IMO, he was very clear in saying they 28 hadn't attempted to assess that and he couldn't respond Les Services StenoTran Services Inc. 613-521-0703 3015 OPG PANEL 2, in-ch (Campbell) 1 to that today. He had no -- anything in that regard 2 would be speculative, so he couldn't indicate in terms 3 of the burden on the IMO which of the two methodologies 4 in his view would be greater. 5 What he did add as his own opinion was that 6 from his regard the management of the tariff related to 7 transmission more naturally fits with the IMO than it 8 does with the transmission company. He was looking 9 forward and looking in terms of the direction that he is 10 seeing with FERC and their Order 2000 which calls on 11 RTOs to be the tariff administrator, and I think 12 potentially looking forward to a date when in Ontario we 13 could have multiple transmission providers that own 14 interconnections. 15 MR. CAMPBELL: And is the aspect of the OHNC 16 proposal that makes a refund payment only to generators 17 in Ontario likely to cause any concern, in your view? 18 MR. BOLAND: In my view, this would be quite 19 problematic. Everything, that FERC has been attempting 20 to do in introducing competition in the States has been 21 premised on non-discriminatory access and encouraging 22 rules to ensure there's non-discriminatory access. 23 If this Board were to rule in favour of the 24 OHNC methodology -- which is credit back to Ontario 25 generators but not other participants undertaking the 26 same transaction -- that would, I think, in a number of 27 parties' eyes, be seen as a discriminatory treatment, 28 and that would create, I think, some friction between Les Services StenoTran Services Inc. 613-521-0703 3016 OPG PANEL 2, in-ch (Campbell) 1 FERC wondering the basis of the OEB's decision; I think 2 the market participants themselves would find a 3 particular discriminatory aspect like that confusing; 4 and I think -- I work for an Ontario generator and we 5 are the beneficiary of that discrimination and I find it 6 awkward. 7 I think, potentially, it would create some 8 friction between the IMO, in Ontario, and the 9 neighbouring ISOs, in the United States. They have a 10 memorandum of understanding to work together, in terms 11 of integrating market rules and so on. I think that 12 would certainly become an issue for discussion in that 13 form. 14 I also think it could potentially come to the 15 attention of the National Energy Board. 16 The National Energy Board, under their Act, 17 have a certain rule associated with fair market access 18 to eligible Ontario customers dealing with trade that 19 goes to the States and I think it's safe to say that, at 20 this point, it's unclear what the exact mechanism will 21 be, in Ontario, when we have an open market and how fair 22 market access can be provided for in an open market. 23 But on the assumption that a true functioning open 24 market can be a way of achieving fair market access, I 25 think any discriminatory aspect related to how that 26 would operate would be a potential concern to the NEB 27 when reviewing their obligations under fair market 28 access. Les Services StenoTran Services Inc. 613-521-0703 3017 OPG PANEL 2, in-ch (Campbell) 1 So, in summary, I see a lot of problems with 2 that particular component of their proposal and I just 3 don't see a good reason for introducing that 4 discrimination. 5 MR. CAMPBELL: Thank you, Mr. Chairman. Those 6 are my questions of Mr. Boland. 7 THE PRESIDING MEMBER: Thank you, 8 Mr. Campbell. 9 Who has got questions on this, please? 10 Mr. Budd, do you have some? 11 MR. BUDD: Yes, I do. Thank you, sir -- and I 12 will be very brief. 13 FURTHER CROSS-EXAMINATION 14 MR. BUDD: Mr. Boland, in your direct 15 evidence, this morning, you were kind enough to give us 16 some examples here. 17 You also, I think -- if I caught your words 18 and wrote them down accurately -- indicated that you, 19 possibly, one day, envisaged the idea of there being 20 multiple transmission companies. 21 Do you recall that just a moment ago? 22 MR. BOLAND: I recall that. I think I was 23 conveying the reflections of Mr. Shalaby. 24 MR. BUDD: Okay. And part of that new world 25 might be looking forward in, say, five or ten years, if 26 there were multiple transmission companies, there may 27 also be multiple companies who are operating or running 28 the interconnection facilities. Is that right? Les Services StenoTran Services Inc. 613-521-0703 3018 OPG PANEL 2, cr-ex (Budd) 1 MR. BOLAND: I'm not positive what you mean by 2 "running the interconnection facilities", but I think 3 that would probably be one entity; it would be the IMO, 4 or however that entity could evolve into an RTO. 5 MR. BUDD: Okay. 6 MR. BOLAND: I think they would be the 7 administer of the tariff. 8 MR. BUDD: So I take it you have directed your 9 mind to how this is going to work on both sides of the 10 border. Am I right? 11 MR. BOLAND: Well, I have demonstrated how it 12 will work according to the Ontario market rules. I 13 haven't really illustrated how the New York ISO deals 14 with this kind of issue. 15 MR. BUDD: Do you envisage the day when there 16 will be merchant transmission lines -- transmission line 17 companies that are going to have to deal with this? 18 MR. BOLAND: Yes, in all likelihood. 19 MR. BUDD: Can you explain your answer a 20 little more fully. 21 How will that work? What do you see 22 happening? 23 MR. BOLAND: Well, what I see happening, for 24 example, is there will be -- with proper market signals 25 across the intertie, and ultimately, if we decide to go 26 to locational base pricing, even within the province, 27 with those proper price signals, the market participants 28 will have decisions to make, in terms of, "Is it in my Les Services StenoTran Services Inc. 613-521-0703 3019 OPG PANEL 2, cr-ex (Budd) 1 economic interest to continue paying congestion? Does 2 it make sense? At some point does it become cheaper for 3 me to say, `I'm going to build my own line and go 4 through all the necessary approvals and have my own line 5 with my own rights associated with that line?'" And 6 then, the issue would be, "Am I going to keep that line 7 for my own interest? Or is there going to be a 8 mechanism to provide access to that line? Am I going to 9 sell my rights to other participants?" I can see that 10 kind of thing happening down the road. 11 MR. BUDD: And just to wrap up, in terms of 12 the future of how you see OHNC behaving in the 13 marketplace -- they are, of course, regulated now. 14 Correct? 15 MR. BOLAND: Yes. 16 MR. BUDD: And in the future could they also 17 become what I'm going to call a "merchant-based open- 18 access transmission line" instead of being strictly 19 regulated? 20 How do you see that unfolding? 21 MR. BOLAND: I haven't thought about that. I 22 wouldn't envision OHNC doing that as part of the 23 regulated company. 24 I would think if they were going to undertake 25 a commercial activity and build a merchant transmission 26 line, when we get to that point, I would think they 27 would do that through a different subsidiary, something 28 that's unregulated. But your question is the first time Les Services StenoTran Services Inc. 613-521-0703 3020 OPG PANEL 2, cr-ex (Budd) 1 I have thought about that. 2 MR. BUDD: Thank you, Mr. Boland. 3 Thank you, Mr. Chair. Those are all the 4 questions I have. 5 THE PRESIDING MEMBER: Thank you, Mr. Budd. 6 Go to Board staff, please. 7 MR. LYLE: Thank you, Mr. Chair. 8 EXAMINATION 9 MR. LYLE: Mr. Boland, when you previously 10 appeared, I believe your evidence, at that time, was 11 that if there was $1 a megawatt hour pre-set EWT charge, 12 that that would mean that congestion payments would also 13 decline by $1 a megawatt hour. Is that correct? 14 MR. BOLAND: Yes. 15 MR. LYLE: Now, when I turn to Undertaking 16 F10.1, page 3, on the third paragraph of that page, the 17 second sentence, you say that: 18 "OHNC's proposal --" 19 And I take it, at this point in time, you are referring 20 to the rebate portion of the proposal: 21 "-- would encourage generators who intend 22 to export to purchase TRs and to pay at 23 least $1 a megawatt hour for them." 24 MR. BOLAND: Under the OHNC proposal -- 25 MR. LYLE: That's correct. 26 MR. BOLAND: -- that's correct. 27 MR. LYLE: If we were to go with the OHNC 28 proposal, with the rebate built in, does that mean that Les Services StenoTran Services Inc. 613-521-0703 3021 OPG PANEL 2, ex (Lyle) 1 congestion payments would not be reduced by $1 a 2 megawatt hour because people would assume that they are 3 going to hedge and they are going to not end up paying 4 the EWT charge? 5 MR. BOLAND: Well, I think what would happen 6 is for those -- for those generators in Ontario looking 7 at the TR market, they would say, "I have got to pay an 8 addition $1 fee", under the OHNC proposal; so they would 9 take that $1 into account. But, then, if they intended 10 to export, if they could build that in with some 11 confidence that they were actually planning and -- and 12 if they know they know they get that dollar back -- 13 MR. LYLE: Yes. 14 MR. BOLAND: -- so if they actually had that 15 intention, they could ignore the $1 fee, in that regard. 16 But they would also have to -- they would have to be -- 17 they would have to own the TR because the only way, 18 under the OHNC recommendation, that you can get a rebate 19 is if you have actually participated in the TR market. 20 MR. LYLE: Now, I notice in the scenario that 21 you sketched out on the board, and also the scenarios -- 22 the other scenarios that you set out in Table 1, on 23 page 4, of the undertaking response, there's no 24 adjustment in the net congestion payments between the 25 OHNC proposal and the OPG proposal. 26 MR. BOLAND: That's right. Up to that point, 27 which is Column (h) in the examples on Table 1 of 28 Undertaking F10.1, you are really just setting out the Les Services StenoTran Services Inc. 613-521-0703 3022 OPG PANEL 2, ex (Lyle) 1 facts and showing the operation of the TR clearing 2 account, as envisioned by the market rules. At that 3 point you haven't introduced a methodology change. 4 MR. LYLE: Well, perhaps what you could so, 5 sir, if we were to assume that there's in fact no rebate 6 mechanism but a $1 EWT charge, could you undertake to 7 run those five scenarios under that assumption, with the 8 assumption, also, then, that net congestion payments 9 would decline accordingly? 10 Do you understand what I'm...? 11 MR. BOLAND: I'm doing this only for the OHNC 12 proposal? Because it's the -- 13 MR. LYLE: Well, certainly it's in a modified 14 OHNC proposal with no rebate. So all this is is a flat 15 $1 EWT charge. 16 And do the calculations under that 17 methodology, building in the assumption that a flat $1 18 EWT charge is going to lead people to reduce the 19 congestion payments they are willing to make to get a 20 cross intertie. 21 MR. BOLAND: Okay, we can certainly do that. 22 MR. LYLE: Okay. We will make that 23 Undertaking F16.1. Is that acceptable? 24 THE PRESIDING MEMBER: Yes. 25 UNDERTAKING NO. F16.1: Mr. Boland to 26 provide five scenarios with adjustments 27 in the net congestion payments between 28 the OHNC proposal and the OPG proposal: Les Services StenoTran Services Inc. 613-521-0703 3023 OPG PANEL 2, ex (Lyle) 1 (1) assuming that there is no rebate 2 mechanism but a $1 EWT charge; and (2) 3 assuming that the net congestion payments 4 declined, accordingly 5 MR. LYLE: And just finally, sir, I believe it 6 is also your evidence that there's no logical 7 distinction in just having the OHNC rebate apply to 8 actual generators that should apply across the board to 9 anybody who's involved in an export transaction? 10 MR. BOLAND: Yes. I believe any rebate 11 mechanism should be nondiscriminatory. 12 MR. LYLE: Now, if we were to move to that, 13 though, isn't it fair to say that the likelihood of 14 there being any surplus left in the EWT account to 15 rebate back to transmissions customers is pretty slim? 16 Isn't everybody going to pay the $1 a megawatt hour for 17 a transmission right so that they get their EWT charge 18 rebated back? 19 MR. BOLAND: Under the OHNC proposal? If they 20 get the rebate back? If they were successful in the TR 21 market isn't every -- aren't those participants 22 encouraged to bid up to the dollar? 23 MR. LYLE: Yes. What I'm saying is -- 24 MR. BOLAND: Yes. 25 MR. LYLE: -- your evidence is the 26 participants are encourage to bid up to $1 to get -- at 27 least $1 to get the transmission -- 28 MR. BOLAND: Well, are those participants Les Services StenoTran Services Inc. 613-521-0703 3024 OPG PANEL 2, ex (Lyle) 1 eligible for the rebate? 2 MR. LYLE: No, assuming that everybody is 3 eligible for the rebate. 4 MR. BOLAND: Everybody is. I'm sorry. Okay. 5 THE COURT REPORTER: Gentlemen, I'm sorry, one 6 voice at a time, please. 7 MR. LYLE: Assume everybody is eligible for 8 the rebate. 9 MR. BOLAND: Yes, okay. 10 MR. LYLE: Assuming that that means those 11 participants are willing to pay at least $1 a megawatt 12 hour for the transmission right. Is there anything 13 going to be left over in the EWT account for the 14 transmission customers? 15 --- Pause 16 MR. BOLAND: I think you are right. If you 17 are only looking at the EWT account, if you pay $1 in 18 and everybody gets a rebate of $1, there is a mechanism 19 under the OHNC proposal that looks at the TR balance as 20 well. 21 But just ignoring that, if you say you pay 22 $1 in and you pay $1 out, I would agree with you for 23 that TWR account there is nothing there. But that is 24 just the EWT account, there is still the entire TR 25 clearing account related to the congestion. 26 MR. LYLE: Yes. 27 MR. CAMPBELL: Mr. Lyle, in your question, 28 just so I'm clear, you must be talking about a situation Les Services StenoTran Services Inc. 613-521-0703 3025 OPG PANEL 2, ex (Lyle) 1 where the trade is fully hedged? 2 MR. LYLE: That's correct, Mr. Campbell. 3 I'm also assuming that people are going to 4 want to fully hedge the transaction if in fact they know 5 that they are going to get a rebate back if they fully 6 hedge the transaction. 7 MR. BOLAND: They may want to. They may not 8 always have that opportunity. 9 The intention is that the IMO will be 10 assessing the capability over the line at any point in 11 time and it will auction off an amount of TRs that would 12 be conservative relative to the amount of their 13 estimate, and so at any point of time, if their 14 expectations are correct -- their expectations could be 15 wrong, but if there expectations are correct -- there 16 would be some amount of trade capability that would be 17 unhedged. 18 MR. LYLE: Those are all my questions. 19 THE PRESIDING MEMBER: Thank you, Mr. Lyle. 20 We will go to Mr. Rogers, please. 21 MR. ROGERS: Thank you, Dr. Higgin. 22 I just have a few questions. 23 FURTHER CROSS-EXAMINATION 24 MR. ROGERS: Just following up on what 25 Mr. Lyle had to say, Mr. Boland, you read the transcript 26 and you saw that Dr. Poray said that the Applicant's 27 proposal was based, to a large extent, on stakeholder 28 input. Do you recall that? Les Services StenoTran Services Inc. 613-521-0703 3026 OPG PANEL 2, cr-ex (Rogers) 1 MR. BOLAND: Yes, I did read that. 2 MR. ROGERS: It's rebate mechanism was in 3 response to stakeholder input. 4 MR. BOLAND: I heard that, yes. 5 MR. ROGERS: Your counsel and you have been 6 very critical of this rebate proposal by OHNC in this 7 hearing. Is that fair to say? 8 MR. BOLAND: Yes. I think the disagreement is 9 sometimes blown out of proportion. I mean, if we look 10 at the big picture here, our proposals are really very 11 similar in terms of we are relying on the market rules, 12 we are relying on congestion to be the primary 13 mechanism -- 14 MR. ROGERS: Yes. 15 MR. BOLAND: -- and there is some discrepancy 16 with respect to this $1 minimum. 17 MR. ROGERS: I understand. 18 MR. BOLAND: On that particular aspect we are 19 obviously in disagreement. 20 MR. ROGERS: Well, as I have heard it, 21 listening to this and in view of the fact that their 22 proposal was based, to some extent, upon stakeholder 23 input, my client obviously is interested in receiving 24 that input through this hearing. 25 My understanding is that your company opposes 26 my client's proposal for a number of reasons, one of 27 which is that the rebate proposed is discriminatory. 28 MR. BOLAND: That's correct. Les Services StenoTran Services Inc. 613-521-0703 3027 OPG PANEL 2, cr-ex (Rogers) 1 MR. ROGERS: You think their proposal, that is 2 OHNC's, would be improved if all exporters got the 3 rebate? 4 MR. BOLAND: Yes, that would be an 5 improvement. 6 MR. ROGERS: Not just generators. 7 MR. BOLAND: That would be an improvement. 8 MR. ROGERS: All right. 9 You have also been critical of it because it 10 is complex and it makes the administration of these 11 transactions more complex than it needs to be? 12 MR. BOLAND: Yes. I think I would 13 characterize that slightly differently and say that it 14 gets OHNC involved in a whole set of settlement streams 15 and makes it obtain -- requiring a whole set of 16 information that they otherwise wouldn't require and 17 then that entire mechanism would have to be set up and 18 that would have a cost associated with it. 19 MR. ROGERS: Mr. Campbell spent quite a bit of 20 time cross-examining Dr. Poray about that. 21 The OHNC proposal would be considerably 22 simplified if the rebate mechanism were taken out of the 23 equation altogether, wouldn't it, and there was no 24 rebate? Just take the $1 -- 25 MR. BOLAND: I think it would be simplified. 26 MR. ROGERS: Just take the $1 and keep it and 27 credit it to the transmission system to help pay for the 28 embedded sunk costs? Les Services StenoTran Services Inc. 613-521-0703 3028 OPG PANEL 2, cr-ex (Rogers) 1 MR. BOLAND: It would be simplified. I'm not 2 sure, then, that the proposal that OHNC is proposing 3 would achieve its objectives. I mean, the objective 4 under the OPG proposal very much is: Let's let the 5 market work and if for some reason the market is less 6 than $1 we are going to make sure that the exporters top 7 it up to $1. 8 The objective underlying the OHNC proposal is 9 less clear to me and I'm not sure -- given that I'm 10 unclear on what the objective -- I mean, I can do the 11 math and I can understand how the math falls out, but at 12 the end I'm not quite sure what the underlying premise 13 is that it's attempting to accomplish. 14 So if you took away the credit, presumably 15 it's there for some reason and I'm not sure what you 16 would have. 17 MR. ROGERS: Well, suppose the object was to 18 try to respond to stakeholder input to the effect that 19 some contribution should be made by exporters to pay for 20 the sunk costs of the transmission system and that they 21 ought not to be given a free ride. 22 MR. BOLAND: I think we all -- "all", maybe I 23 shouldn't say that. I think it is certainly our 24 position, and I think the position of your client as 25 well, is the free ride issue is not involved here. The 26 congestion mechanism is set up and there will be amounts 27 paid back to transmission customers. 28 The mechanism is quite different than what you Les Services StenoTran Services Inc. 613-521-0703 3029 OPG PANEL 2, cr-ex (Rogers) 1 have for the domestic customers in Ontario, but the 2 process is very much there, under either our proposal or 3 your client's proposal. 4 MR. ROGERS: Well, that could be, but you have 5 heard other -- other participants don't necessarily 6 agree that that mechanism returns enough to the 7 transmission system. You understand that, don't you? 8 MR. BOLAND: I understand that, but my 9 comeback to that is you can't get water from a stone. I 10 mean, if the congestion value, if the value of trade to 11 the participants is only $2, you can say "I'm going to 12 slap a $5 charge on it", but you are going to do 13 absolutely no good. The trade won't take place. Rather 14 than getting a shared benefit related to that 15 $2 congestion you will get absolutely nothing. 16 MR. ROGERS: Well, perhaps so. Perhaps so. 17 In any event, I just want to understand your 18 company's position: It is that my client's proposal, 19 although you don't agree with it, would be improved if 20 the rebate were given to all exporters, number one. 21 Two, it would be greatly simplified if the 22 rebate mechanism was taken out of the equation all 23 together? 24 MR. BOLAND: I agree with that, and I think 25 the remaining difficulty that I would have at that point 26 is why your client's proposal is based not at looking at 27 the total picture of what the transmission customer sees 28 related to that clearing account, but only related to Les Services StenoTran Services Inc. 613-521-0703 3030 OPG PANEL 2, cr-ex (Rogers) 1 what is happening in the TR market and basing the credit 2 only on the TR market. Even if you remove the 3 discriminatory aspects would still create some 4 distortion in that TR market in terms of the bidding to 5 the $1. 6 I think, more fundamentally, in the export 7 market if you bought the TR, you know, bidding in the 8 export market into that intertie, if you are successful 9 you are going to get a $1 rebate. So you can bid 10 $1 higher than everyone in the export market who doesn't 11 hold a TR. 12 So I still think, if you were looking from my 13 perspective to improve your client's proposal further, 14 you would re-examine the issue of why only the TR 15 account is being examined rather than looking at the 16 whole of what is going back to the transmission customer 17 through the TR clearing account. 18 MR. ROGERS: Very well. We will consider 19 that. 20 One last question. 21 I asked you when you were here last in your 22 undertaking answer to set out for us why this is so 23 important to your company and what the impact of a 24 $1 charge would be on your company. I don't see that in 25 the examples that you have given us, but maybe I have 26 not understood it. 27 What I want to know is: What effect does an 28 export charge of $1 or $2, or whatever the Board might Les Services StenoTran Services Inc. 613-521-0703 3031 OPG PANEL 2, cr-ex (Rogers) 1 decide, have on your company's profitability in these 2 transactions? 3 MR. BOLAND: I think fundamentally it goes 4 back to what I was attempting to illustrate in my first 5 appearance in front of the Board, and that is that I 6 think the market will quite efficiently capture, if 7 there is a $3 charge or a $2 charge, they will build 8 that in. So you won't see an incremental cost in that 9 regard. 10 I think congestion amounts will go down by the 11 amount that the EWT charge goes up. 12 So that the problem becomes, wherever you set 13 that level of EWT charge you can guarantee that no trade 14 is going to take place below that level. So you are 15 basically setting a threshold and saying "No trade below 16 $4 is worthwhile and I am willing to forego any gain to 17 either the market participants or the transmission 18 customers in Ontario for the improved optics of being 19 able to say I have a minimum $4 charge." 20 So you are creating an environmental loss for 21 everyone in Ontario in being able to have that optic. 22 MR. ROGERS: I would like to focus on your 23 company so I can understand this. My client's proposal 24 would impact your company's profitability, would it? 25 MR. BOLAND: Yes, potentially. I think the 26 way you phrased the question earlier was more in terms 27 of the fixed charge. There are subtle differences in 28 terms of how your proposal would affect our Les Services StenoTran Services Inc. 613-521-0703 3032 OPG PANEL 2, cr-ex (Rogers) 1 profitability versus ours. We talked about the 2 distortions, but they are still basically based on a 3 dollar. 4 I think in us coming forward with a dollar 5 even ourselves, we have said, you know, at that level, 6 that's a fairly low margin, and if you are cutting off 7 that trade, that's not perhaps a huge, huge difficulty 8 for either us or my company or the transmission 9 customers in Ontario. 10 As that amount starts to go up, you are 11 looking at higher and higher volumes of trade. 12 MR. ROGERS: Well, I'm sorry to be so thick 13 about this, but is the answer then that if my client's 14 proposal was accepted by the Board, it will have a 15 negative financial impact on your company compared to 16 your own? 17 MR. BOLAND: Well, you know, with the 18 discrimination in favour of Ontario owned generation 19 companies, we might actually be at a slight advantage 20 under your proposal in some ways relative to other 21 participants. I think the rebate mechanism is not as 22 favourable because of the way you do the carry-over 23 versus the way we do the carry-over. We do a cumulative 24 carry-over and that will have implications down the road 25 versus you doing annual true-up. 26 I think the discriminatory aspect means I'm 27 not positive. 28 MR. ROGERS: I see. On the other side of the Les Services StenoTran Services Inc. 613-521-0703 3033 OPG PANEL 2, cr-ex (Rogers) 1 coin, if the Board were to decide that there should be a 2 charge on megawatt hours, say a dollar or whatever the 3 Board decides, but no rebate, that obviously would 4 impact negatively on your company's bottom line. 5 MR. BOLAND: Well, any trade that might take 6 place at 90 cents or 80 cents and have a profit 7 associated with it would no longer take place. That's 8 correct. 9 MR. ROGERS: And when trades did take place, 10 you would be neutral, it wouldn't matter. Is that what 11 you are saying? Let's suppose the trade does take place 12 and there's a one dollar charge exacted which flows back 13 simply to the transmission customers, there's no rebate 14 to generators, just a one dollar charge that goes to my 15 client and is credited to the transmission system to pay 16 for sunk costs. Does your client lose a dollar on that 17 transaction? 18 MR. BOLAND: No. I think if the trade goes 19 ahead, the exporter in this case -- we are using my 20 company, we are using OPG -- we would reflect that 21 dollar into our bids over the intertie. You are not 22 going to see an incremental payment from OPG in that 23 regard or any other exporter and you are not going to 24 see an incremental amount of funds available to pay to 25 the transmission customer in Ontario. You are just 26 doing it through two different vehicles rather than one. 27 Rather than relying solely on the operation of 28 the transmission clearing account, you would rely on Les Services StenoTran Services Inc. 613-521-0703 3034 OPG PANEL 2, cr-ex (Rogers) 1 that plus the EWT charge, but the transmission clearing 2 account is going to adjust what is reflect what is 3 happening with the EWT charge. 4 MR. ROGERS: One more time and I will leave 5 it. Assume that there's no rebate, it's just a straight 6 dollar per megawatt per hour charge on an export sale, 7 your company generates power and exports it. One dollar 8 per megawatt hour is credited back to OHNC to be 9 credited to sunk transmission costs. All right? 10 Now, under that scenario, are you telling me 11 that your company's profit would be the same whether or 12 not there is a one dollar charge? 13 MR. BOLAND: No. There would be trades that 14 would no longer take place that otherwise would. 15 MR. ROGERS: I'm assuming the trade takes 16 place. 17 MR. BOLAND: Assuming the trade takes place, 18 which mean you are assuming that there is congestion of 19 more than a dollar to make the trade worth while, then 20 what would happen is my company would recognize that one 21 dollar fee in making its bid over the interties, as 22 would all the other market participants. 23 You would expect that market clearing price at 24 that export zone to clear one dollar less, reflecting 25 the one dollar rebate, leaving one dollar's worth less 26 in this clearing account to go back to the transmission 27 customer in Ontario. 28 You add that one dollar -- you reflect the Les Services StenoTran Services Inc. 613-521-0703 3035 OPG PANEL 2, cr-ex (Rogers) 1 fact there is one dollar less there. Add the one dollar 2 that your client has collected through the EWT charge 3 and the transmission customer's whole and the exporter 4 has paid the same amount when the traded has gone ahead. 5 MR. ROGERS: Amazing. So it doesn't matter 6 then. 7 MR. BOLAND: It matters very much for when the 8 trade -- you are setting a hurdle below which no trade 9 will take place. 10 MR. ROGERS: I see. But if the trade takes 11 place, everybody is indifferent. 12 MR. BOLAND: If congestion is high enough that 13 the trade would take place, then there is basically an 14 indifference. 15 MR. ROGERS: I will have about that. Thank 16 you very much. 17 MR. BOLAND: Thank you, sir. 18 THE PRESIDING MEMBER: The Board may have some 19 questions. No. We don't. 20 I think you just answered the question that 21 was in my mind about if we went to a separate one dollar 22 flat fee, which would not involve the TR clearing. You 23 answered that one. That was the question. 24 So, Mr. Campbell, do you have any redirect on 25 this or is that okay? 26 MR. CAMPBELL: No, we don't. Thank you very 27 much. 28 THE PRESIDING MEMBER: All right. Thank you, Les Services StenoTran Services Inc. 613-521-0703 3036 OPG PANEL 2, cr-ex (Rogers) 1 Mr. Boland for coming. You are now excused and you are 2 no longer oath. You can get about with your life. 3 Thank you. 4 MR. BOLAND: Thank you. 5 THE PRESIDING MEMBER: We will then move on to 6 the schedule again. I will ask Mr. Vogel and Ms Godby 7 if they would like to call up their witness panel, their 8 first witness panel, and then we will proceed. 9 Thank you. 10 MR. VOGEL: Thank you, Mr. Chair. I do have a 11 brief opening with respect to the position of the First 12 Nations on this application. 13 Mr. Chair, Panel Members, this intervention 14 has been brought by the Chiefs of Ontario. The Chiefs 15 of Ontario represents the interests of 134 First Nations 16 in Ontario and includes the more than 30 individual 17 First Nations who are listed on the Notice of 18 Intervention as participating either through their 19 regional organizations or individually themselves. 20 The 1997 provincial white paper, which has 21 been referred to in the context of OHNC's evidence, set 22 out the basis for the restructuring of the electricity 23 industry in Ontario. At page 11 of that white paper, 24 the government stated that a key reform objective is to 25 ensure that all Ontarians enjoy the benefits of 26 competition as soon as possible. 27 The government recognized at page 12 of that 28 white paper that for that to happen, there must be a Les Services StenoTran Services Inc. 613-521-0703 3037 1 level playing field. 2 The position of the First Nations on this 3 application, Mr. Chair, is that the First Nations want 4 to participate and they want to take advantage of the 5 opportunities which are afforded by the open market. 6 They want their share of the benefits of competition. 7 Considering their geographic locations, 8 considering the natural resources that are available to 9 them within their reserves, within their traditional 10 territories, considering the certain tax advantages 11 which they have, they are positioned to do so. They are 12 positioned to be able to take advantage of these 13 opportunities, but for that to happen, as the province 14 has said in the white paper, there must be a level 15 playing field. 16 For the First Nations in the context of this 17 application, which deals with the transmission rate 18 structure and cost recovery, for that to happen, in my 19 submission, consideration must be given by the Board to 20 the fact that the First Nations are starting from an 21 unequal position as a result of the history of the 22 development of generation and transmission facilities in 23 this province. 24 With respect to issue ten and the special 25 consideration which the Board -- which the First Nations 26 are requesting of the Board, we will be calling two 27 witness panels to address that issue. 28 The first witness panel will be addressing Les Services StenoTran Services Inc. 613-521-0703 3038 1 this current unique prejudice, a disadvantaged position 2 which the First Nations are in as we enter this new 3 competitive market as a result of the prejudice which 4 they have suffered in the history of development of 5 transmission and generation in the province. 6 The second panel will then address the 7 opportunities that are available to the First Nations 8 and the nature of the special consideration being 9 requested by direction of the Board in order for First 10 Nations to be able to take advantage of those 11 opportunities. 12 In requesting this special consideration from 13 the Board, as I said, the First Nations are requesting 14 that the Board consider where they are starting from, 15 their unique disadvantaged position as a result of the 16 history in this province. 17 Secondly, however, the First Nations are 18 asking the Board to consider that as a matter of law and 19 their constitutional protection of their aboriginal 20 rights and under OHNC's own policy whereby First Nations 21 are to be treated not simply as a special interest 22 group, but rather under that policy and under the 23 statement of political relationship which has been 24 entered into with the province and under the 25 Constitution of Canada. 26 My submission to you is that OHNC's 27 relationship with the First Nations must reflect and be 28 based upon a recognition of these aboriginal and treaty Les Services StenoTran Services Inc. 613-521-0703 3039 1 rights which have been ignored in the past and have not 2 been part of the relationship of the First Nations with 3 Hydro in the development of generation and transmission 4 in the project. 5 Thirdly, the First Nations are asking that the 6 Board consider that since many or most First Nations are 7 customers of OHNC D, and the results of the dismantling 8 of the power district as proposed in OHNC's proposal and 9 the acknowledgement transfer of this $18 million of cost 10 to the remaining customers of OHNC D, which will result 11 in an increase in cost to those customers of 12 per 12 cent, well in excess of the 5 per cent we have heard 13 where OHNC considers to be the maximum of the 14 acceptable, there does not appear to be anything in the 15 proposals advanced by OHNC which would address that 16 prejudice to those customers as customers of OHNC D. 17 Finally, First Nations are asking the Board to 18 consider that in fact, even under OHNC's proposal and 19 other proposals advanced by intervenors in these 20 proceedings, there is provision within those, if allowed 21 by the Board, for special treatment of special interests 22 such as existing generation and the net billing 23 available to customers of existing generation, the 24 exemption from connection costs for existing generation, 25 the treatment of OHNC -- Ontario Hydro contracts. 26 So there are other examples within these 27 proceedings itself of OHNC and other intervenors 28 requesting that the Board consider special circumstances Les Services StenoTran Services Inc. 613-521-0703 3040 1 as justifying special treatment and on all of those 2 bases the First Nations are requesting special 3 consideration from the Board here in order, as I say, to 4 level the playing field and in order to allow these 5 First Nations to take advantage of the opportunities in 6 the marketplace. 7 With that, I would then propose to call the 8 first panel dealing with the present disadvantage 9 position of First Nations. Ms Godby will be leading the 10 evidence on this panel. Perhaps that panel could come 11 forward. 12 Panel, you will have to be sworn first by the 13 Board. 14 SWORN: THOMAS BRESSETTE 15 SWORN: MARY ANNE SEABROOK 16 SWORN: DAN KELLY 17 SWORN: BRUCE CROFTS 18 EXAMINATION-IN-CHIEF 19 MS GODBY: Good morning, Mr. Chair, members of 20 the Board. Good morning, panel. 21 What we are going to do today is start off 22 with the Regional Chief, Tom Bressette, and then Mary 23 Anne Seabrook. She's from Red Rock First Nation. Dan 24 Kelly from Onegaming and then Bruce Crofts. So if I 25 could start with the Regional Chief. 26 Chief Bressette, the saying goes they saved 27 the best for last and I guess in this case it's true. 28 You are the Regional Chief of Ontario for the First Les Services StenoTran Services Inc. 613-521-0703 3041 COO PANEL 1, in-ch (Godby) 1 Nations here? 2 MR. BRESSETTE: Yes. 3 MS GODBY: And for those of us that aren't 4 familiar with the political structure of that 5 organization can you tell me what that means? 6 MR. BRESSETTE: I was elected by 134 chiefs in 7 the Province of Ontario to represent them in matters 8 such as this and speak in our interest and to uphold and 9 protect our treaty rights and the obligations the 10 government have towards our people. 11 MS GODBY: And you have held this position, I 12 understand, Chief Bressette, for the past two and a half 13 years? 14 MR. BRESSETTE: Yes. 15 MS GODBY: And before that you were chief of 16 your community out at Kettle and Stoney Point for eight 17 years. Is that correct? 18 MR. BRESSETTE: Yes. 19 MS GODBY: And as well, at the same time, you 20 also served as the Chair of the London District Chief's 21 Council? 22 MR. BRESSETTE: Yes, I did. 23 MS GODBY: And is that a tribal council in 24 that area? 25 MR. BRESSETTE: There's a tribal council 26 there. It's called the Southern First Nations 27 Secretariat that's an administrative organization for 28 delivering programs and services. The London District Les Services StenoTran Services Inc. 613-521-0703 3042 COO PANEL 1, in-ch (Godby) 1 Chief's Council is a political organization comprised of 2 seven First Nations and their chiefs in the London area. 3 MS GODBY: And you also served as the 4 Southwest Regional Grand Chief for the Union of Ontario 5 Indians. When was that, Chief Bressette? 6 MR. BRESSETTE: That was I guess a year and a 7 half after I was elected chief, I was elected to be the 8 Southwest Regional Grand Chief for the Union of Ontario 9 Indians, which represents 43 First Nation communities, 10 encompassing the Lake Huron area, up towards Lake 11 Superior. 12 MS GODBY: And in your capacity both as chief 13 of your community and also as the Regional Chief of 14 Ontario, have you had an opportunity to familiarize 15 yourself in a general way with some of the issues that 16 First Nations have had with respect to hydro about the 17 predecessor corporation and the corporation as it exists 18 today? 19 MR. BRESSETTE: Yes, we have. 20 MS GODBY: And before coming here today, Chief 21 Bressette, did you have an opportunity to review your 22 prefiled evidence? 23 MR. BRESSETTE: Yes, I did. 24 MS GODBY: That appears as Exhibit E, tab 30, 25 in the application, Mr. Chair. 26 The statements that you have made therein are 27 true and accurate, Chief Bressette? 28 MR. BRESSETTE: Yes. Les Services StenoTran Services Inc. 613-521-0703 3043 COO PANEL 1, in-ch (Godby) 1 MS GODBY: And we can adopt that evidence here 2 today for the purposes of this proceeding? 3 MR. BRESSETTE: Yes, you can. 4 MS GODBY: In your prefiled evidence, Chief 5 Bressette, you indicate that First Nations have a unique 6 place. One of the reasons why you say this is because 7 of their treaties. Can you explain that please? 8 MR. BRESSETTE: Well, our treaties were about 9 peace and friendship. They were not about conquest nor 10 us giving up the land under our feet. We agreed to 11 share this land with people who came from across the 12 ocean and were sort of lost, looking for India. So when 13 they landed here they called us Indians. I am glad they 14 weren't looking for Turkey because they might have 15 called us turkeys. 16 We have that relationship based on a mutual 17 respect and honour for each other. We assisted people 18 when they first came here to learn how to live in the 19 climate. We taught them our medicine. We showed them 20 the kind of food that our people harvested and ate and 21 helped them to survive on the land. 22 They wanted guides and our people showed them 23 traversing the countryside, after which we entered into 24 treaties because I guess the people of the day were told 25 by their king to make treaties with us. 26 MS GODBY: And did those treaties guarantee 27 certain rights and benefits to your people and also to 28 the settlers? Les Services StenoTran Services Inc. 613-521-0703 3044 COO PANEL 1, in-ch (Godby) 1 MR. BRESSETTE: Yes, they did. We agreed to 2 share the resources of this country and to live and to 3 respect each other's ways. We were supposed to respect 4 the way they lived and they were to respect the way we 5 lived and uphold our laws and our customs, and we in 6 turn did not interfere in their affairs. 7 MS GODBY: In your opinion, Chief Bressette, 8 has the spirit and intent of these agreements been 9 upheld? 10 MR. BRESSETTE: I think at the beginning they 11 were, but as more people came and I guess their 12 ignorance of their treaty process by not being educated 13 or told about what they meant, they have sort of eroded 14 and been left I guess collecting dust. As many people 15 say, they are historic documents and why should they be 16 honoured today? 17 Well, to us those are sacred agreements that 18 our people made and the way that we honour our 19 agreements we continue to uphold and live by those 20 treaties, whereby other people have ignored the 21 obligations that were made during those treaty making 22 times. 23 MS GODBY: Consequently, what happened to your 24 land base and your access to resources on your land 25 base? 26 MR. BRESSETTE: When we initiated treaties it 27 was our traditional territories, land we were accustomed 28 to making a livelihood, gathering foods, trapping, Les Services StenoTran Services Inc. 613-521-0703 3045 COO PANEL 1, in-ch (Godby) 1 hunting and fishing. When more people came they wanted 2 title to land. They wanted to own the land, so by and 3 large they sort of encroached more and more until our 4 reserves became the size of postage stamps. I guess 5 under the legal framework that they framed, and we had 6 nothing to do with, they created documents that said you 7 only own as much land as the size of a postage stamp as 8 far as we are concerned. I think out of the whole of 9 Canada we have about 1.5 per cent of the land mass left 10 under our direct control. 11 MS GODBY: That's talking about your reserves. 12 What about the access to your traditional territory, Mr. 13 Bressette, and the access to resources specifically 14 thereon? 15 MR. BRESSETTE: We still claim that those 16 rights are still there. We want to utilize that, but I 17 guess in the southern part of this province it's kind of 18 impossible. We get charged by people for trespassing 19 and things like that. In the north it's relatively wide 20 open. People still enjoy our traditional way of life 21 and being able to harvest and enjoy the life they always 22 did have because there are no people who want to live in 23 the north. They all want the southern part of the 24 province. 25 MS GODBY: Chief Bressette, apart from the 26 treaties, which we have just been discussing, I 27 understand as well that Hydro has a policy for 28 aboriginal relations. Are you aware if that policy Les Services StenoTran Services Inc. 613-521-0703 3046 COO PANEL 1, in-ch (Godby) 1 gives you or provides you with any sort of special or 2 unique status? 3 MR. BRESSETTE: My understanding of that 4 policy is it sort of recognizes and it's supposed to 5 recognize governments and when we are dealt with we are 6 to be dealt with as governments. But by and large I 7 don't know that that is ever upheld and utilized in the 8 proper context. 9 MS GODBY: I'm going to -- because I think 10 that the policy -- I'm going to question you about the 11 policy and its significance with respect to 12 consultations a little bit later. But, right now, what 13 I want to focus on is that, you know, you claim that you 14 have some special status, by virtue of your treaties and 15 by virtue of this policy which recognizes the 16 government-to-government relationship, and that First 17 Nations are governments and they are not to be treated 18 as other stakeholders. But you also claim, in your 19 evidence, that First Nations have suffered a unique 20 prejudice that other people have not suffered, as a 21 result of hydro development. 22 Can you explain that, please, a little bit. 23 MR. BRESSETTE: Well, I can -- I have personal 24 experience in this area because, when I was growing up 25 as a child, in southern Ontario, I recall when hydro was 26 installed at our communities. Before we got hydro, 27 everybody else around us had hydro; farmers had hydro. 28 I recall sitting around in our homes, we had coal oil Les Services StenoTran Services Inc. 613-521-0703 3047 COO PANEL 1, in-ch (Godby) 1 lamps, and we could see lights burning across the field, 2 at a farm. 3 I have also had discussions with other people 4 who live in the north -- and I'm talking the far north 5 -- where they used to have to walk to a farmer's place 6 to get water from him because he had an electric pump 7 and could pump water during the winter months; so they 8 had to go and get water off him. 9 So, that's the kind of evolution that's 10 occurred. We have sort of been sitting on the side and 11 everything's passed us by. And in the development 12 stages, this country makes tremendous efforts to go into 13 Third World countries and bring electrification and 14 bring them up to standards. They don't do that in this 15 country, in our own country we live in. And one of the 16 reasons that I can point to is a study that was 17 conducted. Canada is the Number One place to live, in 18 the world. In the First Nations communities, we rank 19 63rd. That's the kind of living standard our people 20 have. That is not our study; that study was 21 commissioned by the Government. Studies have been 22 undertaken by the United Nations that point out, very 23 distinctly, there's a unique prejudice -- and I heard 24 that word here, today. And we know prejudice; we have 25 lived with it. And that's the thing I think that we 26 can, without a shadow of a doubt, say we have been 27 prejudiced from being accessed to the resources. We 28 look at power and generation of power as a resource, and Les Services StenoTran Services Inc. 613-521-0703 3048 COO PANEL 1, in-ch (Godby) 1 we want to get into this area. And that's why we are 2 here today. 3 MS GODBY: Chief Bressette, you mentioned one 4 of the ways in which, you know, you have been 5 disadvantaged is sort of this inferior or substandard 6 service and, in fact, in many cases, hydro development 7 has sort of bypassed you; you didn't receive the 8 benefits of electrification. 9 Did your communities, however, bear the costs 10 of hydro development, in certain circumstances, that you 11 are aware of? 12 MR. BRESSETTE: Well, we feel it's been borne 13 on the back of our children, for years. 14 MS GODBY: In what way? 15 MR. BRESSETTE: The destruction of our way of 16 life. Like when power generation comes in, it disrupts 17 the natural habitat of fish and wildlife and it impacts 18 on all sorts of things, in terms of the impact it has on 19 trap lines. When they flood to create dams, it flooded 20 out whole communities. I mean these are things that our 21 people have stated that they have suffered as a result 22 of all of this. And they were relocated and moved off 23 of their land. In some cases, communities were divided 24 up and separated. And those are the kind of things, I 25 think, that we can point to. 26 But by and large, someone's gotten wealthy. 27 And money is what makes this country move and -- you 28 know, quite frankly, I see a lot of money sitting here, Les Services StenoTran Services Inc. 613-521-0703 3049 COO PANEL 1, in-ch (Godby) 1 with interest, trying to buy their rights, that they 2 have more right to be here than our people do, and I 3 think that's a statement that has to be recognized here: 4 that we don't have money. If we had our share in the 5 resources of this country, we would not be begging or we 6 would not be doing the other things we have to do to 7 access our rights. And, ultimately, we have to go to 8 court proceedings. Even when we went in court, the 9 rules are changed; so they don't accommodate us. Those 10 are very real and the very kind of prejudices and the 11 things that we paid with. We paid with our dignity and 12 the pride we once enjoyed, as people being able to live 13 and feed our families decently, without begging for 14 money -- and, unfortunately, Welfare is the main state 15 of most of our communities. 16 MS GODBY: So, hydro, to the extent that it 17 interfered with your traditional pursuit that you 18 carried on, the traditional economies that were based on 19 things that you said, like hunting, trapping, fishing, 20 harvesting, those things, in your opinion, Chief 21 Bressette, have resulted in some economic prejudice or 22 loss of opportunity to your people? 23 MR. BRESSETTE: Well, they stopped -- they 24 changed the way of life, I believe. And I'm not saying 25 that's all bad, because it's nice to have hydro. But 26 with that, we get a bill. We don't get to generate 27 revenue from it and enjoy the revenue other people enjoy 28 out of it. We just get the bill. Les Services StenoTran Services Inc. 613-521-0703 3050 COO PANEL 1, in-ch (Godby) 1 MS GODBY: So you get all of the costs but not 2 very many of the benefits that are associated with -- 3 MR. BRESSETTE: That's right. 4 MS GODBY: -- developing the resources on your 5 territory? 6 Chief Bressette, I understand that First 7 Nations are not, at present, transmission customers and 8 I understand that in the second panel you will be 9 discussing this in a little bit more detail. But just, 10 very briefly, why do you think, then, that special 11 consideration for First Nations in transmission rate 12 design is appropriate? 13 MR. BRESSETTE: Well, as much as they go and 14 develop Third World countries and help them get power 15 and up to date, I think our people are coming into an 16 age where they have got educated, our young people have 17 gotten smarter, they have gone into careers that give 18 them a better understanding of moving into this area 19 and, as a result of that, the interest to get into some 20 of these resource-generating areas where a vast amount 21 of it takes place surrounding First Nations communities 22 within traditional territories that they occupy are a 23 reason that we feel we should be entitled to get 24 involved in this, and if we are not sort of allowed to 25 access transmission in this transmission process, we are 26 going to buy our way in later and creating our own 27 stations and our own generating plants. I think power 28 stations and generating plants are going to be a further Les Services StenoTran Services Inc. 613-521-0703 3051 COO PANEL 1, in-ch (Godby) 1 burden when we have to pay, on top of that, to get into 2 this transmission process, which I understand you have 3 to buy into that, and I think that's what we are looking 4 at here. 5 MS GODBY: Are First Nations poised, at 6 present, to become transmission customers? 7 MR. BRESSETTE: Yes, they are. There's a lot 8 of interest growing in the First Nations area and 9 there's been studies undertaken to look to move in that 10 area. I think combined efforts of tribal councils and 11 other groups basically have the ability and the 12 financial resources to be able to move in this area. 13 MS GODBY: Chief Bressette, one of the things 14 that you are looking for the Board to do is to direct 15 the applicant to sit down with you and develop a 16 protocol agreement which will, essentially, set the 17 guidelines or framework for the negotiation of contracts 18 that you are talking about for these individual First 19 Nations to get in and set up these commercial activities 20 which will involve the use of the transmission system; 21 and, as I understand your evidence, you want this 22 framework to include a recognition of, first of all, 23 your unique status, which you have described, and your 24 unique prejudice, which you have described, as well. 25 Tell me, do you think that this special 26 consideration for your people are going to give First 27 Nations an unfair advantage or an unfair competitive 28 advantage over everybody else? Les Services StenoTran Services Inc. 613-521-0703 3052 COO PANEL 1, in-ch (Godby) 1 MR. BRESSETTE: Well, I don't feel that way, 2 myself, that we are going to be given an unfair 3 advantage. The playing field, if it's level. It's 4 tilted in about almost a 90-degree angle where we sit. 5 We are at the bottom; everybody else is at the top. I 6 think we have a lot of catching up to technology and the 7 ability to operate these stations and become 8 knowledgeable and all of these formulas I see being 9 tossed around on the board here. Those are things I 10 don't specialize in, but, definitely, I think what I'm 11 trying to say is, the amount of First Nations who want 12 to get actively participate in this process are not 13 going to break the bank here. We are not going to have 14 a negative impact on anybody. And if this market is 15 opening up, it's becoming deregulated, well, I think we 16 should have an opportunity. I think our people deserve 17 a chance to find ways of creating economic resourcing 18 that can get us out of the squalid conditions our people 19 live in and enjoy a place in this country where we can 20 feel we are part of it. 21 MS GODBY: Well, tell me, Chief Bressette, why 22 do you need a direction from the Board? Why can't you 23 just sit down and negotiate with Hydro? 24 MR. BRESSETTE: If it was that easy, we 25 wouldn't be here today. I think our people have 26 recognized we have been bypassed and I think people feel 27 that they just can ignore a few Indians that they run 28 into as they are stringing wire and they are not a Les Services StenoTran Services Inc. 613-521-0703 3053 COO PANEL 1, in-ch (Godby) 1 concern. Well, if they wanted to deal with us, they 2 would have been talking to us by now. I know I have 3 received -- I have received correspondence since I 4 became interested to come here that sort of encouraged 5 me to go into a bureaucratic process, I call. As a 6 First Nations leader I have been led down the garden 7 path by many bureaucrats that say,"Come to me; don't go 8 to them", and what that does, it shields the pressure 9 off of this kind of process and it keeps us out of the 10 eye that we are interested in. I felt I had to come 11 here today in order to get a response from -- I think, 12 this Board here has the ability to grant what we are 13 asking -- and I don't think we are asking for the sun, 14 the stars, the moon. All we want is a chance. That's 15 all our people are looking for. We are not begging any 16 more; we are asking. We are being respectful; we come 17 here seeking an answer to a question that's eluded us 18 for a long time, "Why don't people treat us the way they 19 treat other people in this land?" 20 MS GODBY: So, I take it, Chief Bressette, 21 that one of the reasons why you are engaged in this 22 process and taking part as an intervenor is because you 23 haven't had a great deal of success in negotiating -- 24 your people, generally, haven't had a great deal of 25 success in negotiating with Hydro, in the past? 26 MR. BRESSETTE: That's true after damage has 27 occurred. It takes a long, long time to get any kind of 28 a resolution and even at the conclusion many times we Les Services StenoTran Services Inc. 613-521-0703 3054 COO PANEL 1, in-ch (Godby) 1 feel it's a take it or leave it deal and we have to take 2 what we can get at the end of the day. 3 It doesn't help us with the damage we have 4 been inflicted by, but nobody judges that. They just 5 worry about how much money they can save their boss and 6 how much less of a payment they would have to make 7 to us. 8 MS GODBY: Thank you, Chief Bressette. 9 I have just a couple of questions on the 10 consultation process. 11 I understand that to the extent that 12 aboriginal rights are going to be affected that there is 13 an obligation to consult with the people whose rights 14 are going to be affected. Is that correct? 15 MR. BRESSETTE: Yes. That has been stipulated 16 in several Supreme Court rulings. 17 One of the recent rulings that came down is a 18 ruling called Delgamuukw whereby First Nations oral 19 tradition has been accepted as written. The same 20 equality is written evidence that is submitted before a 21 court and that gave us a recognition of what is called 22 aboriginal title. Aboriginal title has never been 23 discussed with many First Nations in this country and it 24 is still an underlying issue for us. 25 We want to deal with these matters. We want 26 to sit down and negotiate in good faith negotiations. 27 We don't like confrontation approaches and that is what 28 was leading up to many issues across this country before Les Services StenoTran Services Inc. 613-521-0703 3055 COO PANEL 1, in-ch (Godby) 1 that ruling came down. Now we are engaged in trying to 2 sit down and have these things mediated and negotiate 3 across the table. 4 Chief Bressette, what does "meaningful 5 consultation" mean to your people? 6 MR. BRESSETTE: "Meaningful consultation" 7 means people have to come and talk to us. You know, 8 they have to come and let us know what they are going to 9 be doing in the area and let us have our opportunity to 10 respond. 11 Those are the kinds of discussions I think 12 that we want to see occur where people are directly 13 impacted. We want to see some kind of process set up 14 where we can sit down and talk about these things. 15 MS GODBY: Has Hydro traditionally come and 16 consulted with your people in the past? 17 MR. BRESSETTE: Well, they have come and said 18 they were going through with easements, or whatever they 19 got from Indian Affairs, but I don't think ever directly 20 talked to a lot of us. It was just "We are going to be 21 putting a line through here and Indian Affairs let us 22 do it." 23 MS GODBY: Chief Bressette, is there any 24 reason to believe that they will consult with you in a 25 meaningful way in the future? 26 MR. BRESSETTE: I think if the Board gives 27 direction to them, I think then maybe that will be the 28 thing that breaks this logjam that we have been stuck in Les Services StenoTran Services Inc. 613-521-0703 3056 COO PANEL 1, in-ch (Godby) 1 and trying to deal with for a long time. 2 MS GODBY: Now, just with respect to this 3 process here, can you tell me generally, Chief 4 Bressette -- and you may or may not know this -- but 5 what is your impression about First Nations knowledge on 6 transmission rate design? 7 MR. BRESSETTE: That's one of the things I 8 think that we have not been adequately consulted about, 9 the cost of doing business. I think our people have to 10 hire people to work for us to give us that kind of 11 expertise. As we move into development I think that's 12 what we do, we hire experts to come and advise us. 13 So we are beginning to become more 14 knowledgeable in the area and -- 15 MS GODBY: Were you -- I'm sorry, Chief 16 Bressette, go ahead. 17 MR. BRESSETTE: Those are the approaches I 18 think that we will be making, but transmission rate 19 designs, I understand, will be a guiding principle from 20 this point on and I guess what we are concerned about is 21 we don't have that competitive edge right now. We are 22 sort of chasing a train down a track trying to catch it 23 as it is speeding along. That's where we are. 24 One of our Chiefs told me very directly before 25 coming here, he said, "You have to tell these people: 26 We don't want to sit here any more and wait until 27 someone has the feast and they brush the crumbs off the 28 table. We don't want the crumbs any more." Les Services StenoTran Services Inc. 613-521-0703 3057 COO PANEL 1, in-ch (Godby) 1 That is the only way I think I can really 2 describe the feeling our people have: We are getting 3 the crumbs that are falling from the table instead of 4 sitting at the table while they are cutting up the 5 feast, and that's what we are interested in. 6 MS GODBY: You want a place in the future. 7 MR. BRESSETTE: Yes. 8 MS GODBY: Just one final question, Chief 9 Bressette. 10 When the consultations were ongoing with your 11 people with respect to your input into this process, 12 were you provided with any technical assistance, to your 13 knowledge. 14 Or tell me generally about -- well, first of 15 all, answer that question. 16 MR. BRESSETTE: I think what occurred was 17 Hydro undertook to create a series of roundtables, and 18 they did that. There was a lot of concern from our 19 people because they said why -- "Did you receive notice 20 of this in the office?" I guess we said, "Well, we 21 received a notice that there was going to be 22 consultation" and they said, "Well, were we given any 23 support?" No, we were never offered any expertise to 24 help guide us through this process. 25 Thereby many First Nations, because of the 26 short notice, didn't have the opportunity to go to these 27 hearings and felt that, you know, this was not 28 consultation. I think the people made it clear at the Les Services StenoTran Services Inc. 613-521-0703 3058 COO PANEL 1, in-ch (Godby) 1 meetings they didn't want it to be perceived as 2 consultation, but yet when the report came out it said 3 they did conduct consultation with us. That's a problem 4 we had. We said we were not consulted and that is why 5 we are here today. 6 MS GODBY: Thank you, Chief Bressette. 7 Mr. Chair, I notice that it's time for the 8 morning break. Would you like to take a break now? 9 THE PRESIDING MEMBER: Sure, we can do that 10 now. 11 MS GODBY: Okay. 12 THE PRESIDING MEMBER: So can we come back at 13 quarter to 11:00. 14 MS GODBY: Thank you. 15 --- Upon recessing at 1025 16 --- Upon resuming at 1047 17 THE PRESIDING MEMBER: Thank you. Please be 18 seated. 19 Ms Godby, would you like to resume, please. 20 MS GODBY: Thank you, Mr. Chair. 21 We are going to turn next to Mary Anne 22 Seabrook. Ms Seabrook, I understand that you are a 23 member of the Red Rock First Nation. Is that correct? 24 MS SEABROOK: Yes, that is. 25 MS GODBY: And you are also a member of the 26 negotiating committee which deals with the past 27 grievance that your First Nation has with Ontario Hydro. 28 Is that right? Les Services StenoTran Services Inc. 613-521-0703 3059 COO PANEL 1, in-ch (Godby) 1 MS SEABROOK: Yes, it is. 2 MS GODBY: Can you tell the Board, please, how 3 long you have been a member on that negotiating 4 committee. 5 MS SEABROOK: Since 1997. 6 MS GODBY: Are you able to hear? 7 THE PRESIDING MEMBER: Not very well. That 8 microphone has been causing problems as you will 9 recollect. 10 --- Pause 11 MS GODBY: Ms Seabrook, you reviewed the 12 evidence which is filed at Exhibit E, Tab 30, before 13 appearing here today, did you not? 14 MS SEABROOK: Yes, I did. 15 MS GODBY: Is the information contained in 16 that evidence true and correct? 17 MS SEABROOK: Yes, it is. 18 MS GODBY: So we can adopt it for the purpose 19 of these proceedings here today. Ms Seabrook, would you 20 mind telling the Board a little bit about your 21 community, for instance, where it is located? 22 MS SEABROOK: Lake Helen Reserve is located 23 about a hundred kilometres east of Thunder Bay. Red 24 Rock First Nation actually consists of two reserves. 25 One is Lake Helen which is situated on the Nipigon 26 River. The other reserve is Parmacheene which is 27 situated about 20 miles from the Town of Nipigon. 28 MS GODBY: And what's the total land base of Les Services StenoTran Services Inc. 613-521-0703 3060 COO PANEL 1, in-ch (Godby) 1 your community? 2 MS SEABROOK: The total land base combining 3 the two reserves is 950 acres. 4 MS GODBY: And the membership there? 5 MS SEABROOK: It's approximately -- well, the 6 total band membership is approximately 1,300 people, of 7 which only 273 live on the Lake Helen Reserve. No one 8 resides at Parmacheene. 9 MS GODBY: Can you tell me why no one resides 10 at the Parmacheene Reserve? 11 MS SEABROOK: Because most of the land has 12 been flooded and the people were forced to move from 13 Parmacheene location to Lake Helen as a result of the 14 hydro development. 15 MS GODBY: So what you have is a land base 16 which is approximately how many acres, can you tell me? 17 Did you say 950? 18 MS SEABROOK: Between the two reserves, yes. 19 MS GODBY: So you have that, but you have 20 actually lost the use of one reserve. 21 MS SEABROOK: Yes. One is totally vacant. 22 Nothing takes place there any more. 23 MS GODBY: So it's not fit for habitation. 24 What about any type of development on that? 25 MS SEABROOK: No, nothing. 26 MS GODBY: Ms Seabrook, I understand that the 27 Nipigon corridor is the traditional territory of the Red 28 Rock First Nation. Les Services StenoTran Services Inc. 613-521-0703 3061 COO PANEL 1, in-ch (Godby) 1 MS SEABROOK: Yes. 2 MS GODBY: And can you tell me what types of 3 activities, economic activities, they pursue? 4 MS SEABROOK: Well, people always used that 5 territory. Our people lived along the Nipigon River 6 corridor. That was their traditional territory for 7 hunting, trapping and fishing. They moved up and down 8 the Nipigon River throughout the season. 9 MS GODBY: Was there a guiding operation or a 10 commercial fishery at all? 11 MS SEABROOK: I'm not aware of a commercial 12 fishery, but I know the men were employed as guides in 13 the summertime. There were many tourists that were 14 attracted to the Nipigon area because the fishing was, 15 you know, very good then. 16 MS GODBY: Would you have described your 17 community then prior to the change that took place 18 subsequent to hydro development as self-sufficient 19 economically? 20 MS SEABROOK: Yes. 21 MS GODBY: Economically self-sufficient. 22 MS SEABROOK: Yes. They were very 23 self-sufficient. The people lived off the land. My 24 mother told me stories that when she was young, they 25 used to go berry picking and pick cranberries, 26 raspberries, blueberries. They would preserve these for 27 the wintertime. If the blueberries were good, then of 28 course they sold them for extra income. Les Services StenoTran Services Inc. 613-521-0703 3062 COO PANEL 1, in-ch (Godby) 1 The men in the summer they worked as guides or 2 they fished. They also trapped and they sold the furs 3 to the local Hudson Bay Company. 4 MS GODBY: When was it that Hydro began to 5 develop in your territory? 6 MS SEABROOK: I think it was before the 1920s. 7 MS GODBY: And can you tell me a little about 8 that, Ms Seabrook. Was it the case that they erected 9 both generation and transmission facilities across your 10 territory? 11 MS SEABROOK: Yes. 12 MS GODBY: As a result of those developments, 13 can you tell me about the impacts that they had on your 14 community?; 15 MS SEABROOK: Well, there was land lost at 16 Parmacheene as a result of the flooding. I know the dam 17 had a very negative impact on the fishing. Because 18 there was no fishing, they lost the tourists coming to 19 the area. As a result, the men lost employment. 20 There was food lost because the fish wasn't 21 available any longer. Where you have no fish, you have 22 no tourists, you have no guiding income and you have no 23 food on the table. As a result, our people were forced 24 to go on welfare. 25 I think that this had a very negative impact 26 on our community. 27 MS GODBY: Ms Seabrook, I understand that in 28 addition to the flooding and its impacts on your Les Services StenoTran Services Inc. 613-521-0703 3063 COO PANEL 1, in-ch (Godby) 1 traditional activities such as the fishing you mentioned 2 and the trapping and the harvesting, Hydro also cut a 3 right of way through one of your land bases. Is that 4 correct? 5 MS SEABROOK: Yes. That was at the original 6 reserve which was Parmacheene. At that time Lake Helen 7 Reserve did not exist. When Hydro came in because the 8 transmission lines -- the Chief back then, William 9 Sault, was totally unaware that this was happening. The 10 Hydro guys just showed up and when he asked them what 11 they were doing, they said "Well, we got permission to 12 cut a hydro line through here". 13 Even with that, none of the band members were, 14 you know, sought for employment. 15 MS GODBY: When did that happen, Ms Seabrook? 16 MS SEABROOK: I think it was around 1930. 17 MS GODBY: 1930. And was the transmission 18 line in fact erected? 19 MS SEABROOK: No. It was never erected. For 20 some reason it wasn't. 21 MS GODBY: So what you had then was a right of 22 way that was cut through the land, but there was no 23 transmission lines that were erected. 24 MS SEABROOK: That's right. 25 MS GODBY: And was the First Nation ever 26 compensated for that? 27 MS SEABROOK: The original agreement was for 28 $10 a year rental payment. I think maybe one or two Les Services StenoTran Services Inc. 613-521-0703 3064 COO PANEL 1, in-ch (Godby) 1 years may have been paid and that was it. 2 MS GODBY: And prior to the developments that 3 started in your territory, and I believe that you said 4 in the beginning of your evidence that Hydro began to 5 develop really in or about the 1920s -- 6 MS SEABROOK: Yes. 7 MS GODBY: Does your community recall Hydro 8 ever coming to talk to the people and tell them that 9 this is going to impact on your land, we are going to 10 flood here, it's going to impact on your fishing, it's 11 going to impact on your harvesting, it's going to impact 12 on your traffic? 13 MS SEABROOK: No. There was no consultation 14 whatsoever. I am sure if our people were aware of the 15 effects that this would have had on their lands and 16 their fishing that they never would have allowed it. 17 MS GODBY: And given that the developments 18 have taken place on your traditional territory, has the 19 Red Rock First Nation to date received any compensation 20 for the damages caused to the land or for the loss of 21 economic opportunities? 22 MS SEABROOK: No. There has never been any 23 compensation. 24 MS GODBY: And so how long of a period here 25 are we talking about? 26 MS SEABROOK: Well, you figure the dams first 27 started in 1920 and our people have never received any 28 kind of benefit from that, so you are talking 80 years. Les Services StenoTran Services Inc. 613-521-0703 3065 COO PANEL 1, in-ch (Godby) 1 MS GODBY: So today this is what the 2 negotiating team is trying to negotiate with Hydro, I 3 take it, is some kind of compensation? 4 MS SEABROOK: Right. 5 MS GODBY: Have you been able to share in any 6 of the resources that have been generated as a result of 7 the hydro development on your land? 8 MS SEABROOK: No, not at all. 9 MS GODBY: So there is no future economic 10 potential or no revenues that you are able to share in 11 with Hydro. Is that right? 12 MS SEABROOK: That's right. 13 MS GODBY: Ms Seabrook, why do you think it's 14 appropriate for First Nations to ask this Board for 15 special consideration in this process? 16 MS SEABROOK: I feel that our traditional 17 territory and especially the river was, in our people's 18 minds and I believe I am speaking on behalf of them all, 19 is that our lifestyle was taken away. Like I said, we 20 were very self-sufficient. We lived off the river. We 21 lived off that land and we would like it back, or some 22 compensation or some opportunity. 23 MS GODBY: Is it the opportunity that your 24 people have lost to be self-sufficient and to generate 25 money for themselves and for their economies that you 26 wish to have preserved? 27 MS SEABROOK: Yes. 28 MS GODBY: Do you feel, Ms Seabrook, that Les Services StenoTran Services Inc. 613-521-0703 3066 COO PANEL 1, in-ch (Godby) 1 First Nations have been impacted in a different way than 2 other people in the province from hydro development? 3 MS SEABROOK: Yes. We weren't treated fairly 4 at all. We were totally ignored. We were treated like 5 second-class citizens, without being consulted. There 6 was just a total lack of respect. 7 MS GODBY: Do you feel that the playing field, 8 so to speak, is level here? 9 MS SEABROOK: Definitely not. 10 MS GODBY: And why do you think we need a 11 direction? Why do you think that First Nations can't 12 just sit down and negotiate with Hydro? 13 MS SEABROOK: Well, Hydro ignored us in the 14 past, and I don't mean -- it may not have been their 15 fault, but we were definitely ignored in the past and we 16 don't want this to happen again. We are here now. We 17 are trying to negotiate and all we are asking for is the 18 opportunity, give us the opportunity. 19 MS GODBY: Thank you, Ms Seabrook. 20 Mr. Kelly, if we can turn to you now. I hope 21 your microphone works. 22 MR. KELLY: I hope so too. 23 MS GODBY: Mr. Kelly, you are a member of the 24 Onegaming First Nation. Is that correct? 25 MR. KELLY: Yes, it is. 26 MS GODBY: And you are also a member of your 27 negotiating committee to negotiate a past grievance with 28 Ontario Hydro. Is that correct? Les Services StenoTran Services Inc. 613-521-0703 3067 COO PANEL 1, in-ch (Godby) 1 MR. KELLY: Yes, I was. 2 MS GODBY: And you are also the former Chief 3 of Onegaming? 4 MR. KELLY: Yes. I was a chief from 1993 to 5 1995. 6 MS GODBY: And you had an opportunity to 7 review your prefiled evidence, sir, before coming here 8 today? 9 MR. KELLY: Yes, I did. 10 MS GODBY: And the statements contained 11 therein are true and accurate? 12 MR. KELLY: Yes. 13 MS GODBY: Mr. Kelly, can you tell me, please, 14 where Onegaming is located? 15 MR. KELLY: The Onegaming First Nation is 16 located in the Grand Council Treaty territory. It's 17 about 65 miles south of Kenora and 60 miles north of 18 Fort Francis. 19 MS GODBY: How many people are members of the 20 Onegaming First Nation, Mr. Kelly? 21 MR. KELLY: We currently have a little over 22 600 people registered on our list and 400 of them are 23 living in their community. 24 MS GODBY: And is there a reason why there is 25 a difference between the number of people who are band 26 members and the number of people who are living on the 27 reserve? 28 MR. KELLY: I guess the primary reason is Les Services StenoTran Services Inc. 613-521-0703 3068 COO PANEL 1, in-ch (Godby) 1 there is no economic activity to support that many 2 people in our community. Eighty per cent of our people 3 that do live in our community are unemployed. 4 MS GODBY: Mr. Kelly, is there something 5 particularly special about the land there at Onegaming? 6 MR. KELLY: Onegaming is located between two 7 bodies of water. It's a portage. Our people selected 8 that site for various reasons, number one being the 9 spiritual significance of that area. We had our 10 teaching lodge located there. People from other First 11 Nations used to gather at our community to hold 12 gatherings, traditional ceremonies and so on. That's 13 what is special about our community. 14 MS GODBY: Can you tell me how the people of 15 Onegaming traditionally lived, Mr. Kelly? 16 MR. KELLY: They used to live off the land I 17 guess is what people called it, hunting, fishing, 18 trapping, harvesting and things like that. They were 19 pretty self-sustaining. 20 MS GODBY: In 1950, I understand, or in the 21 late 1950s I understand that Hydro planned to build a 22 115 kV transmission line through Onegaming. Can you 23 tell me, sir, where they located this transmission line? 24 MR. KELLY: The transmission line, basically, 25 cut the community in half. They just ran it right 26 through the centre of the community, basically where it 27 is today. 28 MS GODBY: Did it go over any land that was of Les Services StenoTran Services Inc. 613-521-0703 3069 COO PANEL 1, in-ch (Godby) 1 any importance to you? 2 MR. KELLY: Yes, it did. It destroyed our 3 Mite'iwin Lodge, the teaching place, the place where 4 people prayed and received teachings and that sort of 5 thing. That lodge was removed to accommodate this line. 6 MS GODBY: Tell me, did anyone from Hydro come 7 to your people before erecting this line and consult 8 with them? 9 MR. KELLY: No, they didn't. 10 MS GODBY: What would the people of Onegaming 11 have said if Hydro had consulted with you? 12 MR. KELLY: I think they would have attempted 13 to have them select a different route if they were given 14 that opportunity. 15 MS GODBY: Do you know why they put the 16 transmission line right through the centre? 17 MR. KELLY: We are not really sure. We just 18 look at the map and on the map there is just a straight 19 line from point A to point B. I guess that was the 20 cheapest way to erect the line. We're not sure. 21 MS GODBY: Can you tell me, sir, what type of 22 impact that line has had and the lack of consultation 23 has had with your people on the community? 24 MR. KELLY: Our sacred ground was desecrated. 25 It doesn't exist any more. It had an effect on the 26 future of our people, not being able to practice it. It 27 stopped other First Nations from attending our community 28 because the lodge wasn't there any more. Les Services StenoTran Services Inc. 613-521-0703 3070 COO PANEL 1, in-ch (Godby) 1 MS GODBY: Did it interfere with any of your 2 traditional activities in terms of accessing wildlife or 3 harvesting or anything like that, Mr. Kelly? 4 MR. KELLY: Hunting and trapping were affected 5 somewhat. Animals wouldn't come near the area. Our 6 people had to move further out to I guess hunt the 7 animals or trapping, and the harvesting of berries and 8 things like that were affected by the spraying, and our 9 activities that resulted from this line being in place. 10 MS GODBY: You mentioned spraying, what do you 11 mean by that? 12 MR. KELLY: I guess that was to control the 13 growth of, you know, within the right-of-way, of trees, 14 plants, grass, whatever, just to prevent it from 15 overgrowing and they were spraying that -- to kill off 16 that vegetation and, you know, it affected, you know, 17 our own harvesting activities within that area. 18 MS GODBY: Did that have a negative effect on 19 the environment? And the people of the community? 20 MR. KELLY: Well, I guess, yes, it did, you 21 know. It interfered with, you know, their gathering of 22 medicines. And I think it also affected, you know, the 23 animals that were in that area, at that time. 24 MS GODBY: Mr. Kelly, what about the health of 25 the community members? Was that affected by any of the 26 chemicals that were used to spray? 27 MR. KELLY: Well, we can't prove this but, you 28 know, we do have a very high cancer rate in our Les Services StenoTran Services Inc. 613-521-0703 3071 COO PANEL 1, in-ch (Godby) 1 community. A number of our individuals has passed away 2 with an amount of cancer and, you know, I know of, you 3 know, eight people, in the last 10 years, in our 4 community that have succumbed to cancer or are currently 5 battling this disease. 6 MS GODBY: Mr. Kelly, you also had mentioned, 7 earlier on in your evidence, that the transmission line, 8 in effect, cut your community in half. And in your 9 prefiled evidence, you also state that it resulted in 10 crowding. 11 Can you explain that to the Board? 12 MR. KELLY: Okay. Well, transmission line, as 13 I said, cut the Reserve in half; there was a north side 14 and south side. We were restricted to the south side 15 that has already, you know, housing and on the other 16 highway there and it created some kind of a barrier, you 17 know, probably a psychological barrier, for our people. 18 It wasn't until the mid-seventies that they started to 19 develop on the north side of the community, you know, as 20 a result of this line. 21 MS GODBY: So, did that interfere with the 22 way, then, your community would have developed? 23 MR. KELLY: Yes, it did, you know, housing 24 would have occurred in the northern part a lot earlier 25 had that line not been there. 26 MS GODBY: And was the First Nation 27 compensated, Mr. Kelly, for Hydro's right to use your 28 land for their transmission line? Les Services StenoTran Services Inc. 613-521-0703 3072 COO PANEL 1, in-ch (Godby) 1 MR. KELLY: Yes, they were. It happened after 2 the line went through. I think we got $800 for this 3 right-of-way to go through. 4 MS GODBY: The First Nation got a one-time 5 payment of $800 for the line? 6 MR. KELLY: Yes. 7 MS GODBY: And did they pay you any annual 8 rent? 9 MR. BRESSETTE: Not at that time. We secured 10 a rent in 1994, after our agreement. 11 MS GODBY: Did they pay you anything on 12 account of interfering with your access to resources or 13 the interference with respect to the vegetation and the 14 harvesting, as a result of the environmental damage? 15 MR. KELLY: No, they haven't. 16 MS GODBY: Now, I understand, sir, that a 17 second transmission line went up in 1970. Is that 18 correct? 19 MR. KELLY: Yes, it is. 20 MS GODBY: And where did this transmission 21 line -- where was this transmission line erected, in 22 relation to the first? 23 MR. KELLY: Well, this was erected just 24 adjacent to the first line. 25 MS GODBY: I'm sorry. You said "adjacent"? 26 And did they take any more land from 27 Onegaming? Did they take any more Reserve land from 28 Onegaming? Les Services StenoTran Services Inc. 613-521-0703 3073 COO PANEL 1, in-ch (Godby) 1 MR. KELLY: Yes; they took an extra 50 feet, I 2 guess, when they went through. 3 MS GODBY: In addition to the land that was 4 expropriated before? 5 MR. KELLY: Yes. 6 MS GODBY: And what were the circumstances 7 surrounding the erection of this transmission line? Was 8 the First Nation consulted, with respect to this, to 9 your knowledge? 10 MR. KELLY: Not to my knowledge. I think that 11 this was done between Indian Affairs and Ontario Hydro. 12 MS GODBY: And so, what was your 13 understanding, then, when Indian Affairs came to the 14 community? 15 MR. KELLY: Well, I think work had already 16 been started on the line before, you know, our community 17 became aware of it. But our community was not consulted 18 when the second line went in, too. 19 MS GODBY: And was your community paid any 20 compensation for the second line? 21 MR. KELLY: I think there was an agreement for 22 $75 a year rental. 23 MS GODBY: And what happened with that? 24 MR. KELLY: Well, I think, Chief and Council, 25 at the time, decided that they weren't happy with the 26 agreement and refused to accept payment. 27 MS GODBY: When did they do that, Mr. Kelly? 28 MR. KELLY: In 1980. Around that time. Les Services StenoTran Services Inc. 613-521-0703 3074 COO PANEL 1, in-ch (Godby) 1 MS GODBY: And did the people of Onegaming 2 finally reach an agreement regarding the use of their 3 land for the transmission line? 4 MR. KELLY: Yes, they did, they reached an 5 agreement with Ontario in 1994. 6 MS GODBY: And I take it that pursuant to that 7 agreement some annual amount is paid to the First Nation 8 for the use of the land -- for the use of their Reserve 9 land. Right? 10 MR. KELLY: Yes. 11 MS GODBY: Now, between the time that the 12 first line was erected, after which $808 was paid, and 13 1994, were you, essentially -- and leaving aside, now, 14 the $75 payment per year -- were you paid any other 15 moneys for the use of this transmission line? 16 MR. KELLY: No. 17 MS GODBY: So you were deprived, essentially, 18 of compensation for -- from the time that the line was 19 erected, until 1994, when a final agreement was made? 20 MR. KELLY: Yes. 21 MS GODBY: And would an annual payment to the 22 First Nation, for compensation for using their lands, 23 have helped your First Nation? 24 MR. KELLY: Yes, it would have. You know, we 25 -- our First Nation is always looking for dollars to 26 help with any economic development activities that they 27 wish to engage in, and any dollars that come into the 28 community are usually directed into that area. Les Services StenoTran Services Inc. 613-521-0703 3075 COO PANEL 1, in-ch (Godby) 1 MS GODBY: But you didn't have the benefit of 2 that and so -- 3 MR. KELLY: No. 4 MS GODBY: -- you were deprived of that? 5 MR. KELLY: Yes. 6 MS GODBY: Mr. Kelly, can you tell me whether 7 or not Onegaming received any compensation for 8 transmission lines cutting through its traditional 9 territory? 10 MR. KELLY: No, it doesn't. We do have an 11 agreement that they don't spray any herbicides within 12 certain limits outside our present community. I'm not 13 sure what the distance is. 14 MS GODBY: But there's no agreement to pay any 15 compensation? 16 MR. KELLY: That's right. Outside our current 17 community. 18 MS GODBY: And tell me, Mr. Kelly, in your 19 opinion, and given your experience from negotiating, do 20 you feel that First Nations have been treated 21 differently by Hydro than other people in the province? 22 MR. KELLY: Yes, I do. You know, I think 23 other people, communities, businesses, I guess, get 24 consulted when activities happen. You know, we were 25 not. Other people or businesses get compensated. We 26 haven't had that. You know, it's taken us almost 40 27 years to receive something, you know, that has occurred. 28 MS GODBY: So why is it -- why do you think Les Services StenoTran Services Inc. 613-521-0703 3076 COO PANEL 1, in-ch (Godby) 1 the OEB can help here in this proceeding -- the Ontario 2 Energy Board can help in this proceeding? 3 MS GODBY: Well, I believe that -- well, I 4 hope that they direct, you know, hydro companies to 5 ensure that they give us the opportunity to participate, 6 you know, in this activity, I guess. We want to ensure 7 that, you know, that development and control over our 8 resources are, you know, are ensured for us; that they 9 ask us that, you know -- ensure that we participate in 10 how those things are protected. 11 MS GODBY: You want to have a say? 12 MR. KELLY: We want to have a say. That's 13 right. 14 MS GODBY: Thank you very much, Mr. Kelly. 15 Mr. Crofts, if we could turn to you now. 16 I understand, Mr. Crofts, that you have been 17 involved in, one way or another, with First Nations, for 18 the past 25 years, either as a negotiator or as a 19 facilitator in claims which involve infringement on 20 their interests. Is that correct? 21 MR. CROFTS: Yes. Land claims, pollution 22 claims and flooding claims. 23 MS GODBY: So some of these claims that you 24 have been involved with or you have knowledge of 25 involved Hydro. Is that correct? 26 MR. CROFTS: Well, I was asked by Ontario 27 Hydro in 1993 to act as a facilitator or a chair of one 28 of their processes, and I have acted as, I guess, a Les Services StenoTran Services Inc. 613-521-0703 3077 COO PANEL 1, in-ch (Godby) 1 negotiator for one of the communities, another community 2 in the past grievance process. 3 MS GODBY: You have had an opportunity, 4 certainly to review your evidence before coming here 5 before the Board today? 6 MR. CROFTS: I have. 7 MS GODBY: Are the statements made therein 8 true and correct, Mr. Crofts? 9 MR. CROFTS: They are. 10 MS GODBY: Do you have any amendments to make? 11 MR. CROFTS: There are two brief amendments. 12 The first is on page 7 of my submission. 13 MS GODBY: I'm sorry, just one second. 14 Mr. Chair and Members of the Board, I believe 15 Mr. Crofts evidence is at sub-Tab 2. 16 I'm sorry, Mr. Crofts, you can go ahead. 17 MR. CROFTS: With respect to sub-Tab 2, it's 18 page 7, it's the second paragraph from the bottom. 19 That should read or should be amended to read: 20 "Directions that are required from the 21 Ontario Energy Board to Ontario Hydro 22 Networks Company, the province and the 23 Ministry of Energy to undertake 24 negotiations with First Nations." 25 (As read) 26 MS GODBY: Do you have any other amendments? 27 MR. CROFTS: There is an amendment in the top 28 line of page 8, which follows. Les Services StenoTran Services Inc. 613-521-0703 3078 COO PANEL 1, in-ch (Godby) 1 That should read: 2 "...purchase Ontario Hydro 3 hydro-generation assets and transmission 4 assets, including local distribution 5 companies that may be considered for 6 privatization." (As read) 7 MS GODBY: Thank you. 8 With those amendments, Mr. Crofts, can we 9 adopt that evidence here today? 10 MR. CROFTS: Indeed. 11 MS GODBY: Thank you. 12 Mr. Crofts, at page 7 of your evidence you 13 indicate that the Board is or should be entitled to 14 consider the unique position of First Nations. 15 Why do you feel that First Nations are unique? 16 MR. CROFTS: I think there are really three 17 answers to that or three components to that question. 18 The first is the fact that they have treaties 19 which are legal and binding agreements. Those treaties 20 obviously provide them with reserve lands which some of 21 the members here have spoken to. As you will see in the 22 submissions, many of those have been flooded. 23 They also guarantee access to the entire 24 treaty area. It is the access to resources on treaty 25 lands that has become a major problem. 26 I think it is safe to say that Ontario Hydro 27 development, both generation facilities and transmission 28 assets, on these treaty lands have very significantly Les Services StenoTran Services Inc. 613-521-0703 3079 COO PANEL 1, in-ch (Godby) 1 impacted many Bands in Ontario from a negative -- very 2 negative perspective. 3 MS GODBY: You had mentioned there were three 4 reasons. You have told me about the treaties. What are 5 the other reasons? 6 MR. CROFTS: Maybe just before I get to that, 7 I had one other point with respect to treaties. 8 That is that it is of interest to me that the 9 Supreme Court of Canada has been, I would say, one of 10 the major benefactors, if you will, or supporters of 11 First Nations in that if you take the Marshall decision 12 in Nova Scotia last year, or the Sparrow decision in 13 B.C. in 1990, the Supreme Court is clearly reminding 14 provincial governments that there are rights that these 15 people have, legal rights on their treaty land and it is 16 these rights that have been typically broken or ignored. 17 Going back to the second point, as to why 18 First Nations should be treated in a unique aspect by 19 the Board, one only has to refer to Ontario Hydro's 20 stated policy on aboriginal relationships, which -- and 21 I will quote -- states: 22 "Ontario Hydro owes First Nations the 23 consideration and respect due to 24 governments. Among other things this 25 means that Ontario Hydro cannot assume 26 that First Nations are to be treated 27 simply as another special interest 28 group." (As read) Les Services StenoTran Services Inc. 613-521-0703 3080 COO PANEL 1, in-ch (Godby) 1 That paper then goes on and more specifically 2 says that: 3 "Ontario Hydro is committed to achieving 4 long-term benefits for aboriginal 5 communities that are affected by its 6 projects and by its facilities." 7 (As read) 8 MS GODBY: That would appear certainly to 9 indicate that they indeed, then, have a special place or 10 a special status. 11 MR. CROFTS: Pretty much so. 12 MS GODBY: You said there were three reasons. 13 Can you tell me the third? 14 MR. CROFTS: The third one the other members 15 of the panel have alluded to, which is that First 16 Nations have received no benefits from Hydro activities, 17 be it generation or transmission lines, but they have 18 certainly been the beneficiaries of severe economic and 19 social disruption -- I mean, they have been relocated, 20 some communities have been totally relocated -- 21 certainly trapping, hunting and one of the aspects we 22 will talk about later is wild rice, very significant 23 economic deprivation on traditional treaty lands. 24 MS GODBY: Well, let's get into that, 25 Mr. Crofts, because in your evidence you refer to some 26 specific examples and perhaps it might be useful to the 27 Board for us to review, in brief, some of those. 28 Now, one of the ones that you refer to in your Les Services StenoTran Services Inc. 613-521-0703 3081 COO PANEL 1, in-ch (Godby) 1 evidence is at Whitedog. 2 Can you just explain briefly what happened at 3 the community of Whitedog? 4 MR. CROFTS: Well, in 1959 there were two 5 major generating stations built, dams and generating 6 stations built on the Whitedog traditional lands, one 7 called the Caribou Falls Generating Station and the 8 other one referred to as Whitedog Falls. 9 There were transmission lines built across 10 that community as well. The power, curiously enough, 11 did not go to the community for a good many years after 12 it was being generated, but it did in fact go through 13 the transmission lines through to Kenora and to southern 14 communities. 15 Hydro built an access road through the middle 16 of the reserves, again not for the benefit of the 17 community but to access Caribou Falls Generating Station 18 that happened to be at the north of the community. 19 There were sand and gravel pits developed on 20 reserve land by Hydro to access raw materials for the 21 construction of the dams and Hydro, for reasons that I 22 think escaped even Hydro people, chose not to do much 23 about the timber that was to be -- or the trees that 24 were to be flooded behind the two headponds. 25 As a result, to this day there is something 26 like 500 miles of shoreline that is cluttered with 27 debris. Some of the lakes are literally impassable. 28 There are recorded drownings as a result of boats Les Services StenoTran Services Inc. 613-521-0703 3082 COO PANEL 1, in-ch (Godby) 1 hitting deadheads, and so on. 2 So that there is -- and this is 41 years later 3 that the state of those rivers is still in much the same 4 state. 5 MS GODBY: Mr. Crofts, some of these things 6 that you are referring to, I mean, what type of impact 7 do they have on the people in that community in terms of 8 the economies there? 9 MR. CROFTS: Well, I think that -- let me 10 start by saying that if the Panel were to go home 11 tonight and find that the community in which they live 12 is under 44 feet of water, which was the case with one 13 of the two communities at Whitedog, that they would have 14 some sense as to the economic impact of finding one's 15 house, which one built because there was something like 16 18 log homes that went under 44 feet of water. Graves 17 were exposed and I know there are too many stories I 18 have heard when I'm up there of coffins floating down 19 the river. 20 This goes back a few years, but in terms of 21 economic impact, to be more specific, there were, 22 according to Hydro's own statistics in a letter they 23 provided to me in 1991, there were 48,000 acres flooded 24 as a result of a headpond that was created with Caribou 25 Falls, and there were 33,000 acres flooded as a result 26 of a headpond created at Whitedog Falls. Now, both 27 these developments are within the traditional land use 28 area of this community. Les Services StenoTran Services Inc. 613-521-0703 3083 COO PANEL 1, in-ch (Godby) 1 We had an independent assessment done of the 2 value of the timber that was destroyed as a result of 3 the headponds -- this was for the past grievance 4 negotiations in 1992 with Hydro -- and the independent 5 assessment put a value of something in the range of 6 $77 million on the timber that had been flooded. 7 In addition to that, I don't know how familiar 8 the panel is with Peter Usher, but Peter Usher is noted, 9 I think, in Canada as being one of the foremost land use 10 and land impact experts. He has done a lot of work in 11 the Arctic. 12 Peter made the point that the destruction of 13 the commercial fishery because of the elevated water 14 levels, the debris in the water on a lake called 15 Umbfreville Lake, which was a prime commercial fishing 16 lake for the community, had more impact than just simply 17 the destruction of the fishery because, as Peter pointed 18 out in his report, the fishery in fact was the binding 19 force within this community. I think this has been 20 proven in other communities where studies have been 21 done. 22 The grandparents had a role, the kids had a 23 role, the parents had a role, the family had a role in 24 commercial fishing, whether it was repairing nets, 25 tending nets, whatever. So that was a major impact. 26 MS GODBY: Apart from the fishing and the 27 timber losses, were there other economic impacts to this 28 community? Les Services StenoTran Services Inc. 613-521-0703 3084 COO PANEL 1, in-ch (Godby) 1 MR. CROFTS: Wild rice is not unique to or is 2 not common to all reserves in Ontario, but it certainly 3 is a major part of Kenora area reserves. At Whitedog, 4 statistics from the Ministry of Natural Resources back 5 in the seventies indicate that optimum harvests at that 6 time could total upwards of 200,000 pounds of rice in 7 any one year. 8 That in terms of dollar value to the community 9 translates into about $200,000 of revenue. For a 10 community that has, as some of the other panellists have 11 pointed out in their communities that was dependent 12 large on welfare, $200,000 represents a lot of income to 13 a lot of families. 14 It's also a primary source of food. 15 Nutritionists will tell you that wild rice is a great 16 source of protein. The net result of it is that water 17 level fluctuations since the dams were built have 18 resulted in -- we estimated something in the range of 19 $4 million of lost revenues from wild rice harvesting 20 and that was only through until 1992 when the 21 negotiations were taking place with Hydro. 22 There's an interesting quote for those of you 23 familiar with Werner Troyer, who was an investigative 24 reporter and journalist. He did some work for the CBC. 25 He wrote a book in the 1970s on the stories of Whitedog 26 and Grassy. In that book called "No Safe Place", Werner 27 Troyer quotes an Ontario Hydro official as saying, and I 28 quote directly from that quote: Les Services StenoTran Services Inc. 613-521-0703 3085 COO PANEL 1, in-ch (Godby) 1 "Ontario Hydro don't take the Indians 2 into account in determining water level 3 fluctuations." (As read) 4 That's on page 43 of the Troyer book. 5 Needless to say, in terms of other economic impacts, you 6 know, animal habitat and trapping, which largely took 7 place along the areas in proximity to the river were 8 dramatically impacted. 9 MS GODBY: Mr. Crofts, I take it then from 10 your involvement in this case the First Nations weren't 11 consulted, or certainly at least weren't made aware of 12 the impacts that these developments would have on their 13 communities. Is that correct? 14 MR. CROFTS: Well, in fairness, it has been 20 15 years since I last looked at any documents. I do recall 16 and maybe Hydro people here can correct me, but I do 17 recall a VCR at the time which had insufficient 18 signatures on it which suggested that someone 19 capitalized on the absence of councillors that should 20 have been there for an authorization of some of these 21 activities -- 22 MS GODBY: But from your knowledge in dealing 23 with this community, Mr. Crofts, do you believe the 24 First Nation was made aware of the impact that these 25 developments would have on this community? 26 MR. CROFTS: I don't think they had a clue. I 27 mean you will get a quote -- we will get to the next 28 example here. We will get a quote from an Elder in the Les Services StenoTran Services Inc. 613-521-0703 3086 COO PANEL 1, in-ch (Godby) 1 other community we are going to examine. 2 It goes without saying that they had no idea 3 that when these people came in and started building dams 4 that their entire economy would be totally destroyed. 5 This community incidentally is a welfare basket case at 6 this point. Up until the 1960s it was an independent 7 self-sufficient community much like the Red Rock 8 community. 9 MS GODBY: Mr. Crofts, in your evidence you 10 have discussed the revenues that have been generated 11 from this facility. Was the First Nation able to 12 participate at all in these revenues from the 13 development on its traditional lands? 14 MR. CROFTS: Well, the revenues, as near as I 15 have been able to ascertain them from Whitedog Falls Dam 16 and Caribou Falls Generating Station, are something in 17 the range of $50 million annually. Of that $50 million, 18 the Ontario government collects water rentals of about 19 $3 million. 20 The First Nation until 1993 received zero in 21 terms of any sharing of those revenues. Now, in 1993 22 there was a past grievance settlement with Whitedog 23 between Whitedog and Ontario Hydro. To Ontario Hydro's 24 credit, and I want to give them credit because they are 25 not doing it now but they were doing it at this point in 26 time, the negotiator at that point, who was a 27 Vice-President of Ontario Hydro, indicated that he felt 28 very strongly for legal reasons that we can get into in Les Services StenoTran Services Inc. 613-521-0703 3087 COO PANEL 1, in-ch (Godby) 1 a moment that there should be a sharing of those 2 revenues with the community. 3 As a result, Whitedog to this day collects 4 $500,000 annually as a share of the benefits, as he put 5 it, of the hydro activity. So, of the $50 million of 6 gross revenues that Hydro is generating, the band gets 7 $500,000 annually. 8 MS GODBY: And are those negotiations final, 9 do you know, Mr. Crofts? 10 MR. CROFTS: Well, they are not. I spoke to 11 the facilitator who facilitated the 1993 negotiations 12 and, as I say, I was community adviser or negotiator at 13 that point. That was to be an interim agreement, the 14 $500,000. 15 Ontario Hydro was to meet with the province 16 and establish long term permanent agreements for the 17 sharing of revenues. I'm told in consultation with the 18 hydro negotiator who has now retired this last week that 19 Ontario refused to participate in any discussions of 20 that issue. 21 MS GODBY: And I take it the sort of ongoing 22 payment is to recognize the ongoing prejudice. Is that 23 correct? 24 MR. CROFTS: Well, I think one of the -- as I 25 say, this settlement to me is something that should be 26 held up in many respects as forward looking because it 27 has a revenue sharing component that goes into the 28 future. Les Services StenoTran Services Inc. 613-521-0703 3088 COO PANEL 1, in-ch (Godby) 1 The problem I see with Hydro's past grievance 2 process is that it deals with past grievances. They 3 want cash settlements to deal with the past. That 4 clearly doesn't resolve the problem of communities that 5 have been torn from their basic economic base. It's a 6 little bit like driving a car and hitting somebody and 7 saying "Well, I will pay compensation to you for ten 8 years, but I won't pay you for the following 40 years". 9 The reality is that these people are still 10 suffering the impacts of this relocation, flooding, 11 damage. 12 MS GODBY: And how long did it take Hydro to 13 reach a settlement with this First Nation? 14 MR. CROFTS: Well, the past grievance 15 agreement was finalized in 1993, which was 34 years 16 after the flooding. 17 MS GODBY: Thirty-four years. Do you feel 18 that the fact that hydro did not pay anything for 34 19 years -- did this contribute to the prejudice that the 20 First Nation suffered? 21 MR. CROFTS: Oh, unquestionably. 22 MS GODBY: Mr. Crofts, you refer to another 23 example in your evidence, that of Osnaburg. Perhaps we 24 can briefly go through that. 25 MR. CROFTS: I will just very quickly;. In 26 1935 there were two generating stations built in the 27 Osnaburg or what is called Mishkeegogamang traditional 28 land use area. There were a series of control dams, Les Services StenoTran Services Inc. 613-521-0703 3089 COO PANEL 1, in-ch (Godby) 1 dams that are established to keep the water flowing from 2 other -- in other directions through the generating 3 stations. 4 In that particular case, that community, which 5 was located on Lake St. Joseph, was forced to relocate 6 16 kilometres from its original community site. 7 MS GODBY: Sorry, Mr. Crofts. I didn't mean 8 to interrupt. Were there transmission facilities built 9 as well or was it simply -- 10 MR. CROFTS: Oh, very much so. Ontario Hydro 11 expropriated reserve land for the construction of 12 transmission lines through both of the reserves at 13 Osnaburg. 14 The irony of that, I suppose, was the fact 15 that none of the undertakings -- first of all, the 16 construction of the dams, the construction of the 17 generating station or the construction of the 18 transmission lines was intended for the benefit in any 19 way, shape or form of the First Nation. 20 That power for, I believe, something like 30 21 years went to the mines in Pickle Lake to the north of 22 this community. It was something like 35 years later 23 that the power in fact went to the community itself. 24 MS GODBY: You were telling me about some of 25 the impacts that this development had on the First 26 Nations. Can you continue to elaborate on that, Mr. 27 Crofts, please? 28 MR. CROFTS: Well, there were sacred burial Les Services StenoTran Services Inc. 613-521-0703 3090 COO PANEL 1, in-ch (Godby) 1 sites that were flooded. In 1957 Hydro decided to more 2 or less disband the generation in that area and they 3 built another dam which was intended to redirect the 4 river -- this is the Albany now -- from flowing to the 5 east so that it flowed west to Ear Falls generating 6 station. They wanted to enhance the power generation at 7 Ear Falls. 8 Really all of these activities play -- well, I 9 have been up there enough times. When you drive around 10 the community or drive down the highways, you find 11 rivers that are dry to this point. It's an astounding 12 piece of engineering, but it's also an astounding impact 13 on that community. 14 I think people should note if they are not 15 aware of it that Whitedog and this community, 16 Mishkeegogamang and Osnaburg, have historically been 17 considered to be the two worst social basket cases, if 18 you will, of First Nations in the Province of Ontario., 19 It's interesting that both of them were the victims of 20 relocation and hydro activity. 21 MS GODBY: When you say they were relocated, 22 can you tell me where they were relocated to? 23 MR. CROFTS: They were relocated 16 kilometres 24 from the traditional site on which they had lived. The 25 point they make is it's not just a question of 26 relocating the community. It's the fact that you are 27 then torn from your economic base because in a 28 16-kilometre area they are using that for trapping, Les Services StenoTran Services Inc. 613-521-0703 3091 COO PANEL 1, in-ch (Godby) 1 hunting, ricing. Ricing was another factor of this 2 community, incidentally, which got flooded out. 3 MS GODBY: So we have loss of wild rice. Was 4 any other economic activities impacted? 5 MR. CROFTS: The rice, as you point out, was 6 flooded and has been destroyed to this point in time 7 because once the water levels are up the rice beds are 8 gone. 9 Spawning areas for fish were destroyed. 10 Trapping areas were certainly destroyed and fish, which 11 in most of these northern aboriginal communities is a 12 primary source of food, has been determined to be unfit 13 for human consumption because of mercury. 14 MS GODBY: You have said that the generating 15 stations and the transmission lines were built on First 16 Nations' land. Did the First Nations benefit from this 17 development at all? 18 MR. CROFTS: Again, Ontario Hydro's revenues, 19 gross revenues from stations associated with the water 20 diversion amount annually to something in the range of 21 $77 million to $78 million. That's $78 million each and 22 every year. 23 The Ontario government collects water rentals 24 of approximately $5 million and the First Nation 25 receives zero in the way of any sharing of the revenues 26 or the water rentals. 27 It's worth noting too that when I go through 28 documents that I have got here as to negotiations Les Services StenoTran Services Inc. 613-521-0703 3092 COO PANEL 1, in-ch (Godby) 1 between Ontario Hydro and Osnaburg from I guess the 2 1930s through to the present, up until 1999 the 3 compensation paid by Ontario Hydro to this community for 4 these damages was $5,100. 5 In fact, they have subsequently negotiated a 6 past grievance process where there was an agreement in 7 1999. The problem with that settlement, though, is that 8 it deals strictly with the past and Hydro has had a 9 change of officers, a change of executives since the 10 1993 Whitedog Agreement, which saw the sharing of 11 revenues. Hydro has determined that there will be no 12 sharing of revenues with Osnaburg. 13 Curiously enough, there was a proposal in 1992 14 on the table for this community to share revenues. I am 15 not sure of the number. I believe it was proposed 16 between $500,000 annually and a million dollars as their 17 share of Hydro revenues but, as I say, new Hydro 18 management for reasons known only to themselves pulled 19 that offer off the table. The settlement that was 20 reached in 1999 has no component for benefit sharing 21 with that community. 22 MS GODBY: So there's no recognition that the 23 economic prejudice which you talked about is going to 24 continue on in the future? 25 MR. CROFTS: No, absolutely. 26 MS GODBY: In the settlement? 27 MR. CROFTS: No, absolutely. 28 I think it's interesting too that one of the Les Services StenoTran Services Inc. 613-521-0703 3093 COO PANEL 1, in-ch (Godby) 1 questions I quite frequently get asked is why did 2 Ontario Hydro change its position in terms of the 3 Whitedog revenue sharing and why was it not considered 4 at Osnaburg. 5 In a letter from the Executive Vice-President 6 and Chief Financial Officer of Ontario Power Generation 7 to myself in July of 1999, when I raised the question of 8 the nature of Hydro's settlements, it was stated and I 9 quote: 10 "A limitation in OPGs and Ontario Hydro's 11 discussions with First Nations is that 12 OPG can only address matters over which 13 it has authority. This has excluded from 14 discussion the key issue of First Nation 15 or for First Nations of their ability to 16 share in water rental payments that OPG 17 makes to the province. The province 18 retains exclusive authority over such 19 matters." (As read) 20 That's obviously one person's opinion. I have 21 discussed that same issue, the question of jurisdiction 22 over water rentals with a number of lawyers, a number of 23 Ontario Deputy Ministers and a multitude of experts in 24 the field of water rentals and their conclusion, as 25 expressed to me, is quite clear that both Ontario Hydro 26 and the Ontario government refused to explore the issue 27 of sharing of revenues or sharing of water revenues with 28 First Nations because the government and Hydro are both Les Services StenoTran Services Inc. 613-521-0703 3094 COO PANEL 1, in-ch (Godby) 1 aware that their position is probably nor or may not be 2 supportable in court. 3 MS GODBY: Mr. Crofts, if my math is correct, 4 I take it then that the community of Osnaburg was left 5 without compensation for approximately 53 years. Is 6 that correct? 7 MR. CROFTS: That's right. 8 MS GODBY: And during that 53 year time period 9 they continued to suffer economic prejudice and still do 10 into the future. 11 In your opinion would they have benefited from 12 the payment of some fair compensation during that period 13 to compensate them for their economic loss from which 14 Hydro has benefited? 15 MR. CROFTS: I think it's important that the 16 Board realize that most of these northern communities, I 17 can't speak for the southern ones, but the northern ones 18 have really no independent sources of revenues. I mean 19 there is welfare for community members. Indian Affairs 20 makes grants to education and various components of 21 First Nation life, but there are no independent 22 revenues. 23 So if these communities in the north want to 24 undertake economic development of some sort, they are 25 strapped unless they have got independent revenue. So 26 these revenue-sharing components are absolutely critical 27 to these communities because they represent dollars that 28 would never flow into these communities otherwise. Les Services StenoTran Services Inc. 613-521-0703 3095 COO PANEL 1, in-ch (Godby) 1 MS GODBY: Mr. Crofts, we are going to go 2 briefly over the last example, which is at Whitesand. 3 Can you tell me what happened there? 4 MR. CROFTS: In 1925 Whitesand, which is 5 located up in the Armstrong area, north of Lake Nipigon, 6 was flooded off its traditional lands which were on Lake 7 Nipigon and these were the dams that you were referring 8 to earlier on the Nipigon River that were creating a 9 head pond on Lake Nipigon, so they were flooded in 1925 10 and forced to move from Lake Nipigon. 11 Then, in 1942, a second component of the 12 Whitedog First Nation, which was located on Mojikit Lake 13 north of Armstrong, was forced to relocate because of 14 another batch of hydro activities in 1942, which was the 15 Ogoki diversion and the construction of a series of 16 dams, the Waboose, the Snake Creek and the Summit 17 control dams which flooded Mojikit Lake. 18 MS GODBY: And can you tell me whether these 19 activities in the traditional territory of the Whitesand 20 First Nation had any economic impact to the people 21 living there? 22 MR. CROFTS: Whitesand is a rather interesting 23 community to visit to this day because they are now 24 located high and dry near no lake, not near Lake Nipigon 25 certainly, not near Mojikit Lake. So they are a 26 community that has been totally separated from sort of 27 their umbilical cord of economic activity. 28 MS GODBY: What activities did they do, just Les Services StenoTran Services Inc. 613-521-0703 3096 COO PANEL 1, in-ch (Godby) 1 briefly, and how were they impacted? 2 MR. CROFTS: Well, like all the others, they 3 were ricers, they were hunters, trappers and fishing 4 played a major role on Lake Nipigon. 5 I think it's also worth noting just as an 6 aside that they were given a reserve in 1986. This is 7 only 136 years after the treaty was signed, they were 8 given a reserve of less than one square mile. 9 MS GODBY: Not a very big land base is it? 10 MR. CROFTS: Not for 700 community members, 11 no. 12 MS GODBY: Did the First Nation benefit from 13 the development of hydro in its traditional land-use 14 area? 15 MR. CROFTS: As in the other examples I have 16 given you, the estimated gross revenues from the 17 generating stations that are related in some way with 18 Whitesand diversions, Whitesand dislocations, the annual 19 revenues to Hydro are something in the range of $96 20 million each and every year. 21 The Ontario government receives water rentals 22 from those of $6 million and Whitesand receives nothing. 23 As I say, this community is still waiting for 24 compensation from Hydro and that's 75 years after the 25 Nipigon flooding at that community and 58 years after 26 the Mojikit Lake flooding. 27 MS GODBY: And I take it, like in the other 28 cases that you have described, their economic prejudice Les Services StenoTran Services Inc. 613-521-0703 3097 COO PANEL 1, in-ch (Godby) 1 is going to continue on into the future as well? 2 MR. CROFTS: Absolutely. 3 MS GODBY: Why do you think that this 4 prejudice is unique to First Nations, Mr. Crofts, or is 5 it? 6 MR. CROFTS: I think it is. I think one of 7 the things that's important to recognize is that there 8 are 34 aboriginal communities that appear on Hydro's 9 past grievance list which was produced initially in 10 about 1992, if memory serves me. So we had 34 11 communities that Hydro recognized they had done damages 12 to. That represents something like 27 per cent of all 13 First Nations in the Province of Ontario. 14 So, Hydro, clearly, has been a major player, 15 and I don't think giving these communities some sort of 16 unique assistance is -- can, in any way, be questioned, 17 because they have borne a disproportionate degree of 18 harm. 19 It is also, I think, worthy of note that, in 20 three communities I'm dealing with in these examples, 21 Ontario Hydro negotiations -- between 1920, when these 22 floodings took place, through to 1960, when the latter 23 took place, that the floodings, the dam construction, 24 the transmission line construction -- it's safe to say 25 that either consultation prior to the activity was non- 26 existent or it was cursory -- and let me just quote an 27 elder from Whitesand, Frank Tebishgoeshik, who, in a 28 research paper, in 1994, made the following state: Les Services StenoTran Services Inc. 613-521-0703 3098 COO PANEL 1, in-ch (Godby) 1 "In my own language, we call `Hydro men', 2 flooders; but they never talked to us and 3 told us what would happen; they never 4 asked us to agree; in 1943, the water 5 rose so quickly on Mojikit Lake that 6 people took what they could, but lost 7 most of their personal possessions; when 8 people had to leave they were crying." 9 MS GODBY: That gives you, certainly, a sense 10 of the impact that Hydro has had on these people's 11 lives. 12 Why do you think, though, that it's 13 appropriate to address this type of prejudice and its 14 impact through a rate design on transmission? 15 MR. CROFTS: Well, you know, again referring 16 back to Hydro's own policy paper, or statement, with 17 respect to First Nations, they make it quite clear that 18 these are government-to-government entities, they 19 deserve special treatment; they are not to be treated as 20 special interest groups, they are much more than that -- 21 and, as I say, that's Hydro's own documents that are 22 speaking to that. 23 The other aspect, of course, is that Hydro has 24 been the beneficiary of millions and millions of dollars 25 of revenues from these activities, be they transmission 26 lines or dams. The Ontario Government has been 27 beneficiaries of water levels -- and is, each and every 28 year. The public has been beneficiaries of power. But Les Services StenoTran Services Inc. 613-521-0703 3099 COO PANEL 1, in-ch (Godby) 1 the First Nations have, clearly, suffered nothing but 2 negative impacts. 3 MS GODBY: Mr. Crofts, one final question. 4 Why do you think it's important for a 5 direction to be given by the Board? Why can't the First 6 Nations just simply sit down with Hydro and negotiate 7 for a protocol agreement, like they have asked for, to 8 consult and to negotiate a framework for their special 9 contracts that they wish to pursue? 10 MR. CROFTS: Well, I think that, you know, the 11 problem with all these communities is that their 12 historical economic base has been destroyed and the 13 treaties that were negotiated -- if you look at the 14 Robinson-Huron Treaty, for example, or the Robinson- 15 Superior Treaty, which deals with much of the lands on 16 the maps back here, they were assured by the federal 17 negotiator that they would have access to resources on 18 the treaty lands, not the reserves but on the treaty 19 lands, and when that economic base has been destroyed -- 20 which it has been -- they clearly have to look for other 21 alternatives. And that's why I'm hoping that the Panel 22 will see fit to provide them with other options by which 23 they can achieve economic benefits of some sort. 24 MS GODBY: But what has been your experience, 25 however, in negotiating with Hydro? 26 MR. CROFTS: Well, I think the -- and it 27 doesn't apply just to Hydro; it applies to any 28 corporation. Unless there is some body, some one Les Services StenoTran Services Inc. 613-521-0703 3100 COO PANEL 1, in-ch (Godby) 1 individual, some panel, or some group, that's prepared 2 to take the initiative and force the issue, nothing will 3 happen. So I'm hoping that this Panel will recognize 4 the negative impacts on these communities; that the 5 imbalance in the playing field. I mean, you know, the 6 past grievance process that Hydro established in the 7 early 1990s, it's my understanding, came from really two 8 or three people; one was Maurice Strong, who was the 9 Chairman of the Board at that point in time, and Sam 10 Horton, who was the Vice-President, who had a keen 11 interest in Aboriginal issues. So that I think the 12 Board can play a major role. And I don't want the Board 13 to look at this thing and say, "Well, you know, we are 14 just dealing with transmission" because, in fact, there 15 are opportunities in transmission for these communities. 16 Five Nations Energy -- which someone will speak to later 17 -- is an undertaking between SNC Lavalin, Ontario Hydro 18 and some Aboriginal communities, and it's, you know, a 19 wonderful example of how communities that may not have 20 the expertise, nevertheless, can partner with groups 21 like Lavalin, who do have the expertise, and can achieve 22 some economic benefits for the communities. 23 MS GODBY: Thank you, Mr. Crofts. 24 Mr. Chair, those are my questions for this 25 panel. 26 THE PRESIDING MEMBER: Thank you, Ms Godby. 27 Who would like to go first? Mr. Rattray, do 28 you have some questions? Les Services StenoTran Services Inc. 613-521-0703 3101 COO PANEL 1, in-ch (Godby) 1 MR. RATTRAY: No questions, thank you, 2 Dr. Higgin. 3 THE PRESIDING MEMBER: Okay. On to Board 4 staff, please. 5 MS LEA: Certainly. Thank you. 6 EXAMINATION 7 MS LEA: Good morning. 8 Many of the questions I had for you were 9 answered in your evidence-in-chief. 10 The other thing was I wasn't aware that the 11 panels were going to be split, so I may not necessarily 12 ask my questions appropriately. You will let me know if 13 I should be directing these to the second panel? Thank 14 you. 15 This is a question, I think, primarily for 16 Mr. Crofts, but I'm happy to hear anyone's view on this. 17 Is it your view that the relationship between 18 First Nations and Ontario Hydro, or its successor 19 companies, has improved in, say, the last 10 years? 20 MR. CROFTS: I'm glad you asked that question 21 because, I mean, the reality was that there virtually 22 was no relationship, it seemed to me, up until 1990, 23 when the past grievance process was established. And 24 then, for a period of maybe two or three years, maybe a 25 little bit more than that, through until about 1994, 26 there was still an excellent relationship -- and it was 27 excellent in that it seemed to me, for the first time, 28 Ontario Hydro was genuinely interested in what the First Les Services StenoTran Services Inc. 613-521-0703 3102 COO PANEL 1, ex (Lea) 1 Nations' issues and concerns were. 2 Now, that, in part, may have been, you know, 3 motivated by Konawapa and the desire to develop a new 4 transmission line through northern Ontario. But the 5 reality was there was a developing excellent 6 relationship, and I know, with some of the communities I 7 dealt with, their attitude towards Hydro -- which was 8 not to let even their trucks on the Reserve if they 9 could avoid it -- improved immensely. But in response 10 to your question, I would have to say that it is my 11 understanding, from about 1994 to the present, that 12 situation and the goodwill that was developed in the 13 earlier nineties has diminished dramatically, and I 14 think that relationship is very much on the wane, at 15 this point, and it's very unfortunate. Because the 16 reality is that the revenue-sharing component -- and 17 this doesn't just apply to Hydro -- bringing First 18 Nations into any economic undertakings, whatever they 19 may be, is something that behooves anybody that's 20 operating in their lands. So when Hydro came up with 21 the concept, in 1992-1993 of revenue sharing, or water 22 rental sharing, they really -- you know, they had struck 23 a concept which I felt could be of an immense benefit in 24 redressing what is often referred to as Third-World 25 living conditions on these communities. 26 So, the answer to your question is, there was 27 a period of probably four years where they were on to 28 something. For reasons known -- unknown to myself, they Les Services StenoTran Services Inc. 613-521-0703 3103 COO PANEL 1, ex (Lea) 1 have dropped the ball on that and I think that's really 2 unfortunate because an opportunity exists, a wonderful 3 opportunity, to redress some serious problems and take 4 people away from the Welfare situation. 5 MS LEA: One of the reasons I asked the 6 question is that we have heard from each of you about 7 serious damages that were caused to communities and 8 land, but most of them seem to have occurred prior to 9 about 1970. 10 Can anyone assist me as to whether that sort 11 of damage is occurring now or has occurred in the last 12 five to ten years? Particularly from transmission lines 13 and hydro generation again. Because that's, of course, 14 what this Board deals with here. 15 MR. BRESSETTE: I think that, to respond to 16 you, I guess, in a fair way, the education process we 17 have encountered and learning from trusting everyone, we 18 know we can't trust anyone any more. I think our 19 appearance here let's you know there is no relationship 20 with Hydro that we trust, so we are coming to the Board 21 seeking the Board to give direction to Hydro to deal 22 with us in a fair -- in an atmosphere where we can have 23 representation; we can have expertise that can guide us 24 through that process. If we did have the trust and 25 goodwill they are suggesting, I think, you know, we 26 wouldn't be here; we would be talking to Hydro. 27 Unfortunately, I guess, based on their own tables that 28 they called together, and not consulting with our Les Services StenoTran Services Inc. 613-521-0703 3104 COO PANEL 1, ex (Lea) 1 political structure so we could inform our communities 2 our communities and access our experts together to 3 participate and then gain a fair amount of time instead 4 of the short time in which they chose, leads us to 5 believe it is the same process that we have been dealing 6 with. 7 The only reason there are no continued abuses 8 going on is we won't let it happen any more. That's the 9 only reason why or else it would be continuing today. 10 I think we have put the Department of Indian 11 Affairs on notice as well. They cannot negotiate in a 12 closed door with someone else there to give away rights 13 to our lands any longer. That is a fair position that 14 we feel we must take because, like I said, when we 15 trusted people they often abused our trust and they 16 never heard. The things our people said, they went in 17 one ear and out the other. 18 Unfortunately, the people that came weren't 19 the people who represented us when they spoke with 20 corporate companies seeking access to our lands. So I 21 think we have become knowledgeable enough. 22 One thing you may not know, we weren't allowed 23 to have lawyers up until around 1960. We weren't 24 allowed to sue anybody. We weren't allowed court 25 proceedings. So this is very new to us. We are 26 becoming more knowledgeable and that is why we are 27 coming to these processes. 28 Now we see the value of participating here. I Les Services StenoTran Services Inc. 613-521-0703 3105 COO PANEL 1, ex (Lea) 1 understand throughout there has been some apprehension 2 from some people about allowing us to participate and I 3 think that in itself lets us know that we have to stand 4 up for our own rights any more. We have to take that 5 position. 6 So to answer you in a more direct way, no, you 7 know, nothing is happening because we won't let it 8 happen and we demand to be treated with a little more 9 respect in our own land. 10 Thank you. 11 MS GODBY: Now that Ontario Hydro is no longer 12 Ontario Hydro but is being broken up into its successor 13 companies, who is it that you will be dealing with with 14 respect to some of the past grievances and the 15 negotiations with respect to those and the future plans 16 of these various transmission and generation utilities? 17 MR. BRESSETTE: I think whoever inherits 18 Ontario Hydro inherits the responsibility. When Canada 19 accepted treaty obligations from Great Britain they 20 accepted the responsibility and the legal obligation 21 they owed to us. 22 You know, we have encountered this before with 23 easement rights that were granted to municipalities 24 around our communities. They asked for a right-of-way. 25 They got it. It was to drain water through our land. 26 This is just an example, if you can understand 27 what I'm trying to tell you. 28 We met with the County Council that did this Les Services StenoTran Services Inc. 613-521-0703 3106 COO PANEL 1, ex (Lea) 1 when I was a chief and they said, "Oh, that deal is no 2 longer binding because all those people are dead who 3 signed that agreement." 4 To us, there was still an obligation on the 5 part of whoever it was on behalf of whoever that 6 initiated this easement. They owed us and we were still 7 seeking the same type of compensation from them. They 8 were flooding our land, they didn't want to clean this 9 drain, so we blocked it off and we made them clean it 10 out. That's the only recourse we had because they said 11 all these people are dead. Unfortunately, that's not a 12 good way to do business. 13 We didn't choose to, but we were being ignored 14 and people felt that we didn't have any rights. All 15 these people died on a former Council so they said "We 16 don't owe you anything no more." We still intend to 17 hold whoever is the successor of Ontario Hydro 18 accountable and responsible for the damages, the 19 trespasses and everything else that they have done to 20 our people. 21 MS GODBY: One of the reasons I asked you the 22 question, and something that I think many of us struggle 23 with with respect to your evidence, is how much will a 24 Board order help. 25 In this hearing the Board is only going to 26 make an order regarding the transmission company. 27 I'm going to ask more details about your 28 evidence also to the second panel, but just from this Les Services StenoTran Services Inc. 613-521-0703 3107 COO PANEL 1, ex (Lea) 1 panel: How much will a Board order, if they granted 2 everything you sought, help you in terms of Ontario 3 Hydro, given that this Board has no jurisdiction over 4 the generation company? Right now we are not dealing 5 with the distribution company. 6 MR. BRESSETTE: One leads to the other and you 7 have to understand if you are dealing with transmission, 8 if we enter into this process of creating generating 9 stations, or whatever we do, local delivery centres, the 10 transmission rates are going to have a direct impact on 11 whatever we enter into. So every aspect of this process 12 will ultimately impact on the decisions that we make in 13 the future. 14 I think that's something that we are very 15 keenly aware of now. It's like you chop a tree down, it 16 has an impact on everything around it. I mean there's 17 certain things that occur. In the same way, what I'm 18 trying to say is if hydro transmission rates are 19 established and we sort of want to feed into this later 20 on, I think what we are asking for is some consideration 21 in negotiations that we be given more ability to develop 22 because we are underdeveloped at this time. 23 It's much like a Third World country. You 24 don't go over there and establish a rate and say "If you 25 want in, we are going to establish a rate and these are 26 what they are". "The transmission rates, if you build a 27 generating station, it's going to cost you so much and 28 you can only make this much money." Les Services StenoTran Services Inc. 613-521-0703 3108 COO PANEL 1, ex (Lea) 1 How long will it take them to recoup their 2 investment to where they are actually going to realize a 3 profit off of the money that they invest? It will be a 4 long time if in fact it is only a small source that they 5 are looking at, but that small source will create enough 6 revenue to make a significant change in the economy of 7 that community. That's what we are saying here. 8 MS LEA: One of the things that I wanted to 9 ask the panels that present this evidence, and I don't 10 know whether it is this panel or the next one that can 11 best answer this for me, is whereabouts in Ontario are 12 there presently First Nation electricity projects or 13 where do you plan to build them? Would that be the 14 second panel? 15 MR. VOGEL: The second panel is dealing with 16 that issue. 17 MS LEA: Okay. Thanks very much. A few more 18 questions then on details in your evidence. 19 In your evidence in chief and in the statement 20 by your counsel, you indicated who the Chiefs of Ontario 21 does represent. I understand then that there are some 22 First Nations groups that are not represented by the 23 Chiefs of Ontario. Am I correct? 24 MR. BRESSETTE: The groups that we recognize 25 are people who come and ask us to become an association 26 of ours. We are not a forced entity. We don't force 27 our will over anyone. I mean it's a freedom of choice. 28 The ones I'm referring to are communities that Les Services StenoTran Services Inc. 613-521-0703 3109 COO PANEL 1, ex (Lea) 1 are not recognized as bands under the Indian Act. They 2 are near bands or new bands acquiring status. I would 3 assume that once they get to those levels they will be 4 seeking membership within the Chiefs of Ontario because 5 politically if they ask for assistance, we give them 6 assistance and we support them. 7 MR. VOGEL: Perhaps I can help, Ms Lea. My 8 understanding is that the Chiefs of Ontario represents 9 the interests of all recognized status bands under the 10 Indian Act in Ontario. 11 MS LEA: It does. 12 MR. VOGEL: Yes. 13 MS LEA: Can anybody assist me as to what 14 percentage that represents of either the -- I was going 15 to say the bands, but obviously I don't -- you know, I 16 don't know what the recognition is about, or maybe the 17 native people in Ontario. That may not be a good 18 question to ask because it may not be something that is 19 easily ascertainable. 20 MR. VOGEL: I think all I can tell you is that 21 all recognized First Nations under the Indian Act are 22 represented by the Chiefs of Ontario. I'm not sure if 23 the Chief can add to that or not. 24 MS LEA: No. I think that's enough. Thank 25 you. One moment, please. 26 --- Pause 27 MS LEA: Mr. Kelly, you were talking with Ms 28 Godby about various compensations that you received or Les Services StenoTran Services Inc. 613-521-0703 3110 COO PANEL 1, ex (Lea) 1 didn't receive, as the case may be. At page 7 of your 2 evidence you indicate that there was a settlement that 3 was eventually reached in 1994 for -- I think that was 4 clarified as being an annual rent. Do I understand that 5 correctly? 6 MR. KELLY: Yes. It's $15,000 that is paid to 7 our First Nation for the rental of that property. 8 There's an additional $16,000 for payment in lieu of 9 taxes. 10 MS LEA: So there was $15,000 annually for use 11 of the easement or the land and $16,000. Is that also 12 an annual payment or is that a one time 13 MR. KELLY: That's an annual payment. 14 MS LEA: An annual payment in lieu of taxes 15 MR. KELLY: Correct. 16 MS LEA: Okay. Thanks. That clarifies that 17 for me. 18 Mr. Crofts, at Tab 2, page 7 of your evidence, 19 and this is actually one of the corrections you made to 20 your evidence. It deals with the second last paragraph 21 on page 7. 22 MR. CROFTS: Yes. 23 MS LEA: You say here in the second sentence 24 of that paragraph: 25 "Directions are required from the Ontario 26 Energy Board to Ontario Hydro Networks 27 Corporation --" 28 As corrected. Les Services StenoTran Services Inc. 613-521-0703 3111 COO PANEL 1, ex (Lea) 1 "-- the Province and the Ministry of 2 Energy to undertake negotiations with 3 First Nations to share in a portion of 4 both generating and water rental 5 revenues." 6 You understand that this Board doesn't make 7 directions to the province and the Ministry of Energy. 8 It's rather the reverse relationship. 9 MR. CROFTS: I suppose that goes back to my 10 last comment that I was asked. It may not necessarily 11 be in their purview. I don't know precisely what their 12 purview is, but I do know that nothing happens with 13 First Nations unless somebody takes initiatives. 14 If it's not within their purview, maybe they 15 can whisper in the ears of those whose purview it is in 16 because it's a critical issue. 17 MS LEA: I think if we changed the word 18 "directions" to "recommendations" with respect to the 19 province and the Ministry of Energy, that might be of 20 assistance as I am understanding your evidence. 21 MR. CROFTS: Sure. 22 MS LEA: Okay. Thank you. One moment, 23 please. 24 --- Pause 25 MS LEA: Thank you very much. Those are my 26 questions for this panel. 27 THE PRESIDING MEMBER: Thank you, Ms Lea. We 28 will go to Mr. Rogers, please. Les Services StenoTran Services Inc. 613-521-0703 3112 COO PANEL 1, ex (Lea) 1 MR. ROGERS: Thank you very much, Dr. Higgin. 2 CROSS-EXAMINATION 3 MR. ROGERS: I would like to refer to some 4 documents during the course of this discussion. I am 5 going to ask that a package of documents which have been 6 provided days ago to my friends and much of what is in 7 the evidence, but I put it all in one place, be 8 distributed now and given an exhibit number so that I 9 can discuss them with the witnesses. 10 THE PRESIDING MEMBER: Sure. 11 MS LEA: It will be Exhibit G16.1. Thank you 12 very much. 13 EXHIBIT NO. G16.1: Package of Documents, 14 Communications from OHNC to First Nations 15 MR. ROGERS: I will cover these in a minute, 16 Dr. Higgin and Members of the Board. You will see that 17 the package really consists of communications 18 essentially from my client to First Nations. It has to 19 do with the consultation process. 20 Before I come to that, ladies and gentlemen, 21 my name is Don Rogers. I represent Ontario Hydro 22 Network Corporation, the applicant in this case. I have 23 listened carefully to your evidence this morning. 24 I would like to try and approach this in a way 25 which I hope will clear up some confusion and blurring 26 of lines between various issues here. First, as I 27 understand your evidence this morning, you come before 28 the Board to draw to their attention historical Les Services StenoTran Services Inc. 613-521-0703 3113 COO PANEL 1, cr-ex (Rogers) 1 grievances. Is that correct? Ms Seabrook, could I ask 2 you that question? 3 MS SEABROOK: Yes, I believe that's correct, 4 but we also wanted to I guess let the Board know of the 5 impacts that the hydro development has had on our 6 communities and the Nipigon River and our traditional 7 territories. 8 MR. ROGERS: Yes, I understand. Let's just 9 deal with your situation so that we can put it as an 10 example of what the group has been telling us. 11 MS SEABROOK: Yes. 12 MR. ROGERS: You told us about the effect of 13 electrical generation and transmission facilities in 14 your land. You told us that you are a negotiator or 15 have been a negotiator on behalf of -- 16 MS SEABROOK: I have been on the negotiating 17 team. 18 MR. ROGERS: The negotiating team. 19 MS SEABROOK: Yes. 20 MR. ROGERS: As I understand it, there was a 21 process in place top address these grievances. 22 MS SEABROOK: Yes. That's correct. 23 MR. ROGERS: And this is the negotiating team 24 that you were a part of. 25 MS SEABROOK: Yes. 26 MR. ROGERS: And if I understand it correctly, 27 you did successfully negotiate a settlement. 28 MS SEABROOK: No. We did not settle. Les Services StenoTran Services Inc. 613-521-0703 3114 COO PANEL 1, cr-ex (Rogers) 1 MR. ROGERS: I thought that you told us that 2 you settled your -- well, perhaps I'm wrong. Let me 3 just check that. 4 MS SEABROOK: The negotiating processes 5 stopped. We put an offer on the table and that was it. 6 MR. ROGERS: Oh, I see. The offer was 7 withdrawn so you are still negotiating. 8 MS SEABROOK: We haven't heard from Hydro for 9 quite a while. 10 MR. ROGERS: Who are you dealing with at Hydro 11 now? 12 MS SEABROOK: Originally it was John Peters 13 and now we are dealing with Arnold May. 14 MR. ROGERS: I'm instructed that he works for 15 OPGI which is not my client, but the generation company. 16 Is that correct? 17 MS SEABROOK: I'm not sure where he works, who 18 he works for right now. Who are you talking about, John 19 Peters or Arnold May? 20 MR. ROGERS: Arnold May? 21 MS SEABROOK: May. 22 MR. ROGERS: May. I don't know the gentleman. 23 He doesn't work for my client. 24 MS SEABROOK: All right. 25 MR. ROGERS: Is that the man you are 26 negotiating with now? 27 MS SEABROOK: That's who we were negotiating 28 with. I don't know who they are going to assign us now. Les Services StenoTran Services Inc. 613-521-0703 3115 COO PANEL 1, cr-ex (Rogers) 1 MR. ROGERS: But your negotiations then are 2 with OPGI, not OHNC? 3 MS SEABROOK: Well, since Hydro has changed 4 I'm not really sure -- 5 MR. ROGERS: Who would be responsible. 6 MS SEABROOK: -- who it is. 7 MR. ROGERS: I see. 8 MS SEABROOK: OPGI is the Ontario -- 9 MR. ROGERS: That's the generation company. 10 MS SEABROOK: Yes. That's right. 11 MR. ROGERS: And I understand that you are 12 negotiating with them. Am I correct? 13 MS SEABROOK: That's correct. 14 MR. ROGERS: Mr. Kelly, can I just turn to you 15 for a moment, sir? I hope I have this right, that your 16 band did negotiate a settlement in 1994 concerning past 17 grievances? 18 MR. KELLY: Yes, it did. 19 MR. ROGERS: And there are, therefore, no 20 ongoing negotiations because you have already got a 21 settlement? 22 MR. KELLY: Right. 23 MR. ROGERS: I see. All right. 24 And there are other bands, I take it, who are 25 still on negotiation with whatever Hydro entity, either 26 my client or OPGI, is responsible. Is that right? 27 MR. BRESSETTE: Right. 28 MR. ROGERS: So there is a process outside Les Services StenoTran Services Inc. 613-521-0703 3116 COO PANEL 1, cr-ex (Rogers) 1 these proceedings to try and address these historical 2 grievances that you have. Is that right? 3 MR. BRESSETTE: That's right. 4 MR. ROGERS: Thank you. 5 MR. BRESSETTE: How successful they are I 6 don't know. 7 MR. ROGERS: Well, I guess I don't know 8 either. It's a negotiation that's going on outside this 9 process. You have already said yes to that I think. 10 MR. BRESSETTE: I want to make something 11 clear. There may be some uninitiated processes. 12 Whether they are going and will get anywhere is another 13 matter. 14 MR. ROGERS: I understand. 15 The bands now have the right to go to court if 16 you are not satisfied with the negotiations, don't you? 17 MR. BRESSETTE: Yes. 18 MR. CROFTS: If I may interject, it's a bit 19 difficult when they don't have their own resources. 20 MR. ROGERS: That could be. 21 MR. CROFTS: This is clearly, when you start 22 talking courts you are talking about a process that is 23 enormously imbalanced. They have no revenues for this. 24 MR. ROGERS: That may be so, Mr. Crofts, but 25 the fact of the matter is that there is recourse to the 26 courts. There is nothing illegal about the bands using 27 the court system, as indeed you have, to gain redress 28 for wrongs? Les Services StenoTran Services Inc. 613-521-0703 3117 COO PANEL 1, cr-ex (Rogers) 1 MR. CROFTS: Given the resources that they 2 don't have, but you do have, yes. 3 MR. ROGERS: I don't have it. I just work for 4 the applicant. 5 MR. BRESSETTE: Can I say something to your 6 statement about you can go to the courts? You know, if 7 you want to negotiate and you say you are negotiating in 8 good faith or your company is intent on, why are you 9 suggesting we go to the courts? 10 MR. ROGERS: I am not suggesting you go to the 11 courts. Sir, I will be honest, here's my problem. I 12 have a serious concern with the jurisdiction of this 13 Board to grant what you are asking for. I am trying to 14 understand what it is that this Board can do within its 15 jurisdiction to address your complaints. I am trying to 16 understand what complaints you have which properly can 17 be dealt with by this Board and which cannot. That's 18 really the purpose of my questions. 19 MR. BRESSETTE: So what I understand, we came 20 here because we haven't had satisfaction in dealing with 21 Hydro. The Ontario Energy Board is the one that can 22 direct you to undertake those negotiations and probably 23 oversee and we can come back here if we get in a 24 deadlock. That is a far cry from running to courts, 25 where our communities often enter huge deficits because 26 we live in welfare states in our own country. 27 MR. ROGERS: I am not suggesting you go to 28 court. Les Services StenoTran Services Inc. 613-521-0703 3118 COO PANEL 1, cr-ex (Rogers) 1 MR. BRESSETTE: It's an imbalance in the 2 playing field that we are trying to address here. I 3 think you have to recognize -- and I wish you could do 4 this, you could walk a mile in our shoes, take your suit 5 off and come and live where we live and see the kind of 6 life we live. It's a far cry from anything you can ever 7 even imagine. 8 MR. VOGEL: Mr. Rogers, perhaps I can assist 9 here. I hope this is helpful. The First Nations here 10 are not requesting, and I think the chief indicated this 11 in his evidence, are not requesting the Board to award 12 damages or otherwise address these past grievances. 13 What the First Nations are saying to the Board is that 14 the history of development and generation and 15 transmission facilities in this province have resulted 16 in the First Nations being in a disadvantaged position 17 relative to others with a view to pursuing opportunities 18 in this new marketplace. 19 What they are saying is the Board should take 20 into account that disadvantage position and are 21 requesting the Board to provide special direction to 22 OHNC which will provide the framework that Mr. Curtis 23 referred to in his evidence to permit the types of 24 special consideration which will allow the First Nations 25 then to take advantage of these opportunities. So I 26 think we should be very clear here, that we are not 27 asking this Board and, frankly, I agree with you, Mr. 28 Rogers, the Board does not have jurisdiction to deal Les Services StenoTran Services Inc. 613-521-0703 3119 COO PANEL 1, cr-ex (Rogers) 1 with in the sense of resolving these past grievance 2 processes. 3 So that's not why we are here, but it is a 4 condition which is relevant then to why this Board 5 should grant the special consideration the First Nations 6 are asking for. 7 MR. ROGERS: Very good. Thank you. 8 Then I will leave that whole topic then. 9 Thank you very much. I understand the position. 10 I want then to talk about a second concern 11 that you raised this morning and that is the 12 consultation process in this proceeding with my client. 13 Chief Bressette, I think you are the person I should 14 address about this. 15 You have told us, sir, that Chiefs of Ontario 16 represent all status bands in Ontario. 17 MR. BRESSETTE: Yes. 18 MR. ROGERS: So, if my client wanted to 19 consult with First Nations' peoples they would do it 20 through your organization, would they? 21 MR. BRESSETTE: Yes, they would. 22 MR. ROGERS: That would be the appropriate 23 body for them to have approached? 24 MR. BRESSETTE: Yes. 25 MR. ROGERS: Would you look at the document 26 that we have circulated this morning, G16.1. Do you 27 have that, Chief Bressette, with you? You see the first 28 document there is a letter of June 11, 1999 from the Les Services StenoTran Services Inc. 613-521-0703 3120 COO PANEL 1, cr-ex (Rogers) 1 President of my client, Ontario Hydro Service Company, 2 to all Stakeholder Consultation Participants. Do you 3 see that? 4 MR. BRESSETTE: Yes. 5 MR. ROGERS: Did you receive a copy of this 6 letter? 7 MR. BRESSETTE: I think this letter went into 8 our office and I have to advise you that our office is 9 split in two different sections, one in Toronto and the 10 other one is -- we have a satellite office in Thunder 11 Bay, as well as I have an office in my home community 12 and I do a great deal of travel and spend a great deal 13 of time in Ottawa as well. 14 MR. ROGERS: Yes, but did this letter go to 15 your office, to the Chiefs of Ontario? 16 MR. BRESSETTE: I would imagine that this 17 letter did go to the office. 18 MR. ROGERS: Thank you. 19 MR. ROGERS: Now, there is a second letter 20 here, June 29, 1999, which was sent, I understand, to 21 all stakeholders. 22 MR. BRESSETTE: Yes. 23 MR. ROGERS: Was this letter received by your 24 office? 25 MR. BRESSETTE: I can't confirm anything that 26 you are asking me, unless I have seen it and I have 27 never seen this letter. 28 MR. ROGERS: Were you not aware that this Les Services StenoTran Services Inc. 613-521-0703 3121 COO PANEL 1, cr-ex (Rogers) 1 process was going on from June 11, 1999 and my client 2 was soliciting stakeholders, people who had an interest 3 in the proceedings to become involved and inform 4 themselves about it? 5 MR. BRESSETTE: How I was initially informed 6 about this was I was invited to a coffee shop, a person 7 who was working on contract with OHNC, whatever the 8 acronym is, met with me in Sarnia, Ontario and advised 9 me this is going on. I had another chief with me there 10 to hear what was going on and we advised him that our 11 process, if they wanted to consult with us they should 12 come and make direct contact with us, not send letters 13 to us. Someone should have come to us like any other 14 government representative would and sat down and 15 explained this whole process to us. 16 Subsequent to that I attended a meeting in 17 Albany on the James Bay coast and what I was told there 18 was by one of your representatives at that time was we 19 are very keenly aware that our process is flawed and we 20 are going to have to set up a new consultation process. 21 He advised that to the Mishkeegogamang Tribal Council, 22 of which nothing ever happened beyond that time. 23 So to answer your questions about your 24 letters, that's exactly what happened. 25 MR. ROGERS: Right. So the complaint then is 26 that my company came into existence, I am told, on April 27 1, 1999 and my client, and two months later, on June 11, 28 1999 they wrote to all stakeholders, including you as a Les Services StenoTran Services Inc. 613-521-0703 3122 COO PANEL 1, cr-ex (Rogers) 1 representative of First Nations, inviting participation 2 in the consultation process. Now, your complaint, I 3 gather, is that they should not have done that by a 4 letter. They should have come to see you personally? 5 MR. BRESSETTE: Yes. 6 MR. ROGERS: I see. Had they come to see you 7 personally on June 11, 1999 would you then have 8 participated in all the consultation process? 9 MR. BRESSETTE: We would have set a panel up 10 and negotiated the proper way to conduct consultations 11 with our people. 12 MR. ROGERS: Let's just go through these 13 documents, if we could. 14 I want the Board to be aware of what efforts 15 my client made, however misguided you may think they 16 are. 17 First, we talked about the letter of June 11, 18 1999; and there's a second letter of June 29, 1999, sent 19 to you, as well as all other stakeholders; a third 20 letter, on July the 7th, 1999, enclosing certain 21 documents concerning the consultation process -- did you 22 receive this letter, Chief Bressette? 23 MR. BRESSETTE: December 21st, yes. 24 MR. ROGERS: No, July 7th. It's on page 3 of 25 this compilation. 26 MR. BRESSETTE: No, I have never received this 27 letter. 28 MR. ROGERS: Well, would it come to your Les Services StenoTran Services Inc. 613-521-0703 3123 COO PANEL 1, cr-ex (Rogers) 1 attention if it was sent? If I can show that it was 2 sent to the Chiefs, would it normally have been brought 3 to your attention? 4 MR. BRESSETTE: In some cases, yes; in other 5 cases, people in the office would respond to letters 6 like this. 7 MR. ROGERS: You are not saying that it wasn't 8 received by your office, just that you didn't get to see 9 it? 10 MR. BRESSETTE: Yes. 11 MR. ROGERS: Well, wouldn't you have 12 instructions that letters like this should be brought to 13 your attention so that you could take appropriate 14 action? 15 MR. BRESSETTE: We have a legal advisor who 16 works in the office, not regularly. But I know at the 17 time in which, you know, a lot of these things were 18 coming on, we have other business we do, as well. 19 MR. ROGERS: Yes, I'm sure you do. 20 MR. BRESSETTE: I mean we get swamped with 21 paperwork. I get letters piled this high on my desk 22 every day. And in the meantime, I have a phone in my 23 hand from Chiefs asking me to speak to issues. So, you 24 know, every single letter that crosses my desk -- that's 25 why we prefer someone to come and meet with us -- 26 MR. ROGERS: All right. We will come to that. 27 MR. BRESSETTE: -- who engage us into some 28 kind of process -- Les Services StenoTran Services Inc. 613-521-0703 3124 COO PANEL 1, cr-ex (Rogers) 1 MR. ROGERS: I will come to that, in a moment. 2 So, here's a letter of July the 7th, with 3 three enclosures, which are reports to stakeholders and 4 -- this is in our prefiled evidence; I'm not going to 5 take time with it. 6 Now, if we go to page 6 of this series of 7 documents, here's a letter of August 4, 1999 -- another 8 report to stakeholders. And I'm advised that this was 9 sent to the Chiefs, as well. 10 Was this letter drawn to your attention by 11 your staff? 12 MR. BRESSETTE: No, this letter wasn't drawn 13 to my attention. 14 MR. ROGERS: And you will see it refers to a 15 workshop that was held on July 26th. 16 Did anybody from your office, or did you go to 17 the workshop to find out about what my client's plans 18 were? 19 MR. BRESSETTE: I never went to the workshop, 20 no. 21 MR. ROGERS: All right. Thank you. 22 Now, if we can just continue to flip along. 23 Here's another letter, on page 8, August 20th, 1999, to 24 all stakeholders. 25 Did you receive this letter, Chief Bressette? 26 MR. BRESSETTE: No, I didn't receive this 27 letter. 28 MR. ROGERS: You see they are talking about a Les Services StenoTran Services Inc. 613-521-0703 3125 COO PANEL 1, cr-ex (Rogers) 1 range of options for transmission cost allocation and 2 rate design? 3 MR. BRESSETTE: Yes. 4 MR. ROGERS: And offering a telephone 5 conference session for anybody who's interested and 6 telling you how you can get additional information about 7 it. 8 Did anybody from your organization do anything 9 in response to this letter? 10 MR. BRESSETTE: I don't think anybody would 11 have responded to this because there was not an explicit 12 letter sent to our office requesting that we begin a 13 consultation process for the First Nations in Ontario. 14 MR. ROGERS: Right. The next page, page 9, 15 September 8th, 1999, another report to stakeholders, 16 which was sent to the Chiefs. 17 Did you -- was this brought to your attention? 18 MR. BRESSETTE: No. 19 MR. ROGERS: Do you know what they did with 20 these letters, in your office? 21 MR. BRESSETTE: I wouldn't know what happened 22 to these letters. I can find out today and let you 23 know. 24 MR. ROGERS: All right. Would you do that for 25 me, please? 26 MR. BRESSETTE: Sure. 27 MR. ROGERS: Thank you. 28 Now turning -- we should get an undertaking Les Services StenoTran Services Inc. 613-521-0703 3126 COO PANEL 1, cr-ex (Rogers) 1 number. 2 MS LEA: Yes. F16.2, please. 3 MR. ROGERS: Thank you very much. 4 UNDERTAKING NO. F16.2: Chief Bressette 5 to find out and report on what happened 6 with series of letters sent by OHNC to 7 the Chiefs of Ontario 8 MR. ROGERS: Now, let's go to the next page, 9 which is at page 10 of this package. Now, here's a 10 letter to the Chiefs of Ontario, and to you personally. 11 MR. BRESSETTE: Yes. 12 MR. ROGERS: September 21st. And this is 13 written by a Pat Oakes Do you know Pat Oakes. 14 MR. BRESSETTE: No. 15 MR. ROGERS: Do you see, at the second page, 16 she's the Senior Advisor of the Aboriginal Relations 17 Department in my client's set-up? Do you see that, sir? 18 MR. BRESSETTE: Yes. 19 MR. ROGERS: Are you aware that OHNC had taken 20 the step to create an Aboriginal Relations Group to deal 21 with Aboriginal issues, in the new company? 22 MR. BRESSETTE: I think by the time I got this 23 letter we had already made a decision to come to the 24 Ontario Energy Board, so we ignored these letters, like 25 I said, because we have been involved in bureaucratic 26 shuffles forever in our political processes. 27 MR. ROGERS: I see. Wall, you may have a 28 valid point there, I don't know, but -- and your Les Services StenoTran Services Inc. 613-521-0703 3127 COO PANEL 1, cr-ex (Rogers) 1 evidence to this Board is that you chose consciously to 2 ignore my client's efforts to involve you because you 3 wanted to come to this Board? 4 MR. BRESSETTE: Yes. 5 MR. ROGERS: I see. 6 MR. BRESSETTE: Because of the history of 7 dealing with Ontario Hydro. 8 MR. ROGERS: I see. And you will see that in 9 this letter, September 21st, 1999, Miss Oakes was 10 responding to a letter you, apparently, wrote -- I don't 11 have that here. 12 MR. BRESSETTE: I never wrote a letter to her. 13 MR. ROGERS: Well, maybe someone from your 14 organization did; I don't know. 15 MR. BRESSETTE: No, we didn't. We sent a 16 letter to someone else. 17 MR. ROGERS: Oh, I see. Who did you send it 18 to? 19 MR. BRESSETTE: I think the letter identifies 20 who -- 21 MR. ROGERS: Mr. Gillespie. He works for my 22 client. 23 MR. BRESSETTE: Yes, that's who the letter was 24 written to. 25 MR. ROGERS: All right. And this letter seems 26 to be asking to make arrangements to meet with you. You 27 see, in the last paragraph of the letter, she says -- 28 this Miss Oakes -- that: Les Services StenoTran Services Inc. 613-521-0703 3128 COO PANEL 1, cr-ex (Rogers) 1 "I have previously spoken with your 2 assistant, Elizabeth Thunder-Stevens, to 3 arrange a meeting with you. She has yet 4 to confirm a date and time." (As read) 5 Do you remember getting this letter? 6 MR. BRESSETTE: Yes, I do. 7 MR. ROGERS: And does Miss Thunder-Stevens 8 work for you? 9 MR. BRESSETTE: Yes, she does. 10 MR. ROGERS: And is it her job, among others, 11 to arrange appointments for you? 12 MR. BRESSETTE: Yes, she does. 13 MR. ROGERS: Okay. Now, if we go over to the 14 next page, please. Here's a letter of January 31st, 15 2000. 16 MR. BRESSETTE: Yes. 17 MR. ROGERS: So we have got, now, from -- the 18 last letter was September 21st, 1999, to January 31st, 19 2000. 20 Had you ever contacted OHNC to try and arrange 21 this meeting that they were soliciting with you, up to 22 the time of this letter of January 31? 23 MR. BRESSETTE: I will tell you what happened. 24 I wrote a letter to Mr. Gillespie, because I was advised 25 that's who I should speak to. What happened is somebody 26 who works for him wrote to me and said, "I want to meet 27 with you". I didn't choose to undertake that because I 28 wanted to deal with the person the letter was written Les Services StenoTran Services Inc. 613-521-0703 3129 COO PANEL 1, cr-ex (Rogers) 1 to. And like I said, I have been involved in these kind 2 of processes for years where we get shuffled off to 3 someone at a lower level; we wind up spending our time 4 talking, negotiating, and then we are told, "You have to 5 go and see so and so" after we waste an enormous amount 6 of time and effort trying to make arrangements with 7 these type of people. So, very often -- and we learned 8 this because it's the way we are treated by everyone. 9 It's not just Hydro. Government deals with us in the 10 same way. We ask to meet with provincial ministers; we 11 are told to go and see a committee. We don't go and see 12 the committee; we want to speak to the ministers, 13 because they are the decision makers, they are the 14 people that can give us answers. And, unfortunately, I 15 know you are trying to make your point that, "We did 16 this; we did that". Well, I made a point, too, and 17 everybody ignored me, so -- 18 MR. ROGERS: I'm trying to make the point that 19 my client -- which has just been formed less than a year 20 ago -- has tried very, very hard to consult with First 21 Nations. 22 MR. BRESSETTE: Why didn't your client, 23 Mr. Gillespie, actually pick the phone up and try and 24 call me? 25 MR. ROGERS: Well, look at his letter of 26 January 31st, 2000. 27 MR. BRESSETTE: Well, why didn't he call me. 28 That's not what I asked -- Les Services StenoTran Services Inc. 613-521-0703 3130 COO PANEL 1, cr-ex (Rogers) 1 MR. ROGERS: I'm going to just -- if you look 2 at his letter, Chief Bressette, you will see that Miss 3 Oakes, who is a senior advisor, says, in the last 4 paragraph -- or second paragraph: 5 "We, Les Horswill and myself --" (As 6 read) 7 Now, I will just point out, Les Horswill, as 8 you will see from the bottom of the page, is the Vice- 9 President of my client. 10 MR. BRESSETTE: Yes. 11 MR. ROGERS: That: 12 "We, Les Horswill and myself, look 13 forward to the opportunity to meet with 14 you in person. Unfortunately, I have not 15 been able to arrange a meeting with you. 16 I have spoken, on numerous occasions, 17 since June of 1999, with your 18 administrative assistant and meeting 19 co-ordinator, Elizabeth Thunder. We had 20 discussed some tentative dates which she 21 thought might work with your schedule 22 when you were in Toronto, but to no 23 avail. We are very flexible in our 24 meeting times and are prepared to 25 entertain a breakfast meeting if that 26 time is more suitable for you. Please 27 inform us as soon as possible when you 28 are prepared to meet. We look forward to Les Services StenoTran Services Inc. 613-521-0703 3131 COO PANEL 1, cr-ex (Rogers) 1 your response." (As read) 2 Now, did you ever contact them, or have your 3 assistant contact them, and arrange a meeting? 4 MR. BRESSETTE: By the time this process was 5 moving and your letters were circulated, we had made a 6 conscious decision, in the Executive, to come here -- I 7 have stated that before -- and that will continue to be 8 my position here. 9 MR. ROGERS: All right. So my client was 10 wasting its breath in trying to meet with you? 11 MR. BRESSETTE: Well, we had made a decision 12 because, Number One, we called one person who didn't 13 choose to call us back and set the process up. We came 14 here. 15 MR. ROGERS: Very well. 16 I will just refer you to a couple of other 17 documents. I don't think this one has been 18 redistributed but I draw to the Board's attention that 19 Mr. Curtis, when he was testifying -- I think he was 20 asked by Miss Godby about whether or not he had been 21 involved in any meetings with First Nations and Exhibit 22 F7-3 was filed to show that he did attend -- that there 23 were two meetings held between OHNC and First Nations 24 groups during the period of August through October of 25 1999, one in Fort Albany, on August 31st to 26 September 1st, 1999, and another one at Ohsweken, 27 Ontario, on October 13th, 1999, and Mr. Curtis, I think, 28 was at both meetings. Les Services StenoTran Services Inc. 613-521-0703 3132 COO PANEL 1, cr-ex (Rogers) 1 Were you there, Chief Bressette? 2 MR. BRESSETTE: I was there after he made his 3 presentation. 4 MR. ROGERS: You know that Mr. Curtis was one 5 of the two people responsible for the entire 6 presentation to this Board by my client, concerning 7 transmission rates? 8 MR. BRESSETTE: I believe he's the one that 9 stated to us that he knows there was flaws in his 10 process of consultation and he would have to come up 11 with a different process. I never heard from him since. 12 I had a direct conversation with him over 13 dinner, over lunch at that Albany meeting, and he 14 admitted that what we have done has not worked and we 15 are going to have to find a new way. No new way was 16 sought after that date. 17 MR. ROGERS: Is it also a fact that my client 18 offered to provide financial support for groups who 19 wanted to become educated about their proposal? 20 MR. BRESSETTE: He never offered me that. He 21 may have offered the Muskegog Council that. 22 MR. ROGERS: Well, it's found at Tab 9, 23 Schedule 2, page 10 of 10 of Exhibit B in these 24 proceedings, but there is a document entitled 25 "Stakeholder Consultation Process, OHSC's Financial 26 Support Guideline". These guidelines, as I understand 27 it, offered to provide compensation for groups, such as 28 your group I suppose, to come, to work, to prepare, to Les Services StenoTran Services Inc. 613-521-0703 3133 COO PANEL 1, cr-ex (Rogers) 1 come to the consultation process and be compensated for 2 it. Were you aware of that? 3 MR. BRESSETTE: We were advised that there were 4 five tables for us to go to and I think those were 5 sparsely attended. 6 MR. ROGERS: No, but could you answer my 7 question, Chief. 8 Were you aware that my client offered to pay 9 compensation to groups of people who needed time to 10 study the material that was coming out and to attend 11 educational programs they were putting on. 12 MR. BRESSETTE: Are you saying that was 13 directed at First Nations? 14 MR. ROGERS: No, to all interested parties who 15 didn't have resources, including First Nations. 16 MR. BRESSETTE: The documents may have been 17 there, but I think I have to keep coming back to the 18 point: We don't trust you. 19 MR. ROGERS: I know that. 20 MR. BRESSETTE: We don't trust your company 21 and your dealings with us, so we came here. 22 MR. ROGERS: Very well. 23 Would you at least agree with me this far, 24 that my client, since its inception in a little less 25 than a year ago, has tried harder than any other past 26 Hydro entity to contact you and to involve you in this 27 process? 28 MR. BRESSETTE: I don't think sending us Les Services StenoTran Services Inc. 613-521-0703 3134 COO PANEL 1, cr-ex (Rogers) 1 letters is trying a great deal of degree. They could 2 have at least made an effort to contact us more 3 directly. 4 MR. ROGERS: Well, they did try to contact 5 your Executive Assistant. 6 MR. BRESSETTE: Through someone in the 7 Aboriginal Relations Office. 8 I must keep coming back, I wrote a letter to 9 one gentleman and he did not write, he didn't call me 10 back, he referred me to somebody else and I go back to 11 the bureaucratic shuffle that I am accustomed to that 12 occurs regularly in our dealings with government or 13 corporate entities. 14 It's unfortunate that we don't trust you, but 15 that's what history has taught us. Had our relations 16 been going along smoothly all along I don't think we 17 would be here today. We would have negotiated with you 18 and had settlements to these -- 19 MR. ROGERS: Just for the future then, we are 20 not to contact your Executive Assistant, they are to 21 contact you directly. Is that -- 22 MR. BRESSETTE: We have an Executive Director 23 at the Chiefs of Ontario office and that is the one that 24 looks after correspondence. That correspondence goes to 25 an Executive and we meet monthly with their 26 representatives from all of the political organizations 27 that we represent in Ontario. That is where our 28 decisions are made. They are not made by one person. Les Services StenoTran Services Inc. 613-521-0703 3135 COO PANEL 1, cr-ex (Rogers) 1 MR. ROGERS: Who is Elizabeth Thunder-Stevens? 2 MR. BRESSETTE: That is my Executive 3 Assistant. 4 I also carry a portfolio at the Assembly of 5 First Nations as a Vice-Chief for Ontario. That's two 6 different jobs I hold. One is tied to the Chiefs of 7 Ontario, the Ontario Regional Chief. The other position 8 is the Vice-Chief for the Assembly of First Nations. 9 Elizabeth Stevens works for me on a file of 10 the Vice-Chief for the Assembly of First Nations. 11 Andrew Ruben is the Executive Director at the 12 Chiefs of Ontario. He is directly accountable to our 13 Executive and I am the Chairman of that Executive that 14 makes decisions. 15 MR. ROGERS: All right. 16 Thank you very much, Chief. Those are my 17 questions. 18 Thank you, sir. 19 THE PRESIDING MEMBER: Thank you, Mr. Rogers. 20 The Board may have some questions. 21 Mr. Smith. 22 MEMBER SMITH: Just one question. 23 The reference in your submission to the Hydro 24 policy for aboriginal relations that was approved in 25 May, 1993, is it your information that the Ontario Hydro 26 Networks, the company that has brought this application 27 before us, has approved this policy or it's part of its 28 policy? Les Services StenoTran Services Inc. 613-521-0703 3136 COO PANEL 1 1 MR. BRESSETTE: I think, you know, the only 2 thing I can go back to, when the law was made, when the 3 treaties were signed, we signed them with certain people 4 and we expect that those treaties are still honoured 5 even though those people passed it off to somebody else, 6 that if they had a policy dealing with us it would 7 continue on. 8 Like I stated earlier to the lady across from 9 me, I'm not sure if somebody dies or something that 10 signed that agreement the agreement doesn't mean 11 anything any more. Because that is sort of the argument 12 everybody uses with our people, that "We are not bound 13 by that because we didn't make that policy". 14 So I think our only reference to this document 15 is it still upholding because nobody sent something out 16 saying that it doesn't exist any more. 17 MEMBER SMITH: That is the point I was trying 18 to get at. 19 I just wonder, maybe I could ask again: Are 20 you aware whether Ontario Power Generation and Ontario 21 Hydro Networks have adopted this as their policy? 22 MR. BRESSETTE: Yes. 23 MEMBER SMITH: Or are you saying you assume 24 they have adopted it because it was the old Hydro policy 25 and they haven't said anything any different. 26 MS GODBY: Mr. Smith, perhaps I can be of some 27 assistance. 28 In the cross-examination of Mr. Curtis, I Les Services StenoTran Services Inc. 613-521-0703 3137 COO PANEL 1 1 believe that he indicated that Ontario Hydro Networks 2 Company was indeed bound by that policy and they 3 honoured that. 4 MEMBER SMITH: Thank you very much. 5 I would just ask one other clarifying 6 question, then, to try to be specific. 7 You are asking this Board to go beyond this 8 policy. I understand you to say, well, they have this, 9 but we want the Board to tell them to do something more. 10 MR. BRESSETTE: I understand you are dealing 11 with -- 12 MEMBER SMITH: Is that right? Do I have that 13 right? 14 MR. BRESSETTE: I understand you are dealing 15 with transmission rates here and that is my 16 understanding of what we are here talking about. All we 17 want is this Board to understand that we have been 18 undone in the past. 19 I think you, yourself, could hear by what has 20 been stated here. These aren't conjectured stories that 21 we have sort of decided to concoct and bring forward 22 here. These are experiences in our lives that we have 23 to live and our people continue to live today. 24 You, as Ontario Energy Board, I think are the 25 ones that sort of direct this company whether they 26 are -- how they are going to proceed in an area and can 27 give them some direction to sort of deal with us in a 28 better way than in the past and if they can't Les Services StenoTran Services Inc. 613-521-0703 3138 COO PANEL 1 1 demonstrate that I would hope that there is some kind of 2 a return to this issue and hold them accountable. That 3 is what we are seeking here. 4 MS GODBY: Can I be of some assistance, 5 Mr. Smith? 6 MEMBER SMITH: Thank you. Sure. 7 MS GODBY: I think that the intent is for the 8 Board to look and assess this economic prejudice and in 9 doing so then direct Ontario Hydro Networks company to 10 enter into negotiations with our client which will take 11 that economic prejudice into account in their 12 negotiations of contracts in the future. 13 When they become involved in the distribution 14 and generation of electricity -- and they are impacted 15 by transmission rates -- what they are doing is they are 16 saying: Look, give us a break, take our economic 17 prejudice into account, have the Board direct Ontario 18 Hydro to negotiate with us and some special breaks in 19 rate design when it comes to our turn in taking 20 advantage of the economic opportunities that are 21 available to us. 22 MEMBER SMITH: One further question. The 23 number of First Nations who have been negatively 24 allegedly affected by actions of the old Ontario Hydro 25 was put out here. It doesn't matter if it's 26 twenty-something or thirty-something. They suffered 27 prejudice which you say the Board should do something to 28 redress. Les Services StenoTran Services Inc. 613-521-0703 3139 COO PANEL 1 1 The First Nations who have not suffered from 2 any action by Ontario Hydro or its predecessors, are 3 they exempt from this prejudice or are they also -- you 4 have lumped them in too? 5 MS GODBY: I think the intent -- I mean you 6 have to deal with First Nations as a whole, so the 7 intent certainly would be to recognize them as that and 8 that they have been uniquely prejudiced one way or the 9 other. 10 Now, the extent to which that prejudice has 11 been suffered by them may be something that is taken 12 into account when the specific contracts are negotiated 13 or when the protocol agreement or the framework for the 14 protocol agreement is adopted, hopefully, as directed by 15 the Board. Certainly that can be one of the 16 considerations. 17 MEMBER SMITH: Thank you very much. I have no 18 further questions. 19 MEMBER VLAHOS: Ms Godby, can I just follow up 20 those. As part of this grievance here, there has been 21 talk about the impacts, the economic impacts. I'm sure 22 that you read the Act quite carefully. Does it give any 23 comfort that there are certain sections now, certain 24 powers that are given to this Board under the new Act in 25 terms of transmission location, crossing lands, 26 conversation. Does that give your client any comfort? 27 MS GODBY: It does. I think it does give them 28 some sense of comfort, but what they are really looking Les Services StenoTran Services Inc. 613-521-0703 3140 COO PANEL 1 1 at is to preserve their place in the future. I mean 2 there are real opportunities out there for First Nations 3 to become involved in this industry. There's very great 4 potential. 5 If they were given a break and if the playing 6 field were levelled, then these projects might be, you 7 know, a little bit more commercially viable, the playing 8 field would be level. These people might begin to 9 experience a level of economic self-sufficiency that has 10 been denied them to this date as a result of some of the 11 activities that can be attributed to Hydro in the past. 12 Now, it's all fine and well -- I mean, Mr. 13 Vlahos, I appreciate that the Act does provide some 14 comfort. It's all fine and well for, you know, the 15 applicant to say "We are not here, we can't really give 16 special rates to anybody". That's okay if everyone is 17 starting off in the same position, but they are not. 18 MEMBER VLAHOS: All right. But moving forward 19 and going forward, there are certain provisions in the 20 Act about the operations of Ontario Hydro Services that 21 were not there before. Would you agree with that? 22 MS GODBY: Yes, I would. 23 MEMBER VLAHOS: And that deals with the 24 construction of facilities, so a lot of the discussion 25 today about impact of past practices, there must be some 26 comfort that those may not be repeated because every 27 time a transmission company wishes to expand the system, 28 they have to seek leave of this Board. Les Services StenoTran Services Inc. 613-521-0703 3141 COO PANEL 1 1 MS GODBY: That's correct. 2 MEMBER VLAHOS: Okay. There will be certain 3 processes in place which I believe are under 4 consideration now that will ensure that all those 5 accommodations in the Act are taken care of for the 6 groups that have been affected. 7 Whatever the Act says, plus the Ontario Hydro 8 Services Company policy, is, I guess, a concern the same 9 going forward as it was in the past in terms of impacts. 10 MS GODBY: I think that the First Nations, and 11 I can't, you know -- I think that they can speak to this 12 better than I can, but certainly the things that we have 13 put down in our suggestions for a protocol, for a 14 framework, are not things that, you know, the applicant 15 or someone that is setting up a transmission company and 16 that would have to come before the Board for approval 17 would be turning their minds to. 18 These are very sort of specific, and the Act 19 deals with a sort of a general -- it has general 20 applicability. What we are looking for is something 21 that's unique to First Nations. I mean the protocol 22 agreement I think speaks to that or the proposed 23 framework for the protocol agreement which we are 24 suggesting speaks to the uniqueness of their position 25 and some very unique and distinct things which are not 26 contemplated, I don't think, under the Act. 27 MEMBER VLAHOS: Okay. I think I forgot -- Mr. 28 Crofts, just a question for you, sir. You have been Les Services StenoTran Services Inc. 613-521-0703 3142 COO PANEL 1 1 involved for some years in this area. Have there been 2 any complaints about the gas industry, that side of the 3 energy industry? 4 MR. CROFTS: That I'm not familiar with. 5 MEMBER VLAHOS: You are not familiar with that 6 at all. 7 MR. CROFTS: No. I don't think -- certainly 8 in the communities I am dealing with, gas is not an 9 issue. It's strictly hydro generation because of their 10 locations. 11 MEMBER VLAHOS: Right. Do you know of any gas 12 transmission lines that may be passing those 13 communities? 14 MR. CROFTS: Not to my knowledge, but that's 15 out of my sort of area of expertise, so to speak. 16 MEMBER VLAHOS: Chief Bressette, do you know 17 of any gas pipelines, gas transmission pipelines, that 18 would go through those territories? 19 MR. BRESSETTE: I believe in the Constance 20 Lake First Nation there was a blockade and continues to 21 be one as a result of ignoring the First Nations issues 22 and crossing their territory. That's the kind of thing 23 that occurs when people ignore people who are tired of 24 being ignored. 25 Our people just get frustrated for the lack of 26 money to go to court and everything else. They have no 27 other recourse but to undertake acts of civil 28 disobedience which is not in our way of living, but it's Les Services StenoTran Services Inc. 613-521-0703 3143 COO PANEL 1 1 the only way that people seem to pay attention when 2 those things occur. It's something I don't think nobody 3 is proud of. They would rather sit down and negotiate, 4 but at some point in time when someone has got to hammer 5 and they can do whatever they want because they got 6 money and you don't, it puts you in an awkward position 7 and that's the only place I'm aware of in Ontario right 8 now that is impacted by a gas line is in the Constance 9 Lake area. That construction has been halted as a 10 result of that. 11 MEMBER VLAHOS: Sir, do you know which 12 pipeline that is, who is constructing this pipeline? 13 MR. BRESSETTE: I believe that pipeline has 14 some connection to Sable Gas, an offshore project. 15 MEMBER VLAHOS: Okay. So that would be not 16 within the jurisdiction of this Board. 17 MR. BRESSETTE: I wouldn't assume so because 18 they were negotiating with a company, I think it was in 19 Alberta. 20 MEMBER VLAHOS: But you come from southwestern 21 Ontario and you have Union Gas being the transmitter of 22 natural gas. Are you aware of any transmission lines 23 going through the territory that you speak of? 24 MR. BRESSETTE: Well, in southern Ontario, 25 yes, there are -- there have been instances where they 26 stopped the work, what they negotiated agreements with 27 them once the work was stopped. It was within a couple 28 of days that they came up with some type of Les Services StenoTran Services Inc. 613-521-0703 3144 COO PANEL 1 1 arrangements. 2 In a community near where I used to be Chief, 3 Stony Point, they stopped Union Gas -- well, Union Gas 4 is in that area but they stopped construction of any 5 more lines going by there until they deal with the issue 6 of the land outside the reserve boundaries because 7 people tend to believe we only have rights on our 8 reserves. 9 We have traditional territories that we use. 10 That's an area of contention. 11 MEMBER VLAHOS: So you have experience with 12 the gas side versus electricity. It's different isn't 13 it? 14 MR. BRESSETTE: Yes. We never came here for 15 gas issues before. I think our history with hydro is 16 one why we're here. You know, I must apologize for my 17 presentation here, but, you know, the frustration level 18 I feel when I visit communities that tell me of all 19 things that occur. It bring a lot of anger to my 20 presentation and I apologize for that. 21 MEMBER VLAHOS: That's okay, Chief. 22 But you understand the questions I was trying 23 to ask of your counsel that go to the fact that this 24 Board had to provide approvals to the gas industry in 25 order to build their transmission pipeline and there are 26 certain conditions they have to comply with, making 27 studies for example, environmental studies, et cetera, 28 while the Board did not have that same authority over Les Services StenoTran Services Inc. 613-521-0703 3145 COO PANEL 1 1 the former Ontario Hydro. 2 MR. BRESSETTE: Yes. 3 MEMBER VLAHOS: You understand that? 4 MR. BRESSETTE: We have an organization that 5 was created by the federal government in Vancouver 6 called the Indian Taxation Advisory Board. They deal a 7 lot with resolving these matters because the issues of 8 the lines going across draw compensation questions and 9 Union Gas would much rather deal with an entity like 10 that, that's set up where they can have direct 11 communication with the affected communities, instead of 12 trying to get them all to come to a meeting because it 13 may only impact one community where the gas line is 14 going across, to enter into direct negotiations and 15 resolve the matter. 16 That's why I think there's a difference in the 17 approaches because there is a process set in place and 18 that process comes in the way of a protocol agreement 19 with Union Gas and the taxation board that allows these 20 kind of consultations to happen. 21 MEMBER VLAHOS: Thank you for those answers. 22 THE PRESIDING MEMBER: Thank you. 23 I have one question to you, Chief Bressette. 24 Between now, this hearing finishing and whenever the 25 Board's decision comes out, how do you feel about being 26 approached by Ontario Hydro in the interim, with or 27 without the direction of the Board, with an offer to sit 28 down and start discussions? Les Services StenoTran Services Inc. 613-521-0703 3146 COO PANEL 1 1 The problem is complicated, as you have said, 2 because they now have three companies and two of them 3 deal with power generation and transmission related to 4 that with remote communities. Another one is the 5 generation company. 6 But let's assume that they have heard you, the 7 message has gotten through and at a high level you want 8 to meet with somebody at least like Les Horswill, the 9 Vice-President and Mr. Gillespie or Mr. Osborne. Are 10 you willing to do that if they come to you and make 11 approaches to you in the interim, get things rolling? 12 MR. BRESSETTE: I think we have always 13 preferred negotiations over anything else. I guess it's 14 the spirit in which these negotiations begin. If it's 15 in all openness and in the open and has to deal with the 16 issues at hand and deal with those community leaders 17 that's my preference, that they will undertake to deal 18 with it in that way. 19 But I think, you know, we have always had 20 promises. I mean, we got treaties with this country 21 that every one of them have been broken and court is 22 always recommended, take us to court if you don't like 23 it. 24 Well, we would like to have somewhat of a 25 guarantee or seek some kind of surety that should 26 negotiations break down and we feel the issues are 27 substantial, we can go somewhere to find out whether 28 what we are asking for is fair and reasonable without Les Services StenoTran Services Inc. 613-521-0703 3147 COO PANEL 1 1 having the big money decide, well, we are not going to 2 pay you that, or walking from the table and take us to 3 court if you want. That's the problem we have with 4 negotiating with people who have a great deal of money. 5 They can buy 10 lawyers. We have a hard time having the 6 counsel we have today here. 7 So we have struggled with that and it impacts 8 on our ability to do work in other areas because this is 9 one facet of our life and we have to deal with many 10 others. We have to deal with fishing and hunting issues 11 and a whole litany of things that were guaranteed to us. 12 THE PRESIDING MEMBER: On the other hand, this 13 has raised itself up on the scale of priorities for you 14 and your people, so that's why you are here. 15 MR. BRESSETTE: Yes. 16 THE PRESIDING MEMBER: I wanted to see, you 17 know, one of the things you have come here for today and 18 we will get into the developments with the other panel, 19 you sent a message I think quite clearly, and that is 20 how do you deal with it? Let's hope maybe they have 21 listened to that message and we will see what happens. 22 So with that we would like to thank you very 23 much for coming and telling us about that. We certainly 24 appreciate you and all of your colleagues coming today. 25 We are about at the lunch break. Unless 26 counsel have any questions to reply on, we will go to 27 that. 28 MS GODBY: Dr. Higgin, I have just one or two Les Services StenoTran Services Inc. 613-521-0703 3148 COO PANEL 1 1 questions, if I might. 2 THE PRESIDING MEMBER: Yes, please, go ahead. 3 RE-EXAMINATION 4 MS GODBY: Chief Bressette, do you know 5 whether or not Hydro is prepared to negotiate special 6 rates for transmission? 7 MR. BRESSETTE: I wouldn't think they are. 8 MS GODBY: And Mr. Rogers in his 9 cross-examination of you referred to several pieces of 10 correspondence that were forwarded to your office 11 between June 11 and September 8, which is during the 12 consultation process. Was there anything in those 13 pieces of correspondence that recognized your special 14 status as First Nations? 15 MR. BRESSETTE: No. We were just referred to 16 as all stakeholders I think. That seemed to be our 17 problem. 18 MR. ROGERS: I don't know how the chief could 19 know. He said he never saw the letters. How would he 20 know? 21 MR. BRESSETTE: When I seen them here they 22 said "To all Stakeholders". 23 MS GODBY: Did you have an opportunity to 24 review those letters right now? 25 MR. BRESSETTE: I looked at them when they 26 were passed out. I seen -- and I kept seeing the words 27 "To all Stakeholders". 28 MS GODBY: So there was nothing -- Les Services StenoTran Services Inc. 613-521-0703 3149 COO PANEL 1, re-ex (Godby) 1 THE PRESIDING MEMBER: The chief is going to 2 check whether he had seen them. That's the undertaking. 3 MS GODBY: Chief Bressette, one final 4 question, did you advise Hydro at any time that you were 5 dissatisfied with their process? 6 MR. BRESSETTE: Yes, I did. 7 MS GODBY: And you advised them that there 8 were some deficiencies? 9 MR. BRESSETTE: Yes. 10 MS GODBY: And were those deficiencies in the 11 consultation process addressed prior to the time that 12 their evidence was prefiled? 13 MR. BRESSETTE: No, not that I'm aware of. 14 MS GODBY: Thank you. 15 Those are my questions. Thank you, 16 Dr. Higgin. 17 THE PRESIDING MEMBER: Thank you, Ms Godby. 18 One again, gentlemen and ladies, for coming 19 thanks very much. 20 We will hear from your other panel after 21 lunch. Come back at 2:15. Thank you. 22 --- Upon recessing at 1158 23 --- Upon resuming at 1421 24 THE PRESIDING MEMBER: Thank you. Please be 25 seated. 26 Mr. Vogel, are you ready? 27 MR. VOGEL: Yes. 28 MR. ROGERS: Just before we begin -- I'm Les Services StenoTran Services Inc. 613-521-0703 3150 1 sorry, Mr. Vogel. 2 Dr. Higgin, I would just like to introduce 3 Ms Naomi Martin who is with me this afternoon. She is 4 counsel with Ontario Hydro Networks and she is joining 5 me this afternoon. 6 THE PRESIDING MEMBER: Mr. Vogel. 7 MR. VOGEL: Thank you, Mr. Chair. I call the 8 second Chiefs of Ontario panel. 9 PREVIOUSLY SWORN: THOMAS BRESSETTE 10 SWORN: DAVID DRINKWALTER 11 SWORN: BYRON LeCLAIR 12 MR. DRINKWALTER: There is a Drinkwater with 13 OPG and we should not be confused. He would not be 14 amused. 15 THE PRESIDING MEMBER: Thank you, Mr. Vogel. 16 MR. VOGEL: Thank you, Mr. Chair, Panel. 17 EXAMINATION-IN-CHIEF 18 MR. VOGEL: There is a panel listing which was 19 circulated previously. I don't know that it was made in 20 exhibit, though. Perhaps we should do that at this 21 time. 22 MS LEA: G16.2, please. 23 EXHIBIT NO. G16.2: Document entitled 24 "OHNC - Transmission 2000, Chiefs of 25 Ontario Witness Panels" dated March 8, 26 2000 27 MR. VOGEL: This one is the second panel, 28 Mr. Chair, dealing with the issue of the opportunities Les Services StenoTran Services Inc. 613-521-0703 3151 COO PANEL 2, in-ch (Vogel) 1 available to First Nations and the special consideration 2 which the First Nations are requesting be directed by 3 the Board in this proceeding. 4 By way of introduction, Ontario Regional Chief 5 Bressette you met this morning. To his right is Byron 6 LeClair who is the Economic Development Officer for Pic 7 River First Nations. To the Chief's left is Dr. David 8 Drinkwalter who appears as an expert witness in this 9 proceeding with respect to the special considerations 10 being asked of the Board for First Nations. 11 There was, as you will see on the panel 12 listing, a proposed fourth member of this panel. His 13 name is Mr. Franco Crupi, C-R-U-P-I. I am advised that 14 Mr. Crupi has a heart condition. I can tell you that he 15 was available to give evidence on Friday as originally 16 schedule in Toronto, but I was told yesterday that he 17 has had a setback and that he is not available to give 18 his evidence here today. 19 However, I have spoken to both my friends, 20 Mr. Rogers and Ms Lea, and what I am proposing is that I 21 provide an undertaking that if there are questions that 22 anybody has by way of cross-examination for Mr. Crupi, 23 that we could respond to those questions in writing. I 24 understand that is satisfactory to Mr. Rogers and 25 Ms Lea, in any event. 26 THE PRESIDING MEMBER: May I just ask one 27 question to you, Ms Lea, if you could help us. 28 Do we need an affidavit regarding the evidence Les Services StenoTran Services Inc. 613-521-0703 3152 COO PANEL 2, in-ch (Vogel) 1 or not? 2 MS LEA: Yes. Officially if this evidence is 3 to become sworn evidence in the hearing you will have to 4 file some kind of affidavit from Mr. Crupi. It can be a 5 very simple one in written form just indicating that he 6 attests to the truth of the exhibit that has been filed. 7 MR. VOGEL: Thank you. 8 THE PRESIDING MEMBER: Thank you. 9 MR. VOGEL: Should we give that an undertaking 10 number? 11 MS LEA: Certainly, F16.3. 12 UNDERTAKING No. F16.3: Affidavit from 13 Mr. Crupi 14 MR. VOGEL: Thank you. 15 What I propose to do, Mr. Chair, is review 16 briefly with each of the witnesses portions of their 17 evidence-in-chief, have them adopt that evidence with 18 whatever amendments may be required, and then make them 19 available for whatever cross-examination there may be. 20 THE PRESIDING MEMBER: Thank you. 21 MR. VOGEL: Chief Bressette, you continue to 22 be under oath and you have already adopted your evidence 23 from this morning. 24 With respect to you evidence relevant to this 25 panel, at page 4 of your prefiled evidence, which is 26 Exhibit H, Tab 30 at sub-Tab 3 -- on page 4 of your 27 prefiled evidence, Chief Bressette, you have indicated 28 there that the First Nations are requesting special Les Services StenoTran Services Inc. 613-521-0703 3153 COO PANEL 2, in-ch (Vogel) 1 consideration from the Board with respect to rate design 2 and the cost allocation framework for transmission 3 services as they may apply to First Nations and, 4 specifically, a form of direction from the development 5 of a protocol agreement or framework for subsequent 6 negotiations with OHNC. 7 You have dealt in your evidence somewhat on 8 the panel this morning with why that direction is 9 required. 10 If I can just, with respect to the basis for 11 that direction being in part the past prejudice that has 12 been suffered by First Nations, is it only the 34 First 13 Nations on Ontario Hydro's list -- or the 27 per cent 14 that Mr. Crofts was talking about this morning -- is it 15 only those First Nations who have suffered that 16 prejudice and are concerned about special consideration 17 at this point or are we looking at a broader segment of 18 First Nations? 19 MR. BRESSETTE: The answer is no, it's not 20 just the 34. It's a large percentage of the First 21 Nations in Ontario have been impacted in their 22 traditional territories and they just have not been, I 23 guess, able to deal with this issue at the time being. 24 The reason for that, we have treaty issues, we 25 have court issues and it consumes a great deal of time. 26 But when we undertook to bring this presentation to the 27 Board, here, it was based on the fact that there are 28 grievances that yet have to be dealt with that have Les Services StenoTran Services Inc. 613-521-0703 3154 COO PANEL 2, in-ch (Vogel) 1 impacted on the traditional territories of the First 2 Nation communities. 3 I think Hydro's basic intent in the past was 4 to deal solely with reserve lands. Since then we have 5 sort of looked at this broader issue and we are 6 concerned about all resources that we have access to 7 that we want to share of to create some economic 8 opportunities for our people, not just in the area of 9 one specific matter but all aspects in the resource 10 development. 11 MR. VOGEL: All right. This broader segment 12 of First Nations, then, who are looking for special 13 consideration to enable them to pursue potential 14 opportunities, that is what I want to focus on here. 15 If you turn to page 11 of your prefiled 16 evidence, you discuss in some more detail the nature of 17 those potential opportunities which will be impacted by 18 the Board's decision in this case as they apply to First 19 Nations. 20 At page 11 of your evidence, you have made 21 reference to a 1998 report of the Economic Renewal 22 Secretariat, which appears at sub-Tab D of your 23 evidence. 24 First of all, what is the Economic Renewal 25 Secretariat? 26 MR. BRESSETTE: The Economic Renewal 27 Secretariat is an office that is co-sponsored by the 28 Ontario Native Affairs Secretariat on behalf of the Les Services StenoTran Services Inc. 613-521-0703 3155 COO PANEL 2, in-ch (Vogel) 1 Province of Ontario and the Department of Indian Affairs 2 on behalf of the Federal Government of Canada. This 3 Economic Renewal Secretariat was established to create 4 and generate economic opportunities and economic 5 development for First Nation communities in the Ontario 6 Region. 7 MR. VOGEL: This 1998 report, Chief Bressette, 8 deals with a number of proposed hydro grid extensions in 9 the province. 10 What is the purpose or what is the relevance 11 of these grid extensions? 12 MR. BRESSETTE: The grid extensions, I guess, 13 that they are discussing are the expansion of the hydro 14 grid across Northern Ontario that will sort of deal with 15 the communities that are on diesel generation plants at 16 the current time that have been mentioned earlier on 17 today, that these things are contaminants in the 18 communities, and this seeks to open up those areas for 19 expansion and in bringing hydro grids within the area -- 20 and one, I think, that has been mentioned is the Five 21 Nations Energy Group, in the James Bay area, that are 22 establishing a large grid up there to provide 23 hydro-electric service to generate economic development 24 opportunities, as well as taking our communities off 25 diesel generators. 26 MR. VOGEL: And if we could just look at that 27 report, for a moment -- which, again, is at Tab D in 28 your evidence -- at page 9 of that report, there's a Les Services StenoTran Services Inc. 613-521-0703 3156 COO PANEL 2, in-ch (Vogel) 1 paper which appears was presented to the Secretariat by 2 the Chief Executive Officer of the Secretariat. And at 3 page 9, in this report, in that paper, he discusses what 4 he refers to as: 5 "...great opportunities for partnerships 6 between First Nation communities and 7 non-Aboriginal business to realize the 8 great potential for economic growth..." 9 What is your understanding of those 10 opportunities presently available to First Nations? 11 MR. BRESSETTE: Well, the economic 12 opportunities are to enter into partnership developments 13 such as the Five Nations entered into a partnership with 14 SNC Lavalin to create this hydro grid -- and one of the 15 reasons why they done it, they estimated their cost to 16 Hydro at, I think, about $30 million a year and they 17 recognize that over a five-year period the amount of 18 money they were going to be spending in relation to that 19 was a massive amount of money that was going to be paid 20 to someone else for creating the hydro-electric 21 opportunities, so that gave interest, at the First 22 Nation level, to participate and openly become a service 23 provider of hydro-electric-generating abilities and 24 which sort of was a springboard to other communities in 25 the area to begin looking at this. I know the Nishnabe 26 Aski organization, which deals with a large percentage 27 of the communities in the North are engaged, at the 28 present time, in actively looking and searching out Les Services StenoTran Services Inc. 613-521-0703 3157 COO PANEL 2, in-ch (Vogel) 1 opportunities to buy up some of the generating 2 facilities that are currently there, hydro generation 3 projects, because they are situated on our traditional 4 territories, and that's the reason that this has become 5 a great opportunity is there's more and more people 6 looking to get into partnership arrangements with First 7 Nations in order that they both win in this area; First 8 Nations become active participants and players and the 9 hydro generation field and the company that goes into 10 partnership also generates some profits from the ability 11 to partner with First Nation communities. So both 12 parties win at this whole process. And I think that's 13 the best that I can answer that. 14 MR. VOGEL: This report contains a further 15 paper by the Associate Regional Director General for 16 Indian and Northern Affairs Canada and, at page 13 of 17 the report, he also, in reference to these grid 18 extensions you referred to, he also talked about the 19 potential in Ontario -- this is in the second full 20 paragraph on page 13 -- about the potential in Ontario 21 being impressive and, in the following paragraphs, the 22 proposal to remove 12 communities in the next five 23 years, which is over a third of the remote communities 24 presently on diesel, removing them from diesel by these 25 grid connections. 26 What is the importance or what is the 27 significance to these communities of the potential that 28 he describes here? Les Services StenoTran Services Inc. 613-521-0703 3158 COO PANEL 2, in-ch (Vogel) 1 MR. BRESSETTE: Well, the potential that 2 exists here is creation of economic development 3 enterprises. Currently, the hydro generation facilities 4 that are there are, right now, in need of expansion and 5 that's going to be a costly initiative to create and 6 expand the power source that's being delivered. And the 7 First Nations, in the communities, have recognized the 8 contaminants that are being caused around their lands 9 where they live, there's an impact on the fish -- and 10 many of them eat fish -- there's contamination on 11 wildlife and -- what they are hoping to do is capitalize 12 on this to be able to build economies that will be able 13 to have a greater use of hydro-electricity other than 14 what's currently allowed using the diesel generation 15 plants that are now in existence in our communities, 16 plus the cost of diesel and flying it up there it's a 17 massive cost that's always associated with it and I 18 understood that a lot of this was borne by Ontario Hydro 19 and it was costing them a lot of money, so I think what 20 this does, it -- everybody benefits from the process of 21 this actually occurring and I think the First Nations 22 are focusing on the opportunity that exists for them to 23 actively be able to access and utilize the resources 24 within our traditional territory and become actively 25 involved in those kind of developments that will benefit 26 them; it will benefit, I think, the rest of the 27 ratepayers; and it will also -- it will also benefit 28 their partners, as well. Les Services StenoTran Services Inc. 613-521-0703 3159 COO PANEL 2, in-ch (Vogel) 1 MR. VOGEL: If I can take you back to your 2 prefiled evidence. At page 13 in your evidence, you 3 have made reference to another report which, apparently, 4 identified 158 potential sites for small hydro 5 generation projects to serve remote First Nation 6 communities. 7 Can you tell me, why was that study 8 undertaken? 9 MR. BRESSETTE: Well, the study was undertaken 10 to identify potential sites that may have been developed 11 in Northern Ontario to -- like these are remote 12 generating stations that would, I guess, essentially 13 deal with the need for diesel generation plants and it 14 allows some First Nation communities that are listed on 15 the grid as well, it sort of identifies the power source 16 that would be coming off of there and the potential -- 17 they may be able to plan for the future by looking at a 18 study such as this. 19 MR. VOGEL: All right. And I could just take 20 you to that tab -- the excerpts from the report are at 21 Tab E in your evidence, and there's a summary chart at 22 the last page of that document, entitled "Second 23 Screening Criteria". 24 MR. BRESSETTE: Yes. 25 MR. VOGEL: Under the "Site" summary columns 26 in that schedule, there's an indication as to the 27 capacity of those projects, and they all appear -- am I 28 correct that these proposed projects, in any event, Les Services StenoTran Services Inc. 613-521-0703 3160 COO PANEL 2, in-ch (Vogel) 1 would all appear to be -- or would mostly appear to be, 2 in any event, something more than one megawatt but less 3 than ten. Is that correct? 4 MR. VOGEL: And in terms of representative 5 composed First Nation projects, would 20 megawatts 6 represent -- be fairly representative of the projects 7 which may be undertaken by First Nations in the new 8 marketplace? 9 MR. BRESSETTE: Yes. That's a current target, 10 a figure that most of the communities are hoping to deal 11 with, 20 megawatts. 12 MR. VOGEL: At page 15 of your evidence, 13 dealing with the special consideration and direction 14 concerning development of the protocol that you are 15 requesting from the Board, you are requesting that the 16 protocol be done and approved by the Board prior to open 17 access November 1, 2000. Why do you think that's 18 important? 19 MR. BRESSETTE: One of the things we would 20 like to do is undertake a planning exercise and be able 21 to be involved in this in a set timeframe as opposed to 22 it lingering on and on in negotiations. Why we are 23 asking for the Board to give that direction is so we 24 will at least have got some kind of measure of the 25 undertaking to enter into these negotiations and 26 establish a protocol that sets a framework out for us to 27 be able to have these processes guided by in November. 28 November 1 is closing in on us. Les Services StenoTran Services Inc. 613-521-0703 3161 COO PANEL 2, in-ch (Vogel) 1 We always try to enter into these discussions 2 and the fact that First Nations just recently acquired 3 some funding out of an economic development fund that 4 was proposed and was released -- it hasn't been released 5 yet, but I have got my fingers crossed because we have 6 been negotiating about four years now on this fund that 7 we receive from Casinorama that provides capital funds 8 in the hands of First Nations so they can actually enter 9 into projects and have some real dollars and the ability 10 to get planning and access business partners to conduct 11 these kinds of operations. 12 MR. VOGEL: All right. You have proposed that 13 these negotiations or discussions with respect to 14 development of the protocol take place with the Chiefs 15 of Ontario. I think you responded to Ms Lea this 16 morning that the Chiefs of Ontario does represent all of 17 the status First Nations under the Indian Act in 18 Ontario. Correct? 19 MR. BRESSETTE: Yes. 20 MR. VOGEL: If the Board was to provide that 21 direction, what process would the Chiefs of Ontario then 22 implement to ensure that the interests of all First 23 Nations in Ontario are addressed? 24 MR. BRESSETTE: We do general consultation on 25 matters such as this. We would probably get 26 representatives from each one of the political 27 organizations. We would have a political and a 28 technical adviser who would enter into a process to Les Services StenoTran Services Inc. 613-521-0703 3162 COO PANEL 2, in-ch (Vogel) 1 conduct these. Prior to this being settled or any 2 further directions needed on it, it would go to an all 3 Ontario Chiefs Assembly which every Chief in Ontario 4 usually attends. 5 They would be coming there and that's where we 6 would ratify any agreements or make amendments or give 7 further directions to this committee on whatever process 8 you were following. 9 MR. VOGEL: Thank you, Chief. If I could turn 10 to Mr. LeClair then. Mr. LeClair, you are the Economic 11 Development Officer for the Pic River First Nation, is 12 that correct? 13 MR. LeCLAIR: That's correct. 14 MR. VOGEL: How long have you held that 15 position? 16 MR. LeCLAIR: Eleven years. I am also an 17 elected member of the Pic River Council. 18 MR. VOGEL: I understand that you have been 19 involved in the development of the Kagiano Power Project 20 at Twin Falls. Is that correct? 21 MR. LeCLAIR: That's correct. 22 MR. VOGEL: That's one of the generation 23 projects which has been referred to by the Chief in his 24 evidence which was also discussed in that economic 25 renewal forum report. Is that correct? 26 MR. LeCLAIR: That is correct. 27 MR. VOGEL: Your evidence appears at Exhibit 28 H, Tab 30, sub-Tab 6. Have you reviewed that evidence Les Services StenoTran Services Inc. 613-521-0703 3163 COO PANEL 2, in-ch (Vogel) 1 in preparation for your attendance here today? 2 MR. LeCLAIR: Yes, I have. 3 MR. VOGEL: Is that evidence accurate and 4 true? 5 MR. LeCLAIR: Yes, it is. 6 MR. VOGEL: Do you accept that evidence as 7 your evidence in chief in this proceeding? 8 MR. LeCLAIR: Yes. 9 MR. VOGEL: And that evidence deals in part, 10 Mr. LeClair, with the background to the development of 11 the Kagiano Power Project. How would you describe your 12 First Nation community? 13 MR. LeCLAIR: We are situated at the 14 confluence of the Pic River and the Black River, which 15 is a river system that flows into the north shore of 16 Lake Superior. We are approximately three miles inland 17 from the shores of Lake Superior. We have about 400 18 people on Reserve 375. Our total membership list is 19 800. We have been active in many businesses. We regard 20 ourselves as one of the proactive First Nations in 21 Ontario. 22 We have a large scale forestry operation. We 23 own a television company. You know, we try to do as 24 much as we can to keep our people employed. Hydro has 25 always been the basis from which many of the other 26 opportunities have flowed from. 27 MR. VOGEL: And in your evidence at page 2, 28 you talk about in the first full paragraph on that page Les Services StenoTran Services Inc. 613-521-0703 3164 COO PANEL 2, in-ch (Vogel) 1 the rapidly increasing size of your population relative 2 to the stagnant land base that you have on your reserve. 3 What is the significance to your First Nation of that 4 dynamic? 5 MR. LeCLAIR: Well, certainly the population, 6 the trend itself is not unique. I think that throughout 7 the aboriginal communities across Ontario, indeed across 8 Canada, we were experiencing a rapid growth rate. 9 Our community is 800 acres in size, which is 10 not very large. The river does cut our community in 11 half. The half of the reserve that the community is 12 situated on, half of the community itself is located on 13 swampland. The area that we can actually habitat is 14 extremely limited. 15 As I said, over half of our members live 16 off-reserve and there is constant pressure to return 17 back home to live back within the community, but the 18 inability to grow the reserve means that we can't 19 provide some of the basic infrastructure needs like 20 housing, education facilities, recreational facilities, 21 those types of things. 22 MR. VOGEL: And this -- in that same paragraph 23 you go on to talk about your First Nation having been 24 traditionally denied access to resources for the right 25 to share in benefits. Can you give us some examples of 26 where you feel your First Nation has been denied access 27 to resources and particularly in the context of Hydro? 28 MR. LeCLAIR: From a historical context, this Les Services StenoTran Services Inc. 613-521-0703 3165 COO PANEL 2, in-ch (Vogel) 1 denial dates back to, and the first documented evidence 2 of this denial occurring dates back to 1740 during the 3 initial contact with European settlers who were in the 4 area. They were harvesting things like, you know, furs, 5 beaver pelts, those types of things. 6 While paddling down the coast, they would make 7 notes about this troublesome and quarrelsome band of 8 Indians that seemed to be causing them a great deal of 9 grief. 10 More recently, we have attempted to get 11 involved in the sawmill business. We have made 12 application to the Ministry of Natural Resources. We 13 have been denied access to the licences required to 14 undertake those types of activities. 15 Specifically as it relates to Hydro, we have 16 transmission corridors that cross our traditional land 17 use area to which none of our people have worked in the 18 construction of those corridors. The servicing of the 19 community itself, Ontario Hydro took advantage of the 20 location of their lines on our community by extending 21 the service beyond the boundary of our community to 22 include industrial developments. 23 The mouth of the Pic used to have a major 24 logging operation there. Fort James at the time 25 maintained operations there, so they essentially 26 serviced the community and then simply continued their 27 line right through the community to service this 28 industrial user. Les Services StenoTran Services Inc. 613-521-0703 3166 COO PANEL 2, in-ch (Vogel) 1 There is a national park to the south of our 2 community. Again, these people -- Ontario Hydro I 3 should say simply arbitrarily went in and extended the 4 service beyond our boundary to start servicing the 5 people in the national park as well. That was all 6 without permission from our community. It was without 7 permission from our council. It was without permission, 8 and this is one of the few instances in which there was 9 no deal between Indian Affairs and Ontario Hydro. 10 I think from a prejudicial point, and what 11 makes it particularly unique in this instance is that we 12 are there, we are resident and still denied those 13 opportunities to participate. 14 MR. VOGEL: And with respect to generation 15 development in your traditional lands, has that sort of 16 development sort of taken place without extending the 17 benefits and revenues to the First Nation? 18 MR. LeCLAIR: No. I'm not aware of any 19 developments other than our own within our traditional 20 land use area where we haven't been involved. There are 21 essentially two generating stations that are within our 22 traditional land use area that we are active 23 participants in. 24 MR. VOGEL: Why did you decide to take on the 25 Twin Falls project? 26 MR. LeCLAIR: Well, it's clear that in order 27 for us to maintain the momentum that we have gained in 28 terms of our business development and provide people in Les Services StenoTran Services Inc. 613-521-0703 3167 COO PANEL 2, in-ch (Vogel) 1 the community with jobs and with employment 2 opportunities, we need equity. We need a revenue stream 3 and hydro provides us with that basis, that revenue 4 stream that we can use as equity to grow into other, you 5 know, non-traditional businesses that we seem to regard 6 as our future. In short, it's wealth creation for the 7 community. 8 MR. VOGEL: What is the production capacity of 9 the Twin Falls project? 10 MR. LeCLAIR: Six megawatts. 11 MR. VOGEL: And what interests, dealing with 12 the Twin Falls projects, what interests does the First 13 Nation have in that project? 14 MR. LeCLAIR: The project itself is structured 15 as -- it's a limited partnership. Pic River owns 40 per 16 cent of the general partner which is Kagiano Power 17 Corporation. We own nearly 27 per cent of the limited 18 partnership as well. We have future plans to buy out 19 our existing partners as time goes on. 20 MR. VOGEL: And has that project, that Twin 21 Falls project, been of any benefit to the surrounding 22 community, that is beyond the First Nations community? 23 MR. LeCLAIR: One of the fundamental beliefs 24 of our community and in northern Ontario, the need for 25 partnership beyond your own boundaries is accentuated. 26 It has been to provide employment and business 27 opportunities to the communities outside Marathon. 28 Outside our community, if you look at Twin Les Services StenoTran Services Inc. 613-521-0703 3168 COO PANEL 2, in-ch (Vogel) 1 Falls specifically, contract opportunities were provided 2 to businesses from the town of Manitouwadge. There was 3 a high degree of employment for labourers and people 4 from the town of Manitouwadge in the construction of the 5 transmission line that connects us to the grid. 6 A local contractor from Manitouwadge was 7 employed. We have attempted to extend the benefits, not 8 simply for job creation for our own people, but for the 9 benefit of outlying businesses. 10 MR. VOGEL: Now, you talk in your evidence 11 about the revenues to be generated on an annual basis 12 from this project. After the debt is repaid, what 13 revenues does the community anticipate deriving from 14 this project? 15 MR. LeCLAIR: $1.2 million is our projection 16 at this time. 17 MR. VOGEL: And how -- 18 MR. LeCLAIR: That's on an annual basis. 19 MR. VOGEL: How does the community propose to 20 use that money? 21 MR. LeCLAIR: Well, we have identified through 22 our strategic planning process in which all of our 23 community members gather at the hall, priorities in 24 terms of educational needs. We need a new school. 25 Infrastructure in terms of developing new subdivisions 26 for housing. Beyond that we have economic development 27 priorities. We would like to get involved again. 28 Sawmilling, even though it was declined, is a Les Services StenoTran Services Inc. 613-521-0703 3169 COO PANEL 2, in-ch (Vogel) 1 priority for the community, but to start generating 2 employment opportunities and businesses on the community 3 so that our people -- the priority or the emphasis is 4 not for them to move away in order to work, that we can 5 actually locate the businesses within the community. 6 MR. VOGEL: At page 4 of your evidence, in the 7 last paragraph on that page, you talk about First 8 Nations being unique in terms of their historic 9 exclusion from resources from which others have 10 benefitted. What do you mean by that? 11 MR. LeCLAIR: The transmission grids, the 12 distribution grid, the assets that are not our own that 13 are located on our territory, are there to supply 14 business other than our own, are there to supply 15 consumers, other than First Nation consumers, at great 16 expense to our community. 17 We have been asked time and time again, and 18 this is just another example -- you have heard many 19 examples this morning of how First Nations communities 20 are expected to bear the brunt of these types of 21 infrastructure project to the benefit of many other 22 people in Ontario. 23 I think that the unique relationship here -- 24 what makes us unique is that we are there, we are 25 resident, we see the economic activity, we see the 26 development that occurs on the doorsteps of our 27 communities, yet we are denied an opportunity to 28 participate in the benefits from these types of Les Services StenoTran Services Inc. 613-521-0703 3170 COO PANEL 2, in-ch (Vogel) 1 businesses. 2 So I think that that is what I was referring 3 to there. 4 MR. VOGEL: All right. 5 In terms of current opportunities, looking at 6 projects like the Kahiano Power project, and similar 7 types of projects, if those projects did, by direction 8 of the Board, receive special consideration so that to 9 the extent that they served existing customers those 10 customers didn't have to pay the cost of existing 11 infrastructure or if you didn't have to pay as a new 12 generator connection costs, would those types of cost 13 advantages assist? How would they affect these types of 14 projects? 15 MR. LeCLAIR: Interconnection is a large part 16 of developmental costs and if as a developer, a First 17 Nation developer, through special consideration in the 18 relationship negotiated with the applicant here, we were 19 exempted or otherwise did not have to service that, that 20 would improve the financial performance of these types 21 of projects. 22 I look back, I evaluate these projects, 23 post-moratorium, pre-moratorium, what happened before 24 1993 and what happened after 1993, and certainly the 25 economics of small hydro are much more marginalized 26 today than they were before 1993. 27 Kahiano Power, for example -- and I want to 28 just back up a bit here -- but Kahiano Power, when we Les Services StenoTran Services Inc. 613-521-0703 3171 COO PANEL 2, in-ch (Vogel) 1 first looked at the project had a pre-moratorium 2 contract in which we were supposed to be earning 3 6.3 cents per kilowatt hour and we formally requested 4 the contract in interconnection, I think it was sometime 5 in June or July of 1992. That project was caught up in 6 the moratorium later that year. 7 When they revisited all of the projects that 8 were ready to come about, the contract value was shifted 9 and we were offered a contract at 4.5 cents a kilowatt 10 hour, a third less, and that affected the project 11 significantly. 12 So today, you look at opportunities to improve 13 the economics of the project. We are not getting the 14 same value for the energy that we produce, the product 15 that we produce, in year 2000 as we were before 1993. 16 Interconnection is just one economic incentive, I think, 17 that could improve the returns for communities or for 18 companies that are involved in this type of business. 19 MR. VOGEL: Would it increase the financial 20 viability of these projects? 21 MR. LeCLAIR: Most definitely. Four hundred 22 thousand dollars, by my account, is a lot of money and 23 in the hands of the community could mean that much more 24 and after the evaluation improve the prospects of many 25 of these projects going through to development, through 26 to actual construction and then operation. 27 MR. VOGEL: If the Board were to provide the 28 directions that the First Nations are asking here, and Les Services StenoTran Services Inc. 613-521-0703 3172 COO PANEL 2, in-ch (Vogel) 1 so that included in your contract with negotiations with 2 OHNC there was a provision for consideration of giving 3 you access to management systems and business systems 4 and training opportunities and various sorts of 5 financial assistance in the acquiring or development of 6 facilities, would that assist you in your negotiations 7 with OHNC? 8 MR. LeCLAIR: Most definitely. 9 We have been involved as a community in this 10 business now for 13 years as proponents to a station 11 before Kahiano that was called the Black River Wawatai 12 understation, which means the light, maker of the light. 13 That started in 1987. 14 We have been advocating to communities across 15 Canada, to communities across Ontario to become active 16 in the generation field. I think the interest is now 17 building to a point where people are seeing the 18 potential for long-term unencumbered economic returns 19 for communities that are looking for exactly that type 20 of solution to some of the social problems that they 21 have. 22 Now, if we evaluate where the First Nation 23 industry is today, as generators, we are in our infant 24 stage. I mean, this is -- you know, we are taking our 25 first steps here. Certainly the people represented by 26 the Applicant and Ontario Power Generation, their 27 history with regard to this business and this technology 28 is much longer than ours. They know the technology, Les Services StenoTran Services Inc. 613-521-0703 3173 COO PANEL 2, in-ch (Vogel) 1 they know the management, they know the requirements to 2 build and maintain viable hydro stations. I think that 3 there should be some consideration made or given to 4 mandating these companies to provide us with that 5 expertise. 6 Our initial involvement in this project or in 7 the Black River project -- I use the words 8 interchangeably, Black River and Wawatai -- was a 50 per 9 cent owner. But at that point in time, we didn't have 10 the money to maintain our equity position and today we 11 have a net profit interest in that operation. 12 Now, would I say that that reduced involvement 13 in the project is less than what we expected? Yes, most 14 certainly. But, at the same time, the lessons that we 15 have learned through the course of the development, how 16 to manage these types of projects, how to develop them, 17 the regulatory hurdles that we had to overcome, I think 18 that it was worth the lesson. It was worth the lesson. 19 So we take a look at our second project, 20 Kahiano. We own 40 per cent. We have managed to 21 maintain that ownership interest in that project only 22 because we spent our time and we learned our lessons at 23 Black River and I think that we have farther to go if 24 we, at one point in time, are ready to develop in-house. 25 I look to the landscape here and aside from 26 some other groups like Great Lakes Power, for example, 27 there is no group out there that has a longer or more 28 qualified experience than the people of former Ontario Les Services StenoTran Services Inc. 613-521-0703 3174 COO PANEL 2, in-ch (Vogel) 1 Hydro. 2 So I think that they should be inclined to 3 teach us. 4 MR. VOGEL: Why do you feel you require 5 direction from the Board to make that happen? 6 MR. LeCLAIR: The opportunity to voluntarily 7 negotiate or sit down with First Nation communities has 8 always been there for the utility and it is an 9 opportunity that the utility, for whatever reason, has 10 chosen not to take advantage of. 11 It is certainly an opportunity -- I look at 12 Ontario Hydro's history with my own community and it 13 appears in my mind that we are only valuable when 14 something is needed. 15 In 1992 and 1993, when we became part of the 16 grievance process, at the same time Ontario Hydro was 17 considering a massive transmission corridor between 18 Manitoba and Ontario. At that point in time, they 19 wanted to hear about First Nation grievances throughout 20 the North. The landscape changed, the reality changed 21 and the project was no longer needed, and I find it more 22 than ironic that the consultation process stopped, their 23 interest in settling past grievances stopped, and there 24 has not been any active participation or any active 25 movement on the settlement of past grievances. 26 The scenario for us, today, is that no one 27 knows who's responsible for these past grievances. You 28 have three different companies, today, and everyone's Les Services StenoTran Services Inc. 613-521-0703 3175 COO PANEL 2, in-ch (Vogel) 1 pointing the finger at everybody else; so I'm not sure 2 if we are ever going to get there. 3 Why is it required? I don't trust them. I 4 echo the words of my Chief here. And I don't trust them 5 to make good on the commitments that they have made in 6 the past. I think that the opportunity to sit down and 7 negotiate these types of considerations is something 8 that, in my mind is within the purview of the Board, and 9 we are not asking for commitments, we are not asking 10 for, you know, set rates or free access; we are asking 11 to sit down, let's establish a protocol with the 12 applicant and let's negotiate a final settlement. 13 MR. VOGEL: Thank you, Mr. LeClair. 14 Dr. Drinkwalter, if I can turn to you. 15 Dr. Drinkwalter, you have a Ph.D., in 16 Economics, from the University of Ontario. Is that 17 correct? 18 MR. DRINKWALTER: Yes. 19 MR. VOGEL: You taught at various 20 institutions, over the years, including University of 21 Western Ontario, in the Faculties of Social Science, 22 Business Administration and Engineering, and at York 23 University, in the School of Administrative Studies. Is 24 that correct? 25 MR. DRINKWALTER: Yes. 26 MR. VOGEL: And you were employed by Ontario 27 Hydro for a period of 20 years, starting as their, 28 first, Chief Economist, in 1973, and becoming Director Les Services StenoTran Services Inc. 613-521-0703 3176 COO PANEL 2, in-ch (Vogel) 1 of the Western Region, in 1982. Is that correct? 2 MR. DRINKWALTER: Yes. 3 MR. VOGEL: And since you left -- when did you 4 leave Ontario Hydro? 5 MR. DRINKWALTER: November 1st, '93. 6 MR. VOGEL: And since leaving Ontario Hydro, 7 you have served as Chairman of the London Hydro Electric 8 Commission. Is that correct? 9 MR. DRINKWALTER: Yes. 10 MR. VOGEL: And you are presently providing 11 economic and energy consulting services? 12 MR. DRINKWALTER: Yes. 13 MR. VOGEL: In preparation for your attendance 14 here today, have you reviewed -- had the opportunity to 15 review your evidence? 16 MR. DRINKWALTER: Yes, I have. 17 MR. VOGEL: In that prefiled evidence, which 18 appears at Exhibit H, Tab 30, Sub-tab 1, I understand 19 that there are two amendments. The first being at 20 page 2. Is that correct? 21 MR. DRINKWALTER: Yes. 22 MR. VOGEL: Could you just take us there and 23 indicate what the change is? 24 MR. DRINKWALTER: Okay. Well, I have an 25 overstatement. The first full paragraph, the very last 26 sentence begins, "In addition, the 134 First Nations are 27 all". In fact, they aren't. There is one First Nation 28 that is at least partially served by a municipal Les Services StenoTran Services Inc. 613-521-0703 3177 COO PANEL 2, in-ch (Vogel) 1 utility. And I believe there may be another -- I 2 haven't been able to confirm that. But the vast 3 majority. That should be reworded so it's "The vast 4 majority are customers of the Ontario Hydro Services 5 Company". 6 MR. VOGEL: Okay. Thank you. 7 If you could just turn over to page 26, in 8 your prefiled evidence. Section 4 deals with the 9 "Unique, Historic Prejudice". 10 That is, essentially, what we heard on Panel 1 11 this morning. Is that correct? 12 MR. DRINKWALTER: Yes. There is no new 13 evidence in this. I am -- 14 MR. VOGEL: Okay. Now, apart from that 15 historical evidence of prejudice, looking at this 16 portion of your evidence, what other basis exists, in 17 your view, for the Board considering the special 18 considerations being requested by the First Nations? 19 MR. DRINKWALTER: Well, this is not the only 20 group that is saying, "We have a situation which is not 21 universal in the province and it should be recognized". 22 You have heard a lot, in this hearing, from 23 the large user groups, for example, saying, "We are 24 different. We take our power in large globs. We should 25 be treated differently than other customers within local 26 distribution companies", or, "We should be treated the 27 same wherever we are." I think there is some sympathy 28 for that. There is some sympathy for the fact that Les Services StenoTran Services Inc. 613-521-0703 3178 COO PANEL 2, in-ch (Vogel) 1 existing contracts with former Ontario Hydro customers 2 have been terminated; there is some sympathy for some 3 recognition of that, as we move forward. 4 There is, in the submission from OHNC, a 5 special consideration for folks who were here prior to 6 October, 1998 -- existing generators treated 7 differently. There has to be some way of coming to 8 grips with the rural rate assistance that is part of 9 government policy that was a concern for those citizens 10 who live either at a distance from the facilities or in 11 less populated areas -- and sometimes they are the same 12 -- and, hence, we had the rural rate assistance -- and 13 that was before the recommendation in this submission 14 that those customers, who are all customers of the 15 Ontario Hydro distribution operation, should incur a 12 16 per cent additional penalty on their transmission costs. 17 Now, somehow or other, that has to be 18 recognized, in fact, and I would like to go through this 19 famous table on Exhibit D, Tab 3, Schedule 1, because I 20 really have trouble with that. That's D, 3, Schedule 1. 21 And there's a table on page 4. 22 Now we are told that the power district must 23 be abandoned in order to treat the Ontario Hydro 24 distribution customers the same as the LDCs. And if you 25 look at this table, on page 4, I really cannot put the 26 words and actions together. 27 The first row has 84 large end users directly 28 served from the transmission system. Today, 69 of them Les Services StenoTran Services Inc. 613-521-0703 3179 COO PANEL 2, in-ch (Vogel) 1 are served by Ontario Hydro and considered within the 2 Ontario Hydro LDC; 15 are served by other LDCs and 3 considered within their organization, that LDC. That, 4 to me, is equal treatment. 5 What is proposed here is that the 69 be taken 6 away from that retail entity and be treated as a 7 transmission customer, but the 15 within the LDCs stay 8 there. That, to me, is unequal treatment. 9 So I have real trouble with that. 10 I have the same trouble with the next two 11 lines that show 34 large customers served off the 12 Ontario Hydro Networks distribution company; today they 13 are within that distribution company. We have 133 large 14 customers within the other LDCs served by them off their 15 system. That, to me, says, today, there's equality. 16 What is recommended in this is that the 34 17 join the 69, become transmission customers and disappear 18 from the Ontario Hydro Networks distribution function 19 while the 133 stay within the LDC. 20 Now, I have real trouble putting those actions 21 with the words that say we must treat this distribution 22 company equally when I read the actions as doing just 23 the opposite and, as a result, imposing a further 24 benefit on these folks. 25 So I don't think in that kind of situation 26 that the First Nations are out of line in recognizing 27 previous government policy, both in terms of the postage 28 stamp rates and the supposed commitment to that in the Les Services StenoTran Services Inc. 613-521-0703 3180 COO PANEL 2, in-ch (Vogel) 1 future, and the rural rate assistance program of saying 2 surely something should be done. 3 MR. VOGEL: First Nations, or many First 4 Nations I gather, are amongst the OHNCD customers who 5 are going to experience this 12 per cent increase. Is 6 that correct? 7 MR. DRINKWALTER: Absolutely. With the -- 8 MR. VOGEL: Apart from that addition and your 9 supplementary comments with respect to what justifies 10 special consideration for First Nations, which you have 11 just described, do you accept your evidence then as your 12 evidence-in-chief in this proceeding? 13 MR. DRINKWALTER: Absolutely. 14 MR. VOGEL: If I could take you, then, at 15 page 2 and following in your evidence you discuss and 16 review various opportunities that are available to First 17 Nations as LDCs or generators. 18 How would you describe those opportunities? 19 MR. DRINKWALTER: I'm sorry, I don't follow 20 the question. It's a little early for this, isn't it. 21 MR. VOGEL: Okay. At page 2 of your 22 evidence -- 23 MR. DRINKWALTER: Yes, I'm with you. 24 MR. VOGEL: Okay. Starting at that discussion 25 there -- 26 MR. DRINKWALTER: Yes. 27 MR. VOGEL: -- you are looking at various 28 opportunities available for First Nations as the LDCs Les Services StenoTran Services Inc. 613-521-0703 3181 COO PANEL 2, in-ch (Vogel) 1 and generators. 2 MR. DRINKWALTER: Yes. 3 MR. VOGEL: Could you tell us briefly your 4 views as to what opportunities are available for First 5 Nations as we move ahead in this new marketplace? 6 MR. DRINKWALTER: The opportunities afforded 7 to the First Nations are really surprisingly immense and 8 have tremendous possibilities and they are all sound 9 economically based and all derived from the legislative 10 changes in the electricity supply industry within this 11 province. 12 The opportunities range from what might to 13 seem to be the mundane in putting together local 14 distribution companies through to the exotics of 15 building many comprehensive systems in the north to 16 remove communities from diesel power generation. In 17 between you have a range of potentials for generation 18 projects that range all the way from the mini-hydraulics 19 in the north through some good sized hydraulics in 20 mid-Ontario to the steam-based, or rather the 21 fossil-based generation that we are more familiar with 22 in the south in both mid-Ontario and southern Ontario in 23 cogeneration projects related to industry. So it really 24 spans the whole spectrum. 25 Each one carries with it the possibility of 26 the community developing fully their economic resources, 27 and that includes having the financial resources as a 28 result of the project to be a self-sustaining, Les Services StenoTran Services Inc. 613-521-0703 3182 COO PANEL 2, in-ch (Vogel) 1 self-sufficient community through time to employ their 2 people in meaningful work and create a base which 3 enables them to step even further. 4 Interesting that this community that I have 5 known most of my life started with an agricultural base 6 and not totally dissimilar from the First Nation base in 7 the mid-1800s in some fundamental ways, and yet over 8 time the community that I am familiar with has developed 9 and the First Nation community have not. In many 10 instances they have in fact regressed. 11 I see the possibilities within this industry 12 and this province as being the opportunity for the First 13 Nations to close that gap and be equal citizens in this 14 jurisdiction. 15 MR. VOGEL: Now, at pages 4 through 26 of your 16 evidence you have reviewed the various positions 17 advanced by OHNC in its application and you have 18 recommended alternative dispositions on those issues 19 which would assist the First Nations. 20 If you turn to page 28 in your prefiled 21 evidence, your recommendations in that regard are 22 summarized under paragraph (1)(a) to (i). I'm wondering 23 if you could just briefly review for me the basis for 24 the various recommendations that are contained at that 25 paragraph? 26 MR. DRINKWALTER: Well, the 25-cycle system is 27 a very separate system in the province and ceased to 28 have any value for the 60-cycle system at the point that Les Services StenoTran Services Inc. 613-521-0703 3183 COO PANEL 2, in-ch (Vogel) 1 the frequency changers were taken out of service in 2 London when the second line from the Bruce Generating 3 Station was build through Longwoods and back to 4 Middleport. 5 The second point being, the principals of cost 6 allocation. It seems to me that the very first 7 question -- and what I would counsel any business is: 8 The very first question is figure out the nature of the 9 business that you are in. Before you start to even 10 define your market and your customers and your prices, 11 what is the business? What are the services you provide 12 that people are prepared to pay for. 13 MR. VOGEL: Is that recommendation in (b) then 14 tied to subparagraph (d) dealing with the basis for 15 pricing? 16 MR. DRINKWALTER: Yes. (d), in my mind, is a 17 reflection of the implementation of (b). 18 It strikes me that this transmission business 19 is (a) a business of transporting something, 20 transporting electricity. I'm not sure I have ever 21 understood the engineering behind it, but it does 22 ultimately transport electricity. 23 We heard from Mr. Osborne, comments very 24 consistent with the change in the legislation and that 25 is there is a need for this industry to be 26 commercialized. Setting the organizations in delivery 27 and transmission and generator up under the Business 28 Corporations Act seems to me to be a clear indicator of Les Services StenoTran Services Inc. 613-521-0703 3184 COO PANEL 2, in-ch (Vogel) 1 that. 2 But more than that, unlike distribution, 3 transmission is an industry whose future is behind it. 4 It was set up to deliver electricity from nodes of huge 5 generation such as the Bruce and Pickering and Nanticoke 6 to customers spread out around the province. 7 In the future its role will increasingly be 8 providing value through less movement of the product and 9 more provision of what we now call ancillary services. 10 The hum alongs, the voltage regulation, the reliability, 11 the backup, the black start will increasingly be 12 important. 13 It seems to me in recognizing that momentum 14 and the need to commercialize that you would want to 15 establish a base-in pricing that allowed you to easily 16 move from where you are today to where you are going and 17 would say if we have a problem in inadequate revenues in 18 one area -- and I say a possible problem -- then what 19 are the opportunities that we have to create more 20 revenue by different or new services? 21 Telecommunications comes immediately to mind. 22 So that I see this as a system in the next 23 10 to 15 years repositioning a little more money spent 24 on the system to expand it in interconnections and one 25 or two spots, perhaps, where there is congestion on the 26 system today. But beyond that, it will be living on the 27 fruits of its past labours and I think that we should 28 recognize today what it is that people value in that Les Services StenoTran Services Inc. 613-521-0703 3185 COO PANEL 2, in-ch (Vogel) 1 system and what they pay for. It will make it a lot 2 easier to make the transition in 10 years than if we do 3 something else. 4 MR. VOGEL: Dr. Drinkwalter, dealing with the 5 (b) and (d) and your recommendations there, at least 6 insofar as First Nations are concerned, if charges to 7 First Nations were energy-based, time-related, as you 8 propose, would that be of advantage to First Nations? 9 MR. DRINKWALTER: I believe so. 10 A demand based rate system is very 11 heavy-handed, does not target and is not precise where 12 kilowatt hours can be refined. It was in the mid 13 seventies when Ontario Hydro was trying to introduce 14 time of use rates in the province when I realized that 15 that company's financial survival depended upon the sale 16 and/or purchase of a commodity that nobody produced and 17 nobody bought and nobody wanted, which is called a 18 demand charge. 19 It's kilowatt hours that drive industry, that 20 drives motors and lights and computers and control 21 systems. The perpetuation from the past of the demand 22 charge has lead to the smaller user paying an inordinate 23 amount on a per kilowatt hour basis for the delivery 24 system. I think the time should be at hand with these 25 modifications in the industry to change it. 26 MR. VOGEL: Could you deal with the proposed 27 exclusion of First Nation communities from any customer 28 line connection pool in Recommendation 1C. Les Services StenoTran Services Inc. 613-521-0703 3186 COO PANEL 2, in-ch (Vogel) 1 MR. DRINKWALTER: Well, I think as I have 2 tried to say in here, cost causality is fine as a 3 principle, but if you are going to be charged on the 4 basis of the costs that you cause, then surely you have 5 got to have some ability to influence the total costs. 6 When I am told that I must pay the cost to get 7 to the network and somebody else determined the location 8 of the network, then I am being asked on a principle 9 that I believe is only partially applied to incur costs 10 that I think are inappropriate. 11 As defined, as I understand the definition of 12 the line connection pool in the evidence, a great deal 13 of the costs are beyond the control of any customer and 14 I think quite inappropriate then to be put into a pool. 15 That is particularly true for those people who are at a 16 distance from or in a less populated territory than the 17 average. When I say a distance from, I meant the 18 distance from the grid. 19 So they are being penalized. Right now people 20 in more distant areas or less populated areas already 21 are penalized. They are paying more in spite of the 22 postage rate stamp, they are paying more, which was why 23 the government was moved to introduce the rural rate 24 assistance program and they get an inferior product. 25 It doesn't have the quality, it doesn't have 26 the reliability, it doesn't have the backup. You just 27 can't afford it. They are already paying and the 28 application of a partial principle in my mind leads to Les Services StenoTran Services Inc. 613-521-0703 3187 COO PANEL 2, in-ch (Vogel) 1 them being penalized again. 2 MR. VOGEL: Paragraph 1E and F, that deals 3 with the proposed standing of the power district and 4 imposition of additional costs on OHNC D customers. Is 5 there anything in addition you want to say about that 6 recommendation beyond what you have already indicated? 7 MR. DRINKWALTER: Only one thing. I don't 8 know why this industry refuses to acknowledge reality. 9 I really don't. It has been a puzzle to me for most of 10 my adult career. 11 It seems to me very simple. Transmission 12 customers are customers of the transmission system. 13 They are either tied to it or they are not. It's very 14 simple, it's very direct, it's very straightforward. 15 In the past we have had this definition of a 16 large customer that had a demand of five megawatts or 17 more. There was nothing behind that other than an 18 arbitrary decision that seems to me that we can move to 19 a system that's very neat and very clean and very clear 20 that you are either on the transmission system, which I 21 mean you are either directly connected to it or you are 22 not. If you are connected, you are a transmission 23 customer, if you are not, you are not. 24 MR. VOGEL: Your Recommendation 1G, you are 25 recommending that First Nation generation be eligible 26 for net load billing. What's the basis of that 27 recommendation and how would it be advantageous to First 28 Nations? Les Services StenoTran Services Inc. 613-521-0703 3188 COO PANEL 2, in-ch (Vogel) 1 MR. DRINKWALTER: Well, it would be 2 advantageous to anybody who got it because there would 3 be costs they would not incur. I have great difficulty 4 in asking people to pay for something that they don't 5 use, even if they used it and moved away from it. 6 What bothers me, this is the whole net versus 7 gross argument. I find that theoretical underpinnings 8 of the MDC's argument to be unsatisfactory. It's tied 9 to the potential for uneconomic generation. 10 Now, in most industries transportation costs 11 are a legitimate factor to take into account when 12 deciding whether to enter a business or where to locate 13 it. I believe it is just as true in this industry. 14 That's why the auto parts manufacturing industry is in 15 southern Ontario and not Alberta or Nova Scotia. 16 Because transportation costs are real and are 17 legitimate. 18 I have trouble with the theoretical 19 foundation. I have trouble with the fact that the MDC 20 did not quantify it and that's not a criticism because 21 the MDC people put in an incredible number of hours and 22 took on a mammoth task and I think by and large did it 23 well. We will be well served by their work. 24 I wasn't a member of it, but I really believe 25 they did a good job, but on this one, I think they might 26 have had a little butter on their fingers. 27 Fortunately, through the course of this 28 hearing there has been an attempt to put some Les Services StenoTran Services Inc. 613-521-0703 3189 COO PANEL 2, in-ch (Vogel) 1 quantification on that concept. Is it real and if it 2 is, to what extent is it a problem? I guess from my 3 recollection from what I have seen, it doesn't appear to 4 be a major problem, but the thing that bothers me in it, 5 the thing that I am concerned about is that we have 6 attempted to quantify half the equation. We have 7 attempted to put a number on the potential of cost 8 avoidance, cost transferral, what does it mean in terms 9 of different rates for different people. 10 The values weren't even identified, let alone 11 not quantified. The values run from the cost of the 12 commodity being reduced by competition. One of my 13 clients in a role that I have outside this hearing has a 14 number of locations across Ontario. We are trying to 15 position to buy electricity for that operation across 16 the province from one entity, not a number of LDCs. 17 Quite honestly, there is nobody. They are all 18 getting their power from the same source. That's hardly 19 competition. You are just dealing with different 20 middlemen and the best you can do is hope to try and 21 squeeze somebody's margins on it, but there isn't real 22 competition. 23 The ability to introduce alternative 24 generators into the province seems to me to have real 25 value and we haven't put any number on it. Clearly, 26 distributed generation in the province increases the 27 quality and the reliability of the product. There has 28 no value put on it. It leads to reduced land losses. Les Services StenoTran Services Inc. 613-521-0703 3190 COO PANEL 2, in-ch (Vogel) 1 It does lead to extending the life of existing 2 assets, a system that isn't used as heavily, isn't 3 subject to the same wear and tear as switches opening 4 and closing transformers running at or above their 5 registered level, less maintenance, and extended life. 6 You can avoid or at least delay additions to the system. 7 That is also significant in this province with the long 8 lead time it takes to get approval to construct. 9 With long lead times, on the second line to 10 Bruce it took longer to get approval for it than it did 11 to build it. It was almost three to one in the end. 12 It's a very lengthy process. With that process comes 13 uncertainty and with uncertainty comes cost. None of 14 that has been taken into account and I think it should 15 be. 16 The other area that I think is most 17 significant is that this is one where I don't believe 18 one size fits all. There is a big difference between a 19 150 megawatt unit that is tied to the transmission 20 system or on the site of a customer that is tied to the 21 transmission system, major difference between that and a 22 five megawatt unit being put into a manufacturing 23 facility to enhance the overall efficiency in their use 24 of energy. 25 That seems to be my experience with smaller 26 units that are tied within an LDC. Even within an LDC, 27 and we have heard about this connection cost and we have 28 to do something about that. I have some sympathy with Les Services StenoTran Services Inc. 613-521-0703 3191 COO PANEL 2, in-ch (Vogel) 1 OHNC's long term objective of being able to negotiate 2 specific situations with specific generators because 3 there is, I believe, a major difference between a major 4 unit and a small unit. I think those should be 5 recognized. 6 If you have, as we had in London, a district 7 heating and cooling operation that put in new facilities 8 and in order to enhance the efficiency, put on an 9 electrical generator that was, I think, three and a half 10 megawatts. Reviewing the lawsuit would tell me the 11 numbers, but it's about three and a half. 12 That was done for energy efficiency purposes, 13 and that, it seems to me, should be enhanced. 14 I don't know what the threshold is. I don't 15 know whether it is 10 or whether it is 20, 25. I don't 16 know. My gut feeling tells me that the threshold where 17 the net load for both the network -- I don't believe 18 that gross load should apply to the network, but the net 19 for both the network and the line connection should be 20 at that point at which the generator is tied to the 21 transmission system. 22 But maybe it is of ease to say that those that 23 are at 20 or below tie easily into the distribution 24 system and, hence, should be treated differently. I say 25 that because they are either small hydraulics, which I 26 think have some benefit, or they are units where 27 electricity is secondary to the overall energy 28 efficiency of the organization -- the factory that needs Les Services StenoTran Services Inc. 613-521-0703 3192 COO PANEL 2, in-ch (Vogel) 1 steam puts in an electrical generator to make maximum 2 efficient use of the energy they are requiring. 3 I think when you get to dealing with the First 4 Nations situation, they are in those categories. 5 MR. VOGEL: From the First Nation perspective, 6 Dr. Drinkwalter, having available to them net load 7 billing, would that facilitate or encourage First Nation 8 generation? 9 MR. DRINKWALTER: Yes. 10 MR. VOGEL: In order to accommodate the sorts 11 of First Nation opportunities that we have been 12 discussing here, if the threshold was set at, say, 13 20 megawatts, would that be sufficient to allow that 14 special consideration for First Nation? 15 MR. DRINKWALTER: I believe it would because 16 it captures the hydraulic units that I'm aware of that 17 they are thinking of developing and, from my experience, 18 would capture most of the units put into place to be 19 efficient. 20 Even if a unit goes into a small LDC, by the 21 time you back up to the transmission system, which is 22 what we are interested in here, in the case of the First 23 Nations you go through the OHNC Distribution network 24 that has many delivery points. The only people that 25 only have one or two delivery points off the 26 transmission system are very large industries, steel 27 plants, for example, or automotive stamping and assembly 28 plants. Les Services StenoTran Services Inc. 613-521-0703 3193 COO PANEL 2, in-ch (Vogel) 1 But everybody else is served off a 2 distribution system, and a large LDC like Toronto or 3 London or Ottawa with many delivery points, it's very 4 difficult to come to grips with that line connection 5 cost as a charge for that customer in my mind because 6 there are so many hundreds of other customers around 7 using those facilities and you have the ebb and flow and 8 growth and departure of all of them, very difficult to 9 penalize those who want to do things properly. 10 MR. VOGEL: With respect to your 11 recommendation in paragraph 1(h) and (i) regarding 12 connection charges on new generation, what is the basis 13 for that recommendation and how would it be advantageous 14 to the First Nations? 15 MR. DRINKWALTER: I think the two tie together 16 and are very consistent with what I have already said 17 with the possible issue that (h) raises in the sense of 18 the new versus the old. We have heard a lot about the 19 fact the First Nations in the past have been 20 disadvantaged and their desire not for this Board to 21 take action to compensate for that but rather to take 22 action to level the playing field so in the future they 23 have an equal shot at the evolving world so they can 24 solve their own problems. This perpetuates the new 25 versus old approach if it isn't granted. 26 MR. VOGEL: All right. 27 Continuing then from page 28 over to 31 of 28 your prefiled evidence, you have made further Les Services StenoTran Services Inc. 613-521-0703 3194 COO PANEL 2, in-ch (Vogel) 1 recommendations with respect to the development of a 2 protocol in consultation with the Chiefs of Ontario to 3 provide a framework for contractual negotiations between 4 First Nations and OHNC. Those recommendations deal with 5 access to business and management systems, training 6 opportunities and certain various types of financial 7 assistance to First Nations. Could you tell the Board 8 generally why you think that these things would be 9 appropriate and advantageous to the First Nations, why a 10 direction from the Board in this regard would be 11 appropriate and of advantage to the First Nations? 12 MR. DRINKWALTER: I think the first issue, why 13 the direction, is the one I would like to deal with 14 first, and if I forget the first part, I'm sure I will 15 be reminded. 16 Why is a direction necessary? We are asking 17 for a direction that is tied to an area of jurisdiction 18 of the Board, which is transmission rates and which also 19 include costs of tying in generation facility, so I 20 guess I see it, we see it, in that respect as within the 21 jurisdiction of the Board. 22 Why is it required? I think to be fair to 23 Ontario Hydro Networks Company, what we are asking for 24 is a process that would result in an approved framework 25 within which individual projects would be approved by 26 this Board. 27 To be fair to the networks' people, I think 28 you need the direction from the Board so they have some Les Services StenoTran Services Inc. 613-521-0703 3195 COO PANEL 2, in-ch (Vogel) 1 confidence that they can undertake negotiations in good 2 faith, because if negotiations occur and they are not in 3 good faith, it is worse than telling them today to get 4 lost because it will do more harm than good. 5 So I believe for good faith negotiations to 6 take place and to move forward, this kind of direction 7 which would provide I believe a comfort to OHNC people 8 is required. 9 I think what is in here should not be 10 distorted. These are suggestions. What we are looking 11 for is a framework that says when a project comes 12 forward, whether it is the development of a new LDC or 13 most likely from the purchase of existing assets, the 14 creation of a new LDC or the creation of a new 15 generating station that is tied into the transmission 16 system, what the First Nations are looking for is a 17 contract which gives them some assistance in taking 18 advantage of those economic opportunities. 19 Any one contract may or may not include all of 20 these issues. I have trouble seeing how any one 21 contract would have them all. I think if you had a 22 protocol agreed to and you had negotiations on seven 23 projects, what you would find is that each project had 24 its own contract where the issues were picked from this 25 framework, and there may be some overlap but there would 26 be a lot of difference. 27 What I am trying to suggest here are some 28 things that could be considered for inclusion in that Les Services StenoTran Services Inc. 613-521-0703 3196 COO PANEL 2, in-ch (Vogel) 1 kind of framework. There may be better chances. There 2 may be suggestions for substantial improvements. There 3 is no particular ownership on these as the one and only 4 but they are indicators of what might be done. 5 I have broken them into two deliberately, 6 things that could be done which assist in establishing 7 the management system and could be done at a reasonably 8 low cost, although it likely has a cost and would be 9 part of the revenue requirement and clearly have to be 10 approved by the Energy Board at some point. But these 11 are things that could be helpful to people who have 12 limited experience in what is a very complex industry 13 and an industry where its approaches tend to make it 14 even more complex than it has to be. 15 So these are things that already exist within 16 the Ontario Hydro Networks Company that I felt could 17 easily be given to or provided to a new organization 18 starting and would have much greater value than the cost 19 of doing it. 20 The others relate specifically to tariff 21 issues under discussion in this hearing. Clearly, if 22 you were able to get a waiver of a transmission tie-in 23 cost for some period of time, or forever, that would be 24 an assist to the project that having to pay the full 25 cost wouldn't. 26 The first one talks about the sale of physical 27 assets. If you are going to establish an LDC and take 28 advantage of that potential -- and I see the real Les Services StenoTran Services Inc. 613-521-0703 3197 COO PANEL 2, in-ch (Vogel) 1 potential there as the training ground for people in 2 management and in supervision and in technical skills, 3 electricians and that kind of thing -- I think there is 4 some real things, and first thing you have to get is the 5 facilities would be nice. 6 So these are possible areas for inclusion in 7 the framework. 8 Once we had the framework, there should be the 9 boundaries of negotiations for individual projects. And 10 in many ways, I see it as a prototype for what the 11 Networks Company wants to do, ultimately, with its 12 transmission customers; and that is, come to the Board 13 and have the Board approve a framework for negotiations 14 with customers and then go off and negotiate the 15 contracts and then have the contracts approved by the 16 Board. That's the same process that I see here. 17 MR. VOGEL: That's the new era that Mr. Curtis 18 was talking about in his evidence. Is that correct? 19 MR. DRINKWALTER: Yes. 20 MR. VOGEL: Those are my questions of this 21 panel, Mr. Chair. So they are available for cross- 22 examination. 23 THE PRESIDING MEMBER: We should take a short 24 break; I think everybody needs one. So just 10 minutes 25 and then -- because we do want to finish this panel 26 today. So if we come back at four o'clock, that would 27 be fine. Thank you. 28 --- Upon recessing at 1603 Les Services StenoTran Services Inc. 613-521-0703 3198 COO PANEL 2, in-ch (Vogel) 1 --- Upon resuming at 1610 2 THE PRESIDING MEMBER: Mr. Rattray, do you 3 have any questions? 4 MR. RATTRAY: No, thank you, Dr. Higgin. 5 THE PRESIDING MEMBER: No. Thank you. 6 Then we will go to Miss Lea, then. Thank you. 7 MS LEA: Thank you. 8 EXAMINATION 9 MS LEA: Chief Bressette and Mr. LeClair, can 10 you indicate to us where the First Nations communities 11 are planning on constructing these small generation 12 projects that you spoke about in your evidence? 13 If you can do it on the map, that's great. If 14 not, you can describe it in words. 15 MR. LeCLAIR: Not all of them. 16 MS LEA: Not all of them? Some of them? 17 MR. LeCLAIR: I can show you, generally, where 18 our plans to develop are on the north shore of Lake 19 Superior. 20 MS LEA: Okay. Great. 21 MR. LeCLAIR: This is Thunder Bay. This is 22 Sault Ste. Marie. About halfway between, right beside 23 Marathon, Ontario, we have two river systems here (off 24 microphone). 25 MS LEA: I'm sorry. The which river systems? 26 MR. LeCLAIR: Kagiano River. That's where the 27 Twin Falls Project is being built right now. 28 MS LEA: Kagiano. And how do you spell that? Les Services StenoTran Services Inc. 613-521-0703 3199 COO PANEL 2, ex (Lea) 1 MR. LeCLAIR: K-A-G-I-A-N-O. 2 MS LEA: Okay. 3 MR. LeCLAIR: Well, actually, it's operational 4 now. 5 Black River. We have a station here. 6 We have site south of the Kagiano system (off 7 microphone). 8 MS LEA: Could the counsel -- I'm sorry, 9 ma'am, I have forgotten your name. Could you turn that 10 microphone towards the witness. The microphone that's 11 sitting there. Thanks. 12 MR. LeCLAIR: So we have a station just south 13 of the Kagiano River system that we are -- or the Twin 14 Falls site that we wish to build. It's call the Manitou 15 Falls site. It's a three-megawatt station. 16 On the White River system, we have three sites 17 that we want to build. One is called the Umbata Falls 18 system. It's -- 19 MS LEA: The what? 20 MR. LeCLAIR: Umbata Falls. 21 MS LEA: Umbata? U-M...? 22 MR. LeCLAIR: U-M-B-A-T-A. 23 MS LEA: Yes? 24 MR. LeCLAIR: That's a 20-megawatt system. 25 South of Umbata is the Chigagonce(ph), and 26 that's a 10-megawatt site. 27 MS LEA: Could you spell that, please? I'm 28 sorry; it isn't meant to be a spelling test, but the Les Services StenoTran Services Inc. 613-521-0703 3200 COO PANEL 2, ex (Lea) 1 reporter has to take everything down, so -- 2 MR. LeCLAIR: Chigagonce(ph) -- no, I can't 3 spell it. 4 --- Laughter 5 MR. LeCLAIR: And you will really love the 6 name of the third one, which is north of Umbata. It's 7 called the Chigamwinigam(ph) Falls Development. 8 So there are three sites on the White River 9 system, with a capacity of about 40 megawatts, that we 10 intend to develop. 11 Now, that's just our community. As Tom 12 pointed out, in his evidence, Chief Bressette, there are 13 remote sites all throughout the North and I have -- 14 that's geography that's beyond me. 15 MS LEA: Can anyone assist me as to how many 16 more there are besides the one you have described, First 17 Nations that are thinking of building these sites? 18 MR. BRESSETTE: The only thing that I can 19 offer you is people are exploring these and they have to 20 do a business plan, they have to check the viability, 21 all these other things. No one has said, "Certainly, 22 I'm building this here" because I think all of the 23 development that our communities look at hinges on what 24 happens through this process. I mean if they have got 25 to pay these connection charges and all these other 26 sorts of things that are not going to really benefit 27 them, I mean, the potential that they see is going to go 28 and someone else is going to wind up getting all the Les Services StenoTran Services Inc. 613-521-0703 3201 COO PANEL 2, ex (Lea) 1 benefits, as usual, and they will get the bill to pay 2 for the power they get, they will never be allowed to 3 become active players in this market, and I think, by 4 and large, communities are exploring, right now, 5 potential, and I think the reason for the grid and the 6 chart, as identified by Mr. Vogel, in Tab, I think it 7 was E -- 8 MR. VOGEL: If I can help there. It's at 9 Tab E, Miss Lea, the last page of that tab; and that is, 10 as I think the Chief had indicated, the study which was 11 taken with respect to potential sites to deal with 12 developing alternatives to diesel generation in remote 13 communities. So these are some of the sites that have 14 been identified. 15 MS LEA: Okay. Thanks. That's helpful. 16 Mr. Drinkwalter, a couple of questions about 17 some specifics in your evidence. 18 At page 31, you talk about commercial 19 contracts, in your evidence. 20 I asked OHNC about this and they weren't 21 exactly sure what contracts you were talking about -- 22 and I'm not either. 23 What sort of contracts are you talking about? 24 MR. DRINKWALTER: Under g)? 25 MS LEA: Well, it's just the phrase 26 "commercial contracts". 27 MR. DRINKWALTER: Where do you see it? I'm 28 sorry. I'm not -- Les Services StenoTran Services Inc. 613-521-0703 3202 COO PANEL 2, ex (Lea) 1 THE PRESIDING MEMBER: It's Point 3, at the 2 bottom of the page. 3 MS LEA: It's at the bottom of page 31. 4 MR. DRINKWALTER: I see that as the contract 5 that would be signed between a First Nation LDC that was 6 coming into existence or a First Nation generator coming 7 into existence. 8 It seems to me that if you are going to have a 9 generator that ties into a distributor -- and each and 10 every one of the ones we have looked at would tie into 11 the OHNC distribution area -- there would have to be a 12 contract; I happened to call it a "commercial contract" 13 because I think of it as a commercial activity. 14 MS LEA: So the supposition made by OHNC that 15 it would be regarding connection with the rest of the 16 transmission network, would that be the type of 17 contracts you are talking about? 18 The reason I'm asking these questions, I'm not 19 sure whether the Board's approval is required for the 20 type of contracts you are talking about. 21 If there's a transmission rate to be approved 22 and there's a connection to the transmission network, 23 then it is possible they would be brought forward. 24 I want to understand what your intention was, 25 in that evidence. 26 MR. DRINKWALTER: Well, having just quickly 27 reviewed this section, to get back to it, okay, I -- we 28 are talking about the actions that we are hoping for Les Services StenoTran Services Inc. 613-521-0703 3203 COO PANEL 2, ex (Lea) 1 from the Board. 2 Just prior to the issue you are talking about 3 is Section 2 that addresses the framework for 4 negotiation of contracts -- if you go to the top of 5 page 29, for example, the very top, which is the 6 conclusion of a sentence that starts on the other page: 7 "...provide a framework --" 8 This is what we are asking for, in terms of the 9 protocol, the direction to develop a protocol, which 10 would: 11 "... provide a framework for the 12 negotiation of contracts establishing 13 commercial businesses in the generation 14 or distribution of electricity --" 15 MS LEA: No, my question is: Would such 16 contracts require Board approval? 17 MR. DRINKWALTER: Well, I believe that in the 18 establishment of an LDC, they would, yes. 19 MS LEA: And it would be a contract between 20 the LDC and OHNC? 21 MR. DRINKWALTER: OHNC because it would be a 22 sale of assets of OHNC to the First Nation to create the 23 LDC in most cases. 24 MS LEA: Okay. 25 MR. DRINKWALTER: Then OHNCD would be the 26 provider of the delivery service to get the electricity 27 to that LDC, it would be an embedded LDC within the OHNC 28 distribution network, and my assumption is that if you Les Services StenoTran Services Inc. 613-521-0703 3204 COO PANEL 2, ex (Lea) 1 are in that category you need to contract with OHNC in 2 the future. 3 MS LEA: Yes. I just didn't understand for 4 sure whether or not the sorts of contracts you were 5 talking about would need Board approval. They certainly 6 have to exist. 7 MR. DRINKWALTER: I don't know. 8 MS LEA: Okay. 9 MR. DRINKWALTER: That's for the Board. 10 Certainly I think that the LDC does. My assumption is 11 that if there is a contract with a generator -- and I 12 mean the ultimate position of OHNC when they get there 13 is that there will be individual contracts with 14 individual generators -- if they have an impact that 15 they may or may not require approval of the Board, my 16 assumption is to be cautious and always assume approval. 17 MS LEA: Okay. Thank you. 18 Now, some of the points that you make about 19 several issues in your evidence, the 25-cycle system, 20 cost causality, gross load billing, line connection, 21 those sorts of things, seem to apply to more customers 22 than merely First Nations. Do I understand correctly 23 that these are general arguments on principle that the 24 Board could apply to other customers as well as to First 25 Nations? 26 MR. DRINKWALTER: Oh, absolutely. 27 MS LEA: Regarding the principles of cost 28 allocation and cost causality, as I understand your Les Services StenoTran Services Inc. 613-521-0703 3205 COO PANEL 2, ex (Lea) 1 evidence you argue that the recovery of the cost to 2 providing the infrastructure should not be the guiding 3 principle for OHNC, and that may be an 4 oversimplification. 5 What I wonder if you could address for me is 6 the argument that the transmission system stands ready 7 and that it was designed for peak demand not energy flow 8 during off peak periods and that that infrastructure 9 must be paid for by the customers of OHNC. Could you 10 deal with that sort of argument that OHNC has made in 11 these proceedings? 12 MR. DRINKWALTER: I can try. 13 I think that argument, as you have advanced 14 it, and as I have heard it from OHNC, is a red herring. 15 I think that you could say the same thing about a hotel. 16 A hotel stands ready to provide rooms for people when 17 they appear. They are not charged on the number of 18 times you are in the hotel in a year. You are charged 19 on the room you take. I think the demand charge, I 20 understand, was not an easy lesson for me 25 years ago, 21 but I think I understand the demand charge and where it 22 came from, and I understand that within this industry 23 those people who understand it can feel kindly towards 24 it, but it really does not, in my opinion at least, send 25 the kinds of signals that should be sent in a commercial 26 industry because why people use the system is to receive 27 electricity and voltage stability and a whole lot of 28 other things. Les Services StenoTran Services Inc. 613-521-0703 3206 COO PANEL 2, ex (Lea) 1 MS LEA: Is it not to have access to 2 electricity also so that you can have it when you want 3 it as opposed to using it all the time? 4 MR. DRINKWALTER: Yes. That is part of the 5 time differentiation and pricing, and you don't have to 6 do that on a demand charge. 7 MS LEA: For example, I'm an OHNC Distribution 8 customer and I recognize that what I pay for is 9 attachment to the grid, the fact that I can turn the 10 switch and have the electricity when I want it if I 11 don't want to fire up the oil lamp or the stove. Is 12 there some value in that to be paid for? 13 MR. DRINKWALTER: Sure. 14 MS LEA: But you do not accept the argument 15 that it should drive the revenue collection of OHNC? 16 MR. DRINKWALTER: I don't accept the fact that 17 it has to be collected in a demand charge. I believe 18 that it can be more accurately collected in a time- 19 differentiated energy charge and if you do it that way 20 you can set your charges by peak times that are much 21 more narrowly focused and more accurately reflect the 22 actual use of the system and collect the revenues to 23 provide the peak that is required. 24 MS LEA: Thank you. One moment. 25 --- Pause 26 MS LEA: Thank you very much, gentlemen, for 27 your evidence. 28 Thank you, Mr. Chairman. Those are my Les Services StenoTran Services Inc. 613-521-0703 3207 COO PANEL 2, ex (Lea) 1 questions. 2 THE PRESIDING MEMBER: Thank you, Ms Lea. 3 Can we go now to Mr. Rogers, please. 4 MR. ROGERS: Thank you, Dr. Higgin. I have no 5 questions of this panel. Thank you very much. 6 THE PRESIDING MEMBER: Okay. I will just 7 check with the Board. 8 --- Pause 9 THE PRESIDING MEMBER: No, I don't think we 10 have an questions. 11 I just wanted to ask about the status of the 12 generator that you were talking about, the 6-megawatt 13 generator. How long has that been in service? That was 14 the only question I had. 15 MR. LeCLAIR: We came on line January the 1st 16 and we have been operational -- 17 THE PRESIDING MEMBER: This year? 18 MR. LeCLAIR: This year. We have had some 19 construction difficulties but those are more commercial 20 than anything -- January 1st of this year. 21 THE PRESIDING MEMBER: And where is the load 22 that it supplies at the moment? 23 MR. LeCLAIR: It is connected just east of 24 Manitouwadge. We built actually 30 kilometres of 25 transmission line to get to the grid and most of it goes 26 to Manitouwadge. 27 THE PRESIDING MEMBER: Okay. 28 Thank you very much. There was a bit of a gap Les Services StenoTran Services Inc. 613-521-0703 3208 COO PANEL 2 1 as to whether it actually was in service. I think I 2 understand that, so thank you. 3 Gentlemen, again thank you very much for your 4 evidence. Your counsel may or may not have any 5 additional questions. 6 MR. VOGEL: I have no further questions, 7 Mr. Chair. 8 THE PRESIDING MEMBER: Then thank you. You 9 are excused with the Board's thanks. Thank you very 10 much for coming here. Thank you. 11 Are there any other matters we need to address 12 before we -- I will just make one plea and that is that 13 everybody should try to get their undertaking responses 14 in. I'm not sure but I think you are pretty complete, 15 Mr. Rogers. 16 MR. ROGERS: We are I believe, sir, yes. 17 THE PRESIDING MEMBER: I think there are some 18 others, though, that may still have one or two. If they 19 would go through the transcript, I ask them to get their 20 undertakings in. There was one today, for example, or 21 two that were taken. So I would ask people to expedite 22 those. 23 The argument schedule, we talked about that. 24 The question I have is since there was rather a spot 25 following here, is that going to be put up onto the 26 Board's hearing hotline or something so that people will 27 be clear about that argument schedule? 28 MS LEA: Yes. Apparently, Mr. Thiessen Les Services StenoTran Services Inc. 613-521-0703 3209 1 informs me, it is already on the hotline. I will just 2 reiterate it now. 3 There is going to be argument-in-chief from 4 Ontario Hydro Networks Company on March 17; intervenors 5 argument on March 29; and, reply from OHNC on April 19. 6 THE PRESIDING MEMBER: Thank you very much. 7 Are there any other matters before -- 8 MR. ROGERS: Just one matter I should mention. 9 I don't believe this will be required, but 10 Chief Bressette had one undertaking concerning the 11 correspondence which I believe was received by his 12 office. 13 In the event there is an issue about it not 14 having been received, I would like to advise the Board 15 that I will file an affidavit to prove service -- or 16 mailing of those documents to him. I don't believe it 17 will be a problem but I thought I should mention it. If 18 the answer comes back that, no, they never were 19 received, then I will prove they were. 20 THE PRESIDING MEMBER: All right. Thank you. 21 So with that we adjourn the oral phase of the 22 hearing and the Board will now look forward to receiving 23 your arguments and to deliberating on our decision. We 24 will expedite that of course given the time frames, but 25 there has been a lot of evidence put on the table in 26 this hearing and it will be quite a time that we need to 27 go through all that. 28 So thank you again everybody for your Les Services StenoTran Services Inc. 613-521-0703 3210 1 participation. 2 Thank you again. 3 Bye now. 4 --- Whereupon the hearing adjourned at 1619 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Les Services StenoTran Services Inc. 613-521-0703 3211 1 INDEX OF PROCEEDING 2 PAGE 3 Upon resuming at 0905 3003 4 Preliminary Matters 3003 5 6 OPG PANEL 2 7 PREVIOUSLY SWORN: BRUCE BOLAND 3006 8 Further Examination-in-Chief by Mr. Campbell 3006 9 Further Cross-Examination by Mr. Budd 3017 10 Examination by Board Counsel 3020 11 Further Cross-Examination by Mr. Rogers 3025 12 13 COO PANEL 1 14 SWORN: THOMAS BRESSETTE 3040 15 SWORN: MARY ANNE SEABROOK 3040 16 SWORN: DAN KELLY 3040 17 SWORN: BRUCE CROFTS 3040 18 Examination-in-Chief by Ms Godby 3040 19 Upon recessing at 1025 3058 20 Upon resuming at 1047 3058 21 Examination by Board Counsel 3101 22 Cross-Examination by Mr. Rogers 3112 23 Questions by the Board 3135 24 Re-Examination by Ms Godby 3148 25 Upon recessing at 1158 3149 26 Upon resuming at 1421 3149 27 28 Les Services StenoTran Services Inc. 613-521-0703 3212 1 INDEX OF PROCEEDING 2 PAGE 3 COO PANEL 2 4 PREVIOUSLY SWORN: THOMAS BRESSETTE 3150 5 SWORN: DAVID DRINKWALTER 3150 6 SWORN: BYRON LeCLAIR 3150 7 Examination-in-Chief by Mr. Vogel 3150 8 Upon recessing at 1603 3197 9 Upon resuming at 1610 3198 10 Examination by Board Counsel 3198 11 Questions by the Board 3207 12 Upon adjourning at 1619 3210 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Les Services StenoTran Services Inc. 613-521-0703 3213 1 EXHIBITS 2 NO. PAGE 3 G16.1 Package of Documents, 3112 4 Communications from OHNC to 5 First Nations 6 7 G16.2 Document entitled "OHNC - 3150 8 Transmission 2000, Chiefs of 9 Ontario Witness Panels" dated 10 March 8, 2000 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Les Services StenoTran Services Inc. 613-521-0703 3214 1 UNDERTAKINGS 2 NO. PAGE 3 F16.1 Mr. Boland to provide five 3022 4 scenarios with adjustments in 5 the net congestion payments 6 between the OHNC proposal and 7 the OPG proposal: (1) assuming 8 that there is no rebate mechanism 9 but a $1 EWT charge; and (2) 10 assuming that the net congestion 11 payments declined, accordingly 12 13 F16.2 Chief Bressette to find out and 3126 14 report on what happened with series 15 of letters sent by OHNC to the Chiefs 16 of Ontario 17 18 F16.3 Affidavit from Mr. Crupi 3152 19 20 21 22 23 24 25 26 27 28 Les Services StenoTran Services Inc. 613-521-0703 3215 1 ERRATA/ ADDENDA 2 3 Volume 11, Wednesday, March 1, 2000 4 PAGE LINE 5 2036 5 6 "MR. ORANS:" S/B "MR. BOLAND:" 7 2046 22 8 "tack" S/B "tax" 9 2062 23 10 "Just on that point" S/B 11 "MR. MATTSON: Just on that point" 12 2080 7 13 "congested" S/B "un-congested" 14 2082 4 15 "?" S/B "." 16 2087 15 17 "had" S/B "have" 18 2088 18 19 "MR. BOLAND" S/B "MR. ORANS" 20 21 Volume 12, Thursday, March 2, 2000 22 2206 2 23 "No, I am not, not of the" S/B 24 "No, I am not, my background is" 25 2211 19, 23, 26 26 "rates" S/B "rights" 27 2212 2 28 "rates" S/B "rights" Les Services StenoTran Services Inc. 613-521-0703 3216 1 ERRATA/ ADDENDA (cont'd) 2 3 Volume 11, Wednesday, March 1, 2000 (cont'd) 4 PAGE LINE 5 2212 4 6 "rate" S/B "rights" 7 2212 8 8 "rate" S/B "right" 9 2223 24 10 "official" S/B "efficient" 11 2230 5 12 "MR. ORANS" S/B "MR. BOLAND" 13 2245 24 14 "roles" S/B "rules" 15 2247 16 16 "million" S/B "minimum" 17 2248 19 18 "We don't get" S/B "We don't yet have" 19 2248 19 20 "OPG has sold" S/B "OPG has sole" 21 2254 5, 12 22 "queues" S/B "q's"