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 1                                               RP-2000-0068
 2                    THE ONTARIO ENERGY BOARD
 3    
 4    IN THE MATTER OF the Ontario Energy Board Act, S.O.
 5    1998, c. 15, Schedule B;
 6    
 7    AND IN THE MATTER OF an Application by Hydro One
 8    Networks Inc. for an order or orders granting leave to
 9    construct an electricity transmission line from the
10    Hawthorne Transmission Station to Gamble Junction and to
11    the Ontario-Qu‚bec provincial border at the Ottawa
12    River, all in the regional Municipality of
13    Ottawa-Carleton.
14    
15    
16    B E F O R E :
17    S.K. HALLADAY       Presiding Member
18    K. McCANN           Member
19    A. BIRCHENOUGH      Member
20    
21    Hearing held at:
22    2300 Yonge Street, 25th Floor, Hearing Room No. 1
23    Toronto, Ontario on Friday, November 24, 2000,
24    commencing at 0934
25    
26                             HEARING
27    
28                            VOLUME 3
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 1                           APPEARANCES
 2    PATRICK MORAN            Counsel to Board Staff
 3    KATHI LITT/
 4    NABIH MIKHAIL/
 5    ZORA CRNOJACKI
 6    
 7    MARY ANNE ALDRED         Hydro One Networks Inc.
 8    PETER THOMPSON           City of Cumberland
 9    MURRAY KLIPPENSTEIN/     Pollution Probe
10    JACK GIBBONS
11    ERNEST McARTHUR          Regional Municipality of
12                             Ottawa-Carleton
13    PETER BUDD/              TransEnergie, a Division of
14    KRISTIE SEBALJ/          Hydro-Qu‚bec
15    DENIS GAGNON
16    LLOYD GREENSPOON         Northwatch
17    DAVID BROWN              Independent Electricity Market
18                             Operator (IMO)
19    
20    
21    
22    
23    
24    
25    
26    
27    
28    
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 1                                            Toronto, Ontario
 2    --- Upon resuming on Friday, November 24, 2000
 3        at 0834
 4              THE PRESIDING MEMBER:  Please be seated.
 5              Good morning.  Are there any preliminary
 6    matters?
 7    PRELIMINARY MATTERS
 8              MR. KLIPPENSTEIN:  Yes, Madam Chair.
 9              I was going to bring a preliminary motion on
10    short notice this morning, given that it is the day
11    before the Grey Cup weekend, which is the national
12    football championship.  We have in our midst, in the
13    person of Mr. Peter Thompson, somebody who played in the
14    Grey Cup game in 1966 for Ottawa and I was looking for
15    jurisdiction for the Board to recognize him by declaring
16    him a national historic site or something.
17    --- Laughter
18              MR. KLIPPENSTEIN:  I couldn't find the
19    jurisdiction in the statutes.
20              But if the Board notices him bobbing and
21    weaving with skill and his hard-hitting
22    cross-examination, you may see where he picked up his
23    skills.  And I thought I would -- I was disappointed not
24    to be able to find the jurisdiction, but there it is.
25              THE PRESIDING MEMBER:  Thank you,
26    Mr. Klippenstein.
27              MR. KLIPPENSTEIN:  I should note, as someone
28    originally from Saskatchewan, it would be unseemly for
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                                          Preliminary Matters
 1    me to point out who won the game, but you can look
 2    it up.
 3    --- Laughter
 4              THE PRESIDING MEMBER:  We will take
 5    administrative notice of that.
 6              Are there any other preliminary matters?
 7              Ms Aldred.
 8              MS ALDRED:  Thank you.
 9              I am ready to proceed with the third panel.
10              THE PRESIDING MEMBER:  Thank you.
11              MS ALDRED:  Mr. Rogers, would you please tell
12    us your name and briefly --
13              THE PRESIDING MEMBER:  Excuse me.  I think
14    they need to be sworn.
15              MS ALDRED:  I'm sorry, they need to be sworn.
16              MR. BUDD:  While you are doing that, Madam
17    Chair, I would just like to advise that Mr. Gagnon is
18    here and he also will be sworn.  He is my witness from
19    TransEnergie.
20              THE PRESIDING MEMBER:  Thank you, Mr. Budd.
21    SWORN:  JOHN R. ROGERS
22    SWORN:  VICTOR GIRARD
23    SWORN:  CARMINE MARCELLO
24    SWORN:  BRIAN McCORMICK
25    SWORN:  DENIS GAGNON
26              MS ALDRED:  Thank you.
27    EXAMINATION
28              MS ALDRED:  Mr. Rogers, would you please state
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    your name and just tell us very briefly what you do for
 2    Hydro One Networks?
 3              MR. ROGERS:  My name is John Rogers and I am
 4    the Director of Program Execution for Hydro One.  I have
 5    been with Hydro One and its predecessors for 29 years.
 6              MS ALDRED:  Can you tell us what portions of
 7    the evidence you are responsible for?
 8              MR. ROGERS:  Yes.  I am responsible for
 9    Exhibit B, Tab 4, Schedule 1, pages 1 to 4, concerning
10    the estimated cost of this work.
11              MS ALDRED:  Were you responsible for the
12    preparation of that portion of the evidence?
13              MR. ROGERS:  Yes, I was.
14              MS ALDRED:  Do you have any corrections to
15    make to that evidence?
16              MR. ROGERS:  Yes, I do.
17              When the cost estimate was originally
18    developed, the cost of the hearings and the consultant
19    support for the hearings was not included.  This needs
20    to be added to the filed estimate, which increases the
21    amount by approximately $1.2 million from the $96.5
22    to $97.7.
23              However, the allowance for funds used during
24    construction has been reflected to agree with the
25    detailed staging of the project.  Bringing the north
26    line into service as of February 2002 has resulted in a
27    reduction of $1.7 million.
28              Other changes have occurred in the original
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    estimate as engineering design and field data collection
 2    has continued.  The net result is a reduction from the
 3    original estimate to $96 million even.
 4              MS ALDRED:  Is that the only correction you
 5    need to make?
 6              MR. ROGERS:  Yes, it is.
 7              MS ALDRED:  Is the evidence true to the best
 8    of your knowledge and was it prepared under your
 9    supervision and control?
10              MR. ROGERS:  It is true and I accept it as my
11    evidence.
12              MS ALDRED:  Thank you.
13              Mr. Girard, could you state your name and
14    qualifications, please?
15              MR. GIRARD:  My name is Victor Girard and I am
16    the Manager of Nature Projects at Hydro One Networks.
17              MS ALDRED:  What portions of the evidence are
18    you responsible for?
19              MR. GIRARD:  I am responsible for Exhibit B,
20    Tab 4, Schedule 1, pages 1 to 5; Exhibit B, Tab 5,
21    Schedule 1, pages 1 and 2; Exhibit B, Tab 5, Schedule 2
22    concerning the scheduling of the construction work.
23              MS ALDRED:  And are there any changes that you
24    need to make to that evidence?
25              MR. GIRARD:  No, there are no changes.
26              MS ALDRED:  Thank you.
27              Was that evidence prepared under your
28    supervision and control and is it true to the best of
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    your knowledge?
 2              MR. GIRARD:  Yes, it is.
 3              MS ALDRED:  And do you accept that evidence as
 4    your evidence in this matter?
 5              MR. GIRARD:  Yes, I do.
 6              MS ALDRED:  We already know Mr. Marcello.
 7              Mr. Marcello, what portions of the evidence
 8    are you responsible for this morning?
 9              MR. MARCELLO:  I will be covering Exhibit B,
10    Tab 5, Schedule 1, pages 1 through 6, but excluding the
11    specific areas that Mr. Gagnon will be talking to,
12    Quebec regulatory and other approvals and the water
13    crossing.
14              MS ALDRED:  And any changes to that evidence?
15              MR. MARCELLO:  No, there isn't.
16              MS ALDRED:  And was that evidence prepared
17    under your supervision and control?
18              MR. MARCELLO:  It was.
19              MS ALDRED:  Is it true to the best of your
20    knowledge today?
21              MR. MARCELLO:  Is it.
22              MS ALDRED:  And do you adopt it as your
23    evidence in this case?
24              MR. MARCELLO:  I do.
25              MS ALDRED:  Mr. McCormick, could you please
26    tell us who you are and what your position is with
27    Hydro One?
28              MR. McCORMICK:  My name is Brian McCormick.  I
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    am Manager of Environmental Services and Approvals for
 2    Hydro One Networks.
 3              The environmental assessment for the Ontario
 4    portion of the Hydro Quebec interconnection project was
 5    carried out by my staff.  As such, I am accountable for
 6    the assessment process and compliance with environmental
 7    assessment legislation.  The consultation process and
 8    individual responses to the city, businesses and
 9    residence were carried out with my knowledge and
10    approval.
11              MS ALDRED:  Were you also responsible for
12    preparation of the letter which was sent to Cumberland?
13              MR. McCORMICK:  Yes, I was.  I would be
14    prepared to respond to provide more accurate information
15    to the city.
16              MS ALDRED:  And do you accept that evidence as
17    your evidence in this proceeding?
18              MR. McCORMICK:  Yes, I do.
19              MR. BUDD:  Thank you.
20              Madam Chair, I'm going to ask some questions
21    of Mr. Gagnon sitting beside me.  I know it is somewhat
22    unusual but we will try to make this work.
23              THE PRESIDING MEMBER:  Go ahead.
24    EXAMINATION
25              MR. BUDD:  Mr. Gagnon, you, sir, are the
26    Manager of Business Development of TransEnergie, a
27    Division of Hydro Quebec, which is an intervenor in
28    these proceedings.  Is that correct?
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1              MR. GAGNON:  Yes, this is correct.
 2              MR. BUDD:  And your curriculum vitae, sir, has
 3    been filed in Exhibit A, Tab 6, Schedule 1, page 11
 4    of 23 in Hydro One's materials.  Is that right?
 5              MR. GAGNON:  Yes.  This is right.
 6              MR. BUDD:  Sir, could you take a moment just
 7    to review your background, your education,
 8    qualifications and experience?
 9              MR. GAGNON:  Yes, I certainly can do.
10              I spent 17 years in the energy business of
11    which the last 13 were in the electricity sector with
12    Hydro Quebec and before that I was for four years in the
13    natural gas sector working for SOQUIP.
14              I have a Masters in Economics from Laval
15    University and also a Bachelor of Social Science in
16    Economics.  I am majoring, then, in Energy Economics and
17    the Study of Financial Institutions.
18              Do you want that I go ahead with my
19    occupational experience?
20              MR. BUDD:  Yes.
21              MR. GAGNON:  So actually I am the Manager of
22    Business Development for TransEnergie, which is the
23    Transmission Division of Hydro Quebec.  TransEnergie is
24    Hydro Quebec's division which is responsible for the
25    open access transmission system for wholesale
26    electricity deliveries inside and outside the Province
27    of Quebec.
28              Actually, I am responsible for managing the
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1    division's transmission tariff and to set up the
 2    required transmission contracts.
 3              I also carry out negotiations related to
 4    transmission projects for new interconnection with
 5    neighbouring systems.  So I was involved in the
 6    negotiations with Hydro One for this project.
 7              My main area of responsibility includes to set
 8    up the contractual framework to ensure the division's
 9    annual revenue, to negotiate contracts and to develop
10    administrative procedures related to the signatures of
11    transmission contracts and customers' financial
12    accreditation.
13              I also negotiate various agreements for new
14    interconnection projects.  And I, finally, supervise the
15    procedures for the system impact studies and the
16    connection agreements related to have realized system
17    modification, to increase the transmission system
18    capability or to integrate power plants into
19    TransEnergie's electrical transmission system.
20              MR. BUDD:  Thank you, sir.
21              Did you participate in the preparation of
22    certain responses to interrogatories posed to the
23    applicant, Hydro One?
24              MR. GAGNON:  Yes, I do.  I participated in the
25    response to OEB Staff Interrogatory Nos. 54, 55, 56, 57
26    and 59, and also to Vulnerable Energy Coalition
27    Interrogatories No. 6 and 12.
28              MR. BUDD:  Thank you.
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1              And do you have any amendments to make to
 2    those parts of the responses to the interrogatories for
 3    which you are responsible?
 4              MR. GAGNON:  No, I do not.
 5              MR. BUDD:  And, therefore, do you adopt those
 6    portions of the responses to the interrogatories for
 7    which you are responsible as your evidence in these
 8    proceedings?
 9              MR. GAGNON:  Yes, I do.
10              MR. BUDD:  And I do understand you are here to
11    help the Board.  Is that right?
12              MR. GAGNON:  Yes, I will be pleased to do so.
13              MR. BUDD:  Thank you.
14    EXAMINATION
15              MS ALDRED:  Mr. Rogers, what was your role or
16    what is your role with regard to this project?
17              MR. ROGERS:  My goal -- my role with regard to
18    this project is to manage the process requiring
19    estimates for the work and to review them for accuracy
20    and completeness.
21              I will also, assuming a positive ruling,
22    commit the work and ensure the work is completed on time
23    and on budget.  In this regard, I will also address any
24    cost issues, change requests or timetable slippage that
25    might arise.
26              MS ALDRED:  Could you please describe the
27    actual construction project?
28              MR. ROGERS:  Yes.  There are two major parts
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    to the work before us.
 2              The first is the lines part of the project. 
 3    Over a period of two years, while retaining service to
 4    our customers we will first remove the north set of
 5    towers and replace it with a new set of towers that are
 6    taller.
 7              Once the north set of towers have been removed
 8    and replaced with a new set, and the customers
 9    transferred, we will then remove the south set of towers
10    and replace it with a new set of towers on the south
11    side of the right-of-way.  This will be the set of
12    towers that is the new connection for Hydro Quebec.
13              In the end, we will have the same number of
14    towers, but four circuits versus the two today, and
15    Mr. Girard will review the work in detail later.
16              The second part of the work is renovation of
17    the existing transformer station at Hawthorne within the
18    fenced facilities.  We will need to expand the
19    capability of the present station to enable the
20    connection of the two new sets of circuits and to
21    reconnect the two existing sets of circuits.
22              MS ALDRED:  Could you please address the costs
23    associated with the project?
24              MR. ROGERS:  Yes.  Costs for the work have
25    been developed over the past two-year period and has
26    continued to be refined up to recent time.  Cost
27    estimates were developed by Hydro One's Engineering
28    Service Division with input from investment planning,
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    design, material procurement, construction, operations,
 2    outage planning and the project management groups.
 3              We have worked to ensure that our pricing
 4    estimate for the construction is complete and that the
 5    work can be constructed for the costs stated.  We have
 6    continued to conduct engineering work and field data
 7    collection, especially on soil conditions, to confirm
 8    the footing costs.  This is a high priority since
 9    changes in soil types and condition can drive
10    considerable changes in cost per footing.
11              We have also firmed up the costs of materials
12    and issued tenders so that we can proceed without delay. 
13    Commitments will be made to purchase materials directly
14    upon receipt of a positive ruling.
15              With the increased information, we have been
16    able to more accurately reflect the cost of the various
17    elements of the work, reduce the risk and increase the
18    assurance the work can be completed for the costs
19    quoted.
20              MS ALDRED:  How was the schedule for the
21    project developed?
22              MR. ROGERS:  Again, the schedule for this
23    project has been developed over the past two years.  It
24    is complex, since throughout the project there are
25    existing customers who we will continue to serve and for
26    whom we must ensure that any service interruption is
27    kept to a minimum.  The schedule remains tight, and
28    while the onus on frozen ground construction is no
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    longer as important, the staged nature of the work and
 2    material procurement timelines limits our options to
 3    shorten the construction time for the project.
 4              The schedule is based on standard work
 5    practices.  We have taken measures to reduce the
 6    potential slippage in the completion date, such as
 7    requesting tenders in advance but not committing to
 8    purchase.  We have not included planned overtime or
 9    weekend work to decrease the schedule, as that would
10    increase the cost.  And again, Mr. Girard will speak
11    more to this in the future.
12              MS ALDRED:  How did you develop the estimates?
13              MR. ROGERS:  Our estimates are based on basic
14    design blueprints that are complete for the work.  We
15    have determined the major components of the lines and
16    station work and have priced them either through
17    tenders, comparison with recent purchases, or through
18    discussions with manufacturers.
19              We have based our labour estimates on either
20    recent similar works that have been completed within our
21    company or by determining construction estimates for
22    specific units of work, such as a tower footing, and
23    increasing them to represent the complete job and then
24    making allowance for efficiency gains that you get when
25    you do repetitive work.
26              We have completed preliminary discussions to
27    provide the skilled labour resources to enable the work
28    to be done on plan.
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1              This construction management team, who will be
 2    in control of the work on the ground, have been involved
 3    in the development of the work plan and are committed to
 4    its success.
 5              And over the past four months, we have been
 6    able to firm our costs of the various work components
 7    and, in doing so, reduce the contingency levels to
 8    10 per cent for both the station and line work.
 9              MS ALDRED:  Can you describe the types of
10    controls that exist on the project?
11              MR. ROGERS:  Yes.  For control of the project,
12    we have regular management updates and reviews of
13    financial and scheduled reports, to ensure the work is
14    banked effectively and remains on plan.
15              We have a change control process, to ensure
16    that any deviation from existing plans is reviewed,
17    costed and approved, or denied.
18              We have a commissioning process, to ensure the
19    work completed meets the specifications of the project.
20              And when the work is complete, we will retain
21    our records for an appropriate presentation to and
22    review by the OEB at a future date.
23              MS ALDRED:  Thank you, Mr. Rogers.
24              Mr. Girard, what is the purpose of your
25    testimony this morning?
26              MR. GIRARD:  The purpose of my testimony, my
27    evidence, is to discuss the schedule of the construction
28    activities.
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1              MS ALDRED:  Would you please explain for us
 2    the staging of the construction of the new transmission
 3    lines?
 4              MR. GIRARD:  Yes.  The replacement of the
 5    existing two sets of tower lines on the right-of-way,
 6    shown in red, with two sets of towers on the same
 7    right-of-way, is a complex project.
 8              The most important factor from a construction
 9    scheduling point of view is that the electrical service
10    must be maintained to the local customers in the
11    Cumberland area throughout the project.
12              The H9A tower line on the north side of the
13    right-of-way supplies electricity to the local customers
14    in Cumberland and must be maintained.  That electrical
15    supply must be maintained throughout the construction
16    work.
17              Customers in the City of Cumberland are
18    supplied from Hawthorne transformer station normally. 
19    So that the local customers can be supplied with
20    electricity during the construction of the new line on
21    the north side of the right-of-way, this circuit must
22    first be reconnected through Hydro Quebec at Masson GS.
23              The construction work has been divided into
24    five stages.
25              Stage One:  This would be carried out from
26    December 2000 to October 2001.
27              This construction involves work between
28    Hawthorne TS and Boromee Junction.  The first activity
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    is to set up a project office and construction yard for
 2    the storage of materials.  Next, we will build access
 3    roads along the right-of-way, starting at Hawthorne
 4    transformer station and continuing to Boromee Junction,
 5    near Innes Road.
 6              The access road construction will continue
 7    along the entire right-of-way to the Ottawa River in an
 8    orderly manner to minimize disruption to property
 9    owners.
10              Foundations will be installed, towers erected,
11    and conductors strung for the new two-circuit 230 kV set
12    of towers on the north side of the right-of-way that
13    will replace the existing H9A and D5A circuits.
14              After the new set of towers is complete to
15    Boromee Junction, the customers supplied from Navan DS
16    in the City of Cumberland will be reconnected to the
17    Hawthorne TS.
18              Stage Two:  This would be from October 2001 to
19    December 2001.
20              Next, the north set of towers between Boromee
21    Junction and Wilhaven DS will be removed from service. 
22    The same construction activities will be repeated: 
23    removal of the existing set of towers and conductors,
24    installation of new foundations, erection of the new set
25    of towers, and stringing of the conductor for the
26    new line.
27              What Mr. Rogers is doing is, he is marking
28    these drawings to show where the power is being fed to
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    the local customers during each construction phase.  He
 2    is doing that by putting a "P" on the chart and drawing
 3    an arrow.
 4              You can see, as he is showing, that at this
 5    stage, the second stage of the project, power is being
 6    supplied to Boromee Junction and Navan DS from Hawthorne
 7    transformer station.
 8              Power to Wilhaven DS is being supplied through
 9    Masson GS to Wilhaven DS, across the Ottawa River.  That
10    de-energizes the section between Boromee Junction and
11    Wilhaven DS, where construction work will take place.
12              Always where our construction work takes
13    place -- in other words, removal of the existing line
14    and building of the new line -- power must be removed
15    from the circuits.  We cannot work with the
16    circuits live.
17              After this section is complete, the customers
18    supplied from Wilhaven DS will be reconnected at
19    Hawthorne transformer station.
20              Stage Three:  Mr. Rogers will again mark on
21    the map where the power is flowing from Hawthorne
22    transformer station all the way to Wilhaven distributing
23    station.  This allows us to work from December 2001 to
24    January 2002 on the section between Wilhaven
25    distribution station and Cumberland Junction.
26              The same activities will take place:  We will
27    remove the existing set of towers; we will remove the
28    conductor; we will install new foundations; we will
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    erect the new set of towers and string the new
 2    conductor.
 3              At this point, we will not only have the H9A,
 4    or the 115 kV circuit built from Hawthorne transformer
 5    station to Cumberland Junction, but we will also have
 6    rebuilt the D5A, the 230 kV circuit, which is presently
 7    on the south side of the right-of-way.  It will be
 8    rebuilt on the north set of towers.
 9              At this point, that D5A can be reconnected at
10    Cumberland Junction to the new set of towers and that
11    will be the new connection to St-Isidore.
12              Stage Four:  The section between Cumberland
13    Junction and the Ottawa River on the west side of the
14    right-of-way will now be out-of-service and without
15    power.
16              In that section, we can then remove the towers
17    and build the new towers -- install the foundation,
18    build the new towers, and string the conductor.
19              Mr. Rogers is again showing where the power is
20    coming from Hawthorne transformer station all the way to
21    Cumberland Junction for both the supply to the local
22    customers at Navan and Wilhaven DS, but also that the
23    230 kV circuit is also re-energized and supplies
24    St-Isidore further down the line.
25              At the same time as this work is going on,
26    because we have reconnected the 230 kV circuit at
27    Cumberland Junction, we can now begin work on the new
28    circuit that will eventually supply Hydro Quebec, from
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    Hawthorne transformer station all the way to the Ottawa
 2    River, on the south side of the right-of-way.
 3              Stage Five:  Stage five involves removal of
 4    these new circuits, the existing south set of towers,
 5    and installing foundations for the new set of towers on
 6    the south side of the right-of-way between Hawthorne
 7    transformer station and the Ottawa River.
 8              Erection of these towers will follow and
 9    stringing of the conductor will occur between May and
10    December of 2002.
11              This will then complete all the new
12    construction, and the energizing of the circuits could
13    take place between Ottawa Hawthorne transformer station
14    and the new transformer station in Quebec.
15              Construction work will proceed upon receipt of
16    a positive ruling from the Board.
17              MS ALDRED:  Mr. Girard, could you explain the
18    implications if the start of construction is delayed
19    until February of 2001.
20              MR. GIRARD:  Yes.  A delay to start in
21    February of 2001 would have a significant impact on the
22    schedule due to spring thaw, or what we call the
23    half-load season for secondary roads in Ontario.
24              What this half-load season does is it limits
25    truck loading during March and April each spring to
26    half-load rating for the vehicles travelling on
27    secondary roads.  This is due to the fact that every
28    spring in Ontario, as the thaw comes out of the ground,
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    and spring comes, the road are more sensitive to damage
 2    due to loading of trucks.
 3              The normal practice is to stop construction
 4    during this time, due to inefficiencies and cost
 5    increase of the work, due to the fact that we cannot
 6    move our equipment along secondary roads.
 7              Due to this restriction, construction of
 8    foundations could not start until May 2001 and the
 9    earliest in-service date would be May 2003 if we did not
10    get an approval until February.
11              MS ALDRED:  Can you explain the construction
12    staging for the station work, please?
13              MR. GIRARD:  Yes.  The construction staging
14    for the station work would be all within the fenced area
15    at Hawthorne transformer station and would include the
16    replacement of four existing 230 kV circuit breakers in
17    an existing yard.  It would also involve the building of
18    new bus work and the installation of five 230 kV circuit
19    breakers in a new area to terminate the new circuits to
20    Hydro Quebec.
21              MS ALDRED:  Mr. Girard, I would just like to
22    point you back actually to the question before this one
23    when I asked you about consequences of delay until
24    February.
25              You mentioned that the in-service date would
26    be delayed until May 2003.  Is that the overall
27    in-service date or the Ontario portion?
28              MR. GIRARD:  That is the in-service date for
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    the Ontario portion of the work.
 2              MS ALDRED:  Thank you, Mr. Girard.
 3              Mr. McCormick, can you please provide an
 4    overview of the environmental process for this project?
 5              MR. McCORMICK:  Over the period January to
 6    December 1999 Hydro One Networks carried out an
 7    environmental assessment of the Hydro Quebec
 8    interconnection project in accordance with the class EA
 9    for minor transmission facilities.  The process
10    addressed the requirements of the Ontario Environmental
11    Assessment Act and included a public information and
12    consultation process.  Alternatives were considered and
13    the preferred options selected based on environmental,
14    technical and economic factors.
15              The process balanced a number of
16    considerations and concluded that the preferred
17    configuration will minimize environmental impacts,
18    including impacts on local property owners, utilize
19    existing property rights, employ a technically sound
20    design and do so at acceptable cost.
21              MS ALDRED:  How were the concerns of
22    Cumberland addressed within the environmental assessment
23    process?
24              MR. McCORMICK:  The City of Cumberland made
25    their concerns known very early in the EA process.  The
26    study period in fact was increased from approximately
27    June to December to facilitate greater discussion and
28    exchange of information with the community.  Council
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    requested replacement of the lattice towers with steel
 2    poles for the section of the corridor which passes
 3    through the urban portion of the city.
 4              The technical and cost implications of the
 5    city's proposal were discussed at meetings and through
 6    exchange of correspondence, all of which were fully
 7    documented in the environmental study report.
 8              After extensive discussion, the city remained
 9    committed to a steel pole option that they believed to
10    be aesthetically more appropriate.
11              Hydro One carefully considered the proposal
12    but concluded that the option was not acceptable.  The
13    rationale was documented in the environmental study
14    report.  The number of structures would be 50 per cent
15    greater, given design limitations and, as a result,
16    50 per cent more property owners would be affected. 
17    This is the key environmental impact.
18              MS ALDRED:  Did the class environmental
19    assessment process consider the steel pole option?
20              MR. McCORMICK:  This was the focus of
21    considerable discussion and exchange of information. 
22    The City of Cumberland's concerns were documented in
23    Chapter 10 of the environmental study report, in
24    letters, resolutions, et cetera, documented in the
25    appendices of the EA.  A list of relevant events
26    exchanges has been prepared, summarized for the
27    reference of the Board, and we are prepared to provide
28    that to you.
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1              MS ALDRED:  Did the environmental assessment
 2    process provide the City of Cumberland with the
 3    opportunity to appeal -- that is, bump up their
 4    concerns?
 5              MR. McCORMICK:  The class EA process provides
 6    an opportunity for concerns to be filed -- to use your
 7    term, bump up requests -- with the Minister of
 8    Environment which could lead to a more extensive review
 9    of the project.
10              The City of Cumberland and a resident,
11    Mr. Tardif, did file requests for a bump up.  The
12    minister subsequently rejected the two requests.  The
13    minister recognized that to replace the towers, on a
14    one-for-one basis, only the lattice design was possible. 
15    With the use of steel poles the number of structures
16    would increase and thereby increase the number of
17    residents who would be negatively impacted, in addition
18    to further disturbance to the natural environment.
19              MS ALDRED:  Are you committed to continuing a
20    dialogue with Cumberland regarding their concerns?
21              MR. McCORMICK:  Yes.  We prepared the response
22    to provide more information and certainly would be more
23    than pleased to continue those discussions.
24              MS ALDRED:  Can you think of any possible
25    areas for cooperation with the city?
26              MR. McCORMICK:  One possible area for
27    cooperation is to better define mitigation and
28    landscaping alternatives that would tend to reduce the
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    aesthetic impacts.
 2              MS ALDRED:  What are the implications of a
 3    concession to the City of Cumberland's request for steel
 4    poles?
 5              MR. McCORMICK:  In addition to increased cost
 6    the class EA has provided approval for the lattice
 7    design only.  The steel pole design will impact a
 8    significant number of property owners by placing new
 9    towers directly adjacent to their properties.  Due
10    process warrants full notification and consultation to
11    ensure that they have had the opportunity to file
12    objections to the design change.  The environmental
13    study report then must be revised and resubmitted.
14              With a 50 per cent increase in towers, it is
15    reasonable to expect that a large number of property
16    owners will object to the decision, despite the support
17    of the city.
18              MS ALDRED:  Mr. McCormick, in your last answer
19    you referred to a 50 per cent increase in towers?  Did
20    you mean poles?
21              MR. McCORMICK:  I'm sorry, I meant poles.
22              MS ALDRED:  Is there a policy which governs
23    the use of steel poles?
24              MR. McCORMICK:  Hydro One Networks does not
25    have a policy on the use of steel poles.  Lattice towers
26    are the design standard and considered for most
27    projects.
28              The selection of the steel pole option is a
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    site specific consideration.  This has been a practice
 2    as long as I can remember.
 3              MS ALDRED:  Mr. Marcello, what is Hydro One's
 4    view of reliability?
 5              MR. MARCELLO:  I would like to point out that
 6    we have brought forward a proposal that actually
 7    enhances the reliability to our customers.  At Hydro One
 8    we always work to ensure that our system is reliable for
 9    our customers and that our assets are maintained and
10    operated in a safe and reliable manner.
11              We take reliability very seriously and we
12    wouldn't bring forward a proposal that we feel didn't
13    meet the requirements of the IMO's reliability
14    requirements or NPCC's basic criteria.
15              MS ALDRED:  Could you please elaborate on your
16    understanding of the IMO's requirements with regard to
17    this interconnection?
18              MR. MARCELLO:  I think the requirements could
19    be summed up in two basic fundamental areas.
20              First off, there is a need to determine
21    whether our proposal, the new interconnection, would
22    have any sort of impact on the existing system.  You
23    would need to look and see if any facilities needed to
24    be modified or upgraded or added.
25              The second area, there is a need to define how
26    the new system would be operated.  You need to determine
27    the new operating parameters and look at specific
28    operating scenarios where certain control actions may be
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    required.
 2              In the case of this interconnection the most
 3    common type of control action we would anticipate would
 4    be reducing the flow of power through the converter, the
 5    HVDC converter, in the event of a particular
 6    contingency.  Such control actions are usually taken
 7    through the use of special protection schemes, which we
 8    refer to as SPSs for short.
 9              MS ALDRED:  So can you tell us what Hydro One
10    Networks has done to ensure that the IMO requirements
11    are met in this proposal?
12              MR. MARCELLO:  Let me address those two areas
13    separately.
14              In terms of determining whether there is an
15    impact on the rest of the system and whether facilities
16    would need modifications or upgrades, we would basically
17    carry out the same sorts of studies that are covered off
18    in the IMO System Impact Assessment.
19              We examine the capability of the existing
20    system and the new system to withstand short circuits. 
21    We examine the capability of the system and equipment to
22    carry the required loads expected under numerous
23    operating scenarios.  We look at the type of voltages we
24    can expect with the new system in place and we determine
25    if there is a need for additional reactive support in
26    the form of capacitor banks.
27              At this point I would like to highlight that
28    within the System Impact Assessment the accountability
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    for short circuit analysis rests with Hydro One Networks
 2    alone and the accountability for load capability
 3    analysis is shared between Hydro One and the IMO.  The
 4    accountability for the reactive power assessment is
 5    solely the IMO's accountability.
 6              Having completed these analyses, we have
 7    determined that there are no changes that are required
 8    as a result of short circuit capability.
 9              We have determined that four additional
10    breakers -- or four existing breakers need to be
11    replaced with four new ones capable of carrying the
12    increased load levels expected.
13              We have also determined that two additional
14    capacitor banks and their associated breakers and
15    equipment would be required in order to maintain
16    adequate voltages.
17              These facilities are incremental to the basic
18    facilities that would be required to simply connect the
19    circuits to the station at Hawthorne, and based on our
20    extensive experience in planning and designing of tower
21    systems over the past 90 years we are confident that
22    these incremental facilities will meet the IMO's
23    requirements.
24              MS ALDRED:  What about the second fundamental
25    area which deals with operating the system?
26              MR. MARCELLO:  In terms of ensuring that the
27    system is stable and reliable, we have demonstrated that
28    we meet NPCC's basic criteria for the design and
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1    operation of the power system.  However, the IMO is
 2    accountable for operating the power system and in doing
 3    so, they must conduct numerous studies to look at the
 4    internal Ontario system.  These studies are clearly the
 5    IMO's accountability and are vitally important to ensure
 6    that the operation of the system can take place in a
 7    safe and reliable manner.
 8              The results of the studies will determine the
 9    transfer capabilities and the associated security
10    limits.  Basically, this defines the amount of power
11    that could be transferred across the system and across
12    critical interfaces without negatively impacting the
13    reliability of the system or the integrity of Hydro
14    One's equipment or that of any of our connected
15    customers.
16              The IMO also needs to identify the specific
17    scenarios or contingencies where control action must be
18    taken.  And we fully anticipate the need for a special
19    protection scheme in our proposal.  And this special
20    protection scheme will be designed to address the
21    specific scenario that will be identified as part of the
22    IMO's assessment.
23              We have budgeted approximately half a million
24    dollars for the special protection scheme.  Even in the
25    event that the IMO's assessment requires a much more
26    complex scheme than we have anticipated, it is felt that
27    it would be a small incremental impact to the overall
28    project.
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1              MS ALDRED:  Mr. Marcello, I understand that
 2    you wish to clarify a response you gave on Panel 1.
 3              MR. MARCELLO:  Yes, that is correct.
 4              In reviewing the transcripts, I would like to
 5    expand my answer to the Presiding Member with respect to
 6    the 400 megawatt emergency tie.
 7              Following the 1998 ice storm, Hydro Quebec
 8    established the temporary interconnection by building a
 9    230 kV double circuit line from the new Outaouais TS
10    basically to Masson in Quebec and it is at that point
11    that the circuit was tied to the Ontario system via the
12    existing 230 kV D5A circuit.  And this interconnection
13    is there to provide the Outaouais region with an
14    emergency support in the event of another catastrophic
15    type incident as we had in 1998.
16              The current interconnection takes that
17    temporary connection and incorporates it into the new
18    design.  And this is accomplished by firstly installing
19    converter equipment at Outaouais, then completing the
20    remainder of the 230 kV circuit in Quebec and tying it
21    to the circuits we are building from the river crossing
22    to Hawthorne TS.
23              I may have left the mistaken impression that
24    the interconnection alone was required to improve the
25    reliability to Quebec's Outaouais region.  But in fact,
26    the interconnection is just one component of the overall
27    plan in Quebec to improve their system reliability post
28    the ice storm.
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                      HYDRO ONE NETWORKS PANEL 3, ex (Aldred)
 1              MS ALDRED:  Thank you, Mr. Marcello.
 2    EXAMINATION
 3              MR. BUDD:  Mr. Gagnon, if I could turn to you
 4    then.
 5              Could you tell us and the Board about the role
 6    of TransEnergie within Hydro Quebec?  How it is
 7    structured?
 8              MR. GAGNON:  Yes, Mr. Budd.  I would be
 9    pleased to do that.
10              TransEnergie is the division of Hydro Quebec
11    which has the responsibility to manage and operate the
12    high voltage electrical transmission system within the
13    province of Quebec.
14              Since May 1st 1997 when the Hydro Quebec's
15    open access transmission tariff was implemented,
16    following its approval by the government of Quebec in
17    March of 1997, the transmission activities performed by
18    TransEnergie are functionally separated from the
19    wholesale marketing and generation activities of Hydro
20    Quebec.
21              The transmission tariff to which I just
22    referred was filed in the actual case as an attachment
23    to OEB Staff Interrogatory No. 57 which is Exhibit C,
24    Tab 1, Schedule 57.
25              As a result of the implementation of the open
26    access transmission tariff, TransEnergie operates an
27    OASIS system which is an acronym for Open Access
28    Same-Time Information System.  As stated in the Federal
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1    Energy Regulatory Commission Order 888-M89:
 2                   "And all transmission customers being
 3                   third parties or Hydro Quebec generation
 4                   and wholesale marketing units, all
 5                   customers are treated on the same
 6                   non-discriminatory open access basis." 
 7                   (As read)
 8              Based on the provisions of the tariff, the
 9    general rule for service on TransEnergie transmission
10    system is first come, first served.  Also, Hydro Quebec
11    adopted a strict code of conduct similar to what is
12    proposed by the FERC in the U.S. to ensure the integrity
13    of the transmission access process.
14              MR. BUDD:  Thank you, sir.
15              Now, if I could have you turn to
16    TransEnergie's reasons for intervention in these
17    interconnection proceedings, could you tell the Board
18    what is the main reason why TransEnergie decided to
19    enter into this interconnection agreement and is
20    committed to invest over $200 million for the project
21    that is the subject matter of these proceedings?
22              MR. GAGNON:  Yes, Mr. Budd.
23              After the severe ice storm of January 1998
24    which had a very large impact on our customers and also,
25    as I understand, on some electric customers in Ontario,
26    specific proposals were made by Hydro Quebec to secure
27    the security of supply to its customers in the southern
28    part of the province where most of the Quebec load is
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1    concentrated.
 2              In addition, the need to add a new source of
 3    supply from the southwest part of the Province of Quebec
 4    to secure the electricity supply for all of our
 5    customers in case of a major failure of a transmission
 6    corridor from Churchill or James Bay became clear.
 7              The preferred way of doing that was to realize
 8    the proposed interconnection with the neighbouring
 9    province of Ontario.  The interconnection project does
10    represent the most cost effective way for Hydro Quebec
11    to improve such transmission capacity between Ontario
12    and Quebec and thereby to increase the security of the
13    transmission system in both provinces.
14              In addition, the new interconnection will
15    provide opportunities for electricity suppliers and
16    buyers in both provinces to trade electricity between
17    the Ontario and Quebec markets and by this, to increase
18    the efficiency of their respective markets.
19              MR. BUDD:  Yesterday, sir, the witness panel
20    from Hydro One was asked about who controls this
21    converter.  In fact, who does control the converter and
22    how does that arrangement work?  Would you tell the
23    Board, please?
24              MR. GAGNON:  Yes, I would like to do so.
25              To realize the interconnection project, there
26    was an agreement that was entered into between Hydro
27    Quebec and Hydro One.  This is the Outaouais-Hawthorne
28    interconnection facilities' expansion agreement which is
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1    filed as Exhibit B, Tab 5, Schedule 3.
 2              In the agreement, the agreement provides for
 3    the future control of the equipment and yesterday, when
 4    I heard the question, I was left with the impression
 5    that TransEnergie alone would control the equipment,
 6    which is not the case.
 7              In the agreement that I just mentioned, we
 8    refer to two future agreements that are in the process
 9    of being negotiated and will be completed:  one between
10    TransEnergie and Hydro One Networks that we call the
11    facilities' agreement and another one between
12    TransEnergie and the IMO which we call the
13    interconnection agreement.
14              Those agreements will have provisions to
15    provide for the control of the interconnection.
16              If I can read at page 3 of the
17    Outaouais-Hawthorne interconnection facilities'
18    agreement, we will see what kind of questions have to be
19    agreed to together between TransEnergie and Hydro One
20    Networks:
21                   "The agreement will cover the following
22                   subjects:
23                   (a) the rating of equipment;
24                   (b) protocols for emergency situations,
25                   switching, arranging outages, work
26                   production and similar matters;
27                   (c) provisions that address each party's
28                   obligations with respect to maintenance
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1                   and replacement of the interconnection
 2                   facilities;
 3                   (d) a requirement for the establishment
 4                   of a facility's honours committee as a
 5                   mechanism for managing the ongoing
 6                   relationship between the parties; and
 7                   (e) a right for either party to audit the
 8                   operating records of the other to verify
 9                   the other's claims of reliability
10                   problems, interference with existing
11                   transactions or committed transmission
12                   service, emergency conditions or other
13                   operating conditions that constrain the
14                   interconnection facilities."  (As read)
15              This is for the agreement to be completed
16    between TransEnergie and Hydro One Networks.
17              Also, in the same document, turning to page 9,
18    then there are some words about the future agreement
19    between the IMO and TransEnergie.
20              It says there that:
21                   "The Interconnection Agreement will
22                   include common system operating
23                   instruction prior to permitting the
24                   operation of the new interconnection
25                   facility."  (As read)
26              And it is also said that:
27                   "Together the Facilities Agreement and
28                   the new Interconnection Agreement will
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1                   provide the basis for the ongoing
 2                   operation and maintenance of the new
 3                   interconnection facility."  (As read)
 4              MR. BUDD:  Thank you.
 5              Sir, what is the status of the requisite
 6    approvals in Quebec for this project?  Where does that
 7    stand?
 8              MR. GAGNON:  There is one major environmental
 9    approval which is required from the Government of Quebec
10    for the Outaouais converter station and it is planned to
11    be obtained before the end of November this year.
12              Public environmental hearings were conducted
13    in this respect and the final report from the Bureau des
14    audiences publiques sur l'environnement -- le BAPE -- to
15    recommend the project was made public on September of
16    this year.
17              In addition, a federal permit required for the
18    rebuilding of an existing crossing of the Ottawa River
19    was issued in September 2000.
20              Following the issuance by the Government of
21    Quebec of the decree authorizing the Outaouais converter
22    station, all other related approvals, which are more
23    construction matters and which are typically obtained in
24    due course which are not already obtained, will be
25    obtained.
26              MR. BUDD:  Is the approval of the R‚gie
27    d'‚nergie required?
28              MR. GAGNON:  No, there is no required approval
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1    from the R‚gie d'‚nergie for this project.
 2              MR. BUDD:  Okay.  Could you just take a moment
 3    to explain the status of open access to Hydro Quebec's
 4    transmission system, please?
 5              MR. GAGNON:  Yes, I can.
 6              Since May 1, 1997, the Quebec transmission
 7    grid is working as an open access system for all
 8    wholesale activities.  Thus, any transmission customer
 9    may enter into a contract for the use of TransEnergie
10    transmission system in accordance with the rules stated
11    in the tariff for wheeling through, wheeling out or
12    wheeling in the Province of Quebec for all sale
13    transactions.  Such transactions occur daily involving
14    third parties or Hydro Quebec generation as customers.
15              MR. BUDD:  Very good.
16              Does Hydro Quebec hold a FERC licence, then?
17              MR. GAGNON:  Yes.  An affiliate of Hydro
18    Quebec called HQUS Limited holds a FERC licence.
19              The FERC has thus confirmed that the tariff
20    fully satisfies the reciprocity of access conditions
21    that are required to do electrical activities in the
22    United States.
23              MR. BUDD:  So sir, could you confirm for this
24    Board that Hydro Quebec is indeed fully committed to
25    this interconnection project?
26              MR. GAGNON:  Yes, I can.
27              The Ontario interconnection project was
28    approved by Hydro Quebec's Board of Directors in 1998. 
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1    According to the agreement, which I referred earlier,
 2    entered into between Hydro Quebec and Hydro One
 3    Networks, Hydro Quebec is thus committed to the
 4    interconnection project inasmuch as all the relevant
 5    approvals are obtained in a timely fashion.
 6              MR. BUDD:  Thank you.
 7              I am moving to the final area, Madam Chair and
 8    members of the Board.
 9              Could you also confirm that Hydro Quebec will
10    continue to exercise its best efforts in cooperation
11    with the applicant, Hydro One, to advance the in-service
12    date for the interconnection project.
13              In giving your answer to the Board, would you
14    make reference, please, sir, to Exhibit 4.10 in respect
15    of the critical dates.  This was an exhibit of
16    yesterday.
17              MR. GAGNON:  Yes, sir.
18              Hydro Quebec will continue to exercise its
19    best efforts in cooperation with the applicant to
20    advance the in-service date for the interconnection
21    project.  We would like to get the benefit of the
22    security of supply of all Quebec customers as early as
23    possible, trying to put the new interconnection in
24    service by December 2002.
25              If we refer now to Exhibit 14.10, that is a
26    table which shows, for a date that there would be a
27    decision by this Board, what is the possible in-service
28    date for the interconnection project.
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1              It shows that if we have a decision before the
 2    1st of December, then it is possible for TransEnergie to
 3    be in service by December 2002, subject, however, to
 4    Hydro One being able to shorten their construction
 5    schedule in order that we have the relevant period for
 6    the commissioning of the converter before December 2002.
 7              Then, if the decision of this Board is not
 8    before December 1st but is before January 15, 2001, then
 9    we won't be able to make the peak winter 2002/2003 with
10    the interconnection project.  However, it is still
11    possible to make it for the 31st of May, 2003, which is
12    the referred to in-service date in Hydro One's
13    application.
14              Then if we have -- if the decision of this
15    Board comes only after January 15, 2001, then there will
16    be some delay, but the major impact for TransEnergie is
17    that there is a possible major cost increase for the
18    converter station.  The reason for that is that to
19    protect the May 2003 and, if possible, December 2003
20    in-service date, we have already started the process
21    to -- the tender process to buy the converter equipment, 
22    Actually, we have a price which is guaranteed by the
23    supplier up until January 18, 2001.
24              And if we don't -- and we cannot give a firm
25    command before having all the approvals in place, and if
26    we don't give the command -- the order before January
27    18, 2001, then the supplier has the possibility to
28    revise his price.  There were major discrepancies in the
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1    price so there is a possibility that it may well occur.
 2              MR. BUDD:  So just to be perfectly clear,
 3    Mr. Gagnon, what you are attempting to do is to request
 4    of the Board, then, that if it is at all possible that
 5    an approval, even a nod, be given prior to December 1st
 6    so that the company is able to go -- to not go through
 7    one more winter season of 2002/2003 without the service? 
 8    You would like to have that service.  Is that correct?
 9              MR. GAGNON:  Yes, we would like that.  Because
10    as for TransEnergie, the main reason for having that
11    interconnection is to increase the security of supply in
12    the Province of Quebec.  So we would like to have that
13    as soon as possible.  And if we can have it for the
14    winter 2002 and 2003, that would certainly be our
15    preferred solution.
16              MR. BUDD:  Thank you, Mr. Gagnon.
17              Does that complete your direct evidence?
18              MR. GAGNON:  Yes, it does.
19              MR. BUDD:  Madam Chair, members of the Board,
20    I just wanted to advise that Mr. Serge Fortin is sitting
21    behind me and he is an engineer on matters technical. 
22    It may be necessary, but we are not expecting that it
23    should be, that Mr. Gagnon may need to ask him
24    something.  But I don't propose that he be sworn.
25              THE PRESIDING MEMBER:  That's fine, Mr. Budd.
26              MR. BUDD:  Thank you.
27              And as for that, my witness is available for
28    cross-examination.
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                        HYDRO ONE NETWORKS PANEL 3, ex (Budd)
 1              MS ALDRED:  We are finished with our direct
 2    evidence.
 3              THE PRESIDING MEMBER:  Mr. Moran.
 4    EXAMINATION
 5              MR. MORAN:  Panel, maybe if I could just
 6    confirm with you before we start whether you have
 7    Exhibit 14.9 in front of you, the table of comparison of
 8    costs per kilometre.
 9    --- Pause
10              MR. MORAN:  It's a two-page document.  Do you
11    have it?
12    --- Pause
13              MR. MORAN:  I don't know if this question is
14    properly put to Mr. Marcello or to Mr. McCormick but it
15    has to do with the capacity parameter that was chosen
16    for this project.
17              Was there any examination of different
18    alternatives to the 1,250 capacity?
19              MR. MARCELLO:  The original discussions with
20    Hydro Quebec had proposed, I believe, 1,000 megawatt
21    connection, and in doing some of the studies the first
22    thing we looked at was:  Is this an appropriate level? 
23    Can we get more out of it?
24              Basically, to go much beyond 1,250 would have
25    required significant reinforcements on both systems, but
26    from a practical standpoint 1,250 would be an upper
27    bound.  To have gone to, for example, let's say 1,500,
28    the interconnection at 230 kV wouldn't have been
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    appropriate, it would have been a 500 kV, probably a
 2    single circuit, and then you are into issues of one
 3    circuit out-of-service.  You have lost the entire
 4    interconnection.  You don't have the additional
 5    diversity.
 6              Plus additional reinforcements were required
 7    on either side.  So from a practical sense, the 1,250
 8    was an upper bound.  I think the 1,000, which was sort
 9    of a nominal starting point, we realized:  You are not
10    getting anything for 1,000.  The lines would pretty well
11    be the same and all the upgrades we had to do on our end
12    were pretty much the same.  So 1,250 was basically where
13    we narrowed into.
14    --- Pause
15              MR. MORAN:  Thank you.
16              Let me turn you now to Exhibit 14.9.  Again,
17    I'm not sure who would be the right person to give
18    this to.
19              Let me just walk you through it so that we
20    understand what it is.  It's a breakdown of costs under
21    a number of headings that you see in Column 1, and it's
22    a comparison of two projects.
23              Column 2 and Column 3 relate to a 1992 project
24    that Hydro One carried out.  Are you familiar with that
25    project?  It was supplied to the Board in response to an
26    interrogatory.
27              And Column 4 and 5 are the costs with respect
28    to the Quebec intertie.
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1              And in Column 6 we see the changes in costs
 2    between the two projects.  And those changes don't allow
 3    for inflation, okay.
 4              We will be using this for a number of
 5    questions over the next little while, so I just wanted
 6    to take you through it so that there was an
 7    understanding of what that is.
 8              Then on the second page there is a description
 9    of an American project, and that information was
10    obtained by Board staff and it is summarized in
11    that page.
12              I would like to start off with the design
13    standard for the proposed towers.
14              Are there other design standards available for
15    projects of this nature?
16              MR. MARCELLO:  Just so the question is clear,
17    in terms of design standards there were certain loading
18    criteria we could have built the line to and when we are
19    specifying a new facility at a very macro level we would
20    be categorizing the ability to withstand lightning
21    strikes, the ability to withstand certain ice and wind
22    loadings, the ability to withstand outages from what is
23    referred to as "galloping" which is basically like a
24    skipping rope.
25              So there are standards that would outline
26    different classes of construction.
27              So from that perspective there are, I believe,
28    four standards we can talk to.  But in terms of steel
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    towers, it is really two you would narrow into.
 2              MR. MORAN:  All right.  In your interrogatory
 3    responses on this issue you indicated that you were
 4    going to follow the Hydro One standard design specs. 
 5    Are these standards more stringent than the CSA or ASCE
 6    specifications for this project?
 7              MR. MARCELLO:  In terms of the ice loading
 8    requirements they are.  The Hydro One standard for the
 9    tower we are proposing is two inches of radial ice.  I
10    believe -- I don't know the exact figure of CSA, but it
11    is lower than that.
12              MR. MORAN:  And presumably that decision is
13    based on the 1998 ice storm experience in part?
14              MR. MARCELLO:  I would say that the ice storm
15    experience confirmed our practical experience over the
16    past number of years.  When we look at the performance
17    of the facilities during the ice storm, the 500 kV
18    towers stood up very well.  There was basically no
19    damage to them.  And it is that ice loading standard
20    that this interconnection will be built to.
21              MR. MORAN:  All right.
22              Let me turn now to Exhibit 14.9, the table. 
23    Let me start off with the engineering costs as we see
24    them compared for 1992 project and the current proposed
25    project.
26              When we look at that, it looks like there is a
27    decrease in engineering costs.  Can you explain how that
28    comes about?
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1              MR. GIRARD:  Yes, I will answer that question.
 2              The engineering costs for the new line --
 3    first of all, the new line to Hydro Quebec is
 4    42 kilometres and the line that we are comparing it to
 5    on the Parkway belt is 7 kilometres.  Therefore, just
 6    because it is longer and when you are doing the design
 7    of the -- the engineering design, it is more repetitive
 8    and therefore you can experience savings.
 9              MR. MORAN:  Economies of scale.
10              MR. GIRARD:  Economies of scale, yes.
11              MR. MORAN:  All right.  Okay.
12              Turning then to the overheads, we see quite a
13    significant increase over the two projects to the
14    current project.
15              First of all, what do you include under
16    "Overheads"?
17              MR. ROGERS:  Yes.  The overheads are the costs
18    of the company, such as corporate overheads that are
19    directed to the work, plus the costs of the network
20    management organization, the planning organization,
21    human resources, and that type of thing.
22              MR. MORAN:  All right.  In this particular
23    case, when you were estimating the overheads for this
24    project, what were your assumptions?
25              MR. ROGERS:  I'm sorry?
26              MR. MORAN:  In this particular case for this
27    project when you are estimating the overheads, what
28    assumptions were you using?
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1              MR. ROGERS:  We have a general overhead which
 2    is 16.3 per cent and that general overhead was what was
 3    applied.
 4              MR. MORAN:  Okay.  And where does that number
 5    come from?
 6              MR. ROGERS:  It has been the number for the
 7    past while and it is developed by our finance people.
 8              MR. MORAN:  Okay.  For how long has that been
 9    the number?
10              MR. ROGERS:  I can't say.
11              MR. MORAN:  Is there any way for us to
12    understand why it appears to be greater for this project
13    as a percentage than for the 1992 project?
14              MR. ROGERS:  Yes.
15              MR. MORAN:  Okay.
16              MR. ROGERS:  In 1992 the organization was
17    structured differently.  We had a more decentralized
18    organization.  A lot of -- effectively the 4 per cent,
19    or thereabouts, that is shown in 1992 were the corporate
20    overheads only.  And the overheads that were for line
21    management, and for the rest of the company that is now
22    centralized, were actually charged to the work and were
23    part of the work cost.
24              MR. MORAN:  Can I turn you to Exhibit B,
25    Tab 4, Schedule 1 at page 15.
26    --- Pause
27              MR. MORAN:  Do you have that?
28              MR. ROGERS:  The page again, please?
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1              MR. MORAN:  I'm sorry.  Page 15 of 15.
 2    --- Pause
 3              MR. MORAN:  Do you have it?
 4              MR. ROGERS:  Yes.
 5              MR. MORAN:  Yes, all right.
 6              When we look at that page I guess we see
 7    direct costs are about $80 million.  Right?
 8              MR. ROGERS:  Yes.
 9              MR. MORAN:  Total project costs minus AFUDC
10    and overheads, $80 million.  That is how you get the
11    $80 million figure.  Right?
12              MR. MARCELLO:  That is what it says there,
13    yes.
14              MR. MORAN:  Okay.  Which gives you overheads
15    of $10.368 million.  Right?
16              MR. MARCELLO:  I haven't calculated, but okay.
17              MR. MORAN:  If we, in the same exhibit, go to
18    page 1, we have the total project costs on page 1, which
19    would suggest, using that figure, that the overheads are
20    $11.3 million.
21              MR. MARCELLO:  You are saying using the figure
22    that PHB had used to determine the economic benefits and
23    extrapolating that to page 1.  Is that --
24              MR. MORAN:  If you look at page 1 of 15 of
25    Exhibit B, Tab 4, Schedule 1 --
26              MR. MARCELLO:  Right.  It shows 96.5 as a
27    bottom line number.
28              MR. MORAN:  That's right.
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1              MR. MARCELLO:  So you are proposing to apply
 2    the percentage you calculated on page 15 to page 1 to
 3    determine what the overheads are?
 4    --- Pause
 5              MR. MARCELLO:  I just don't understand the
 6    question, I'm sorry.
 7              MR. MORAN:  Using the same formula, total
 8    project costs minus AFUDC and minus overheads, to get
 9    your $80 million on page 15 of 15 that we just looked
10    at, using that formula and changing the total project
11    cost figure to 96.536, we come up with a different
12    overhead.  Right?
13              MR. MARCELLO:  If we go to page 2 and page 3,
14    of the same exhibit, there are a couple of tables that
15    break out the AFUDC costs.  I guess what I'm saying is
16    that I don't know --
17              MR. MORAN:  But not the overhead.
18              MR. MARCELLO:  I'm sorry.  I don't understand
19    how PHB may have calculated their 80, whether they did
20    or didn't, and how they went about doing it.
21              MR. MORAN:  All right.  If we go to page 2,
22    which you have just referred to, we have overheads --
23              MR. MARCELLO:  Again, this isn't my area, but
24    I recall that there was an Interrogatory where we
25    responded that had the AFUDC and the overheads broken
26    out, and that was in response to the detail in Tables 1
27    and 2.  So it may be more helpful to look at that one.
28              MR. MORAN:  Okay.  Let's go to Schedule 45. 
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    Page 2 of Schedule 45, Exhibit C, Tab 1.
 2    --- Pause
 3              MR. MORAN:  Do you have it?
 4              MR. MARCELLO:  Yes.
 5              MR. MORAN:  All right.  If we look at that
 6    table it breaks out the overheads, as you indicated.  On
 7    that table we get a total overhead of 12.73 million.
 8    --- Pause
 9              MR. MORAN:  I guess my question is quite
10    simple:  What is the right number for overheads, given
11    the possible three different numbers that we have from
12    the three places that I have just taken you to?
13    --- Pause
14              MR. MARCELLO:  In terms of PHB's analysis, I'm
15    not familiar with how they got to that number.
16              MR. MORAN:  All right.  Well let's leave that
17    one aside, then, and look at the $10.3 million figure
18    that we get in Schedule 1, on page 15, and the
19    $12.73 million that we get in Schedule 45 at page 2.
20    --- Pause
21              MR. MORAN:  Is this something that you want to
22    take some time to check and get back to us on?
23              MR. MARCELLO:  Sure.
24              MR. MORAN:  All right.
25              MS ALDRED:  Mr. Moran, I think maybe
26    Mr. Skalski needs to be consulted on this, so if we
27    could take it as an undertaking.
28              MR. MORAN:  Perhaps that is best, to give an
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    undertaking, Madam, Chairman, to keep things moving.
 2              THE PRESIDING MEMBER:  That would be fine.
 3              MR. MORAN:  I have an undertaking list in here
 4    somewhere.
 5              It will become Undertaking 15.4.
 6              MR. MARCELLO:  Could you just state it for us.
 7              MR. MORAN:  An undertaking to confirm the
 8    actual overhead number that would apply to this project.
 9              MR. MARCELLO:  Okay.
10                   UNDERTAKING NO. 15.4:  Mr. Marcello
11                   undertakes to confirm the actual overhead
12                   number that would apply to this project
13              MR. MORAN:  Who is accountable for this
14    component of the budget at Hydro One?
15              MR. MARCELLO:  For overheads?
16              MR. MORAN:  Yes.
17              MR. MARCELLO:  I think, as Mr. Rogers had
18    pointed out, our finance group -- and Mr. Skalski is
19    from that group -- would be able to answer any questions
20    in that regard.
21              MR. MORAN:  All right.
22              And with respect to the actual project, what
23    do you do to manage overheads, to ensure that they stay
24    controlled?
25              MR. ROGERS:  We manage the work that goes on
26    during the construction.  The overheads are a number, an
27    application, given to us by finance, that is applied to
28    the cost.
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1              MR. MARCELLO:  My understanding would be that
 2    the whole discussion around overheads would come before
 3    the Board during a rate hearing and we can discuss
 4    whether 16.5 is appropriate, and how we got to 16.5 in
 5    the year 2000 from what appears to be 4 or 5 per cent in
 6    1992.
 7              I'm sure there are 101 good explanations, it
 8    is just not my area.  I'm sorry.
 9              MR. MORAN:  Let me turn now to Interrogatory
10    No. 42.  That is Exhibit C, Tab 1, Schedule 42.
11              This is a question with respect to costing. 
12    It is on the basis of recognizing that we don't have
13    detailed costing at this point, because the final
14    engineering and design work and all of that has to be
15    carried out.
16              However, just a few questions on the answer.
17              In the first paragraph in your response, you
18    have indicated that a combination of competitive bids,
19    vendor budgetary estimates and internal historical
20    benchmark data were used.
21              Could you just describe how that was done,
22    please?  How it works.
23              MR. GIRARD:  Yes, I would be happy to.
24              We have an estimating group, and what they
25    have -- historical information.  Now that we know in
26    general, in very general terms, what work has to be
27    done, we look historically at how we have installed
28    these types of facilities before.
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1              As far as vendor budgetary estimates, what we
 2    did was we contacted vendors and told them about the
 3    project and the material and equipment we would require,
 4    and we have asked them for what they feel their price
 5    would be.
 6              And also, for certain items, we have actually
 7    issued tenders.  We have issued tenders for tower steel
 8    and bolts; we have issued tenders for aggregate to build
 9    road access; we have issued aggregates for concrete, for
10    tower footings; and we have issued contracts for anchor
11    bolts.  None of these contracts have been awarded, but
12    they have been issued and we have prices.
13              So that is where the competitive bids come in.
14              MR. MORAN:  And if we move to the third
15    paragraph in your response, you indicate, as you just
16    indicated, that the breakers and DC switches are based
17    on competitive bidding, steel structure insulators,
18    cables, stones and other building material based on
19    historical data and actual cost.
20              Was there some convergence in that data that
21    you saw when you were doing this?
22    --- Pause
23              MR. MORAN:  How did the historical data
24    compare to the informal contractor contacts that you
25    made?  How do they compare?
26              MR. GIRARD:  The historical data was
27    favourable to the bids we are getting in now.  Actually,
28    in the case of tower steel, the bid we have right now is
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    lower than our historical data.
 2              MR. MORAN:  All right.
 3              On line 28 you make a reference to a
 4    single-source supplier for metering, RTU and other
 5    protection equipment.
 6              Is there a reason why there is only a
 7    single-source supplier?
 8              MR. GIRARD:  The reason is, there is only one
 9    person who builds the type of equipment.
10              MR. MORAN:  With respect to the cost of
11    labour, you indicate that it is based on the current
12    union contract.
13              Could you just confirm whether this is a
14    closed-shop situation that you are dealing with.
15              MR. ROGERS:  Yes, it is.
16              MR. MORAN:  Turning to the second page of that
17    schedule, there is a reference to "labour requirements
18    were estimated using more fundamental work packages'.  I
19    am just wondering if you could explain what that means?
20    --- Pause
21              MR. GIRARD:  That has to do with the line work
22    and because we haven't done a line exactly like this
23    before what we did is we went into the actual detail of
24    the work with our construction people and worked it down
25    to how many crews we would require and what actual work
26    would have to be done to come up with the estimate.
27              MR. MORAN:  And this term, "more fundamental
28    work packages"?
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1              MR. GIRARD:  More fundamental work packages
 2    means -- I would say what they mean by that is how many
 3    carpenters would you need on a site to install a
 4    foundation?  How many ironworkers would you need to
 5    erect the tower.
 6              MR. MORAN:  In terms of the final detail
 7    costing post-construction, would you have any objection
 8    to filing a report on that with the Board as a condition
 9    of approval?
10              MR. ROGERS:  No, we would not.
11    --- Pause
12              MR. MORAN:  I understand that your Board of
13    Directors has approved the current budget that is
14    proposed for this project?
15              MR. MARCELLO:  Yes, we have.
16              MR. MORAN:  All right.  Is there any further
17    decision making process at that level to be made on this
18    project post-approval?
19              MR. MARCELLO:  The Board of Directors have
20    approved the project.  I think, as Dr. Macedo had
21    mentioned earlier, for $97.7 million on the condition of
22    a favourable approval from this hearing.  That's
23    basically it.
24              MR. MORAN:  Okay.  Thank you.
25              Mr. Girard, I think the next few questions are
26    for you.
27              You have already described the sequence of
28    construction activities with the assistance of the
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    schematics that you were showing to the Board.  And you
 2    have indicated the need for two winter seasons, I
 3    believe, for this project.
 4              MR. GIRARD:  As Mr. Rogers indicated, after
 5    further examination and discussions with the National
 6    Capital Commission, the use of two winter seasons is not
 7    the significant part.  The significant part of this
 8    construction is the complexity of keeping power supplied
 9    to the local customers in the area during the
10    construction phases.  Therefore, the critical part is
11    the 24 month -- 25 month period.
12              MR. MORAN:  So the original idea that because
13    of the wetland issues and the requirement for frozen
14    conditions to deal with that part of the construction is
15    no longer as important as it was?
16              MR. GIRARD:  That is correct.
17              MR. MORAN:  All right.
18    --- Pause
19              MR. MORAN:  If I might just have one moment --
20    --- Pause
21              MR. MORAN:  All right.
22              Let's look at contingencies now.  As we see
23    them on the table, there is an estimate for
24    contingencies.
25              Could you indicate what costs are budgeted for
26    under that heading?
27              MR. GIRARD:  Could you -- which table are you
28    looking at, Table 1 or 2?
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1              MR. MORAN:  I'm sorry, Exhibit 14.9.  It just
 2    carries over the contingency figures that are in your
 3    material.
 4    --- Pause
 5              MR. GIRARD:  What we are talking about here
 6    are the contingencies for the Hydro Quebec
 7    interconnection of $4,234,000.
 8              MR. MORAN:  That's right, for the --
 9              MR. GIRARD:  Which is -- yes.
10              Included in there are unforeseens such as a
11    difficulty in installing foundations as we are building
12    the towers, difficulties in weather, difficulties --
13              In the station itself we have proposed certain
14    work arrangements because we are working -- a major part
15    of it is replacing four existing 230 kV breakers.  That
16    is work in an energized area where our conductors lie
17    very close to the work.  We have to be very careful
18    working in there and there may be some unforeseens
19    involved in that work.
20              MR. MORAN:  Okay.  And can you maybe elaborate
21    a little bit on that, why the contingency estimate for
22    the station work is a fair bit higher than the
23    contingency estimate for the line work?
24              MR. ROGERS:  In fact, since the original work
25    we now have better design information, better diagrams,
26    and we have been able to bring the contingencies down to
27    10 per cent for the station work.
28              MR. MORAN:  All right.  Thank you.
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    --- Pause
 2              MR. MORAN:  Mr. Gagnon, I just have a couple
 3    of quick questions I would like to put to you.
 4              First of all, with respect to the 315 kV line
 5    between Vignan and Petite Nation, is that a new line or
 6    an existing line that is proposed?
 7              MR. GAGNON:  The Ottawa substation will be
 8    connected to the Ch‚nier-Vignan line, which is an
 9    existing line.
10              There is also another project not directly
11    related to the interconnection to secure the supply of
12    electricity into the Ottawa region.  This is a model
13    project.  This is Grand-Brul‚/Vignan line, but the
14    Grand-Brul‚/Vignan is not related to this project.
15              This interconnection project is connected to
16    the Ch‚nier-Vignan line which ties the Montreal area to
17    Hull-Gatineau area and this is an existing line.
18              MR. MORAN:  Thank you.
19              On the question of permits, you indicated, I
20    think in passing, that there are a number of permits
21    still to be obtained.  I wonder if you could just give
22    us a quick understanding of what those permits involve? 
23    What they are and what they involve.
24              MR. GAGNON:  Okay.  There is a --
25    --- Pause
26              MR. GAGNON:  Excuse me.  I will take a few
27    moments.
28    --- Pause
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 1              MR. GAGNON:  Would it be possible to get after
 2    the break?  I know I have a list of that, but I'm not
 3    sure where I put it.
 4              MR. MORAN:  That would be fine.
 5              Madam Chair, Undertaking 15.5.
 6                   UNDERTAKING NO. 15.5:  Mr. Gagnon
 7                   undertakes to provide a quick
 8                   understanding of what the permits still
 9                   to be obtain are and what they involve
10              MR. MARCELLO:  Would it be helpful for our
11    construction people to give an indication?
12              I believe Mr. Gagnon gave a sense that they
13    were types of permits that we would receive during the
14    course of construction, if that was what you were
15    referring to, or were you talking about regulatory
16    permits?
17              MR. MORAN:  Regulatory permits.
18              MR. MARCELLO:  Okay.
19              MR. GAGNON:  Excuse me, I have the list that I
20    was looking for so maybe I can respond now.
21              For regulatory permits, as Mr. Marcello
22    mentioned, the only one that is required is the decree
23    from the Government of Quebec following the
24    environmental process that is planned to be issued this
25    November.
26              For the Outaouais substation, there is some --
27    --- Pause
28              MR. GAGNON:  Excuse me.  I will take a few
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    minutes.
 2    --- Pause
 3              MR. GAGNON:  Okay, excuse me.  I am ready now
 4    to answer your question.
 5              So there is one major permit which is
 6    required, this is the decree from the Government of
 7    Quebec.  All other related approvals come from the
 8    decree and we need -- Hydro Quebec needs to have that
 9    decree before obtaining the others.
10              The others are the minister's authorization
11    certificates for the civil work and the electrical work. 
12    This is related to the Outaouais substation.  Also,
13    there is a construction and expropriation decree that
14    will follow the decree authorizing the project.  And
15    then there is a request for non-agricultural use of the
16    land that will also follow the decree from the
17    government.
18              So all those are for the Outaouais substation.
19              For the completion of the line of the 230 kV
20    line, to complete the Quebec part of the project we need
21    15 kilometres of 230 kV lines, of which 12 kilometres
22    are already built and were used for the 400 megawatt
23    temporary emergency interconnection.
24              There are three kilometres that still have to
25    be completed.  For that, we need the minister's
26    authorization certificate, which is forecast to be
27    obtained this month also.  But it is a minor approval in
28    that case, what we refer to in Quebec as a section 22
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    approval.  This is not a certificate requiring public
 2    hearings like for the converter station.
 3              And there is also a permit to be obtained in
 4    the spring of 2001 according to the Quebec-Canada
 5    agreement related to flooding zones.  Then there are the
 6    other permits that follow from the section 22 permit:
 7    the construction and expropriation decree, the Outaouais
 8    Urban Community compliance certificate, and the request
 9    for non-agricultural use from the Commission de
10    protection de territoires agricoles.  So we need, for
11    those last, to have the section 22 approval.
12              And, finally, for the crossing of the
13    Outaouais River, the replacement of an existing crossing
14    actually owned by the company Maclaren which will be
15    transferred to TransEnergie.  We need a permit from the
16    Coast Guard which is planned to be obtained this month
17    also.
18              And as I mentioned earlier, we have obtained
19    the permit from Fisheries and Oceans Canada.  We
20    obtained the permit in September this year.
21              MR. MORAN:  Thank you.
22              There are quite a few little permits to get
23    still.  Right?  Could you give us an estimate of the
24    time line that you would anticipate for lining all
25    those up?
26              MR. GAGNON:  Well, as I mentioned, all those
27    permits, except for the decree from the government that
28    is needed for the converter station, all the others --
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    we need that one to get the others.  All the others will
 2    be received during -- will start the process.  They are
 3    not on the critical path of the project and it is
 4    normal -- in a construction project like that in Quebec
 5    it is normal to have all the others that follow from the
 6    first in the course of the project.
 7              So none of the others are in the critical
 8    path.  The only one is the decree for the converter, the
 9    Outaouais converter station.
10              MR. MORAN:  Thank you.
11              I understand that you have to get approvals
12    from -- or have approvals already from the National
13    Capital Commission.  What is the status of that?
14              MR. McCORMICK:  There has been extensive
15    discussions with the National Capital Commission.  We
16    understand all of the issues to be resolved now with the
17    federal agencies, Fisheries and Oceans for example.
18              I was informed yesterday afternoon that the
19    NCC has been requested to hold the decision until the
20    OEB decision has been rendered.  That is a verbal
21    instruction to my staff.
22              MR. MORAN:  All right.
23              With respect to easements that might be
24    required, is there an NCC easement required in this
25    project?
26              MR. McCORMICK:  The current plan doesn't call
27    for any new easements.  At the Hawthorne TS, we are
28    looking at an opportunity to save some costs in the
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    layout of the lines coming out.  And that would
 2    potentially require a small new easement with NCC.
 3              The basic trade-off there is:  How much money
 4    can we save in our design and is an easement required? 
 5    But we don't -- that decision hasn't been made yet.
 6              MR. MORAN:  All right.
 7              Would you be able to file with us a copy of
 8    the form of the easement that would be used by the NCC
 9    in the event that you want to proceed that way?
10              MS ALDRED:  Yes, we can do that.
11              MR. MORAN:  I'm not sure if that is necessary
12    to be marked as an undertaking.
13              And you indicate there is no other easement,
14    so you are not proposing to file any other forms of
15    easement for this process?
16              MS ALDRED:  I'm not proposing to, with the
17    proviso that if the Board would like to see some of the
18    other formats I am more than happy to provide them.  I
19    did mention in the response to the IR request that I was
20    providing one form, but there were others.  If you are
21    interested in seeing those others, I am certainly
22    willing to do that.
23              MR. MORAN:  Fine.  Why don't you deal with it
24    as part of the first.
25              Are there any temporary easements needed for
26    construction?
27              MR. GIRARD:  We have done a preliminary layout
28    for our access roads and there are some temporary
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    easements that we will be attempting to get.  We have
 2    had some preliminary discussions but nothing has been
 3    finalized.
 4              MR. MORAN:  If you need to do temporary
 5    easements, I assume you will file the form that you
 6    would use for that as well for the Board's approval?
 7              MR. MARCELLO:  I think that was filed under
 8    Staff Interrogatory 64.
 9              MR. MORAN:  All right.  Thank you.
10    --- Pause
11              MR. MORAN:  I'm on my last area now,
12    Madam Chair.
13              THE PRESIDING MEMBER:  Thank you.
14              MR. MORAN:  With respect to the construction
15    process -- Mr. McCormick, you may be the best person to
16    deal with this -- I just want to put a couple of
17    principles on the table first to see if you agree
18    with them.
19              Mitigation as a result of construction
20    impacts is something that is being considered, as I
21    understand it.
22              MR. McCORMICK:  That's right.
23              MR. MORAN:  All right.  And there are costs
24    associated with mitigation.  Right?
25              MR. McCORMICK:  Yes.
26              MR. MORAN:  And if no mitigation is carried
27    out, there may well be costs associated with fixing
28    problems later on that are bigger than if you had
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    mitigated.  Right?
 2              MR. McCORMICK:  You are asking me to
 3    speculate, but perhaps that could be right.
 4              MR. MORAN:  There could be costs for failing
 5    to mitigate.  Whether they are bigger or not would be
 6    speculation, you are quite right.
 7              And, of course, all of that will have some
 8    sort of impact, ultimately, on rates because those costs
 9    have to be recovered.  Right?
10              MR. McCORMICK:  Right.
11              MR. MORAN:  Okay.  So in the context of the
12    mitigation plan that you have for this project, is there
13    any objection to a condition of approval requiring a
14    report on the mitigation that was carried out and the
15    success of mitigation?
16              MR. McCORMICK:  From my perspective, that's
17    not a problem.  It is a routine activity to specify all
18    environmental requirements before construction takes
19    place and then to monitor during construction to make
20    sure it all happens.
21              So I think that information is routinely
22    gathered and reported upon.
23              MR. MORAN:  Okay.  Thank you.
24              Could you just take a moment to describe the
25    mitigation program for this project?
26              MR. McCORMICK:  I have to admit that I'm not
27    familiar with all the details and perhaps Vic could jump
28    in here.
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1              There have been offers made to the City of
 2    Cumberland to discuss options, landscaping options,
 3    options to improve --
 4              THE PRESIDING MEMBER:  Excuse me,
 5    Mr. McCormick.  Would you please speak up.
 6              MR. McCORMICK:  I was saying that I'm not
 7    familiar with all of the details of the mitigation at
 8    this point.  This was carried out by my staff, so I can
 9    provide more details at a later date.
10              Discussions have been held with the City of
11    Cumberland offering to discuss specific mitigation
12    options.  They chose at the time not to exercise that
13    option so I think there are still opportunities there to
14    further refine what would be done.
15              The type of mitigation that we typically get
16    involved with is more by way of avoidance, for example
17    access to rights-of-way are done the way that minimize
18    the need for stream crossings.  Work is done at times of
19    the day when noise may be a problem to local residents
20    so we try to minimize that and keep it in the core hours
21    of the day.
22              So there are a number, quite a number of
23    mitigation activities that take place.  There are
24    construction guidelines that are part of our commitment
25    in every environmental assessment to follow.  Again,
26    those are routine.  They tend to buried in construction
27    costs, quite frankly, and don't represent incremental
28    costs, so it is sometimes rare to see an allocation of
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    specific funds to mitigation.  I just can't tell you
 2    right now because we need the project engineer to know
 3    what that is.
 4              MR. MORAN:  Mr. Girard, did you want to add
 5    something?
 6              MR. GIRARD:  I think Mr. McCormick touched on
 7    the areas that in carrying out all construction work
 8    that is done by Hydro One, we have a document that is
 9    the Construction and Site Restoration Guidelines For The
10    Construction And Maintenance Of Transmission Facilities
11    and we do all our work according to those guidelines, as
12    Mr. McCormick said.
13              Those costs are included in the cost of the
14    project.  The type of work there is not only the
15    installation of the access roads but the removal of the
16    access road and restoring of the right-of-way into the
17    condition it was before we came on to the site.  That is
18    levelled, if there is seeding required or chisel
19    ploughing required to restore it for agricultural land,
20    just whatever is required to bring it back to the
21    condition it was before we appeared.
22              MR. MORAN:  All right.
23              Perhaps you could undertake to file a copy of
24    that guideline with us then.  Would that be
25    satisfactory?
26              MR. GIRARD:  Yes, we can arrange that.
27              MR. MORAN:  Undertaking 15.5.
28              What would I call this guideline? 
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                       HYDRO ONE NETWORKS PANEL 3, ex (Moran)
 1    Mitigation --
 2              MR. GIRARD:  No.
 3              MR. McCORMICK:  We refer to it as Construction
 4    Guidelines.  The title is a little longer than that, but
 5    if you refer to it as such we will know what you mean,
 6    yes.
 7              MR. MORAN:  Thank you.
 8              You will file the Construction Guidelines.
 9              THE PRESIDING MEMBER:  Thank you, Mr. Moran.
10              I have that as 15.6.  I realize (off
11    microphone) answers his interrogatory on permits
12    quickly.
13              MR. MORAN:  I guess I thought maybe it wasn't
14    necessary --
15              THE PRESIDING MEMBER:  Oh, all right.  Fine
16              MR. MORAN:  -- since he had answered the
17    question in quite a lot of detail.
18    --- Pause
19              MR. MORAN:  Thank you very much, panel.
20              Those are all my questions.
21              THE PRESIDING MEMBER:  Mr. Moran, are those
22    your questions?
23              MR. MORAN:  Yes.
24              THE PRESIDING MEMBER:  Okay.  Thank you.
25              Now would be an appropriate time, I think, to
26    have a break.
27              So we will break for 15 minutes.
28    --- Upon recessing at 1019
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 1    --- Upon resuming at 1040
 2              THE PRESIDING MEMBER:  Please be seated.
 3              Have the intervenors decided on an order of
 4    cross-examination among yourselves?
 5              MR. THOMPSON:  I think I'm first, Madam Chair.
 6              THE PRESIDING MEMBER:  Mr. Thompson.
 7              MR. THOMPSON:  Thank you.
 8              THE PRESIDING MEMBER:  Go right ahead.
 9    EXAMINATION
10              MR. THOMPSON:  Yes, panel.  For the purposes
11    of my cross-examination I think what you will need to
12    have in front of you really are two documents.  One is
13    the Cumberland evidence, which is Exhibit 10.1, and then
14    the second is Mr. Curtis' letter to Mr. Vice,
15    Exhibit 13.21.
16              I suspect that most of my questions will
17    probably be for either Mr. McCormick, Mr. Marcello or
18    maybe a few for Mr. Rogers.
19              Just so you will know what I am trying to
20    cover here, panel, there are six topics and I will just
21    list them for you.
22              First is, I want to get an update concerning
23    the use of steel poles in the province.  That was an
24    outstanding undertaking.  And then there are a few other
25    just sort of clean up items that I want to deal with at
26    the outset.
27              The second topic I want to briefly touch on is
28    the significance of electricity infrastructure design
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    for community planning of today and tomorrow.
 2              The third topic, the segments of these
 3    facilities that pass through the current and prospective
 4    urban areas of Cumberland.
 5              Fourthly, I wish to scrutinize the
 6    reasonableness of the conclusions on which Hydro One
 7    based its rejection of the steel pole option.
 8              Fifthly, I want to ask some questions about
 9    process.
10              Then, finally, I want to scrutinize your
11    comments about Cumberland's participation in the EA
12    process.
13              So that is an ambitious agenda and I'm hopeful
14    that I can get through it in an hour to an
15    hour-and-a-half, if I'm lucky.
16              Starting with the first point, there was an
17    undertaking given last day, transcript 58,
18    Undertaking 15.1, to give us further evidence on the
19    frequency of use of steel poles in the province.
20              Could someone answer that, please?
21              MR. McCORMICK:  In the past 25 years, all
22    poles constructed -- all structures, less than 5 per
23    cent, 4.9 per cent to be specific, were steel poles. 
24    The balance, 89 per cent, were towers, lattice towers. 
25    There were also guide towers, which were just under 6
26    per cent.
27              MR. THOMPSON:  And can you help us with an
28    understanding of the circumstances where steel poles
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    have been used?
 2              MR. McCORMICK:  The decision is site specific. 
 3    It can be a component of the environmental assessment
 4    process where the public believes or expressed some
 5    concern over the aesthetics of the proposed structures. 
 6    There are a number of factors that typically are taken
 7    into consideration, but there is no specific criteria
 8    that would automatically trigger selection of a steel
 9    pole over a tower.
10              MR. THOMPSON:  Speaking generally, is it fair
11    to suggest that where they have been used, they have
12    been used where the transmission line corridor passes
13    through urban areas?
14              MR. McCORMICK:  That is generally true, yes.
15              MR. THOMPSON:  Could you pull your microphone
16    down a little bit, please, Mr. McCormick?
17              MR. McCORMICK:  It's spring loaded.  It
18    doesn't want to stay up.
19    --- Laughter
20              MR. THOMPSON:  Oh, I see, okay.  Thanks.
21              Well, just before I leave this, how many
22    communities would you say have the steel pole option
23    installed, approximately?
24              MR. McCORMICK:  I don't have precise figures
25    on that, so that is perhaps an undertaking we can take.
26              MR. THOMPSON:  All right.  Could we have a
27    number for that, please?
28              MR. MORAN:  It would be 15.6.  Undertaking to
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    provide information on the number of communities --
 2              MR. THOMPSON:  -- where the steel poles have
 3    been installed.
 4              MR. MORAN:  -- where steel poles have been
 5    installed.
 6                   UNDERTAKING NO. 15.6:  Mr. McCormick
 7                   undertakes to provide information on the
 8                   number of communities where steel poles
 9                   have been installed
10              MR. THOMPSON:  Thank you.
11              Now,if you would turn to Tab 7 of the
12    Cumberland material, the second last page.  This is part
13    of Mr. Pierce's response to the Ministry of the
14    Environment of January 28, 2000.  And on the second last
15    page under the topic "Analysis of Impact on Visual
16    Environment", the author of this document discusses that
17    steel poles have been an engineering option for the past
18    30 years.  It goes on to say they are not normally
19    considered as an alternative.
20              Then it goes on and says:
21                   "Primarily they are used only in those
22                   areas where environmental, technical and
23                   spatial restrictions limit the use of
24                   conventional lattice structures."
25              Can someone explain that statement to me,
26    please?
27              MR. McCORMICK:  Environmental -- I'm going to
28    speculate on a number of these, but environmental I
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    would suggest is cases where there are other uses of the
 2    corridor that we would like to accommodate, such as if
 3    the corridor happens to be narrow.
 4              MR. THOMPSON:  What has that got to do with
 5    environmental?
 6              MR. McCORMICK:  Well, environment has a very
 7    broad definition.  You have to remember the definition
 8    of environment is in the Environmental Assessment Act
 9    and it covers all the obvious impacts on natural
10    environment, but it also shows social and talks about
11    technical and economic.  So resource use is
12    environmental.
13              MR. THOMPSON:  This statement to me,
14    Mr. McCormick, strongly indicates that steel towers are
15    environmentally superior to lattice towers because the
16    statement says they are used where environmental
17    restrictions apply.
18              Is that a fair conclusion to draw from that
19    statement?
20              MR. McCORMICK:  No, we wouldn't argue that as
21    a general -- on a general basis.  But, the big "but"
22    here is that typically steel poles have to be spaced
23    closer together and that can then pose quite a number of
24    different impacts.
25              And so when you are looking at the two options
26    you will often find situations where the number of
27    towers puts the steel pole option at a disadvantage
28    environmentally.  It could mean more access roads.  It
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    could be greater effects on vegetation, wildlife
 2    habitat.  There are quite a range of possibilities
 3    there.
 4              Heritage resources is another one, you are
 5    digging foundations in additional areas.  We would tend
 6    to go with pole or tower for tower replacement.  And the
 7    impacts, therefore, are less.
 8              MR. THOMPSON:  Let me ask the question this
 9    way:  Can you provide me an illustration of a case where
10    an environmental restriction applied so that the steel
11    pole option was preferable?  What type of environmental
12    restriction is this statement referring to?
13              MR. McCORMICK:  I can't give you an example.
14              MR. THOMPSON:  Can anybody on the panel help
15    me with that, without guessing?
16              All right.
17              Well, can I have an undertaking to explain the
18    environmental restrictions that are referred to here
19    where steel poles were deemed to suffice, but lattice
20    towers weren't.
21    --- Pause
22              MR. MARCELLO:  At Yonge Street and Highway 407
23    there are off ramps criss-crossing under the existing
24    Parkway belt right-of-way and I believe -- I'm working
25    from memory here, I'm just visualizing it -- that there
26    are steel poles situated in pockets because there is no
27    possible way of accommodating a tower in that situation.
28              MR. THOMPSON:  That sounds like a ground
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    availability problem.  Is that what you are saying?
 2              MR. MARCELLO:  In that particular case, yes, a
 3    ground availability problem.  But I guess in terms of
 4    what Mr. McCormick had referred to as environmental,
 5    that that would be covered off within that definition.
 6              MR. THOMPSON:  Who authored this document that
 7    we are referring to?  Was it Mr. Pierce?
 8              MR. McCORMICK:  This was prepared by a former
 9    member of my staff.
10              MR. THOMPSON:  So it's someone who reports to
11    you, Mr. McCormick?
12              MR. McCORMICK:  He did.
13              MR. THOMPSON:  Can we have, by way of
14    undertaking, the environmental restrictions that are
15    being there referred to in this document which apply to
16    limit the pole option to the steel pole option? 
17    Somebody must know what that was referring to.
18              MR. McCORMICK:  Let me go back and try to
19    explain this.  And perhaps, too, the statement itself
20    was not well worded.
21              Every instance during an environmental process
22    where the choice of a lattice structure or a steel pole
23    becomes an issue, options are considered.  And those
24    options tend to look at environmental considerations,
25    technical considerations and spatial considerations and
26    there may well be a case where steel poles will be
27    selected.  I will give you some examples.
28              There was a case where the number of towers
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    that existed -- they were old towers in Burlington, they
 2    existed and the spacing was very tight and a steel pole
 3    option on a very narrow corridor did not mean an
 4    increased number of towers, of structures.
 5              I'm sorry, I tend to throw these words around
 6    too loosely.  I probably tend to like to talk about
 7    towers as meaning everything.
 8              So the existing lattice structures were
 9    interspersed with wood poles, and there was quite a
10    large number of them.  It was a narrow corridor with
11    other uses, bike and hiking trail through there, and it
12    made sense under the circumstances.  But we weren't
13    putting additional structures behind people's backyards
14    so it was a non-issue relative to Cumberland.
15              Other cases that I know, it's a brand new
16    development, there is no existing structures there, it's
17    high profile, it's a concern, there may be causes there
18    where a steel pole might be selected for visibility
19    reasons.
20              So you are looking at it from two different
21    perspectives.  One is significant environmental impacts
22    of imposing an extra 50 per cent more towers in the
23    Cumberland that isn't typically the case in other areas
24    where steel poles would have been selected.
25              MR. THOMPSON:  But in the Cumberland area we
26    are dealing with a growing community and we have three
27    segments of that corridor described in our evidence, and
28    I will come to that in a minute.  Some of them are
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    completely built up, some are in the process of being
 2    built up and some aren't built up yet, but they are all
 3    sort of urban areas, either current or prospective.
 4              Are you telling me that in the areas that are
 5    not yet urban but will be urban, steel poles is
 6    appropriate?
 7              MR. McCORMICK:  We would look at it on a
 8    case-by-case basis.  I can't speculate.  But, you know,
 9    you are going to do that when you are carrying out an
10    undertaking and you are going through your environmental
11    assessment process.
12              MR. THOMPSON:  We are on a case-by-case --
13    this is a case, Cumberland's problem.
14              MR. McCORMICK:  The environmental assessment
15    process is completed.  You had the opportunity to make
16    your case before the minister and the minister denied
17    your request.
18              MR. THOMPSON:  Well, the request that was made
19    of the minister was simply to give it a hearing, and he
20    decided he wasn't going to bump it up.  But there is
21    really no approval of any sort here in this process, is
22    it?  It's just a process.
23              MR. McCORMICK:  That's what a class EA is. 
24    It's an approval.  It's an approval of a process, that
25    if you follow that process and you meet the requirements
26    of that process and the public has the opportunity to
27    appeal, and they did, and the appeal is rejected, you
28    have met that and you have got an effective approval. 
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    But the approval was of the class EA itself.
 2              MR. THOMPSON:  I will come back to that under
 3    the process -- the process topic.
 4              Just to go on before I leave this use of poles
 5    today, and the 5 per cent in areas where they are used,
 6    who decides finally whether to go with poles or not? 
 7    Has that historically just been Hydro One's call?
 8              MR. McCORMICK:  There is an instance, at least
 9    one -- maybe there are others that I'm not familiar with
10    where a consolidated hearings board has given us
11    approval on that particular condition.
12              But typically this is part of the
13    environmental assessment process.  There are
14    recommendations developed by the team who prepares --
15    carries out the environmental assessment that involves
16    project engineering people and it also involves
17    Carmine's people, that Carmine will ultimately -- and
18    his management structure will ultimately make that --
19    will approve it and get executive approval for it.
20              MR. THOMPSON:  Well, we are aware of the
21    Kanata situation where apparently a joint board -- and
22    that I understand is an Ontario Municipal Board and an
23    Environmental Assessment Board hearing.  Is that boards
24    that have joined?
25              MR. McCORMICK:  I'm sorry, it's the
26    Environmental Assessment Board and I think maybe OMB. 
27    I'm not sure of that case, I'm sorry.
28              MR. MARCELLO:  Yes, that is the case.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. THOMPSON:  All right.  And so that joint
 2    board in Kanata directed the use of steel poles.  But
 3    did Hydro propose that, or was Hydro fighting like a
 4    caged tiger?
 5              MR. McCORMICK:  I wasn't directly involved,
 6    but my understanding was that we did not propose it.  It
 7    was considered, but the Board ultimately made it a term
 8    and condition of approval.
 9              MR. THOMPSON:  And was the Board motivated by
10    a broad array of public interest concerns, or can you
11    say -- is there a written decision?
12              MR. McCORMICK:  I can't speculate.
13              MR. THOMPSON:  Is there a written decision
14    with respect to that matter and, if so, could we perhaps
15    have an undertaking to file it?
16              MR. McCORMICK:  I presume there is, but I
17    can't be sure where that exists or how to get it.
18              MR. THOMPSON:  If it exists, could we have an
19    undertaking to file it, please?
20              MS ALDRED:  Yes.  I will file that for you.
21              MR. THOMPSON:  Thank you.
22              MR. MORAN:  Undertaking 15.7, to file a copy
23    of the joint board decision with respect to the Kanata
24    transmission line.
25                   UNDERTAKING NO. 15.7:  Ms Aldred
26                   undertakes to file a copy of the joint
27                   board decision with respect to the Kanata
28                   transmission line
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. THOMPSON:  Let me just move to another
 2    sort of clean-up point.
 3              There has been some discussion of mitigation
 4    this morning, Mr. McCormick.  And this is a topic that
 5    is described in Mr. Curtis' letter to Mr. Vice, on the
 6    second page.
 7              The last sentence reads:
 8                   "For example, one possible area of
 9                   cooperation is to better define
10                   mitigation and landscaping
11                   opportunities." (As read)
12              Do you see that?
13              MR. McCORMICK:  Yes.
14              MR. THOMPSON:  Okay.  My understanding is that
15    you had a hand in drafting this correspondence.  Am I
16    correct?
17              MR. McCORMICK:  That's right.
18              MR. THOMPSON:  Okay.
19              Do I understand correctly that mitigation
20    activities between Hydro One and Cumberland should go
21    forward now regardless of what structural option is
22    finally approved by this Board?
23              In other words, mitigation is something
24    outside of proceedings before this Board and should be
25    going on really as a concurrent process.  Is that right?
26              MR. McCORMICK:  We would like to do that.
27              MR. THOMPSON:  You have that in mind, do you,
28    when you are talking about mitigation?  It's not
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    conditional mitigation, it is mitigation regardless of
 2    what goes up.  Is that what you are talking about?
 3              MR. McCORMICK:  It is an offer that we have
 4    made, so we are prepared to do it.
 5              MR. THOMPSON:  Is it conditional on anything: 
 6    that we throw in the towel, that --  Is it conditional
 7    on anything, or is it part of the --
 8              MR. McCORMICK:  No, it's not conditional. 
 9    It's not conditional on throwing in the towel.
10              MR. THOMPSON:  All right.  And so that process
11    can go forward concurrently with what this Board is
12    doing?
13              MR. McCORMICK:  Yes.
14              MR. THOMPSON:  Okay.  Let's, from clean-up,
15    go to --
16              Oh, I'm sorry, there is just one other item of
17    clean-up, and that was really, I think, for Ms Aldred.
18              There was a discussion at, I think it was
19    transcript 113, about the implications of section 97 of
20    the Act, about the agreement that is to be provided to
21    the Board.  I just wonder if that is going to be
22    answered on the record now or whether we are going to
23    get a written undertaking response.
24              MS ALDRED:  We would prefer to do it in
25    writing.
26              MR. THOMPSON:  All right.  Thank you.
27              Okay.  Let's move to the second topic, which
28    should be brief.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              I had a very brief discussion with the other
 2    public interest considerations panel yesterday about the
 3    significance of electricity infrastructure design in
 4    current and prospective community planning.
 5              Can this panel accept that electricity
 6    infrastructure design is a matter of major concern to
 7    community planners?
 8              MR. MARCELLO:  I would say that if your
 9    community and its planners feel it is a concern, then
10    it's a concern.  I mean, who am I to say that you don't
11    have that concern?
12              MR. THOMPSON:  Okay.  So I will take that as
13    an acceptance by Hydro One.
14              And just on the sort of yesterday and today in
15    terms of electricity infrastructure, what used to be
16    overhead 50 to 70 years ago in the distribution end is
17    now, in large measure, underground in new and growing
18    communities.  Is that fair?
19              MR. MARCELLO:  Hydro One Networks has a
20    distribution system and it's largely overhead.  I guess,
21    depending on how you would categorize "new and growing
22    communities", we have new and growing communities that
23    are overhead.  But I will grant that there are
24    communities that are much more dense in terms of their
25    population that have chosen to go underground.
26              MR. THOMSPON:  Well, I know Hydro One
27    distributes in a number of communities, and it was my
28    understanding that where communities take the initiative
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    to have their distribution infrastructure moved
 2    underground, Hydro One supports those initiatives and
 3    puts its lines underground.  Perhaps gradually, but it
 4    does take place.  Am I misunderstanding the facts?
 5              MR. ROGERS:  Hydro One has had a policy in the
 6    past of having overhead line as the line standard.  And
 7    if underground line was desired, then the cost
 8    differential would be recovered from the group that
 9    wanted it put underground.
10              MR. THOMPSON:  If somebody pays, you will go
11    along with it, but otherwise it's business as usual,
12    just as it was 70 years ago.  Is that really the mind
13    set?
14              MR. ROGERS:  Our standard construction is
15    overhead line, and that is what is included in the rate,
16    and the additional costs would be recovered.
17              MR. THOMPSON:  Can you accept that some of
18    these electricity infrastructure initiatives in the new
19    order, such as moving distribution lines underground,
20    are driven by planning considerations -- desirability of
21    an aesthetically superior community neighbourhood, that
22    kind of thing?
23              MR. MARCELLO:  Again, I'm not going to
24    speculate on what an individual community may deem as
25    appropriate.
26              But, again, if it was a concern in a community
27    that they put their lines underground, and the city
28    planners dealing with their local utility decided that
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    that was the way to go, that's fine.  But, as Mr. Rogers
 2    has pointed out, Hydro One standard for distribution has
 3    been overhead.
 4              MR. THOMPSON:  Well, I guess really what I'm
 5    suggesting is maybe somebody at Hydro One should be
 6    rethinking its standards as we move forward into the
 7    21st century.  Is that possible, they might?
 8              MR. MARCELLO:  I will bring that message back
 9    to our standards people.
10              MR. THOMPSON:  Okay, great.
11              Well, in the letter, Exhibit 13.21, there is
12    some discussion about Hydro One's support for the
13    planning initiatives.  Community planning isn't just
14    done on a helter-skelter basis, it is something that is
15    driven by Ontario legislation and planners think alike
16    in the province.
17              But in connection with this issue on the
18    attachment to Exhibit 13.21, reference to paragraph 3,
19    Networks points out that it is exempt from the Planning
20    Act, which we accept.
21              But under paragraph 6, you say:
22                   "Networks routinely consults with and
23                   seeks support from affected
24                   municipalities.  Our best efforts are
25                   made to identify and resolve issues. 
26                   Although Networks respects planning
27                   principles and policies, this is not a
28                   commitment to compliance."  (As read)
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              But is it safe for me to conclude that you do
 2    look at applicable planning policies and, on a
 3    best-efforts basis, attempt to comply?
 4              MR. McCORMICK:  That's correct.
 5              MR. THOMPSON:  And so would it be fair to
 6    suggest that if there were no material differences
 7    between two particular infrastructure options on the
 8    broad array of public interest considerations, there are
 9    no material differences, under the application of the
10    best-efforts concept would Hydro One agree to proceed
11    with the option that was favoured by the affected
12    municipality?
13              MR. McCORMICK:  You are asking us to, again,
14    speculate.
15              MR. THOMPSON:  I'm asking really a question of
16    principle.  Is that how the best-efforts principle
17    works?
18              MR. McCORMICK:  The best-efforts principle
19    will certainly bring to the table all of the
20    considerations and it will certainly be an important
21    factor if everything else is equal and we are down to
22    two options that have no substantial difference.  That
23    may well be the decision but until you have the specific
24    circumstances we can't agree.
25              MR. THOMPSON:  In this case, let me put it to
26    you this way:  If this Board were to find that you have
27    failed to make the case that there are material
28    differences with respect to cost between these two
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    options and that there are material differences with
 2    respect to environmental factors -- let's assume that
 3    those two findings are made because that's what we are
 4    here to determine -- would Hydro One, in the face of
 5    those findings, in the application of the best-efforts
 6    principle, proceed with the steel pole option?
 7              MR. MARCELLO:  The two underlying assumptions
 8    are, in my opinion, not correct.  There is a material
 9    difference in the cost and there is a material
10    difference in the environmental impact, and that was
11    documented in the class EA process that Mr. McCormick
12    has spelled out.
13              MR. THOMPSON:  I understand that, but assume
14    the objective adjudicator says:  You are wrong.  There
15    are no material differences.  What I'm really asking: 
16    Is that enough to prompt Hydro to say "Okay, we will put
17    up the steel poles".  Or do we have to go further and
18    basically order you to do it?
19              MR. MARCELLO:  In this case there is a
20    material difference in cost and the environmental
21    assessment process, which has gone through the Minister
22    of Environment, clearly indicates that there is a
23    difference in the environmental impact.  So to speculate
24    otherwise is not fruitful for this particular
25    discussion.
26              MR. THOMPSON:  All right, I will move on.
27              MR. MARCELLO:  Thank you.
28              MR. THOMPSON:  In terms of Cumberland's
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    opportunity to enhance the compatibility of this
 2    transmission structure with its urban areas, this is
 3    really the only opportunity it is going to have.  Would
 4    you agree?  To put it another way:  Whatever the Board
 5    approves goes up and it stays there for an awfully
 6    long time.
 7              MR. MARCELLO:  The towers are being designed
 8    to last a long time, yes.
 9              MR. THOMPSON:  Let's move to the next topic
10    with respect to the segments of the line that we are
11    talking about.
12              Perhaps the best way to do this is to do two
13    things.  One is to turn up Tab 5 of Cumberland's
14    evidence.  Somewhere in your evidence there is a map,
15    Exhibit -- I had it here and now I have misplaced it.
16    --- Pause
17              MR. THOMPSON:  Yes, it is Exhibit B, Tab 2,
18    Schedule 2, page 1.
19              THE PRESIDING MEMBER:  Excuse me, what was
20    that reference, Mr. Thompson?
21              MR. THOMPSON:  Yes, Exhibit B, Tab 2,
22    Schedule 2, page 1.
23    --- Pause
24              MR. THOMPSON:  Do you have these maps, panel?
25    --- Pause
26              MR. THOMSPON:  Do you have them?
27              MR. MARCELLO:  Yes, we do.
28              MR. THOMPSON:  Okay.  And looking at
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    Exhibit B, Tab 2, Schedule 2, page 1, would you agree
 2    with me that the City of Cumberland is located to the
 3    east of what is called MacFarlane Road?  Do you take
 4    that is subject to check?
 5              MR. MARCELLO:  Sure.
 6              MR. THOMPSON:  Okay.  So that all that area on
 7    your map east of MacFarlane Road is the City of
 8    Cumberland.
 9              If you then go to --
10              MR. MARCELLO:  Just to help me out, the Tenth
11    Line is where?  I'm looking at your map and I see Tenth
12    Line highlighted.
13              MR. THOMPSON:  The Tenth Line on your map, if
14    you come over one block, the next line over, that's the
15    Tenth Line to the right.
16              Okay?  Are you with me?
17              MR. MARCELLO:  More or less, okay.
18              MR. THOMPSON:  You will see that our map --
19              MR. MARCELLO:  There is one that is marked
20    "Draft Cumberland Development Area", and then there is
21    another map in that section that shows Tenth Line at one
22    extreme, handwritten.  Now maybe I have handwritten it,
23    so you will forgive me.
24              MR. THOMPSON:  Let's look at your map, okay.
25              MR. MARCELLO:  Yes.
26              MR. THOMPSON:  The Tenth Line Road is actually
27    marked on it.  Okay?
28              MR. MARCELLO:  yes.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. THOMPSON:  So that is the Tenth Line Road
 2    I have written in hand at the bottom of the first map
 3    under Tab 5.
 4              Are you with me?
 5              MR. MARCELLO:  Yes.
 6              MR. THOMPSON:  Okay.  So only part of the line
 7    is in Cumberland.
 8              MR. MARCELLO:  Yes.
 9              MR. THOMPSON:  The part from Hawthorne to
10    MacFarlane Road is another municipality.
11              MR. MARCELLO:  Yes.
12              MR. THOMPSON:  In our map at Tab 5 we
13    identified three segments from the Tenth Line to
14    Cardinal Creek.
15              MR. MARCELLO:  I see it.
16              MR. THOMPSON:  Okay, then from Cardinal Creek
17    to Wilhaven Drive --
18              MR. MARCELLO:  I see it.
19              MR. THOMPSON:  -- then from Wilhaven Drive to
20    the river.
21              MR. MARCELLO:  Okay.
22              MR. THOMPSON:  I just wanted you, if you can,
23    to take subject to check that from the Tenth Line to
24    Cardinal Creek is substantially built up and, in
25    addition, is growing.
26              MR. MARCELLO:  Okay.
27              MR. THOMPSON:  And that, I believe, is zoned
28    for residential uses.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. MARCELLO:  Okay.
 2              MR. THOMPSON:  From Cardinal Creek to Wilhaven
 3    Drive, it is in the process of being developed but is
 4    not yet substantially urban.
 5              Could you take that subject to check?
 6              MR. MARCELLO:  Sure.
 7              MR. THOMPSON:  Then from Wilhaven Drive down
 8    to the Ottawa River I believe it's zoned for rural
 9    estate uses, but again it is developed to some extent
10    and in the process of being increasingly developed for
11    urban use.
12              Would you take that subject to check?
13              MR. MARCELLO:  Okay.
14              MR. THOMPSON:  Now, how many poles
15    approximately are in each of those segments?
16              MR. MARCELLO:  How many towers?
17              MR. THOMPSON:  How many towers -- okay.  How
18    many poles.  Towers/poles.  When I say poles I mean
19    towers are poles, just like Mr. McCormick.
20              MR. MARCELLO:  Okay.  Subject to check, okay,
21    here we go.
22              MR. THOMPSON:  Yes.
23              THE PRESIDING MEMBER:  Mr. Thompson, I think
24    the word is "structures".
25              MR. THOMPSON:  Structures, okay.  All right.
26              MR. MARCELLO:  Existing structures, okay.
27              MR. THOMPSON:  Structures, right.
28    --- Pause
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. MARCELLO:  I don't have the exact number
 2    of towers.
 3              MR. THOMPSON:  It will be a ballpark estimate. 
 4    That's all I need.
 5              MR. MARCELLO:  Let's just go for what I do
 6    have, okay?
 7              MR. THOMPSON:  Right.
 8              MR. MARCELLO:  The whole right-of-way from
 9    Hawthorne to the river has, I recall, about 65 towers
10    on one tower line and about 67 towers on the second
11    tower line.
12              MR. THOMPSON:  So let's average it, 66.
13              MR. MARCELLO:  Okay.
14              MR. THOMPSON:  All right.  So only part of
15    those are on the Cumberland segment.
16              MR. MARCELLO:  That's correct, yes.
17              MR. THOMPSON:  So could we have those numbers,
18    if we can, by segment?  Approximately.
19              MR. MARCELLO:  Okay.  From Mer Bleue Road --
20    which is a bit to the east of Tenth Line but still in
21    the general vicinity you were talking about -- to about
22    Cardinal Creek, that sort of stretch there --
23              MR. THOMPSON:  Yes.
24              MR. MARCELLO:  -- I'm suggesting it's about
25    15 towers on one side and then 15 on the other, so that
26    is about, in total, 30 towers, ballpark.
27              MR. THOMPSON:  Ballpark, okay.
28    --- Pause
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. THOMPSON:  I don't want to get hung up on
 2    this.  Can we just sort of have a rough estimate and I
 3    would be happy to have it --
 4              MR. MARCELLO:  Let's just say from Mer Bleue
 5    to the river --
 6              MR. THOMPSON:  Okay.
 7              MR. MARCELLO:  -- as a total.
 8              MR. THOMPSON:  All right.  Let's do that.
 9              MR. MARCELLO:  Okay.  I'm looking at 29 or
10    30 towers times two.  So it's roughly half the distance. 
11    So within the City of Cumberland, I would say about half
12    the line runs through it.  So that's roughly 30-odd
13    towers on the north right-of-way and another 30 on --
14    I'm sorry, on the north tower line and another 30 odd on
15    the south tower line so approximately half.
16              MR. THOMPSON:  Ballpark, as I understand what
17    you are telling me, is from the Tenth Line to the river. 
18    There is about 30 on the north part of the right-of-way
19    and about 30 on the south.  Is that --
20              MR. MARCELLO:  Yes, that's reasonable.
21              MR. THOMPSON:  Okay.  I appreciate this is not
22    going to be precise, but assuming those three segments
23    were more or less equal, there would be about 10 towers
24    per segment but on each side of the right-of-way.
25              MR. MARCELLO:  Okay.
26              MR. THOMPSON:  Okay.  And if you are going to
27    put up steel poles, as I understand it, you are going to
28    need 15 for 10.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. MARCELLO:  Okay.
 2              MR. THOMPSON:  Okay.  So it's another five
 3    poles or another five structures.  Right?
 4              MR. MARCELLO:  Sure.
 5              MR. THOMPSON:  And so it's five -- big
 6    picture, five new structures, as far as where people are
 7    currently residing, it's five in the first segment,
 8    Tenth Line to Cardinal Creek, give or take, and about
 9    five in the second part there between Wilhaven Drive and
10    the river.  So we are talking about big picture, 10 new
11    structures --
12              MR. MARCELLO:  Times two.
13              MR. THOMPSON:  Well, there are two --
14              MR. MARCELLO:  There are two physical towers.
15              MR. THOMPSON:  All right.  So are these the --
16    this is going to cheese off a lot of people.  Is this
17    what you were suggesting earlier because there is a new
18    tower in their backyard?  Well, not in their backyard
19    but they are looking out their window and they are
20    seeing a steel tower.
21              Is that the major environmental concern that
22    drives this decision?
23              MR. MARCELLO:  When you go through the EA
24    process and you look at everything on balance, one
25    concern is going to be that one person who relied on our
26    process who currently looks out their kitchen window and
27    sees nothing tomorrow is going to have a steel pole
28    there and that person may or may not care, I don't know,
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    but they relied on that process.
 2              So now, a year and a half later, we slap a
 3    pole there and they do happen to have a concern about
 4    it.  They are going to feel that what happened in the
 5    system, you have gone through a process, I relied on
 6    that process, I wasn't impacted negatively and here is
 7    something has been undone in this whole evolution.
 8              So is that one person or that 10 people or
 9    that 20 people or those 20 people plus their three
10    neighbours, because they get to see it too, a big deal
11    or not?  From the grand scheme of things, that is not --
12    I am just an engineer.  You know, I have gone through an
13    environmental assessment process.  The things were
14    looked on balance and that was one of the factors.  In
15    putting in the foundation, the ground is disturbed. 
16    Again, I am not a civil engineer and I am not an expert
17    in construction methods but it is a concern.
18              Additional towers require additional access
19    roads.  That is more disruption.  Again, there is the
20    balance between that impact and the incremental cost.
21              On a whole, from where I sit, trying to build
22    an interconnection with Hydro Quebec so that the people
23    of Ontario get $240 million benefit, it really doesn't
24    matter whether it's a steel pole or a tower, as long as
25    it's reliable and it delivers the power.
26              MR. THOMPSON:  We are on the same page there.
27              MR. MARCELLO:  In terms of the environmental
28    impact, there is a process in place and we followed the
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    process and this is the outcome.
 2              MR. THOMPSON:  I'm just trying to nail down
 3    the major environmental impact you are now relying on. 
 4    I understood Mr. McCormick to say in-chief it is now the
 5    increased number of poles and the impact of those
 6    increased number of poles on people who don't have a
 7    pole out their back window now who will have a pole out
 8    their back window now is a condition that Cumberland
 9    seeks is frantic.  Is that where we are now on this
10    steel pole option?
11              MR. MARCELLO:  It was our conclusion that the
12    50 per cent increase in structures was a significant
13    impact.  I mean, it certainly would be to those people
14    who are backing some of who are looking from their front
15    window on to this, on to the corridor.
16              MR. THOMPSON:  Okay.  Well then that then
17    brings me to my next topic, a scrutiny of the
18    conclusions that drove Hydro One here to this process.
19              And again, if we start with the -- I think it
20    would be -- it's really, I guess, the -- well, at Tab 3
21    of the Cumberland brief, we have documents pertaining to
22    public meetings so this is part of the consultative
23    process, as I understand it, that you are supposed to
24    follow.  Is that right?
25              MR. MARCELLO:  Yes, it is.
26              MR. THOMPSON:  And if I read through this
27    document, it seems pretty clear to me that when you
28    started the process, as far as Hydro One was concerned,
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    you had your mind made up that it was going to be
 2    lattice towers, tower for tower, on both sides of the
 3    easement.
 4              MR. MARCELLO:  Lattice towers are a reference
 5    design.  What you are seeing there is a background
 6    package given to the public at an information centre
 7    which showed some of the options.  When you are
 8    evaluating route alternatives, it makes tremendous sense
 9    to compare them on an equivalent basis.
10              So you would typically pick the best route or
11    line configuration based on one common structural
12    design.  In the EA we dealt with it that way.  We dealt
13    with the issue of well, if they are small segments of
14    those configurations or route alignments that happen to
15    have steel poles, that was dealt with as a public issue
16    in Chapter 10 in the appendices of the document.  There
17    was no presumption that that was the selection, go
18    through the options.  We compared route alternatives
19    with the same structure just for purposes of comparing
20    apples with apples.
21              MR. THOMPSON:  Well, maybe I didn't phrase
22    this question properly.  Perhaps the way to do it is to
23    go back to the third last page under the tab, under the
24    heading "Class Environmental Assessment Process".
25              MR. MARCELLO:  Okay.
26              MR. THOMPSON:  And we have in the second
27    paragraph there a statement by Hydro One with respect to
28    its preferred solution.  My only point is that when you
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    start the consultative process, you already have a
 2    preferred solution in mind, right?  That is the way it
 3    works, isn't that right?
 4    --- Pause
 5              MR. MARCELLO:  Again, I might not have phrased
 6    it in retrospect the way it is phrased there.  The whole
 7    principle behind the environmental assessment process is
 8    you bring options to the table.  Sometimes it's helpful
 9    to the public to see where you are leaning.  But you
10    don't do it on the premise that that's it and that's
11    only it and we are here to defend what we have decided. 
12    It's more "Here is the alternative.  Tell us what you
13    think of it."
14              You will see on the next page the steel poles
15    in the range of the structure options.  So there was no
16    presumption whatsoever.  It best reflects how the
17    company was leaning.  But that is it.
18              MR. THOMPSON:  Well, go back two pages from
19    that and we have "preliminary comparison of transmission
20    system alternatives".  There is no steel pole in that
21    comparison.
22              MR. McCORMICK:  The whole point of the
23    exercise was to pick the route and then the
24    configuration on the route.
25              MR. THOMPSON:  Certainly, this --
26              MR. McCORMICK:  If you want, a steel pole is a
27    subset of one of those options.  Once you have picked
28    your configuration you could then look at steel poles
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    and pieces of that.
 2              MR. THOMPSON:  In any event --
 3              MR. McCORMICK:  That was the desire.
 4              MR. THOMPSON:  -- this document seems to
 5    express a preference for what you finally decided to do. 
 6    Is that fair?
 7              MR. McCORMICK:  There is a distinction between
 8    preference and decision or conclusion.
 9              MR. THOMPSON:  Well, it may be a very subtle
10    one.
11              In any event, the process then kicks off and
12    you have an open house and discussions with Cumberland,
13    and you pointed out that that carried on through to, I
14    think the end of the year almost.  Is that correct?
15              MR. McCORMICK:  That is right.
16              MR. THOMPSON:  But as part of the process,
17    there was a notification that you talked about to
18    landowners and others.
19              MR. McCORMICK:  It went to a wide range of
20    groups, politicians, planning committees, affected land
21    owners.
22              MR. THOMPSON:  And it is not in -- the notice
23    that you are talking about, I believe was a notice that
24    was sent out in June of 1999.  Would you take that
25    subject to check?  It is in the complete Class
26    Environmental Assessment Study report but it is not in
27    the excerpts that are in the Cumberland book.
28              MR. MORAN:  I am not sure.  I guess that would
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    be Exhibit 14.11.
 2              THE PRESIDING MEMBER:  Mr. Thompson, is this
 3    already in the evidence?
 4              MR. THOMPSON:  Yes, I believe a complete --
 5    well, I think we should mark it subject.  It is an
 6    excerpt from the assessment report which is provided, I
 7    believe, in response to an IR but I believe we should
 8    mark it separately.
 9              MR. MORAN:  It is a single page from this
10    large document that is an interrogatory response.
11              THE PRESIDING MEMBER:  Right.  But
12    Mr. Thompson wants it marked as an exhibit so that
13    is fine.
14              What exhibit number are we up to now?
15              MR. MORAN:  Exhibit No. 14.11.
16                   EXHIBIT NO. 14.11:  Excerpt from the
17                   assessment report provided in response to
18                   an interrogatory response
19              MR. McCORMICK:  If I have your question
20    straight now, this is what was called the final notice
21    at the time and it was published in the Ottawa Citizen,
22    Le Droit and we made it generally available throughout
23    the community.
24              The original class EA process was hoping to
25    trigger the 30-day review period at that time because of
26    express concerns.  As I have mentioned in my direct, we
27    actually extended the process for another --
28    approximately six months before we submitted our draft
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    environmental study report to the Minister of
 2    Environment.
 3              MR. THOMPSON:  But this is the notice you were
 4    talking about that affected landowners had received. 
 5    Right?
 6              You have taken a position, as I understand it,
 7    is that you are going to go back and re-consult with
 8    everybody if you don't get your way.  That is what I
 9    understood you to say in-chief.  Is that what you are
10    telling us?
11              MR. McCORMICK:  I would never use those words
12    but we are always prepared to discuss issues and if
13    issues were not resolved, we will make our best efforts
14    to come back to those issues and see if there is some
15    middle ground.
16              MR. THOMPSON:  I didn't express it clearly. 
17    My understanding of what you were telling us in-chief is
18    that if you don't get your way here on this pole issue,
19    you have to start this process all over again because
20    nobody got notice that they might be steel poles instead
21    of lattice towers.  Is that what you are telling us
22    in-chief?
23              MR. McCORMICK:  We have an approval under the
24    Environmental Assessment Act.  Now, if you read the
25    class EA, there is a mechanism in there that if the
26    undertaking changes, then certain steps have to be
27    taken.  You cannot unilaterally change your undertaking
28    from what was effectively approved.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              So there is an obligation to go back to the
 2    public, tell them what the change is, tell them how that
 3    may impact them, let them voice their concerns and then
 4    you resubmit your environmental study report to the
 5    Minister and the Minister, based on the feedback he gets
 6    at that point, there will be another opportunity for
 7    bump up so if people who now have a tower right off
 8    their backyard or out their front window will have a
 9    chance then to object, presuming they haven't convinced
10    us already that the amendment makes no sense.
11              MR. THOMPSON:  Well, the Minister didn't
12    approve anything in this case.  He just issued a letter
13    saying "I am not going to bump it up."
14              MR. McCORMICK:  I'm sorry, say that again.
15              MR. THOMPSON:  The Minister didn't approve
16    anything in this case.  He just said, "I am not
17    satisfied you have completed the process and there is no
18    need for bump up."
19              MR. McCORMICK:  But he gave cause.  He
20    believed -- his basic decision was that there was no
21    need for further review or assessment of this project. 
22    The decision is final.
23              MR. THOMPSON:  But let me just come to the
24    notice here that people were provided under the EA
25    process.
26              If you look at the second paragraph of this
27    notice, it describes the project.  It is not tied to
28    lattice towers, would you agree?
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. McCORMICK:  Please explain where you are.
 2              You are talking about the final notice from
 3    June?
 4              MR. THOMPSON:  That is right, "Proposed
 5    portion of this..."  Well, you can read it.
 6              There is nothing in there that ties this to
 7    lattice towers.  It involves replacing these lines with
 8    new double-circuit towers.  That allows for
 9    alternatives, correct, or processes about.
10              MR. McCORMICK:  That is true but again, the
11    context is that the process had proceeded for a period
12    of six months.  Hydro One had reached some conclusions
13    at that point.  That was the undertaking that they were
14    going to go to the Minister for approval for and the
15    steel pole option was not part of what we were seeking
16    approval for.
17              MR. THOMPSON:  I understand that.  That is why
18    we are here.
19              But let me just -- the notice that people got
20    under the EA allowed for alternatives in towers and then
21    it goes on further and points out in the second-last
22    paragraph that the Ontario Energy Board in effect has
23    the final say.  Do you see that?
24              MR. McCORMICK:  The Ontario Energy Board has
25    approval of the project but it wasn't meant to deny the
26    importance of the Environmental Assessment Act approval.
27              MR. THOMPSON:  My point is, Mr. McCormick,
28    anybody reading that notice would not say, "Okay, my
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    lattice towers are there and no alternatives could
 2    possibly be considered."  Would you accept that?
 3              MR. McCORMICK:  I can't speculate on how
 4    people will interpret this.
 5              MR. THOMPSON:  Well --
 6              MR. McCORMICK:  Anybody who understands the
 7    environmental assessment process knows alternatives are
 8    considered.
 9              MR. THOMPSON:  That is my point.
10              And in this case, anybody who participated
11    knew that the steel pole option was on the table because
12    Cumberland was making strong submissions that it should
13    be considered.  Fair?
14              MR. McCORMICK:  At that point in time there
15    had been numerous discussions and exchange of letters
16    back and forth between Hydro One and Cumberland.  I
17    think both sides knew where the other one --  what the
18    position would be taken by the other one.  Nobody was
19    lacking information on the issue.
20              MR. THOMPSON:  The point is this.  In the EA
21    process, the notice allowed for alternatives.  In the
22    process, the fact is alternatives were being considered
23    and so nobody, I suggest, can now complain they didn't
24    have notice that the steel pole option was one of those
25    available.
26              MR. MARCELLO:  They may not be able to
27    complain but they will still be impacted and the cost
28    will still be higher.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. THOMPSON:  You were in effect telling me
 2    that if one person says, "Hey, you told me there
 3    wouldn't be a pole in my backyard and now there is," is
 4    the process going to grind to a halt and you are going
 5    to start this all over again because every person has
 6    his say.  Is that what you are telling us?
 7              MR. McCORMICK:  The undertaking is clearly
 8    defined in the Environmental Study Report.  We cannot
 9    change that undertaking without notifying everyone. 
10    They should know when a new structure is being put in
11    close proximity to their property and they should have
12    an opportunity to object to that.
13              MR. THOMPSON:  Fine.  Let's -- well, if you
14    want to go through it again, that is your choice, I
15    guess.  I am in effect saying you don't have to but
16    let's move on to a sort of chronology here in terms of
17    your open mindedness to the steel pole option.
18              In the Cumberland material at Tab 11, we have
19    excerpts from the EA report.
20              MR. McCORMICK:  Those are excerpts from the
21    EA report.
22              MR. THOMPSON:  If you go back -- I am sorry, I
23    should have numbered these pages and I apologize.
24              Back in May of 1999, it's about a quarter of
25    an inch from the back of Tab 11, you will see a letter
26    from Mr. Pierce, Senior Planner, to Karen Currie.
27              MR. McCORMICK:  What's the date of that?
28              MR. THOMPSON:  May 28, 1999.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. McCORMICK:  We have that.
 2              MR. THOMPSON:  This is in the spring of 1999. 
 3    It's even before this final notice has gone out.  This
 4    is the reaction of Hydro One's predecessor to this steel
 5    pole alternative.
 6              The first part of the page you are rejecting
 7    the notion there that it could be one steel pole as
 8    opposed to two steel poles.  Correct?  Cumberland had
 9    expressed a desire to have one steel pole going down the
10    middle of the right-of-way and carrying all this stuff?
11              MR. McCORMICK:  That's the first item in that
12    letter, yes.
13              MR. THOMPSON:  And that was rejected.
14              Then over on the second page, in Item 3 we see
15    evidence of Hydro One's open-mindedness to the other
16    steel pole alternative, which is putting two up on each
17    side of the right-of-way.  There it is rejected on the
18    basis of estimated costs of $10 million.  Fair?  In
19    other words, the driver was cost?  There is nothing in
20    there --
21              MR. McCORMICK:  It is a very clear statement
22    about having to replace three poles to replace every two
23    latticed towers.  The statement is there and implicit in
24    that is the concern about the impact of those extra
25    towers -- extra poles.
26              MR. THOMPSON:  My suggestion is,
27    Mr. McCormick, through the initial stages here the basis
28    on which Hydro One was rejecting a consideration of the
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    alternative was cost and costs associated with putting
 2    the two -- I'm sorry, you need three steel poles for two
 3    lattice towers.
 4              Would you accept that as a reasonable
 5    characterization of Hydro's position initially?
 6              MR. McCORMICK:  My staff, who did this
 7    assessment, who were responsible for the environmental
 8    portions of it, were convinced that it was less
 9    environmentally acceptable.  The impacts of those extra
10    structures were significant.
11              MR. THOMPSON:  Go to the next document.  This
12    is now July 8, 1999, Mr. Shewchuk responding to
13    Ms Currie.
14              Again, the second paragraph, the emphasis is
15    on cost differences.  Would you accept that as
16    reasonable?
17              MR. McCORMICK:  It does say -- it talks about
18    the extra towers, it talks about the costs and it talks
19    about additional environmental impacts at locations
20    where tower structures do not presently exist.
21              MR. THOMPSON:  Unspecified environmental
22    impacts at that point.  Fair?
23              MR. McCORMICK:  In the letter it's not
24    specified.  I'm sure there was lots of discussion
25    about it.
26              MR. THOMPSON:  All right.  And then we go to
27    July 21, 1999.  This is now a letter from Mr. Shewchuk
28    to Mr. Lathrop, again essentially rejecting this option.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. McCORMICK:  We have it.
 2              MR. THOMPSON:  If you go to the second page of
 3    the attachment, this is where we see the use of steel
 4    poles was considered.
 5              Do you see that in the second paragraph?
 6              MR. McCORMICK:  Yes.
 7              MR. THOMPSON:  It talks again about the three
 8    steel for two lattice and again the emphasis is on cost,
 9    $7 million now.
10              MR. MARCELLO:  In that particular attachment,
11    if you go back one page you will half a page of
12    environmental considerations and then you flip the page
13    and you find your one line on cost.
14              MR. THOMPSON:  Those environmental
15    considerations are not comparing the steel pole to the
16    lattice.  The steel pole to the lattice option is only
17    discussed on the second page.
18              MR. McCORMICK:  I will agree with you that we
19    didn't detail out all of the environmental concerns, as
20    I said before.  In large part having property owners
21    getting new structures in their front or backyards, so
22    to speak, was the key environmental issue.  That is
23    environmental by every stretch of the imagination. 
24    There were others that were probably of lesser
25    importance, but nevertheless they were there, as we have
26    already described, the need for increased access roads.
27              The fact that you can put a lot of structure
28    on an existing disturbed area on a one-for-one basis is
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    very different than having to put steel poles in new
 2    locations which have not been previously disturbed.  You
 3    are still going to get into impacts on not disturbed
 4    property, vegetation, wildlife habitat, whatever they
 5    may be.
 6              So there are other factors that I'm sure were
 7    discussed, they just were not elaborated on in these
 8    letters.
 9              MR. THOMPSON:  My clients will suggest,
10    Mr. McCormick -- well, you didn't deal with them
11    directly, did you?  Your staff did?
12              MR. McCORMICK:  My staff did.
13              MR. THOMPSON:  There is nobody on the panel
14    who actually had dealings with --
15              MR. MARCELLO:  I had met with Mr. Lathrop at
16    one point.
17              MR. THOMPSON:  Okay.
18              Just jump to the EA report then.  It is at
19    Tab 11 of the Cumberland material.  There is the one
20    ultimately filed on April 30, 2000, but there was a
21    draft report,I believe,distributed I think in December
22    of 1989.  Am I in the ballpark on the chronology there,
23    Mr. McCormick?
24              MR. McCORMICK:  That's right.  On December 2,
25    1999, yes, the draft ESR was submitted to the minister.
26              MR. THOMPSON:  That prompted the exchange of
27    correspondence we find at Tabs 6 through to 10 of the
28    Cumberland material, which I will come to in a moment.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              At Tab 11 we have the EA report which was
 2    ultimately filed and, as I understand it, it's in the
 3    same terms as the draft.  Am I correct?
 4              MR. McCORMICK:  You are asking if the report
 5    was changed subsequent to the draft?
 6              MR. THOMPSON:  Yes.
 7              MR. McCORMICK:  I don't believe there were any
 8    changes.
 9              MR. THOMPSON:  I don't think there were.  If
10    there were, they weren't material from what I can
11    determine.
12              So this is representative of what was
13    circulated in December.
14              If you go to page 30 of this document, this is
15    the comparison of environmental impacts for five
16    alternatives.  Right?
17              This is a summary of the overall environmental
18    impacts.  Is that fair?
19              MR. McCORMICK:  That's right.
20              MR. THOMPSON:  And none of those alternatives
21    involve a comparison of what is A4 to A4 with steel
22    poles?  This study did not do an overall environmental
23    assessment of those two options.  Do you agree?
24              MR. McCORMICK:  No, I don't agree.
25              MR. THOMPSON:  Well, it's not there in that
26    summary.
27              MR. McCORMICK:  This table was not meant to
28    meet that purpose.  This table was a comparison of four
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    right-of-way configurations using the same structure in
 2    each one for the comparison of apples to apples, as I
 3    explained.
 4              The issue that was raised by Cumberland was
 5    dealt with as a specific issue in Chapter 10 where all
 6    of the resulting documentation was put in appendices. 
 7    So there is a very clear depiction of what Cumberland's
 8    concerns were and why we decided not to accept their
 9    recommendation.
10              MR. THOMPSON:  If you were going about
11    objectively and fairly evaluating the Cumberland
12    alternative, I suggest to you that you would have at
13    least given it status in the summary chart.  It is not
14    there, is it, sir?
15              MR. McCORMICK:  It's not there, I will agree
16    to that, but the need for it I question.
17              MR. THOMPSON:  Yes.  What is there, though,
18    are the A1 to A5 that you had previously identified
19    before the whole process began, being your sort of
20    preferred range of alternatives.  Do you agree?
21              MR. McCORMICK:  If we were doing it all over
22    again we would do it the same way.  We would deal with
23    the Cumberland issue at best as a subset of A4.  We
24    didn't deal with it in the table because it isn't
25    comparable to the others.  It dealt with changes to
26    small sections of the A4 option.
27              We dealt with it in a different way, but that
28    is the only distinction.  It is dealt with in different
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    parts of the environmental study report.
 2              MR. THOMPSON:  Well, where you deal with the
 3    Cumberland option is at page 38. It's in the "Public
 4    Concerns" section.  It's sort of like in the complaint
 5    department section of the report.  Do you agree?
 6              MR. McCORMICK:  It's not a complaint
 7    department.  It's a place where public groups try to
 8    objectively express their concerns.
 9              I don't think we could have done a better job
10    of stating how they felt about it and why with all the
11    documentation that was exchanged back and forth.  So the
12    ministry had a very clear idea of what the issues were
13    and why the impasse existed.
14              MR. THOMPSON:  This text, though, also
15    explains why you were rejecting the Cumberland option at
16    that time.  In the second paragraph, the first topic is
17    once again cost.
18              You have cost first and then you say:
19                   "...and result in additional
20                   environmental impacts."  (As read)
21              Again unspecified.
22              Cost was first at that time.  Fair?
23              MR. McCORMICK:  It was placed first in the
24    sentence; whether it is first in the individual's mind,
25    that is speculation.
26              MR. THOMPSON:  But then your concluding
27    paragraph is only focusing on costs.
28              MR. McCORMICK:  This was written by
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    Environmental staff who had reached their own
 2    environmental recommendations.  I can assure you that
 3    they believe strongly that the environmental impacts
 4    were greater for the steel pole option.  And how they
 5    expressed it on paper is neither here nor there.
 6              MR. THOMPSON:  Well, I think it is here.
 7              MR. McCORMICK:  Well, the Minster of the
 8    Environment has again reviewed all this material, has
 9    reached a conclusion.
10              MR. THOMPSON:  I suggest to you, sir, that
11    there is nowhere in that report, or any of the material,
12    the run-up to it, the notion that the key reason for
13    rejection is we are going to have more poles bothering
14    more people.
15              That is sort of a late-in-the-day ground for
16    rejecting the proposal.
17              Do you accept that?
18              MR. McCORMICK:  No, I can't accept that.
19              MR. THOMPSON:  Okay.
20              MR. McCORMICK:  It may not have been expressed
21    to your liking, but --
22              MR. THOMPSON:  That wasn't expressed at all is
23    what I am suggesting to you.
24              MR. McCORMICK:  How often do you have to say
25    there is 50 per cent more towers and what does that mean
26    to the people who live along the right-of-way.
27              MR. THOMPSON:  Well, that was always said in
28    the context of cost.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. McCORMICK:  You have cited several
 2    examples where it was cost and environmental; the two
 3    were hand in hand.
 4              MR. THOMPSON:  Let's move on, if we could,
 5    quickly.  At Tab 6, we have Mr. Lathrop's response to
 6    the draft Environmental Assessment Report.
 7              Would you take that, subject to check?
 8              MR. McCORMICK:  This is Mr. Lathrop to Blair
 9    Rohaly of the Ministry?
10              MR. THOMPSON:  That's right.  I assume you
11    have read this material before you came here today?
12              MR. McCORMICK:  Yes, I did.
13              MR. THOMPSON:  Okay.
14              Anyway, if you can take, subject to check,
15    that's Cumberland's initial response to the draft report
16    is reflected in the letter at Tab 6; correct?
17              MR. McCORMICK:  Yes.
18              MR. THOMPSON:  And in that letter, at page 1,
19    at the bottom, Cumberland was expressing the view that
20    Hydro has not dealt with what they call the upgrade
21    issue in a fair and equitable manner.  They were
22    complaining about the way you handled the process. 
23    Fair?
24              MR. McCORMICK:  That's the statement.
25              MR. THOMPSON:  And they then went on and
26    expressed their views in terms of the community planning
27    issues.  They evaluated the report and expressed their
28    views on certain issues.  And then Hydro responded at
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    Tab 7.  Is that fair?
 2              MR. McCORMICK:  That is correct.
 3              MR. THOMPSON:  And here again, the letter of
 4    January 28th, the second paragraph, the first ground of
 5    rejection is financial and the second is environmental. 
 6    Costs still appeared to be the priority at that time. Is
 7    that fair?
 8              MR. McCORMICK:  The statement is:
 9                   "There are objectively demonstrable
10                   financial and environmental factors..."
11              And whether one goes before the other, you
12    can't read any meaning into that.
13              MR. THOMPSON:  Mr. Lathrop responded on
14    February 14th.  Correct?
15              MR. McCORMICK:  Yes.
16              MR. THOMPSON:  Hydro responded again on
17    March 1st.
18              MR. McCORMICK:  Yes.
19              MR. THOMPSON:  And then we have the Minister's
20    letter, at Tab 10.  Fair?
21              MR. McCORMICK:  Yes.
22              MR. THOMPSON:  Then, as far as I can figure
23    out, the first time we ever see this notion that an
24    increased number of poles is going to bother an
25    increased number of residents is in the Minister's
26    letter.
27              Can you point to any place where that notion
28    was expressed by Hydro One in the written material?
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. McCORMICK:  I would have to do some
 2    checking, but isn't that intuitive?
 3              MR. THOMPSON:  Well, not to me.
 4    --- Pause
 5              MR. THOMPSON:  Well, do you want to check?  I
 6    am suggesting to you that it is not there.
 7              MR. McCORMICK:  I don't see the purpose --
 8              MR. THOMPSON:  You don't see the purpose; all
 9    right.
10              So you accept, then, for the purposes of this
11    proceeding that it is not expressed in writing in any of
12    the materials that --
13              MR. McCORMICK:  I don't accept that.  It may
14    well be.
15              The point is, if you know you need more
16    structures on a right-of-way, how can you not have more
17    property owners affected?  It goes hand in hand.  It is
18    a statement of the obvious.
19              MR. THOMPSON:  All right.  Well, if we know it
20    is five more towers in two particular sections, where
21    there are residents --
22              In any event, you say this Minister's letter
23    is what -- a decision on something, an approval of some
24    sort?
25              MR. McCORMICK:  The Minister has rejected a
26    request from two groups, the city and Mr. Tardif, to
27    conduct a more detailed assessment of that project.  And
28    he has said that there isn't adequate grounds.  So he
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    has rejected that request.  And by rejecting that
 2    request you get an effective approval under your
 3    class EA.
 4              MR. THOMPSON:  He rejected the request for a
 5    bump-up.  And let's face it:  What Cumberland wanted was
 6    some independent quasi-judicial tribunal to assess
 7    whether your position was meritorious or wasn't
 8    meritorious.
 9              That is what they wanted.  Fair?
10              MR. McCORMICK:  I can't speak to what they
11    wanted.  It is within the Minister's discretion to
12    decide whether that should take place, and he decided
13    not to.
14              MR. THOMPSON:  But at that point in time, with
15    respect to process, we had the Environmental Assessment
16    process, which is the only, at that time, third-party
17    adjudicative process that Hydro One was subject to. 
18    Everything else in terms of the public interest, the
19    judge was Hydro One.
20              Agree?
21              MR. McCORMICK:  Perhaps you could repeat the
22    question.
23              MR. THOMPSON:  Well, I went through this with
24    Panel 1, that in terms of the process that was available
25    to any party expressing concerns with what Hydro One was
26    planning, we had the EA process, and then all other
27    public interest considerations, the judge of those would
28    be Hydro One.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              That is the way it used to be in the good old
 2    days.  Hydro One was an authority unto itself.
 3              MR. McCORMICK:  Ontario Hydro was.
 4              MR. THOMPSON:  Ontario Hydro; I apologize. 
 5    But as of the spring of 1999, that is the regime that
 6    was in place.
 7              Let me put it to you this way:  Cumberland
 8    didn't have a choice of going down one road and another
 9    road, in terms of getting a quasi-tribunal assessment of
10    its concerns; the only road that was available was the
11    EA road.
12              MR. McCORMICK:  And is that a problem?
13              MR. THOMPSON:  Your position is, well, they
14    went down that road, and so what are they here squawking
15    about; if they took a choice on process, then they
16    should live with it.
17              And what I am suggesting to you is that that
18    analogy doesn't apply.
19              MR. McCORMICK:  This is a long-standing,
20    successfully managed process.
21              MR. THOMPSON:  Well, it is a new ball game,
22    Mr. McCormick, and the OEB is now the judge of what is
23    in the public interest.
24              In any event, I will move on.
25              You will agree with me that the Minister's
26    letter, whatever it is, is not the result of any
27    quasi-judicial process.
28              MR. McCORMICK:  It is not the result of a
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    quasi-judicial process; it is the Minister exercising
 2    his decision-making power.
 3              MR. THOMPSON:  And none of the information
 4    that was fed to the Minister was subject to any scrutiny
 5    by affected parties by cross-examination in a hearing.
 6              That wasn't available to them.
 7              MR. McCORMICK:  That was the whole point of
 8    the submission that your clients made to the Minister. 
 9    If he believed a hearing could add value, he probably
10    would have agreed; he didn't agree.
11              MR. THOMPSON:  Well, they got their hearing
12    here, so that is why we are here.
13              Hydro One appears to rely on this Minister's
14    letter and the EA assessment process and the report, to
15    support the approvals that it seeks in this proceeding. 
16    Do I understand that correctly?
17              MR. McCORMICK:  We have complied with
18    legislation.  It was a necessary step, so we are relying
19    on that approval, yes.
20              MR. THOMPSON:  Do you agree that the weight
21    that is ascribed to those documents in this process
22    before the Board and the meaning that is ascribed to
23    those documents in this process by the Board is for this
24    Board to determine.
25              MS ALDRED:  Can you repeat that question,
26    please?
27              MR. THOMPSON:  Having relied on these
28    documents and the Minister's letter in these proceedings
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    to support the approval that you seek from this Board,
 2    does Hydro agree that the weight and meaning of the
 3    documents is for this Board to decide?
 4              MS ALDRED:  No, we do not.
 5              MR. THOMPSON:  So, is it Hydro One's position
 6    that this Board must rubber stamp what the Minister has
 7    said?
 8              MS ALDRED:  I think it made it clear at the
 9    outset what Hydro's position was, that this hearing was
10    going to be argued -- that the validity of the
11    regulation of public interest was not going to be argued
12    in this particular forum, and we heard at the outset
13    that there was going to be a stated case on this issue. 
14    And we agreed to provide witnesses to canvass these
15    issues to provide a full record and on a without
16    prejudice basis.
17              We will not agree that -- our position is that
18    we have an environmental assessment that we did, that we
19    followed the proper process, and we have a valid
20    decision.
21              MR. THOMPSON:  I am not so sure that answers
22    my question because you really, in your evidence, in
23    pre-filed evidence, you refer to these processes.  You
24    refer to the documents and you appear to rely on them to
25    support the relief that you seek from this Board.  And
26    the question that I have is with respect to your
27    application as framed.  Do you accept that the weight
28    could be ascribed to these documents and the process is
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    for this Board to determine?
 2    --- Pause
 3              MS ALDRED:  I am sorry, I thought that was a
 4    rhetorical question because I did think I had already
 5    answered Mr. Thompson as to our position.
 6    --- Pause
 7              MR. THOMPSON:  Mr. McCormick, I want to go
 8    back quickly, if I can, to the factors in the assessment
 9    at page 30 and 31, and the factors that go into an
10    overall assessment, an environmental assessment of an
11    option.  Are there seven, in total:  existing land use,
12    proposed land use, cultural heritage features, visual,
13    natural environment and agriculture?  Correct?
14              MR. McCORMICK:  The class EA itself spells out
15    a number of factors that would typically be addressed,
16    and normally what happens, by the time you get into an
17    environmental study with the Board, the ones that are
18    largely irrelevant to, don't help you to distinguish one
19    option from the other, usually are dropped.
20              MR. THOMPSON:  Well, I am just trying to focus
21    on the summary.  What I would like to do quickly with
22    you, if I could, is just run down these seven factors,
23    but comparing A4 to A4 with steel poles.  Are you
24    with me?
25              MR. McCORMICK:  Okay.
26              MR. THOMPSON:  I thought you told me a few
27    moments ago that we would define this --
28              MR. McCORMICK:  No, what I said was if we were
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    doing it all over again we probably would have dealt
 2    with the steel pole issue in the same way that we have
 3    already.
 4              MR. THOMPSON:  I am sorry, I thought you would
 5    have included in this analysis of alternatives.  But let
 6    us just go on an existing land use.  This refers to
 7    what?  Easements?
 8              MR. McCORMICK:  Any use of the right-of-way
 9    happens to be --
10              MR. THOMPSON:  More towers means a change in
11    existing land use.  Is that right?
12              MR. McCORMICK:  It could impact the use of the
13    land.
14              MR. THOMPSON:  But the evidence indicates that
15    the area of the base of a steel tower compared to the
16    area of these lattice monsters is quite different.
17              MR. McCORMICK:  Above ground.  Yes, but the
18    numbers are different too.
19              MR. THOMPSON:  I appreciate there are three
20    for two, but on balance, above ground, I would suggest
21    to you, there is less invasion of land for the steel
22    tower option than the lattice tower.  Would you accept
23    that?
24              MR. McCORMICK:  Less invasion.  The
25    foundations can be quite substantial.  If there are
26    heritage issues you may be impacting there simply
27    because you are now disturbing undisturbed area.  If
28    there is vegetation and wildlife habitat you are
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    disturbing more area because the lattice would go on
 2    existing disturbed locations.
 3              MR. THOMPSON:  You are going to take down the
 4    existing -- you are going to have an army in there
 5    putting up new towers.  Are you really suggesting that
 6    putting up the steel and the temporary impacts of
 7    construction activities are going to materially disturb
 8    the environment compared to the other option?  Is that
 9    what you are suggesting, sir?
10              MR. McCORMICK:  You are putting poles in a new
11    places, so material -- so how great the difference is I
12    am not going to speculate on right now.  It would depend
13    very much on where, which tower and which location you
14    are talking about.
15              MR. THOMPSON:  In terms of the footprint
16    issue, I was trying to suggest to you that there is less
17    land above ground occupied by the steel pole
18    alternative.  You seemed to resist that, but if you go
19    to Tab 9 at page 3, Mr. Pierce seemed to accept that
20    that was correct.  Under Foot Print and Soils he says it
21    is certainly correct that the area covered by the base
22    of the lattice structures will be greater than that for
23    the pole.  Can you now accept that?
24              MR. McCORMICK:  The area of a foot print is
25    different.  I accept that, yes.
26              MR. THOMPSON:  Then he goes on.  He says the
27    actual area of foundation is similar, given that there
28    will be three poles for every two lattice structures,
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    which means to me the foundations for the steel are
 2    smaller but because you have got more you end up just
 3    about the same.  Is that fair?
 4              MR. McCORMICK:  Okay, but we are not talking
 5    just about area.  We are talking about putting something
 6    on an existing foundation versus something that is going
 7    to go in a largely undisturbed area.
 8              MR. THOMPSON:  My point is had someone fairly
 9    gone through these criteria and these factors for
10    overall environmental assessment comparing steel versus
11    the lattice, for existing land use steel would have been
12    no worse and perhaps a little better, in other words, no
13    material difference.  Proposed land use, I would say the
14    same thing.  The total land use is about the same.  The
15    easement rights you have on the entire width.  Cultural-
16    heritage features, no difference.  Let us then move --
17              MR. McCORMICK:  That is not true.
18              MR. THOMPSON:  I am sorry, what
19    cultural-heritage harm do steel towers cause compared to
20    lattice?
21              MR. McCORMICK:  I would have to review the
22    details of the archaeological report but typically, you
23    are creating foundations in undisturbed ground so you
24    could have artifacts there that could be an issue with
25    what is buried in the ground.  If you just locate on
26    disturbed locations, i.e. on the same foundations or
27    adjacent to lattice towers, on a structure by structure
28    basis, there is no affect at all.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. THOMPSON:  Are you saying because they
 2    have to dig another hole in a different place that is an
 3    environmental difference of significance?
 4              MR. McCORMICK:  It is a factor.  I am not
 5    going to argue significance.  I told you the biggest
 6    significance is you have got 50 per cent more towers in
 7    the backyards and front lawns of residents and that is
 8    the biggest issue.  There are other factors that come
 9    into play depending on where you are on the
10    right-of-way.
11              MR. THOMPSON:  The environmental significance
12    of 50 more towers that occupy less area may be less than
13    the ones that are less in number but occupy more space. 
14    Wouldn't you agree?
15              MR. McCORMICK:  No.
16              MR. THOMPSON:  The towers, for example, occupy
17    less air space.  Steel poles occupy less air space than
18    these lattice towers.  Is that a factor that we should
19    consider?
20              MR. McCORMICK:  What is the consequence of
21    that?
22              MR. THOMPSON:  Well, I guess that to the
23    extent that a structure occupies air space and air is
24    part of the environment, we should ask ourselves if
25    there is a difference.  If it makes a difference it is
26    in favour of steel poles, I would suggest, not lattice
27    towers.
28    --- Pause
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MR. THOMPSON:  Does it make a difference in an
 2    environmental study?
 3              MR. McCORMICK:  Please express that again.
 4              MR. THOMPSON:  If the structure alternatives
 5    are being considered, one of them occupies less air
 6    space than another, is that something that we should
 7    consider?
 8              MR. McCORMICK:  I am not aware that has ever
 9    been a consideration on any environmental assessment
10    unless you get into the aesthetic issues.
11              Well, let's get into the aesthetic issue, the
12    compatibility with neighbourhood planning.
13              The poles have a smaller base, steel poles 
14    compared to the tower.  Do you accept that?
15              MR. McCORMICK:  Yes.
16              MR. THOMPSON:  They occupy, in my analogy,
17    less airspace.  You would accept that as an aesthetic
18    factor, if it's not environmental?
19              MR. McCORMICK:  I would like to see some
20    calculations there.  In terms of mass, they are pretty
21    substantial.  I have never seen a calculation.
22              MR. THOMPSON:  All right.  I will go with the
23    pictures.  I think they tell a pretty significant story.
24              But on the compatibility with the community,
25    the urban neighbourhood, are you seriously suggesting
26    that lattice towers habit over steel poles?
27              MR. McCORMICK:  I think we basically said
28    there may be occasions where indeed it does.  I mean, if
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    you look at it on site-specific basis and you make your
 2    call there, when you have all the considerations on the
 3    table.
 4              MR. THOMPSON:  Well, does anybody on the panel
 5    accept the contention that lattice towers are ugly
 6    compared to steel poles?
 7              MR. MARCELLO:  I asked my daughter that
 8    question, and she likes the one with the triangle
 9    "thingies" which would be the lattice towers.
10              MR. THOMPSON:  Well, she will get a job with
11    Hydro One.
12    --- Laughter
13              MR. MARCELLO:  Actually, she wants to be a
14    lawyer.
15              MR. BUDD:  One for the lawyers.
16    --- Laughter
17              MR. THOMPSON:  I'm serious -- from
18    aesthetics --
19              MR. MARCELLO:  I'm serious, too, I asked her
20    that very question because I thought --
21              MR. THOMPSON:  Unfortunately, she is not here
22    for questioning, she's --
23              MR. MARCELLO:  I will call her up, if you
24    like.
25              MR. THOMPSON:  I mean, compared to the steel
26    poles, objectively you can go through the differences,
27    but aesthetically, they are just so ugly compared to the
28    steel poles -- 99 people out of 99 would agree with me.
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1              MS ALDRED:  Maybe this should just go for
 2    argument at the end at this particular point.
 3              MR. THOMPSON:  But no one will agree they are
 4    ugly, not one of the four people -- five people.  Maybe
 5    Mr. Gagnon will comment.
 6    --- Laughter
 7              MR. GAGNON:  I won't venture into that,
 8    Mr. Thompson.  I am not qualified to speak about that.
 9              MR. THOMPSON:  But aesthetics and
10    compatibility with urban neighbourhoods is a very
11    significant consideration for community planning.  You
12    will accept that as a principle, will you,
13    Mr. McCormick?
14              MR. McCORMICK:  It's a consideration.
15              MR. THOMPSON:  So if in our little chart there
16    where you had visual, if you were just comparing fairly
17    the steep pool to the lattice tower, could you in your
18    heart of hearts give the nod to the steel pole as being
19    more visually pleasing than the other monster.
20              THE PRESIDING MEMBER:  Mr. Thompson, I think
21    they have answered that question.
22              MR. THOMPSON:  They answered that one, okay. 
23    Thanks.
24              It seems to be, when we shake this all down, a
25    rejection of the steel pole option for cost reasons has
26    pretty much been discredited.  Would you accept that?
27              The reason I say that is when we apply the
28    rate impact test that you apply to have this Board
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    adjudicate whether your costs are reasonable and compare
 2    it to the cost of the steel pole option, the differences
 3    are minuscule, they are immaterial.
 4              MR. MARCELLO:  The differences are between
 5    $3 and $10 million.
 6              MR. THOMPSON:  The differences are between
 7    four cents and 14 cents per year.  That's the way you
 8    asked this Board to adjudicate the impact of your
 9    $97 million.
10              MR. MARCELLO:  And that's $3 to $10 million.
11              MR. THOMPSON:  I will leave it for argument.
12              Let's move to process, if I could quickly.  I
13    am probably going to be maybe another 15 minutes,
14    Madam Chair.  Should I attempt to finish?
15              THE PRESIDING MEMBER:  Just 15 minutes,
16    Mr. Thompson.
17              MR. THOMPSON:  I told you it was a full
18    agenda here.
19              THE PRESIDING MEMBER:  I trust you won't be
20    referring to exhibits to slow you down.
21              MR. THOMPSON:  Well, I don't know, but I will
22    try to --
23              THE PRESIDING MEMBER:  We don't want the panel
24    to slow you down for your 15 minutes.
25              MR. THOMPSON:  Well --
26    --- Pause
27              MR. THOMPSON:  Perhaps you could explain to
28    me, panel, on this question of process, findings,
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    timing, the Board has indicated that it's slating a case
 2    for the court.  Can someone help me with what Hydro One
 3    expects to be decided before December the 1st or
 4    January the 15th?
 5              MS ALDRED:  We expect, hopefully, to have a
 6    decision on the application we filed.
 7              MR. THOMPSON:  Even before the scope of the
 8    test that's to be applied has been determined?
 9              MS ALDRED:  It's my understanding that the
10    stated case is being brought forward and we would hope
11    that the scope would be determined by the time the panel
12    has to make the decision.  But it may not be.  In that
13    case, the panel will consider the evidence they have
14    heard and make a decision.
15              MR. THOMPSON:  Going back to you,
16    Mr. McCormick --
17              MR. BUDD:  Madam Chair, could I just wade in
18    here ever so slightly in case I wasn't clear from my
19    friend this morning and even through Mr. Gagnon's
20    submission.
21              We were looking for the possibility from this
22    Board, if it were comfortable, by Friday, December
23    the 1st, that they nod, if possible, an oral gathering,
24    if I can put it that way, whereby the Board could
25    express the types of conditions or something, if it were
26    able to, by Friday.  The reason is very simply that that
27    is a date by which contracts either get let and this can
28    proceed so that one winter period is able to be met
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    through additional security and liability.  If that date
 2    is missed, then that winter is lost.
 3              So, of course, it's up to the Board as to its
 4    comfort level, but that's what we meant by the
 5    December 1 date, Mr. Thompson, if that's helpful.
 6              MR. THOMPSON:  Well, let me try this question,
 7    panel.
 8              Let's just assume -- and again this is a
 9    hypothetical -- but assume that the Board agrees with us
10    that the cost and environmental reasons that you relied
11    on to reject the steel pole option lack merit in this
12    particular case, and that in fact there are no material
13    differences between the two options, or if anything the
14    pole option is environmentally superior, and assume that
15    the Minister's letter -- the Board finds the Minister's
16    letter doesn't preclude them from making those findings.
17              If all that happens, will you go forward with
18    the steel pole option, and, if not, tell me the process
19    that you say you are going to follow to go through with
20    that option.
21              MR. MARCELLO:  I believe Mr. McCormick already
22    covered off the process that would be followed in that
23    event and there is really nothing more to add to that
24    question -- to that answer.
25              MR. THOMPSON:  Well, perhaps you can summarize
26    it for me quickly.  The Board either makes those
27    findings or grants the condition that we have asked for. 
28    Is it your position you have to start the process all
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    over again, or will you go forward with the process?
 2              THE PRESIDING MEMBER:  Mr. Moran.
 3              MR. MORAN:  Madam Chair, I think that
 4    Mr. Thompson's question is really asking this panel to
 5    speculate about what the Board might or might not do. I
 6    am not really sure that this panel can be very helpful
 7    on that, unless they know something that no one else
 8    knows.
 9              THE PRESIDING MEMBER:  Thank you, Mr. Moran.
10              Mr. Thompson, I think that that is this
11    panel's problem as to exactly what findings we make and
12    exactly what orders we are going to make and the timing
13    of those orders and the validity of those orders.
14              MR. THOMPSON:  Okay.  Thanks.
15              My last area is -- and perhaps it will overlap
16    with what I have covered before -- but in this letter,
17    Exhibit 13.21, there is a -- you made it several times
18    today, Mr. McCormick, this criticism of Cumberland or
19    it's a comment I guess on Cumberland's proceeding to
20    exercise and express its concerns in the EA process. 
21    The implication is that having done that all
22    environmental subject matter is no longer up for
23    discussion.  Is that a fair paraphrase of what you were
24    saying here and what is being said in this letter?
25              MR. McCORMICK:  I am not going to be so
26    presumptuous as to tell the Board what they can consider
27    or not consider.  We have followed and complied with the
28    Environmental Assessment Act requirements and we believe
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    the environmental issues have been dealt with.
 2              MR. THOMPSON:  Does this panel agree that the
 3    compatibility of infrastructure design with community
 4    planning objectives does not fall within the ambit of
 5    environmental impacts?  I thought the last panel did,
 6    but --
 7              MR. McCORMICK:  You will have to explain that
 8    more clearly.
 9              MR. THOMPSON:  That planning public interest
10    factors, community planning public interest factors,
11    that topic and the topic of the environment are
12    different?
13              MR. McCORMICK:  I have explained that we make
14    every effort to sit down with the Planning Department
15    from various communities that are affected to find out
16    what plans they have for the area.  We try to find out
17    whether there are any areas that they have designated,
18    for example, as environmentally sensitive or protection
19    areas.  We try to work with them to deal with that.
20              We are exempt from the Planning Act, so that
21    any talk of approval isn't in the cards.  So we are
22    working with them very closely.  There will be times
23    when our conclusions are different from theirs.  Again,
24    that's why there is an opportunity for them to appeal,
25    to submit their bump-up requests, make their case before
26    the ministry and the minister and the minister will make
27    the final call.
28              MR. THOMPSON:  And you have been with the
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                    HYDRO ONE NETWORKS PANEL 3, ex (Thompson)
 1    utility how long, Mr. McCormick?
 2              MR. McCORMICK:  Over 20 years.
 3              MR. THOMPSON:  I have been fighting utilities
 4    about that long as well.  We have had a lot of
 5    discussion about utility mindset over my 26 years in
 6    practice.  Hydro was really quite a unique utility and
 7    really had no regulator other than itself up until
 8    recently.  Is that fair?
 9              MS ALDRED:  Hydro has always had to comply
10    with legislation like every other body corporate in the
11    province.
12              MR. THOMPSON:  I will leave it for argument.
13              Thank you very much, Madam Chair.
14              THE PRESIDING MEMBER:  Thank you,
15    Mr. Thompson.
16              It is now about 12:30.  I think it is an
17    appropriate time for a lunch break.  We will break for
18    an hour and reconvene at 1:30.
19              MR. MORAN:  Madam Chair, Mr. Greenspoon wanted
20    to discuss briefly the scheduling of argument.  I think
21    his schedule is that he might want to leave, if we could
22    have a quick discussion on what the Board wishes.
23              MR. GREENSPOON:  That is all right, Madam
24    Chair.  I can be informed by the transcript as to what
25    you decide.  I don't wish to hold the board up.
26              THE PRESIDING MEMBER:  Are you leading us,
27    Mr. Greenspoon?
28              MR. GREENSPOON:  I am.  My transportation back
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                                   HYDRO ONE NETWORKS PANEL 3
 1    home is around one o'clock today.  I have already made
 2    those arrangements.  I have no questions of this panel.
 3              THE PRESIDING MEMBER:  You have no questions
 4    of this panel?
 5              MR. GREENSPOON:  No, I don't.  It's only the
 6    issue of argument and I can follow the transcript on the
 7    Internet I think to see what that is on Monday.
 8              THE PRESIDING MEMBER:  Or a Board staff will
 9    keep you informed, there is no problem.
10              MR. GREENSPOON:  Thank you very much, Madam
11    Chair.
12              THE PRESIDING MEMBER:  Have a safe trip back
13    home.
14              MR. GREENSPOON:  Thank you and I appreciate
15    your tolerance.
16              THE PRESIDING MEMBER:  We will reconvene
17    at 1:30.
18              Thank you.
19    --- Upon recessing at 1230
20    --- Upon resuming at 1336
21              THE PRESIDING MEMBER:  Please be seated.
22              We are missing Mr. Thompson.
23              MR. LATHROP:  I don't know where he went.
24              THE PRESIDING MEMBER:  That's fine.  I'm sure
25    he will show up.
26              Are there any preliminary matters while we are
27    waiting for Mr. Thompson?
28              No?  Nothing?  That's fine.
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                                   HYDRO ONE NETWORKS PANEL 3
 1              MR. THOMPSON:  I would like to introduce,
 2    Madam Chair, to the panel the witness panel for the City
 3    of Cumberland.
 4              Nearest to the panel is Chris Brouwer, a
 5    planner with the City of Cumberland; followed by
 6    Mr. Stephen Cunliffe, who is the Director of Planning.
 7              Do I have that right, Mr. Cunliffe?
 8              MR. CUNLIFFE:  Commissioner.
 9              MR. THOMPSON:  Commissioner of Planning.
10              Next to Mr. Cunliffe is Mr. Ned Lathrop, who
11    is currently with the new City of Ottawa, but at the
12    material time was the Chief Administrative Officer for
13    the City of Cumberland.  Next to Mr. Lathrop is Gerry
14    Lalonde, the Mayor of Cumberland.  Perhaps the witnesses
15    could be sworn, please.
16              You have to go up there, fellows, to be sworn. 
17    "Toute la gang".
18    --- Pause
19    SWORN:  CHRIS BROUWER
20    SWORN:  STEPHEN CUNLIFFE
21    SWORN:  NED LATHROP
22    SWORN:  GERRY LALONDE
23              THE PRESIDING MEMBER:  Mr. Moran, while we are
24    waiting, I note that we have CVs for these witnesses.
25              MR. THOMPSON:  Yes, Madam Chair.  I'm just
26    going to speak to these documents which I placed on the
27    dias before you came in, which I would like to have
28    marked.
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                                   CITY OF CUMBERLAND PANEL 1
 1              The first is the curriculum vitae of
 2    Mr. Cunliffe.  Could I have a number for that, please?
 3              MR. MORAN:  Why don't we just put them all in
 4    as one exhibit?
 5              MR. THOMPSON:  Okay.  Then there are the three
 6    CVs, which Mr. Moran has suggested we mark as one
 7    exhibit.  There is Mr. Cunliffe's, followed by
 8    Mr. Lathrop and then Mr. Brouwer.
 9              MR. MORAN:  That would be 15.8, Madam Chair. 
10    I'm sorry, I have the wrong list here.
11              That would be 14.12, Madam Chair.
12                   EXHIBIT NO. 14.12:  Curriculum vitae of
13                   Mr. Stephen Cunliffe, Mr. Ned Lathrop and
14                   Mr. Chris Brouwer
15              MR. THOMPSON:  The next document, Madam Chair,
16    that I would like to have marked is a document prepared
17    by Mr. Cunliffe, which I will have him speak to in a
18    moment, but this is Mr. Cunliffe's response to the
19    letter that Mr. Curtis wrote commenting on Cumberland's
20    position.
21              If we could have a number for that please,
22    Mr. Moran.
23              MR. MORAN:  Exhibit 14.13.
24                   EXHIBIT NO. 14.13:  Letter from Mr. S.
25                   Cunliffe in response to a letter from Mr.
26                   Curtis re Cumberland's position
27              MR. THOMPSON:  Then the other two documents
28    which you have there, Madam Chair, you have the
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                                   CITY OF CUMBERLAND PANEL 1
 1    originals, the other members of the panel have copies. 
 2    These are corrections to the Cumberland prefiled
 3    evidence at Tab 6.
 4              If you go into the written text which was
 5    seven pages you will see a photostat of Attachment 1. 
 6    Unfortunately, it was the page as folded.  We didn't get
 7    the complete copy.
 8              THE PRESIDING MEMBER:  Which tab is this,
 9    Mr. Thompson?
10              MR. THOMPSON:  Tab 6.
11              THE PRESIDING MEMBER:  Tab 6, okay.
12              MR. THOMPSON:  Mr. Lathrop's letter of
13    January 21.  At the end of the text of the letter,
14    Attachment 1 is "Map 1:  Cumberland Urban Area".  In the
15    photocopying we copied it folded rather than open and so
16    that's where the one document goes please.
17              Then if you go over two more pages you come to
18    Attachment 2, "Map 3:  Impact on the Visual
19    Environment".  That is where the second document
20    belongs.
21              THE PRESIDING MEMBER:  Unfortunately,
22    Mr. Thompson, I only seem to have Attachment 2, not
23    Attachment 1.
24              MR. THOMPSON:  Do you have it?
25              THE PRESIDING MEMBER:  Oh, there it is.
26              MR. THOMPSON:  Do you have it?
27              THE PRESIDING MEMBER:  Yes.  Mr. Birchenough
28    had taken my Attachment 1.
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                                   CITY OF CUMBERLAND PANEL 1
 1    EXAMINATION
 2              MR. THOMPSON:  Mr. Cunliffe, perhaps I will
 3    start with you.
 4              I should say that the lead member of the
 5    witness panel will be Mr. Cunliffe.  The others are here
 6    to support.
 7              Mr. Cunliffe, your CV has been filed as part
 8    of Exhibit 14.2.  I understand that your current
 9    position is that of Commissioner of Planning and
10    Economic Development for the Corporation of the Township
11    of Cumberland?
12              MR. CUNLIFFE:  That's correct.
13              MR. THOMPSON:  And you have held that position
14    for how long, sir, approximately?
15              MR. CUNLIFFE:  About 11 years.
16              MR. THOMPSON:  And your academic experience is
17    a Bachelor of Arts from Carleton University?
18              MR. CUNLIFFE:  That's correct.
19              MR. THOMPSON:  Filed in these proceedings,
20    Mr. Cunliffe, is the prefiled evidence of the City of
21    Cumberland marked as Exhibit 10.1.
22              First of all, was this document prepared under
23    your direction?
24              MR. CUNLIFFE:  Yes, it was.
25              MR. THOMPSON:  I understand that there are
26    some corrections to be made to the text and perhaps you
27    could confirm on the record that they are as follows.
28              First of all, at page 8 I understand that in
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    paragraph 24 in the fourth last line, the second last
 2    word, the word "through" should be "throughout"?
 3              MR. CUNLIFFE:  Correct.
 4              MR. THOMPSON:  On page 9, the first line,
 5    there is a comma after the word "planning".  I
 6    understand that that should be deleted?
 7              MR. CUNLIFFE:  Yes.
 8              MR. THOMPSON:  At page 10 in paragraph 28, the
 9    second last line, the last four words currently read
10    "through urban areas".  I understand the words "current
11    and prospective" should be inserted after the word
12    "through"?
13              MR. CUNLIFFE:  That's correct.
14              MR. THOMPSON:  Finally, on page 11,
15    paragraph 31, in the second line, the word "of" between
16    "class environmental assessment" should be deleted?
17              MR. CUNLIFFE:  Yes.
18              MR. THOMPSON:  Would you just confirm for the
19    record that the maps that were at Attachment 1 and
20    Attachment 2 under Tab 6 as photostatted were incomplete
21    and the photostats that we have delivered complete that
22    segment of the evidence?
23              MR. CUNLIFFE:  That's correct.
24              MR. THOMPSON:  Now, subject to these
25    corrections, Mr. Cunliffe, do you adopt this testimony
26    as the testimony of the City of Cumberland in these
27    proceedings?
28              MR. CUNLIFFE:  I do.
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1              MR. THOMPSON:  Now, the city was asked one
 2    interrogatory and there was a response provided which
 3    basically attached a letter that we had written on
 4    behalf of the city to the Board.  Does that
 5    interrogatory response accurately reflect the position
 6    of the city in these proceedings?
 7              MR. CUNLIFFE:  Yes.
 8              MR. THOMPSON:  The other document,
 9    Mr. Cunliffe, I would like to have you identify that was
10    prepared by you, there has been marked in this
11    proceeding as Exhibit 14.3 a document on City of
12    Cumberland letterhead, entitled "Response to
13    Clarification of Issues Raised in Cumberland Evidence
14    Provided by Networks, November 16".  That, I understand,
15    is a response to the points made in Mr. Curtis' letter
16    and its attachments?
17              MR. CUNLIFFE:  Yes.
18              MR. THOMPSON:  Did you prepare that?
19              MR. CUNLIFFE:  I did.
20              MR. THOMPSON:  Mr. Lathrop, could I next turn
21    to you, please.
22              Your CV has been filed as part of
23    Exhibit 14.12.  Perhaps you could just tell the Board
24    your current position.
25              MR LATHROP:  I am presently the General
26    Manager of Development Services for the new City of
27    Ottawa, which will take place January 1st, 2001.  That
28    is one of six senior management positions reporting to
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    the General Manager of the entire city.
 2              MR. THOMPSON:  And prior to that, your CV
 3    indicates that you were the Chief Administrative Officer
 4    of the City of Cumberland.
 5              MR LATHROP:  That is correct.
 6              MR. THOMPSON:  And you held that position for
 7    how long?
 8              MR LATHROP:  Approximately 10 years, since
 9    1989.
10              MR. THOMPSON:  What role did you have to play
11    in the dispute between Cumberland and Hydro One Networks
12    with respect to this steel pole issue?
13              MR LATHROP:  I responded to a fair amount of
14    correspondence, half of the city, to and from Hydro One,
15    and staff under me were directed to initiate actions
16    which detailed our concerns over a proposal that Hydro
17    One had in terms of the corridor through the city.
18              MR. THOMPSON:  And while you were with the
19    city in the CAO position, did you, in effect, lead the
20    city's forces in connection with this dispute?
21              MR LATHROP:  Yes, I did.
22              MR. THOMPSON:  And you left the city
23    approximately when?
24              MR LATHROP:  I was hired by the new City of
25    Ottawa under the Ottawa Transition Board early in July
26    of year 2000.
27              MR. THOMPSON:  If I could next turn to you,
28    Mr. Brouwer.
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1              Your CV has been filed as part of
 2    Exhibit 14.12.
 3              Could you just describe to the Board your
 4    current position with the City of Cumberland.
 5              MR. BROUWER:  I am a Planner in the Planning
 6    Department.
 7              MR. THOMPSON:  And you have held that position
 8    for how long?
 9              MR. BROUWER:  Approximately five years.
10              MR. THOMPSON:  And I understand that you have
11    assisted Mr. Cunliffe and Mr. Lathrop in connection with
12    this dispute with Hydro One.
13              MR. BROUWER:  That's correct.
14              MR. THOMPSON:  I will come back to you in a
15    moment.
16              Mr. Lalonde, you, I understand, are the Mayor
17    of the City of Cumberland.
18              MR. LALONDE:  That is right, sir.
19              MR. THOMPSON:  And the City of Cumberland, the
20    evidence indicates, is governed by a Major and a Council
21    of five, a total of six.
22              Is that correct?
23              MR. LALONDE:  A total of five -- four
24    Councillors and the Mayor.
25              MR. THOMPSON:  Okay.  And how long, sir, have
26    you been in city politics in Cumberland?
27              MR. LALONDE:  Nineteen years, sir.
28              MR. THOMPSON:  And is that as a member of
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    Council and subsequently Mayor.
 2              MR. LALONDE:  You are quite right.
 3              MR. THOMPSON:  And you have been Mayor for how
 4    long, Mr. Lalonde?
 5              MR. LALONDE:  Since June 15th, 1999.
 6              MR. THOMPSON:  Could you just, for the benefit
 7    of the Board, provide the political perspective on why
 8    the City of Cumberland feels so strongly about this pole
 9    issue.
10              MR. LALONDE:  When it was brought to our
11    attention that the now Hydro One wanted to redo the
12    line, the corridor, wanted to change the line, we had
13    quite a few calls from residents, and also from
14    community associations.  And this was not the first time
15    occurring in the RMOC, the Ottawa Carleton regional
16    government.
17              In the late 1980s in Kanata, the same issue
18    was brought up.  So we had an awful lot of studies, a
19    lot of good information that was given to us from our
20    friends from the west.  And also, we are good listeners
21    here in Cumberland, listening to our Planning Department
22    and listening to our residents.
23              It became very apparent that we should really
24    follow the demand or the requests of Hydro One, which we
25    did.  What we are really asking, we want to make sure,
26    in the way we are expanding our city, that it is done
27    properly, in a proper manner, in the planning aspect
28    of it.
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1              Maybe it is a special study, a special
 2    project.  But nevertheless, in Kanata, within the Region
 3    of Ottawa-Carleton, it was viewed as a special project
 4    in the late 1980s, and our residents in the east are
 5    expecting the same treatment -- just want to be as fair
 6    as possible, with the same concerns.
 7              MR. THOMPSON:  Now, in the evidence, I think
 8    there are number of resolutions of Council dealing with
 9    this issue.  Is it fair for the Board to conclude that
10    Council strongly supports this initiative?
11              MR. LALONDE:  Definitely.  It was always a
12    unanimous decision.  It was -- at any time, no
13    Councillors or the Mayor at any time dissented on any
14    motion concerning this issue.  It was always 100 per
15    cent.
16              MR. THOMPSON:  Mr. Brouwer, perhaps I could
17    turn to you and ask you if you could by reference to the
18    enlargements that are on the support system behind
19    you -- which I understand are enlargements of what is in
20    the prefiled material -- just briefly provide for the
21    Board the context for Cumberland's position with respect
22    to the steel pole issue and its compatibility with
23    neighbourhood planning compared to the lattice tower
24    alternative.
25              Could you do that, please.
26              THE PRESIDING MEMBER:  Excuse me, could you
27    give me a reference in this prefiled material,
28    Mr. Thompson.
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1              It is difficult for us to --
 2              MR. THOMPSON:  Yes, I'm sorry.
 3              There are the maps.  The first map is
 4    essentially what appears at Tab 5, I believe.
 5              THE PRESIDING MEMBER:  Tab 5.  Right. 
 6    Thank you.
 7              MR. THOMPSON:  Okay.  And then behind it there
 8    are photographs, which are enlarged photographs of --
 9              THE PRESIDING MEMBER:  Tab 6.
10              MR. THOMPSON:  -- of what is at Appendix 6.
11              There is also a neighbourhood map that
12    Mr. Brouwer will be referring to, which is --
13    essentially what is map 1 in Attachment 6.
14              THE PRESIDING MEMBER:  Thank you.  That is
15    fine.
16              MR. THOMPSON:  I think I have captured it.
17              MR. BROUWER:  Thank you.  Just as a general
18    overview, this particular plan shows a northerly part of
19    the City of Cumberland.  The section of the hydro line
20    that is of concern to us is highlighted here, in a bold
21    double line, beginning at Tenth Line Road and continuing
22    eastward, and then to the north, to the Ottawa River,
23    which shows up at the northerly part of this plan.
24              The urban area is shown here in the westerly
25    part of the municipality.  There is also an estate
26    residential and village residential easterly part.
27              Now the reverse of this plan is an
28    enlargement, a colour enlargement of our urban area --
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    and it appears as map 1 in Tab 6.
 2              This is a representation of general road
 3    patterns and land use.  The light yellow area is
 4    depicting existing built residential.  The browner or
 5    more amber yellow indicates our expansion area lands,
 6    which are, in some cases, completely developed and, in
 7    others, planned for development and being approved.
 8              The hydro line is shown, this green line that
 9    runs across diagonally on the plan here.  The Ottawa
10    River is up here on the north.
11              The general topography of this area, except
12    for a ravine on the Cardinal Creek and a ridge on the
13    northerly side of the urban area, is very flat.  And so
14    the city's position is that this hydro line that runs
15    through the heart, really, of our residential area has a
16    very significant vertical element in the community.
17              All of the development lands here in the
18    expansion area are being designed based on a development
19    plan that was approved by Council several years ago, and
20    that development plan was put in place through our
21    official plan; it implements it.
22              In the development plan, the plan speaks of
23    providing a unique community experience and enhancing
24    the built environment.  And also, there are several
25    design features listed -- it is in Tab 2, section 2.2 of
26    the book -- in our development plan -- here on page 6.
27              In those design features, the first listed
28    desirable feature is to provide visual reference points
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    throughout the community.  And the city feels that since
 2    this is such a prominent visual element in the community
 3    that this is an opportunity, when the towers are being
 4    replaced, to provide a more aesthetically pleasing
 5    alternative to the community.
 6              MR. THOMPSON:  Just before you leave that,
 7    Mr. Brouwer, could you just take a look at Tab 5 in the
 8    Cumberland exhibit.
 9              As I understand it, what you have been
10    describing is an area that runs from the Tenth Line,
11    roughly, to Cardinal Creek.
12              Is that right?
13              MR. BROUWER:  That is correct.
14              MR. THOMPSON:  And then there is a second area
15    that we segmented in this map at Tab 5, from Cardinal
16    Creek to Wilhaven Drive.
17              What is the state of development currently in
18    that area?
19              MR. BROUWER:  This is a designated
20    agricultural area.
21              MR. THOMPSON:  Does that mean there is no
22    development there, or that it is -- prospective
23    development?
24              MR. BROUWER:  At present, it is currently
25    primarily agricultural, but it is part of the long-term
26    planning for the city that the urban area would expand
27    in easterly way -- both south and east.
28              MR. THOMPSON:  So at the moment there are no
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    residences abutting the right-of-way on that particular
 2    segment?
 3              MR. BROUWER:  I don't know that detail.  I do
 4    know that there are residences that exist in proximity
 5    to it, in that area.
 6              MR. THOMPSON:  Then the third segment that we
 7    have identified is the segment from Wilhaven Drive to
 8    the river.  And could you just describe to the Board the
 9    state of development, urban development, in that area?
10              MR. BROUWER:  There is a ridge that divides
11    the estate residential up here with the village
12    residential down here.  There are approximately
13    300 dwelling units for the estate residential up in this
14    area that has proximity to the tower line and the
15    village has approximately 500 dwellings in it.
16              MR. THOMPSON:  Are there new developments
17    under way in that particular segment?
18              MR. BROUWER:  There are no current
19    applications for subdivision approval here but there are
20    several vacant lots that we receive building permits for
21    on a regular basis.
22              MR. THOMPSON:  Thanks very much.  Can you then
23    go to the photographs, please, and highlight the points
24    that should be there from a planning perspective?
25              MR. BROUWER:  These are photo enlargements of
26    what appear in Tab 6 in the book and what they represent
27    is a visual comparison between the corridor and
28    Cumberland, as it sits today which is on the left hand
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    side of the panel compared to the steel tower option
 2    which is not constructed out in Kanata.  It happens to
 3    be on the right hand side of the panel.
 4              This top set of photos indicates that there is
 5    really quite less impact with a single tower.  It has
 6    less mass in the viewscape when you look down the
 7    corridor.
 8              The bottom photos show a picture of a base of
 9    a lattice style tower compared to a steel pole tower.  I
10    believe the dimension on the steel lattice type
11    structure is approximately 30 feet as compared to
12    approximately 20 feet diameter for the steel so it is
13    less area covered on the ground.  There are also fewer
14    structural elements in the towers themselves.  All of
15    the structure of the model pole, the steel pole, is
16    contained in a small area whereby the lattice tower is
17    spread over a larger area.
18              All of the -- you can see the context
19    particularly here on the bottom ones of the homes which
20    can be found typically in behind the corridor through
21    Cumberland.
22              MR. THOMPSON:  Just give us the figure in a
23    number so people can cross-reference that to the --
24              MR. BROUWER:  The top figure is Figure 1, the
25    top left.  I'm sorry, these are both considered as
26    Figure 1.
27              MR. THOMPSON:  Okay.  Thank you.
28              MR. BROUWER:  And the bottom is Figure 6.  On
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    the reverse side of this panel we are going really from
 2    the longer view of the towers to a closer up view in
 3    terms of the proximity to residential uses and again
 4    here the figure you are referring to there now is
 5    Figure 2.
 6              MR. THOMPSON:  Figure 2, thank you.
 7              MR. BROUWER:  This is a shot in an existing
 8    residential street in Cumberland with the tower line as
 9    it exists today in behind.  The proposed lattice towers
10    would be, I think, approximately 30 feet higher than
11    these.  Compared to the Kanata pole line which is the
12    steel pole, and you can see quite clearly here that the
13    steel poles blend more pleasingly into the viewscape
14    through the residential area.
15              There is a bit of a close up here in Figure 7
16    where we took a shot in between two existing homes where
17    you can see a lattice style structure in between.  And
18    here we found one out in Kanata.  The pole line is also
19    in between two homes.  We took this particular shot
20    because it illustrates coniferous trees in there and you
21    can see how easily landscaping can help the thinner pole
22    blend into the community.
23              MR. THOMPSON:  Yes, and there is another set
24    of photos there as well, are there?
25              MR. BROUWER:  Yes.
26              MR. THOMPSON:  If you could just highlight
27    those for us by reference to the figure number as well.
28              MR. BROUWER:  Okay.  The top is Figure 4. 
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 1    What Figure 4 is meant to illustrate is a feeling of a
 2    more residential look through the corridor in the Kanata
 3    experience where it has been landscaped.  You see the
 4    steel poles that are happening through the corridor in
 5    the adjacent residential compared to in Cumberland where
 6    the lattice style structure really looks more
 7    industrial, in our opinion.  Granted this hasn't been
 8    landscaped yet as this one has, but if you look at the
 9    style of the structure as compared to this, we feel that
10    a steel pole is much more aesthetically pleasing.
11              The bottom figure is Figure 5.  That is a shot
12    that was in the heart of both corridors where you might
13    find a recreational pathway.  The whole of the corridor
14    through Cumberland is designated a major bicycle
15    recreational pathway so one day we will have landscaping
16    and a pathway that will meander through.  It is our
17    feeling that the one that exists in the Kanata area is a
18    little more friendly in terms of pedestrian use.  Again,
19    it is the appearance of the tower, we feel, does that.
20              The top figure is number 8.  This photo was
21    meant to show -- they are both Kanata in this case --
22    how successfully the poles can be had adjacent to a
23    residential area.  In this case in Kanata there has been
24    some berming done and some landscaping.  Here there is
25    less of that with still less impact than in the
26    Cumberland example where the lattice structure is much
27    broader, wider.
28              The bottom figure is figure number 3.  What
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    this illustrates is the impact of the comparative two
 2    styles of lines.  I had a roadway.  So at Kanata where
 3    you see the pole line crossing a major road it is much
 4    more attractive, in our view, compared to the Cumberland
 5    example which is more industrial in appearance.
 6              MR. THOMPSON:  And finally, Mr. Brouwer, in
 7    community planning circles, is there any doubt, is there
 8    any disagreement concerning whether steel poles or
 9    lattice poles are more compatible with neighbourhood
10    planning?
11              MR. BROUWER:  In any of the discussions I have
12    had with colleagues I think the consensus was that the
13    steel pole is preferred.
14              MR. THOMPSON:  Could I come back to you now,
15    Mr. Cunliffe?
16              The focus of the pre-filed evidence that has
17    been prepared by the city of Cumberland is this
18    community planning, public interest factor.  Could you
19    just give us a brief overview of current community
20    planning principles and objectives compared to what they
21    were 50 to 70 years ago when these poles were first
22    installed?
23              MR. CUNLIFFE:  When the structures were first
24    installed in the 1930s and forties it was pre the baby
25    boom and rapid urban expansion in Canada so when the
26    lines went in they were going into a rural environment
27    and the issues then were really a disturbance on the
28    activities and impacts on crops respectively.  After the
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    war, with the baby boom in the 1950s, suburbia took
 2    place and it was the answer to the post-war housing
 3    needs of the country.  And from that experience
 4    community planning really took shape in a much more
 5    detailed fashion throughout North America and in Canada.
 6              By the time the sixties rolled around suburbia
 7    was less of a -- it had lost some of its charm and we
 8    were experiencing some problems with it.  We were now
 9    faced with heavy traffic going downtown, this type of
10    thing, and there was a general concern with some of the
11    abuses that had happened during the rapid expansion of
12    suburbs.
13              So in the sixties municipalities started to
14    put in place design standards and criteria for
15    development, this type of thing.  Storm drainage went
16    from open drains or ditches to storm drains.  Curbing
17    came into place because of that.  Sodding of the houses
18    and generally, in residential areas, wiring went from
19    above ground to below ground.
20              By the seventies again the suburbs had grown
21    even more and there was experience that they were too
22    much a bedroom community so there was a drive to make
23    the suburbs more liveable and provide a place for work
24    as well as home and we then started through that process
25    even more detailed planning and development of criteria
26    to make the suburbs a more liveable quality of life
27    place.
28              In Cumberland our response to that, which came
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    out of the regional official plan for sustainable
 2    communities, we have developed a town centre for
 3    example.  Very detailed design guidelines help buildings
 4    work and it creates a very pedestrian-oriented
 5    development.
 6              Recently in planning and in our neighbourhoods
 7    we also have further looked at the design criteria and
 8    in Ottawa-Carleton for instance, most of the
 9    municipalities, including Cumberland, have relooked at
10    our guidelines for streets, for instance, and because we
11    were having problems with traffic because of, actually,
12    utilities trying to take over the space.  We were losing
13    room for the pedestrian part of the environment
14    including trees and sidewalks and this type of thing.
15              So we all stepped back and said, "Look, the
16    streets are more than a utility corridor, they are more
17    than a road and a utility."  So we have established,
18    again looking at that very detailed guideline, again
19    generally wiring those underground in our streets.
20              Recently, in the Ottawa area, there has been a
21    rapid expansion of the high technology community and
22    there was a recent task force called TOP, The Ottawa
23    Partnership, which was actually composed of the leaders
24    of high technology in the Ottawa area.
25              They identified the quality of life as one of
26    the major foundations of economic development and then
27    continued to the sustainability of it in the Ottawa
28    area.  This was made very clear.  Ottawa is ranked sixth
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    now in the world in some studies in terms of quality of
 2    life and TOP has recommended that economic growth and
 3    community development must go hand-in-hand.
 4              So that is further emphasis on the need to
 5    provide a clean environment, quality of life environment
 6    and the need for municipalities to provide that kind of
 7    standard of living and the fact the workers for high
 8    technology are demanding that.
 9              So that is really the emphasis on community
10    development in general and specifically in the Ottawa
11    area.
12              In terms of the Cumberland experience, we have
13    primarily a bedroom community and there is severe
14    imbalance between jobs and housing.  The high-tech boom
15    has happened mainly in the west end of Ottawa,
16    Cumberland being in the east end, and TOP again has
17    identified that that imbalance, that mismatch is a very
18    top priority in the Ottawa area that we have to solve.
19              So we doubly look at this type of thing like
20    the type of corridor as being very important and its
21    impact on how workers in the high technology field view
22    the quality of environment in our municipality and our
23    ability to attract them and jobs to the area.
24              MR. THOMPSON:  Now, these points, I believe,
25    are highlighted in Exhibit 14.3 on pages 1, 2 and 3,
26    under the heading Ottawa's Economic Vision and Quality
27    of Life: Planning for Communities.  Is that right?
28              MR. CUNLIFFE:  That's correct.
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1              MR. THOMPSON:  Now, your Exhibit 14.3 does, in
 2    addition, provide some response to comments contained in
 3    Exhibit 13.21, which is Mr. Curtis' letter and its
 4    attachment.  I would like to ask you a few questions
 5    just about what is in this letter and get Mr. Lathrop to
 6    comment on it as well if he wishes.
 7              In the second paragraph of this letter,
 8    Exhibit 13.21, it says:
 9                   "Networks wishes to stress that it has
10                   fully complied with the spirit and
11                   requirements for the provincial
12                   environmental assessment legislation." 
13                   (As read)
14              Could you comment on that, please, from
15    Cumberland's perspective?
16              Mr. Cunliffe first and then Mr. Lathrop.
17              MR. CUNLIFFE:  Well, the city also conducts
18    environmental assessments.  We typically do a couple of
19    them a year, mainly in the engineering side, and EAs do
20    involve the generation of alternatives, much like the
21    process that Hydro went through, and you take those
22    alternatives and go out to the public for comment.
23              However in our experience, if the public
24    identifies an alternative that you haven't, then it's
25    incumbent -- and you have reviewed it -- it's incumbent
26    on you to go back through the process and put that
27    alternative into the ones that you are further studying
28    and evaluating.
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1              To me, this was a major flaw in this
 2    environmental assessment because right from the
 3    beginning, the municipality voiced its concern that the
 4    steel poles were desired.  The steel pole was shown as
 5    an option in terms of a structure but never as an
 6    alternative to be evaluated.
 7              So we really had our hands and arms locked
 8    behind our backs because there was no way that we could
 9    respond in any great way to the process because the one
10    alternative that we felt that needed to be evaluated
11    wasn't on the table.
12              MR. THOMPSON:  Mr. Lathrop, anything to add?
13              MR. LATHROP:  The only additional comments
14    would be that I concur with what Steve is saying and
15    basically our attempt was to try and bring those
16    concerns forward to Hydro One on numerous occasions and
17    the correspondence shows that.
18              MR. THOMPSON:  In the letter of Mr. Curtis and
19    his attachment, Mr. Curtis makes some comments with
20    respect to paragraph 3.  I am looking at the attachment
21    to his letter.
22              Could you summarize briefly your comments with
23    respect to Mr. Curtis' comments, Mr. Cunliffe?
24              MR. CUNLIFFE:  Yes.  The fundamental flaw I
25    have always found in dealing with Hydro is one that
26    because legally they don't have to follow various acts,
27    that they don't really give very much recognition to the
28    comments that they do receive because in the final
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    analysis, they don't have to.
 2              So it always, in my view, has been kind of a
 3    lip service-type of a situation where they say on one
 4    hand yes, their policy is to consult, and then on the
 5    other hand it comes through in the various
 6    correspondence, but on the other hand, they don't
 7    have to.
 8              MR. THOMPSON:  Thank you.
 9              Now, in these comments that Mr. Curtis
10    provides -- and perhaps I will speed this up a bit -- he
11    notes that initially Cumberland was urging consideration
12    of one pole instead of two poles, two lines.  Is that
13    correct?
14              MR. CUNLIFFE:  That's correct.
15              MR. THOMPSON:  And he does, however, note a
16    little further on that Cumberland will accept a two-pole
17    alternative.  Is that where we are today?  Does
18    Cumberland accept the two steel pole alternative versus
19    one?
20              MR. CUNLIFFE:  Yes.
21              MR. THOMPSON:  The letter and the comments
22    also seem to criticize Cumberland's participation in the
23    EA process and then its participation in this case.
24              Could you comment on that, please,
25    Mr. Lathrop?
26              They seem to be suggesting that you had your
27    kick at the cat, kick at the pole, in the EA process and
28    stopped complaining.  I would like to get your reaction
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    to that suggestion.
 2              MR. LATHROP:  All right.  Maybe I would answer
 3    that by saying I never felt that in terms of our ability
 4    to be able to get the attention of Hydro One that we
 5    actually were able to do that.
 6              We had our community basically saying that we
 7    agreed with the necessity to be not only bona fide
 8    supporters of the principle of providing energy
 9    generation corridors within the province and we actually
10    supported Hydro even though some of our residents were
11    saying, you know, "Why does the corridor need to be
12    there?"
13              We were basically saying, "It is an existing
14    corridor.  This is something which needs to be done. 
15    Look at Ice Storm 98 and the fact that we didn't have
16    maybe proper interconnects to be able to support the
17    system.  Hydro has got a legitimate reason to want to
18    upgrade this corridor," at least the argument they were
19    giving us, but we did feel that we had an ability to be
20    able to influence and hopefully ask Hydro to consider
21    the aesthetics and some of those other community issues
22    that we felt were important.
23              Unfortunately, the reaction we got was
24    basically two reactions.  One was that in terms of
25    Hydro, they felt it was too expensive and said so.  And
26    secondly, they felt that there was an environmental
27    impact with it.
28              Now, we went to some length, including I took
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    a trip down in Toronto talking to Rod Taylor, who was
 2    the Executive Vice-President of Hydro One, about not
 3    only the economic issue but also the issue of the
 4    environment.  And I basically said to him, especially
 5    within the area that we were mostly concerned, this was
 6    an entire urban environment.  It was being completely
 7    modified due to urban growth.  There isn't one sector of
 8    that corridor within the urban area that hasn't been
 9    turned over in terms of putting in sanitary sewers,
10    storms.
11              If you know anything about urban development,
12    it is complete land reforming to actually be able to
13    create storm water networks, et cetera.  So, the
14    environmental issue really was one issue which I felt
15    was, in this particular urban situation, not relevant to
16    the real issue, which I think Hydro One was telling us
17    was the expense.
18              My conversations, which, if you would like, I
19    could discuss with you, in terms of my visit to Toronto
20    indicated that.
21              MR. THOMPSON:  So did Hydro One -- well, when
22    Hydro One was resisting your overtures was the initial
23    rationale for this cost-related?  Is that your
24    impression?
25              MR. LATHROP:  Maybe I will relate this through
26    my meeting that I had in Toronto.
27              That meeting did talk about the issue of not
28    only funding, but it also talked about the issue of
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    responsibility in terms of where Hydro could go with the
 2    new legislation.
 3              I want to be very careful about how I word
 4    this because I know Mr. Taylor is not here and I want to
 5    make sure I don't say things and put words in his mouth.
 6              I did go down there in order to talk to Hydro
 7    about two issues.  One was our legitimate urban concerns
 8    about a monopole design, and also the concern that I
 9    felt over Hydro's new responsibility, which, in my
10    opinion, was bottom-line driven.  I felt that the
11    impression I was getting out of that discussion was that
12    Hydro One could not recommend anything but the least
13    cost option, that that was the rationale which was laid
14    out in front of them by the new changes to their status.
15              I asked them to reconsider that.  I said that,
16    in my opinion, they did not have to consider that as the
17    lowest-cost option.  I certainly left that meeting
18    thinking that they were going to take that back and were
19    prepared to recommend that to higher ups.  Obviously,
20    that didn't happen, number one.
21              Number two, I did express to them my concern
22    that environmental issues in my opinion was a red
23    herring, that it was not a legitimate concern,
24    especially within the urban area, especially with the
25    fact that we had completely reformed that urban area, so
26    there wasn't an issue of whether you put a monopole in
27    one location or you have five more monopoles versus ten,
28    simply because we were working with areas that were
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    already completely modified by storm sewers, sanitary
 2    sewers, watermains and everything else.
 3              So, to me, that was a red herring, and I am
 4    prepared to say that here.  I don't think Hydro really
 5    followed through with coming back to us in terms of
 6    discussing how they were going to deal with us.
 7              MR. THOMPSON:  I think it's fair to say,
 8    Mr. Lathrop, that the city does not regard this issue as
 9    simply an environmental issue?
10              MR. LATHROP:  No, we don't.
11              MR. THOMPSON:  It goes far beyond that?
12              MR. LATHROP:  Yes, it does.
13              MR. THOMPSON:  Finally, Mr. Lathrop, you did
14    write to the Minister of Energy, as I understand it, at
15    the end of this process.  That document is found at
16    Tab 12 of the Cumberland evidence.  That was on May 10,
17    after the letter was received from the Minister of the
18    Environment.
19              MR. LATHROP:  That's correct.
20              MR. THOMPSON:  Is it fair to say that what you
21    were attempting to find here was a tribunal to consider
22    your concerns?
23              MR. LATHROP:  That's correct.
24              MR. THOMPSON:  And you got a response from the
25    Minister of Energy, which we find at Tab 13?
26              MR. LATHROP:  That's correct.
27              MR. THOMPSON:  What did you draw from the
28    letter at Tab 13?
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1              MR. LATHROP:  It was my opinion that I would
 2    be allowed to present the case in front of the Ontario
 3    Energy Board in terms of our concerns over the impact
 4    this was having on our community.
 5              MR. THOMPSON:  Thank you very much.
 6              Those are my questions.
 7              THE PRESIDING MEMBER:  Thank you,
 8    Mr. Thompson.
 9              Mr. Moran.
10              MR. MORAN:  I don't have any questions,
11    Madam Chair.
12              THE PRESIDING MEMBER:  Thank you, Mr. Moran.
13              MS ALDRED:  May I have a second?
14              THE PRESIDING MEMBER:  Certainly.
15    --- Pause
16              MS ALDRED:  Madam Chair, I don't have any
17    cross for these witnesses.
18              THE PRESIDING MEMBER:  Thank you, Ms Aldred.
19              Mr. Gibbons, I guess you don't have any
20    questions?
21              MR. GIBBONS:  We have no questions for this
22    panel.
23              THE PRESIDING MEMBER:  Mr. Birchenough.
24    EXAMINATION
25              MEMBER BIRCHENOUGH:  I understand that the
26    panel is here speaking on behalf of the City of
27    Cumberland, specifically, the residents of your city
28    that butt on the proposed new line who will be impacted
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                                           CITY OF CUMBERLAND
 1    by additional towers -- additional poles, excuse me, if
 2    poles were to be installed.
 3              Have you had the opportunity to have input
 4    from those specific residents that would be impacted by
 5    additional poles?
 6              MR. CUNLIFFE:  We don't have the plan.  Hydro
 7    has never provided the plan for where additional poles
 8    would go.  We do know that there won't be that many
 9    additional poles.
10              Recently, actually during the election, one of
11    our councillors sent out a newsletter to the residents
12    that backed on detailing the status of what we were
13    doing here.  He conveyed back to me that he had a number
14    of calls from the residents saying that if we wanted any
15    petitions or any of that nature they would go out and
16    provide them.  They are aware that we are requesting the
17    steel monopole option, and it has always be clear that
18    there would be additional ones.
19              THE PRESIDING MEMBER:  Mr. McCann.
20              MEMBER McCANN:  Yes.  Thank you, Madam Chair.
21              Could I ask the panel -- could I find out if
22    you know the difference in the cost of a steel pole and
23    in a tower structure?  Have you had the opportunity to
24    check this out, the difference in costs?
25              MR. CUNLIFFE:  No.  Hydro has been providing
26    us information on the overall cost of the steel
27    monopoles, and it has ranged anywhere from $3 million to
28    $10 million.  We have never had a very clear indication
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                                           CITY OF CUMBERLAND
 1    from them exactly what the cost per pole is.
 2              MEMBER McCANN:  Is there a tally on the number
 3    of poles that are going to be backing your city?  Is
 4    there a tally on the number of poles being used?  Is it
 5    going to be five poles, ten poles, twenty poles?
 6              MR. CUNLIFFE:  No, we don't have -- well, in
 7    earlier testimony, we heard that there were about 15
 8    poles.
 9              MEMBER McCANN:  Fifteen or thirty?
10              MR. CUNLIFFE:  To the river is 30, but through
11    the urban area there are about 15.
12              MEMBER McCANN:  All right.  Thank you.
13              THE PRESIDING MEMBER:  Thank you, Mr. McCann.
14              I just have a couple of questions for
15    clarification.  This utility corridor has been in the
16    area since the 1930s we were told.  Is that correct?  So
17    that all of the development presently in the City of
18    Cumberland, the utility corridor and those structures,
19    as we are calling them, have been there?  So it is not
20    adding an additional hazard or unsightly utility
21    corridor to your community.  Your community was built up
22    around that corridor.  Is that correct?
23              So this is an opportunity to improve it, but
24    in fact it has been there as the community has
25    developed?
26              MR. CUNLIFFE:  It has been there, but the
27    proposal by Hydro is to actually increase the size of
28    the towers.
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 1              THE PRESIDING MEMBER:  I appreciate this.  The
 2    towers will be taller -- probably about the same base,
 3    but they will be taller, which is needed for technical
 4    reasons.  But, in fact, it will be a utility corridor
 5    with the same footprint as it was before.  It will just
 6    have taller towers?
 7              MR. CUNLIFFE:  That's correct.
 8              THE PRESIDING MEMBER:  We had evidence before,
 9    and I would just like to confirm whether this land in
10    this utility corridor has or has not been disturbed?
11              MR. CUNLIFFE:  Yes, it has.  It has either
12    been disturbed, or it is about to be disturbed with
13    servicing.  And those studies have been also approved
14    through the EA process.
15              So this is approved disturbance.
16              THE PRESIDING MEMBER:  Through your EA
17    process.
18              MR. CUNLIFFE:  Yes.  Ours, as well as the
19    Regional Municipality's.
20              THE PRESIDING MEMBER:  You have documents to
21    establish that the area has -- the utility corridor will
22    be disturbed, and you have done your EA studies, so you
23    are convinced, as far as archaeological aspects are
24    concerned, vegetation aspects are concerned, some of the
25    concerns that were raised before, that in fact there
26    aren't any concerns, or that a study would not show any
27    concerns.
28              MR. CUNLIFFE:  That's correct.
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 1              THE PRESIDING MEMBER:  Can you help me just
 2    briefly.  I see Kanata is using a lot of its utility
 3    corridor for recreational purposes, and I assume that
 4    that is what Cumberland wants to do as well.  Is that
 5    correct?
 6              MR. CUNLIFFE:  Yes.  We have a diagram, if you
 7    would like to see our concept for it.
 8              THE PRESIDING MEMBER:  I am sure it is lovely. 
 9    Thank you.  I appreciate that it will be wonderful, with
10    the landscaping and grooming, and everything else like
11    that.
12              Can you help me with what approvals are needed
13    to be able to do this, or are any approvals necessary?
14              MR. CUNLIFFE:  For?
15              THE PRESIDING MEMBER:  For you to be able to
16    use the utility corridor for recreational purposes, or
17    to develop it, as far as recreational purpose is
18    concerned.
19              MR. CUNLIFFE:  Well, the Municipality actually
20    owns most of it, from Innes Road through to Cardinal
21    Creek -- which is basically the Tenth Line to Cardinal
22    Creek.  The Municipality actually owns the corridor, or
23    it will own it as a condition of subdivision approval.
24              We have prepared plans for it, which are part
25    of our planning process.
26              THE PRESIDING MEMBER:  Have you been in
27    discussions with Hydro One Networks as far as
28    landscaping this corridor is concerned?  They have
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 1    indicated that that is one of the environmental
 2    mitigation measures they are willing to discuss.
 3              MR. CUNLIFFE:  We have had some discussions. 
 4    We have showed them the plans that we have prepared for
 5    the corridor.  However, mitigation has never really been
 6    on the table.
 7              THE PRESIDING MEMBER:  No other questions.
 8              The panel is excused with our thanks.  Thank
 9    you for coming down from --
10              MR. THOMPSON:  I just have one question of
11    re-examination, Madam Chair.
12              THE PRESIDING MEMBER:  I apologize,
13    Mr. Thompson.
14    EXAMINATION
15              MR. THOMPSON:  Just on the point about the
16    location of the steel poles, if that option had been
17    considered.  It is in response to the question
18    Mr. Birchenough answered.
19              Had the steel pole option been thoroughly
20    assessed in the EA process, would that type of plan have
21    been presented to the participants in that process -- or
22    in the alternative?
23              MR. CUNLIFFE:  Yes.
24              MR. THOMPSON:  Was that done in this case
25    at all?
26              MR. CUNLIFFE:  No.
27              MR. THOMPSON:  Thank you very much.
28              THE PRESIDING MEMBER:  I'm sorry,
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                    CITY OF CUMBERLAND PANEL 1, ex (Thompson)
 1    Mr. Thompson, to have cut you off.
 2              Now, panel, you are excused.  Thank you very
 3    much.  Have a safe trip back to Cumberland.
 4              We will now press on and resume with Panel 3.
 5    PREVIOUSLY SWORN:  JOHN R. ROGERS
 6    PREVIOUSLY SWORN:  VICTOR GIRARD
 7    PREVIOUSLY SWORN:  CARMINE MARCELLO
 8    PREVIOUSLY SWORN:  BRIAN McCORMICK
 9    PREVIOUSLY SWORN:  DENIS GAGNON
10              THE PRESIDING MEMBER:  Gentlemen, are you are
11    settled in?  All right.
12              Cross-examination.  Mr. Klippenstein, I think
13    you are next.
14              MR. KLIPPENSTEIN:  Thank you, Madam Chair.  I
15    have what I hope will be just a couple of minutes of
16    cross-examination, and I believe I have questions only
17    for Mr. Gagnon.
18    EXAMINATION
19              MR. KLIPPENSTEIN:  I wonder, Mr. Gagnon, if
20    you could turn up Exhibit 14.4 -- which is the two pages
21    of the TransEnergie publication.
22              MR. GAGNON:  Yes, Mr. Klippenstein, I have it.
23              MR. KLIPPENSTEIN:  That you.  That was
24    Exhibit 14.4.
25              If you could look at the first page of that
26    exhibit -- and I will just read the last paragraph on
27    the left-hand column, and I will ask you about the
28    purposes of the proposed new transmission line.
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 1              That excerpt from the TransEnergie
 2    publication says:
 3                   "For example, the new 1,250 megawatt
 4                   interconnection planned for the Outaouais
 5                   region is designed primarily to provide a
 6                   more secure power supply for all Quebec
 7                   consumers.  By increasing the potential
 8                   for electricity exchanges between Quebec
 9                   and Ontario, this new interconnection
10                   will make the power supply of the
11                   interconnected systems more secured and
12                   also allow for profitable commercial
13                   transactions."  (As read)
14              Do you see that?
15              MR. GAGNON:  Yes, I see that.
16              MR. KLIPPENSTEIN:  The question I have for you
17    is in the context of your comments that the primary
18    justification for the new line in your testimony was for
19    security of supply, as I understood it.
20              But I wonder, would you agree that it is also
21    one of the purposes of this proposed new transmission
22    line to facilitate new commercial transactions that are
23    profitable to Hydro Quebec?
24              MR. GAGNON:  Yes, I think you are right,
25    Mr. Klippenstein.  The first reason, or the main reason,
26    the principal reason for Hydro Quebec to propose and to
27    make an agreement with Hydro One to build that new
28    interconnection is for the security of supply of the
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 1    Quebec system, as I mentioned previously in my direct
 2    evidence, and principally to have a new source of supply
 3    coming from the southwest in case we have a major
 4    disturbance on our supply from Labrador, from the
 5    Churchill Falls plant, or from northern Quebec.
 6              However, the interconnection being in place,
 7    it is for sure that it will have the capacity and it
 8    will be possible for any of our transmission customers
 9    to use that interconnection to do some transactions
10    between Ontario and Quebec.
11              MR. KLIPPENSTEIN:  For commercial, profitable
12    purposes, I take it?
13              MR. GAGNON:  Yes, I suppose that our
14    customers, when they do transactions, do them for
15    commercial profitable transaction, yes.
16              MR. KLIPPENSTEIN:  Thank you, Mr. Gagnon.
17              That was all I was seeking to ask about,
18    Madam Chair.
19              THE PRESIDING MEMBER:  Thank you,
20    Mr. Klippenstein.
21              Are there any other intervenor questions?
22              I'm sorry, I have lost track between this
23    morning and this afternoon.  I don't think so.
24              Mr. Birchenough.
25    EXAMINATION
26              MEMBER BIRCHENOUGH:  I just have a couple of
27    general questions for the panel.
28              The project as defined, and as I understand
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 1    it, is approximately a $300 million project, if I look
 2    at the capital cost of the Quebec installation and that
 3    of the installation in Ontario, is that right?
 4              MR. MARCELLO:  Yes, that is correct.  The
 5    Hydro One portion is 96 --
 6              MR. GAGNON:  And Hydro Quebec is around
 7    $225 million.
 8              MEMBER BIRCHENOUGH:  All right.  In terms of
 9    benefit to Ontario, specifically Ontario consumers, we
10    have quantified an approximate benefit of $240 million
11    as the benefit in 2005 to Ontario.
12              Has an equivalent benefit been quantified on
13    the Quebec side of this intertie?
14              MR. GAGNON:  No, Mr. Birchenough.  I don't
15    have an equivalent figure because, as I mentioned
16    previously, in Quebec the main reason, the reason why
17    the Government of Quebec and Hydro Quebec committed
18    themselves to build that new interconnection, is for the
19    security of supply, particularly because -- in fact,
20    essentially -- following the great Ice Storm that we had
21    in January 1998.
22              So the recommendation to make the project was
23    not based on that commercial basis.
24              MEMBER BIRCHENOUGH:  As I understand the
25    project costs, as they have been outlined, approximately
26    one-third of the cost of the project is being carried by
27    Ontarians, and two-thirds in Quebec.
28              I am trying to get to a cost-benefit analysis
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 1    and quantify the cost and benefits and determine whether
 2    in fact one-third of the capital cost of the project is
 3    a reflection of the fact that Ontario will gain
 4    one-third of the benefits.  But I am hearing that the
 5    benefit has not been quantified.
 6              MR. GAGNON:  Yes, that is exact.
 7              For us, the justification for the project in
 8    Quebec was not made on an commercial basis, so we
 9    don't -- when the line was justified to the Government
10    of Quebec and approved by the Government of Quebec, it
11    was not done on the basis of a profitable commercial
12    transaction.
13              We know for sure that there will be some, and
14    certainly there will be some benefit for Hydro Quebec
15    generation and other transmission customers in Quebec,
16    but we do not justify the project on the basis -- the
17    security of supply, having a new source.  Because most
18    of our generation comes from the north and from the east
19    of the province of Quebec with long transmission lines,
20    Hydro Quebec evaluated that the security of supply
21    justified the cost of the project.
22              And also, this project is only one project,
23    part of a program to reinforce the system.  There were
24    other lines that will be or have been constructed by
25    Hydro Quebec after the ice storm to reinforce the
26    system.
27              We mentioned this morning the
28    Grand-Brul‚/Vignan line, which is one of them.  Also,
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 1    there is a belt around Montreal and around Quebec City
 2    and also in the Eastern Townships.
 3              So all those projects, including the new
 4    interconnection, were built or will be built to
 5    reinforce the security of supply of the Quebec system.
 6              MEMBER BIRCHENOUGH:  Let me then go back to
 7    the other members of the panel, and again looking at
 8    this project as a $300 million project, which is what it
 9    is, how was it determined that the Ontario share of this
10    project should be one-third and not some other number.
11              MR. MARCELLO:  The basic principle we had was
12    each party would pay for those facilities in their own
13    jurisdiction and then it was up to those individual
14    parties to determine whether in fact they can justify
15    that project.
16              So from the Quebec basis, $225 million versus
17    reliability, was Hydro Quebec's issue to resolve and
18    reconcile.  From our perspective in Hydro One, we are
19    before the Board saying this $96 million will bring
20    benefits of $240 million per year and it's clearly
21    economic.
22              MEMBER BIRCHENOUGH:  I would like to just move
23    on to another point.
24              As the construction schedule was described to
25    us, there is a period of time where the City of
26    Cumberland will actually be fed from Masson.  Is that
27    right?
28              MR. GIRARD:  Yes, that is correct.
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 1              MEMBER BIRCHENOUGH:  So, in effect, the
 2    consumers in the City of Cumberland will be buying power
 3    from Quebec at that point in time.
 4              MR. MARCELLO:  I'm not sure that they will be 
 5    buying power from Quebec.  We have an arrangement to use
 6    the transformation at Masson and, in effect, through
 7    some complicated connections, we are using the 230 kV
 8    circuit D5A, feeding into Masson across their
 9    transformer and back.
10              The reason we did it in this fashion was it
11    allowed us to -- it basically freed us up.  Our original
12    plan was to install a temporary transformer at
13    Cumberland Junction and in a sense jury-rig a
14    connection, but the costs were quite substantial and we
15    were able to negotiate with Masson to use their
16    facilities during construction.
17              So it is, in effect, Ontario Power going
18    across and back down into Ontario.
19              MEMBER BIRCHENOUGH:  But I understand that
20    the systems cannot be synchronically linked at the
21    present time.
22              MR. MARCELLO:  That's correct.  And in fact we
23    won't be synchronically linked.  We will be, in effect,
24    just expanding our system across the river through their
25    transformer which will be isolated from the rest of the
26    system and back in.
27              So, in effect we, for all intents and
28    purposes, are using Masson's facilities as part of the
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 1    Ontario system during the construction.
 2              MR. GAGNON:  If I may add a comment,
 3    Mr. Birchenough, for clarification.  The Masson
 4    transformer is not on the Hydro Quebec system.  It is on
 5    Maclaren Energy System, which is not directly
 6    synchronized with Hydro Quebec.
 7              MEMBER BIRCHENOUGH:  I understand.
 8              In your testimony, Mr. Gagnon, you mentioned
 9    that Hydro Quebec was committed to this project.
10              If approvals were obtained in a timely
11    fashion, can you tell me what that means in terms of
12    exact dates and whose approvals and whether in fact, if
13    they are not obtained on those dates, is Hydro Quebec
14    then no longer committed to this project?
15              MR. GAGNON:  Well, sir, that's part of our
16    agreement with Hydro One.  I think this morning I
17    referred to Exhibit 14.10 where I mentioned different
18    dates where it would be possible that we receive the
19    approval and what would be the consequences for those
20    dates.  And the latest date I mentioned was January 15,
21    2001, and then I mentioned that if the approvals were
22    received after that date then there would be a possible
23    major cost increase for the converter station.  However,
24    it doesn't mean to say that in that case Hydro Quebec
25    wants to proceed.
26              However, in our agreement with Hydro One, both
27    parties agreed to proceed with the project conditionally
28    upon approval of the regulatory approvals.  And in the
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 1    case where we could not have -- either party could not
 2    have an approval when it is needed, then I think there
 3    may be some thinking, but actually in all the scenarios
 4    that we considered, Hydro Quebec is definitely committed
 5    to do the project.
 6              Thank you.
 7              MR. MARCELLO:  I would just like to add one
 8    point to that as well.
 9              In the agreement it stipulates the targeting
10    service date for the overall project and everybody is
11    working towards it and, again, it stipulates that each
12    party has to have all their approvals in place, their
13    own company, board of directors approvals and their
14    regulatory or governmental approvals in place.
15              Once those are done, the two parties come back
16    together, sit down and nail down the in-service date. 
17    If everything happens according to the schedule that was
18    envisioned when we drafted up that agreement, the
19    in-service date is going to be December 2002 for our
20    facility, May 2003 for overall.
21              If, for whatever reason -- and again the term
22    of our agreement I believe extends to July of 2001, and
23    the reason for that -- and I think it's mentioned in one
24    of the interrogatories -- is there is uncertainty around
25    approvals.
26              When we do secure the approvals, we have to
27    sit down and we have to say, "Okay, what was the impact
28    of any delay, if in fact there is one, on Hydro One's 
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 1    in-service, Hydro Quebec's in-service, what's the new
 2    targeted in-service date?"
 3              But we are all working towards a planned 
 4    in-service date that was documented in that agreement.
 5              THE PRESIDING MEMBER:  Thank you,
 6    Mr. Birchenough.
 7              Mr. McCann.
 8              MEMBER McCANN:  Thank you, Madam Chair.
 9              Can I ask the panel if they could tell me the
10    difference in cost between a tower and a pole and the
11    number of poles needed to go through the City of
12    Cumberland?
13              MR. MARCELLO:  The way we went about doing an
14    estimate, we basically looked at how many towers are
15    existing.  So I'm just going to use an example of
16    10 towers.  And I think if we had to replace those
17    10 towers with poles, we would require 15 poles, and in
18    for those 10 towers we were assuming a budgetary  number
19    of approximately an extra $100,000 per existing tower.
20              So if there are 10 towers there now and we are
21    going to end up with 15, the incremental cost would be
22    about $1 million.
23              That was the type of calculation that was
24    taking place when the figure of $3 to $10 million was
25    being talked about.
26              The only difference between those figures is
27    the number of towers we were looking at.  And again it's
28    more illustrated for the purposes of the discussion as
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 1    opposed to saying it i's exactly $100,000.  We haven't
 2    done the detailed engineering, but that was the sort of
 3    discussion that took place.
 4              MEMBER McCANN:  Well then, how do you come up
 5    and have a figure from $3 to $10 million?
 6              MR. MARCELLO:  The length of -- the number of
 7    poles that were being considered in the given scenario,
 8    you would have a range.  So there were, depending on the
 9    courses of discussion, at one point it was let's put
10    poles along the entire section, which was a big area,
11    and that was the $10 million estimate.
12              Then certain discussions were:  Well what if
13    we were to only focus on this narrow area?  And that's
14    how we came up with the $3 million.
15              MEMBER McCANN:  So then it would be safe to
16    say the cost for going through the City of Cumberland
17    then is what, $3 million?
18              MR. MARCELLO:  If in fact Cumberland's
19    position today is:  Let's just do that short section, I
20    would say, yes, that's fair.  It's in the order of
21    $3 million.
22              MEMBER McCANN:  And are these poles being
23    tendered out for the exact cost or is -- or then is your
24    quote on the quota of towers -- like, you know, for the
25    cost of doing the towers.
26              Actually, the answer that I'm trying to find
27    is the exact difference between the cost of a tower and
28    a pole.
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 1              MR. MARCELLO:  For an individual tower versus
 2    an individual pole?
 3              MEMBER McCANN:  For the number of poles so
 4    that I can have an idea of how it comes out.
 5              MR. MARCELLO:  The tendered prices we have
 6    right now are for steel towers.
 7              MEMBER McCANN:  Right.
 8              MR. MARCELLO:  Not steel poles.  We have not
 9    tendered for steel poles.
10              MEMBER McCANN:  Then how can we come up with a
11    final figure on the cost difference until you have a
12    total figure on the poles and a total figure on the
13    towers and then you find out the difference in the cost? 
14    Is there any way that our panel could have that
15    information?
16              MR. MARCELLO:  We can go back to our
17    engineering people and ask from an estimating
18    perspective what is the cost of one tower, what is the
19    cost of one pole and then give in a section what would
20    be the overall cost difference, if that's helpful to the
21    Board.
22              THE PRESIDING MEMBER:  Is it helpful to the
23    Board, Mr. McCann?
24              MEMBER McCANN:  I would, but I would want one
25    more think answered.
26              Is it cheaper to install a pole or is it
27    cheaper to install a tower?  So there is a two-point
28    question I wanted answered:  the cost of the pole and
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 1    the cost of the construction part.
 2              MR. MARCELLO:  So a constructed -- so the
 3    material cost and an installed ?
 4              MEMBER McCANN:  Right.
 5              THE PRESIDING MEMBER:  Could we have an
 6    undertaking number, Mr. Moran?
 7              MR. MORAN:  No. 15.8.
 8              THE PRESIDING MEMBER:  Thank you.
 9                   UNDERTAKING NO. 15.8:  Mr. Marcello
10                   undertakes to provide a final figure on
11                   the poles and a total figure on the
12                   towers and the difference on the costs
13              MEMBER McCANN:  Thank you, Madam Chair.
14              Thank you, panel.
15              MR. MARCELLO:  Thank you.
16              THE PRESIDING MEMBER:  And I guess last, but
17    not least, I get to ask you a few questions.
18              I want to start with the construction and the
19    construction schedule.  As I understand it now, because
20    of changes in the National Capital Commission, you can
21    now construct year-around with any major problems.  Is
22    that correct?
23              MR. GIRARD:  That is correct.
24              THE PRESIDING MEMBER:  So in fact, the
25    limiting factor is the fact that you have to keep the
26    power supply throughout the process, and therefore it is
27    going to take you 25 months, I think you said,
28    regardless of when you start?
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 1              MR. GIRARD:  That is correct.
 2              THE PRESIDING MEMBER:  Okay.  But you also
 3    mentioned something about the spring thaw and
 4    half-loads.  Can you tell me how that relates into your
 5    construction schedule?
 6              MR. GIRARD:  Yes, I can.
 7              Every spring in Ontario, in March and April,
 8    we go through half-load seasons on secondary roads. 
 9    Because we have a 25-month construction schedule, the
10    way it is laid out now, we have in our construction
11    schedule allowance for two half-load seasons.
12              If the approval did not come to us until, say,
13    February, then we would have three -- because we have
14    25 months, we would have three half-load seasons.  So it
15    would be an extension of two months to the schedule,
16    probably extend to 27 months.
17              If we start -- if we got approval, let's say
18    the 1st of February, which is what we looked at,
19    probably what we would be looking at is actually not
20    getting in the field, building roads and installing
21    tower foundations until after the spring thaw this year,
22    because what we do is we would have to -- if we did it
23    otherwise we would gear our forces up in February just
24    to stand them down or lay them off for March and April,
25    and what we want to do is keep our costs as efficient as
26    possible.  We want to keep our forces working
27    continuously.
28              THE PRESIDING MEMBER:  It sounds like you are
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 1    advocating that we should delay the approval until after
 2    the spring thaw so you won't have to start construction
 3    and have three --
 4              MR. GIRARD:  No, what I am saying is that if
 5    it was delayed that long.  If it comes in December, we
 6    will start right away.  If it comes in January, we will
 7    start right away.
 8              THE PRESIDING MEMBER:  So you would still,
 9    regardless -- if you started in January you are going to
10    have three half-loads spring thaw construction problems.
11              MR. GIRARD:  No.  Well, actually, if we
12    started in January --
13              THE PRESIDING MEMBER:  You would be okay.
14              MR. GIRARD:  We will be okay.  We will only
15    have two spring thaws.
16              THE PRESIDING MEMBER:  But if you started two
17    months later, you would have three; but if you started
18    six months later, you would only have two.
19              MR. GIRARD:  That is correct.
20              THE PRESIDING MEMBER:  Okay.  I think I
21    understand that.
22              In gas construction, which I am a bit familiar
23    with, there is a concept of wet-weather shut down.  Do
24    you have the same problems in construction for
25    electricity?
26              MR. GIRARD:  No, we do not.
27              THE PRESIDING MEMBER:  Okay.  So you don't
28    have to worry about shutting down in the wet weather?
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 1              MR. GIRARD:  No, we do not.
 2              THE PRESIDING MEMBER:  Thank you.
 3              Mr. Gagnon, as I understand it, we are waiting
 4    for a decree from the government first.  That is the
 5    first thing that you need as far as setting in process,
 6    the review process, the regulatory --
 7              MR. GAGNON:  Yes, Madam Chairman.
 8              For the approvals in Quebec, that is the first
 9    thing we need.  As soon as we have the decree from the
10    Government of Quebec, all the other related approvals in
11    Quebec will come in line following that first approval.
12              However, before ordering our converter, which
13    is the main expense we have, we also need to have a
14    certainty that Ontario Hydro is authorized to start
15    construction on its side.  Hydro Quebec cannot take the
16    risk to order the converter before signing the neutral
17    acknowledgement and confirming the in-service date to
18    which Mr. Marcello referred earlier.  We cannot put that
19    firm order before having that confirmation.
20              THE PRESIDING MEMBER:  I understand that you
21    want things as firm as possible before you firm up the
22    order from major equipment.
23              I was confused -- I understand that you need
24    approval for the substation, and I was confused whether
25    that process requires public consultation and public
26    hearings or not.
27              MR. GAGNON:  That is already done, Madam
28    Chairman.
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 1              I mentioned this morning that that -- the
 2    authority in Quebec, the public hearing board, the
 3    Environmental Public Hearing Board, has already issued
 4    its final report to the Minister of the Environment, and
 5    it was a positive report, and the Minister of the
 6    Environment transmitted the report to the -- in fact,
 7    that is where we are.  We need the authority to issue
 8    the decree -- the Governor in Council writing.  So this
 9    is what we need.
10              But the public hearing portion is already
11    done, and the final report, which is positive, which
12    recommends the project, is completed since last
13    September.
14              THE PRESIDING MEMBER:  Okay.  So I know you
15    are anticipating the decree sometime this month.  It
16    seems as though you were anticipating all the approvals
17    this month.  Is that correct?
18              MR. GAGNON:  Well, we don't need everything
19    else in Quebec this month.  There are some construction-
20    related items that we will file, following the approval
21    of the Government of Quebec.  All other approvals, which
22    are in the regulations will be given if and when the
23    government issues the decree; then all others will
24    follow in due course.
25              But we need the first one as well as the
26    permit from the OEB for Hydro One to order our
27    converter.
28              THE PRESIDING MEMBER:  Now, do the other
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 1    approvals follow as a matter of course, or are there
 2    other independent decisions that have to be made?
 3              MR. GAGNON:  Well, my understanding is that
 4    they will follow, except for the portion -- the crossing
 5    of the --
 6              THE PRESIDING MEMBER:  River.
 7              MR. GAGNON:  -- of the Ottawa River where we
 8    already have an authorization from one federal
 9    department, and we need another one.  This is separate
10    from the Quebec process.
11              But for the Quebec process, my understanding
12    is that when the Governor in Council gives the
13    authorization for the project then all other
14    governmental agencies will follow.
15              THE PRESIDING MEMBER:  Thank you.
16              You mentioned that the primary reason for this
17    interconnect, from Hydro Quebec's point of view, is the
18    security of supply.  I guess I am wondering -- I
19    understand right now there is the 400 line that is going
20    across -- there is a lot of increased capacity just for
21    security of supply.
22              Does Quebec need that extent of increased
23    capacity just for security of supply to the region?
24              MR. GAGNON:  Well, the reason those two -- the
25    temporary 400 megawatt interconnection and the permanent
26    1,250 megawatt interconnection have very different
27    functions.
28              The 400 megawatt temporary interconnection was
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 1    put in place following the ice storm, and its function
 2    is to secure the local area of the Outaouais region.
 3              So if we had a problem similar to what we had
 4    in 1998, then it would be possible to isolate some
 5    Quebec load on the Ontario system through that
 6    400 megawatt temporary interconnection.
 7              However, the purpose of the 1,250 megawatt
 8    permanent interconnection is to secure the entire Quebec
 9    system in case we lost one of our main transmission
10    corridors from James Bay or Churchill Falls.
11              For the Outaouais region, there is another
12    solution which is going on to secure -- to replace that
13    400 megawatt emergency interconnection.  This is the
14    Grand-Brul‚/Vignan line that I referred briefly this
15    morning.
16              THE PRESIDING MEMBER:  Thank you.  I guess my
17    question still is, in order to secure the region, the
18    larger region, do you need a 1,250 megawatt
19    interconnection with Ontario, or would something less
20    than that be sufficient?
21              MR. GAGNON:  Well, I am not an expert on that,
22    but what I have been told is that we need the greatest
23    capacity possible because the function of that is to
24    replace one of our corridors from James Bay and
25    Churchill Falls, and we have about 5,000 megawatts of
26    generation coming from Churchill Falls and, I think, in
27    the area of 20,000 from James Bay.  So if we lose a line
28    in one of those corridors, we need the most capacity
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 1    possible to compensate the loss.
 2              THE PRESIDING MEMBER:  Thank you.  I just
 3    wanted to make sure I understood what you were telling
 4    Mr. Birchenough.  And as I understand it, when you were
 5    justifying this project to the Government of Quebec,
 6    there was no economic analysis on the benefit of
 7    exporting power to Ontario through the interconnection. 
 8    Is that correct?
 9              MR. GAGNON:  Yes, exactly.
10              THE PRESIDING MEMBER:  They didn't ask you to
11    justify it on any economic basis?
12              MR. GAGNON:  Well, no, because it was -- as I
13    mentioned, it was part of a program following the ice
14    storm in 1998.  The Government of Quebec asked Hydro
15    Quebec to propose some efficient ways, to make it the
16    most possible to avoid that situation in the future.
17              So there were a few projects that were
18    proposed, mainly a belt in the Eastern Townships, one in
19    the Montreal area and one in the Quebec City area, as
20    well as the Grand-Brul‚/Vignan line and the Ontario
21    interconnection.  So it was all a package, I could say,
22    of measures that were proposed by Hydro Quebec and
23    accepted by the government to secure the transmission
24    system.
25              THE PRESIDING MEMBER:  Just a comment to Hydro
26    One -- you might think about that the time in
27    negotiations -- if they don't have to justify it
28    economically because you do have to justify it
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 1    economically in Ontario, but that was just a side
 2    remark.
 3              Thank you very much, Mr. Gagnon.
 4              I guess my next questions are to Mr. McCormick
 5    and perhaps you can help me here, Mr. McCormick.  We
 6    understand now that the utility corridor is in fact
 7    disturbed land.  Would that change some of the comments
 8    you made earlier as far as the additional studies that
 9    would need to be done?
10              MR. McCORMICK:  Subsequent to the
11    environmental assessment there has been tremendous
12    changes of development in the area,  approximately from
13    Tenth Line to approaching Cardinal Creek.  So I would
14    say that any kind of natural environmental impacts
15    perhaps would be relative and perhaps would be
16    diminished.  But I don't think that statement is true
17    for the balance of the corridor, through the Cumberland
18    Heights, for example.  That, as of last week, didn't
19    appear to be disturbed, and I don't think there are
20    plans to do that -- so it's true for part but not all.
21              THE PRESIDING MEMBER:  So for the built-up
22    areas then you could rely presumably on the EAs that the
23    City of Cumberland has done for its own purposes?
24              MR. McCORMICK:  What am I going to do with
25    that information?
26              THE PRESIDING MEMBER:  Well, I think when
27    Mr. Thompson was talking about the difficulties that
28    networks would have as far as switching over from
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 1    structures, from the towers to the poles, one of your
 2    concerns was the fact that the EA did not take into
 3    account the additional disturbance of the land because
 4    you were building on top of the already existing
 5    footprint.
 6              MR. McCORMICK:  Yes.  I was just trying to
 7    explain the analysis that took place at that time.  The
 8    problems that we would encounter of course was still
 9    with the fact that the approval that we had would have
10    to be amended, renewed.  We would have to go back to a
11    certain level of public involvement.  It opens the door
12    again to loop back, so that's understood.
13              It's not a technical analysis that is
14    particularly problematic to us.  It's more the process
15    of getting that approval amended and what other issues
16    might be entered into.
17              THE PRESIDING MEMBER:  I understand your issue
18    is that you did one EA based on this criteria and it has
19    gone through the process, the Minister hasn't bumped it
20    up.  As far as you are concerned, you have done all that
21    you have to do.
22              I guess what I am trying to work through is
23    Mr. Thompson's point about dealing with the change of
24    the poles from the lattice to a pole structure, what
25    additional amount of work, from an EA point of view, not
26    the process point of view, but from an EA point of view
27    you would have to do.
28              Can you help me out though.  I know we have
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 1    been talking a lot about the visual impact.  I am
 2    looking at the City of Cumberland's prefiled evidence. 
 3    Right now I am looking at Figure 1.  As I look at these
 4    lattice poles in Cumberland, as opposed to -- the
 5    lattice towers I guess -- the poles, it seems to me from
 6    the views of these pictures, not having been there, that
 7    in fact the lattice poles are staggered, where the
 8    straight poles aren't.
 9              So when you are talking about visual impacts
10    of having the three poles for every two lattice towers,
11    can you comment on the visual impact of the staggering
12    effect?
13              MR. McCORMICK:  I think that you can assume
14    that the poles will be aligned.  There won't necessarily
15    be any staggering.  The picture was perhaps where there
16    was a bend in the line.  I am not sure what the
17    explanation is.
18              THE PRESIDING MEMBER:  Because then I look at
19    Figure No. 3 and they seemed to be staggered there too. 
20    In Figure No. 4, they seem to be staggered there.
21              MR. McCORMICK:  I think it's just the
22    perspective that was chosen by the photographer.
23              THE PRESIDING MEMBER:  In No. 5 they seem to
24    be staggered.  So if you are talking about the viewscape
25    and you are staggering the poles, it seems to me as
26    though from a pure right point of view having the poles
27    that are in fact aligned causes less visual impact than
28    the lattice towers that are staggered.
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 1              MR. McCORMICK:  That's right.  Please don't
 2    assume that there is going to be any staggering to my
 3    knowledge.
 4              THE PRESIDING MEMBER:  So if there is
 5    staggering now then you will keep on having staggering
 6    because you are going on the same footprints.
 7              MR. McCORMICK:  I see what you are saying.  I
 8    think it may be a perspective issue with the
 9    photographs.
10              THE PRESIDING MEMBER:  I understand all
11    photographs are -- I take your answer.
12              My next question deals with -- just help me
13    with the internal process of the EA.  Your staff
14    prepared the environmental assessment and, presumably,
15    you approve it in some fashion because it is prepared by
16    people.
17              MR. McCORMICK:  Yes.
18              THE PRESIDING MEMBER:  We have also talked
19    about the issue as far as the visual effects, the visual
20    aesthetics and whether in fact that is part of the EA or
21    not the EA, the viewscape, I think is what it was
22    called.  Who made the decision within your group that
23    the viewscape or the aesthetics of the pole was not a
24    relevant environmental concern for this report?
25              MR. McCORMICK:  We have a team of people doing
26    the environmental assessment, so the recommendation came
27    from a team.  One of the members was our landscape
28    architect.
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 1              Now the decision, it's a joint matter --
 2              THE PRESIDING MEMBER:  But could you help me
 3    with the numbers?  Sorry, I apologize for interrupting
 4    you.
 5              MR. McCORMICK:  I just lost my train of
 6    thought.
 7              Could you repeat the question?
 8              THE PRESIDING MEMBER:  Yes.
 9              In doing an environmental assessment there are
10    many criteria, presumably, that you have to look at. 
11    One of them, as I understand it, is the visual aesthetic
12    impact, the viewscape, and determining whether that is
13    or is not relevant under particular circumstances.  You
14    did the environmental assessment, your group did the
15    environmental assessment and there is no assessment that
16    I can see on the visual impact of this lattice tower
17    versus the pole.
18              So therefore, at some point in time there has
19    to be the decision that was made that that was not a
20    relevant consideration for this particular EA.  The
21    viewscape was a visual impact of the lattice versus the
22    towers, and can you tell me --
23              MR. McCORMICK:  But we did make some offers to
24    the city to have some visual representations made up and
25    that was not pursued by the city.  So our general take
26    on it was that with more towers placed in areas where
27    there are not now towers was a more critical issue than
28    in the perspective -- depending on how you look at that
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 1    corridor and from where you are standing, it could be
 2    very important or it could not be very important.
 3              We felt that that examination wasn't necessary
 4    to do our environmental assessment.  It was more
 5    important -- well, it was most important that the
 6    conclusion was that there would now be towers, poles,
 7    sitting in the front yards in the back of others.
 8              That's how aesthetics was dealt with.  We are
 9    not going to argue that one looks better on a one to one
10    basis than the other.  It was, what were the impacts of
11    the two options, and, aesthetically, the individuals who
12    now are going to get something that they don't have was
13    a significant impact.
14              THE PRESIDING MEMBER:  But someone made that
15    assessment.
16              MR. McCORMICK:  That was a recommendation that
17    came from the team.  Two members of my staff were --
18              THE PRESIDING MEMBER:  Okay.  So it was an
19    internal -- two people on your team made that
20    determination and recommended it, that we don't need to
21    look at the visual impact of the towers versus the
22    poles.  We just have to say that because there is going
23    to be a three for two replacement, that they already
24    have the towers as it is there and they are going to
25    have additional poles, that that alone is sufficient to
26    have the aesthetics side of the equation, of the overall
27    environmental assessment equation?
28              MR. McCORMICK:  Fundamentally, that's true. 
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 1    It's such a subjective matter --
 2              THE PRESIDING MEMBER:  That's a problem,
 3    isn't it?
 4              MR. McCORMICK:  -- and different people will
 5    look at it in different ways.  You can pull the same
 6    information together and some people won't care and some
 7    people will care a lot.
 8              How do you bring this down to a rational
 9    decision?  We felt that it was the impact on those extra
10    people.
11              THE PRESIDING MEMBER:  So it was based solely
12    on that?
13              MR. McCORMICK:  Yes.
14              THE PRESIDING MEMBER:  I mean -- right, that's
15    the problem, isn't it?  The question is that the
16    aesthetics is very subjective.  And I guess what I am
17    trying to balance out -- I don't even know if this panel
18    could agree if we had to make a decision over poles or
19    whatever, towers.  I know that children seem to like the
20    lattice.
21              MR. THOMPSON:  My granddaughter opted for the
22    steel poles.
23    --- Laughter
24              THE PRESIDING MEMBER:  Perhaps we should have
25    a referendum.
26              MR. THOMPSON:  You need 3 per cent.
27              MR. MARCELLO:  There was a suggestion that
28    since the French had the Eiffel Tower and the Canadians
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 1    had the CN Tower that, on the Canadian side -- or the
 2    Ontario side of the river; sorry, I didn't mean that.
 3    --- Laughter
 4              MR. MARCELLO:  That on the Ontario side of the
 5    river it would be poles and lattice on the other.
 6              THE PRESIDING MEMBER:  Mr. Moran, did you want
 7    to ask questions?
 8              MR. MORAN:  Madam Chair, with your permission
 9    there was one follow-up question to a question that you
10    posed to Mr. McCormick.
11              THE PRESIDING MEMBER:  If I can finish one
12    last question for Mr. McCormick and then you are free to
13    continue.
14              Was a contribution in aid of construction ever
15    discussed with Cumberland?
16              MR. McCORMICK:  A contribution?
17              THE PRESIDING MEMBER:  In aid of construction.
18              MR. McCORMICK:  So many dollars spent on
19    construction, is that what you mean?
20              THE PRESIDING MEMBER:  No.  It's a concept
21    whereby you ask for contributions to your construction
22    costs from the city.
23              MR. McCORMICK:  Not to my knowledge.
24              THE PRESIDING MEMBER:  You didn't ever pursue
25    with Cumberland the possibility that they would
26    contribute some money, since costs was one of the
27    factors, in order to get the straight poles rather than
28    the lattice poles?
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 1              MR. McCORMICK:  Again, not to my knowledge.
 2              THE PRESIDING MEMBER:  Thank you.  Those are
 3    my questions.
 4              Mr. Moran.
 5    EXAMINATION
 6              MR. MORAN:  Thank you, Madam Chair.
 7              The class EA process that you follow, as I
 8    understand it, is set out in an approval document called
 9    the Class Environmental Assessment for Minor
10    Transmission Projects?
11              MR. McCORMICK:  That's right.
12              MR. MORAN:  And that document essentially sets
13    out the rules.  It tells you what you have to study, how
14    you have to do consultation and all of that?
15              MR. McCORMICK:  Yes.
16              MR. MORAN:  I believe, if I remember
17    correctly, that it also contains a section about what
18    happens if you have to make a change to the undertaking?
19              MR. McCORMICK:  That's right.
20              MR. MORAN:  And it discusses things like the
21    preparation of addendum reports and that?
22              MR. McCORMICK:  Yes.
23              MR. MORAN:  I was wondering if you could
24    undertake to file a copy of that document with the
25    Board?
26              MR. McCORMICK:  Yes.
27              MR. MORAN:  Madam Chair, that would be
28    Undertaking 15.9.
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 1              THE PRESIDING MEMBER:  Thank you.
 2                   UNDERTAKING NO. 15.9:  To file a copy of
 3                   the document "Class Environmental
 4                   Assessment for Minor Transmission
 5                   Projects"
 6              THE PRESIDING MEMBER:  Ms Aldred, anything in
 7    re-direct?
 8              MS ALDRED:  No.  Thank you.
 9              THE PRESIDING MEMBER:  Thank you.
10              The panel is excused.  Thank you for coming.
11              Ms Aldred, any other witnesses?
12              MS ALDRED:  No, that is it.  Thank you.
13              THE PRESIDING MEMBER:  Thank you very much. 
14    Any of the intervenors?  Any more witnesses?
15              Mr. Budd, are you confused?
16              MR. BUDD:  I'm sorry, I just didn't hear you,
17    with the shuffling of papers.  And I don't have any more
18    witnesses, definitely.
19              THE PRESIDING MEMBER:  No more witnesses; no
20    more cross-examination.
21              MR. BUDD:  No, thank you.
22              THE PRESIDING MEMBER:  Everyone is happy.
23              MR. BUDD:  Almost.
24              THE PRESIDING MEMBER:  Almost.  Well, on that
25    note, I would like to thank everyone.
26              First of all, I would like to thank you for
27    meeting our deadline and finishing today, even early.  I
28    do appreciate that.  We will all be able to get away for
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 1    the weekend.
 2              I would like to know who Mr. Thompson is
 3    voting on for the Grey Cup -- but we will find that out
 4    later!
 5              So, thank you to the panel, thank you to
 6    counsel, thank you to Board Staff.  And, of course,
 7    thank you to our Court Reporters.  As always, Dan does a
 8    great job here.
 9              THE COURT REPORTER:  Thank you.
10              THE PRESIDING MEMBER:  Mr. Moran, before we
11    finish, I think there is one last detail, and that is
12    the timing of the argument.
13              MR. MORAN:  Thank you, Madam Chair.
14              Briefly, there has been discussion amongst --
15    I think the only person that I didn't get a chance to
16    get input from was Mr. Budd.  But the proposal is for
17    Hydro One to submit written argument by Wednesday of
18    next week.  And anyone who wants to reply to that would
19    do so by the following Wednesday.
20              THE PRESIDING MEMBER:  Just so that we can
21    have some dates.
22              MR. BUDD:  That right away poses a problem, if
23    we were even going to contemplate a December 1
24    indication from the Board.
25              MR. MORAN:  As I say, I didn't have a chance
26    to canvass Mr. Budd's opinion on this, because he wasn't
27    available.
28              MR. BUDD:  I did have a couple of ideas about
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 1    it, and I --
 2              THE PRESIDING MEMBER:  Mr. Budd, we can tell
 3    you right now, we are not going to be in a position to
 4    make a decision by December.
 5              MR. BUDD:  Okay.  Well -- then go ahead.
 6              MR. MORAN:  I guess the only question is if
 7    Ms Aldred wants -- how much time she would need for any
 8    reply.  If the intervenors were responding by Wednesday,
 9    a week Wednesday, I don't know if the end of the week
10    would be enough time for her or not.
11              THE PRESIDING MEMBER:  Ms Aldred, your first
12    response, your argument, is on the 29th, right?
13              MS ALDRED:  Wednesday.
14              THE PRESIDING MEMBER:  Wednesday.  And then
15    the intervenors would respond by the 6th of December --
16    which is a Wednesday.
17              Is that satisfactory?  I am seeing  a
18    few nods.
19              MS ALDRED:  Is there any way we could have the
20    intervenors respond before the 6th, something like
21    the 4th?
22              MR. BUDD:  We would be ready for the 4th.
23              MR. THOMPSON:  My answer is no.
24              MR. KLIPPENSTEIN:  Likewise.
25              THE PRESIDING MEMBER:  We should tell Hydro
26    One right now that the panel have real concerns about
27    granting any leave to construct until the IMO has
28    finished their final study -- to put you on notice.
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 1              I think we have tried -- the Board staff have
 2    tried to put you on notice before.
 3              System reliability is critical to any decision
 4    that the Board makes, and until the IMO is in a position
 5    to certify the system reliability, I don't think any
 6    members of this panel are willing to grant a leave to
 7    construct with that issue still outstanding, without the
 8    IMO essentially finalizing their report.
 9              That having been said --
10              MR. BUDD:  I was just going to say thank you,
11    Madam Chair, for notifying us of that.  I really do
12    appreciate that.
13              My clients just advised me to advise the Board
14    that, in respect of Exhibit 14.10, if the IMO is the
15    party that is -- the Board of course is going to rely on
16    the IMO in terms of a final assessment, as opposed to
17    hearing anything further from them, either by way of
18    evidence or re-opening, or some kind of indication as we
19    had in the TransAlta case, where we actually had a rep
20    from the IMO come and sit in the box and tell the Board
21    what its recommendations generally were, if I summarize
22    it in this way, that it is doable, details to be worked
23    out, but it is doable.  If we don't have that before
24    January 15, this is going to cost very likely, as the
25    third bullet points out here, in the tens of millions
26    more for the piece of equipment.
27              And I know that no Board likes to be put in
28    that kind of position, I understand.
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 1              THE PRESIDING MEMBER:  Talk to the IMO.
 2              MR. BUDD:  Indeed.  Now that I have heard
 3    that, you bet, I will probably be on the phone this
 4    afternoon -- because that is a serious problem.
 5              THE PRESIDING MEMBER:  All right.  I
 6    understand, but as you are aware, the IMO is the agency
 7    responsible for system reliability.  We rely on the IMO. 
 8    You are right, we did make special dispensation in the
 9    TransAlta case.  You are not going to get your leave to
10    construct until after we get the final IMO report in
11    TransAlta in any event, so --
12              MR. BUDD:  Right.
13              THE PRESIDING MEMBER:  That having been said,
14    the 6th for intervenor responses.
15              MS ALDRED:  Well, this is fine then.
16              THE PRESIDING MEMBER:  Would you like some
17    more time to do your argument?
18              MS ALDRED:  Yes, I think I would like a week
19    after that then, please.
20              THE PRESIDING MEMBER:  Do you want more time
21    to do your original argument, Ms Aldred?
22              MR. BUDD:  Can you just -- excuse me, for a
23    minute.
24    --- Pause
25              MR. BUDD:  Madam Chair, I know it's highly
26    unusual, but I would like to take five minutes, if I
27    could please.
28              Is that possible?
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 1              I appreciate that, Members of the Board.
 2              THE PRESIDING MEMBER:  Then why don't we just
 3    retire for five minutes.
 4              MR. BUDD:  Thank you.
 5    --- Upon recessing at 1527
 6    --- Upon resuming at 1555
 7              MR. BUDD:  I would like to say thank you for
 8    allowing us to regroup after that.
 9              THE PRESIDING MEMBER:  You are very welcome,
10    Mr. Budd.
11              Ms Aldred, we were back to scheduling.
12              As I understand it, where we were was that you
13    were going to put in your argument in-chief on
14    Wednesday, November 29th.  Then intervenors have until
15    the next Wednesday, which is December 6th, to respond.
16              And, Ms Aldred, your Reply is due on
17    Wednesday, December 13th.  Correct?
18              Are there any other matters?
19              MR. THOMPSON:  Yes, Madam Chair.
20              Could I just, for the record, leave these
21    visual aids that Cumberland was using.  I have received
22    the exhibit numbers from Mr. Moran, and I have marked
23    them Exhibit 14.14., 14.15, and 14.16.
24              THE PRESIDING MEMBER:  And that way, you don't
25    have to transport them back to Ottawa, Mr. Thompson!
26              MR. THOMPSON:  I have a big enough load;
27    Mr. Cunliffe forgot his bag, so I have to carry that.
28              Never bring anything you can't file, right!
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 1    --- Laughter
 2              THE PRESIDING MEMBER:  That having been said,
 3    it is almost four o'clock on a Friday night.  Is there
 4    anything else?
 5              Thank you very much.
 6    --- Whereupon the hearing concluded at 1558
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 1                       INDEX OF PROCEEDING
 2                                                        PAGE
 3    Upon resuming at 0834                                337
 4    Preliminary Matters                                  337
 5    HYDRO ONE NETWORKS PANEL 3
 6    SWORN:  JOHN R. ROGERS                               338
 7    SWORN:  VICTOR GIRARD                                338
 8    SWORN:  CARMINE MARCELLO                             338
 9    SWORN:  BRIAN McCORMICK                              338
10    SWORN:  DENIS GAGNON                                 338
11    Examination by Ms Aldred                             338
12    Examination by Mr. Budd                              338
13    Examination by Ms Aldred                             345
14    Examination by Mr. Budd                              365
15    Examination by Mr. Moran                             375
16    Upon recessing at 1019                               402
17    Upon resuming at 1040                                402
18    Examination by Mr. Thompson                          402
19    Upon recessing at 1230                               467
20    Upon resuming at 1336                                467
21    CITY OF CUMBERLAND PANEL 1
22    SWORN:  CHRIS BROUWER                                468
23    SWORN:  STEPHEN CUNLIFFE                             468
24    SWORN:  NED LATHROP                                  468
25    SWORN:  GERRY LALONDE                                468
26    Examination by Mr. Thompson                          471
27    Examination by The Board                             496
28    Examination of Mr. Thompson                          501
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 1                       INDEX OF PROCEEDING
 2                                                        PAGE
 3    HYDRO ONE NETWORKS PANEL 3
 4    PREVIOUSLY SWORN:  JOHN R. ROGERS                    502
 5    PREVIOUSLY SWORN:  VICTOR GIRARD                     502
 6    PREVIOUSLY SWORN:  CARMINE MARCELLO                  502
 7    PREVIOUSLY SWORN:  BRIAN McCORMICK                   502
 8    PREVIOUSLY SWORN:  DENIS GAGNON                      502
 9    Examination by Mr. Klippenstein                      502
10    Examination by The Board                             504
11    Examination by Mr. Moran                             530
12    Upon recessing at 1527                               536
13    Upon resuming at 1555                                536
14    Upon concluding at 1558                              537
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 1                            EXHIBITS
 2    NO.                    DESCRIPTION                  PAGE
 3    
 4    14.11          Excerpt from the assessment           432
 5                   report provided in response
 6                   to an interrogatory response
 7    
 8    14.12          Curriculum vitae of Mr. Stephen       469
 9                   Cunliffe, Mr. Ned Lathrop and
10                   Mr. Chris Brouwer
11    
12    14.13          Letter from Mr. S. Cunliffe in        469
13                   response to a letter from Mr. Curtis
14                   re Cumberland's position
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 1                          UNDERTAKINGS
 2    NO.                    DESCRIPTION                  PAGE
 3    
 4    15.4           Mr. Marcello undertakes to            384
 5                   confirm the actual overhead
 6                   number that would apply to this
 7                   project
 8    
 9    15.5           Mr. Gagnon undertakes to provide      392
10                   a quick understanding of what
11                   the permits still to be obtain
12                   are and what they involve
13    
14    15.6           Mr. McCormick undertakes to           405
15                   provide information on the
16                   number of communities where
17                   steel poles have been installed
18    
19    15.7           Ms Aldred undertakes to file          412
20                   a copy of the joint board
21                   decision with respect to the
22                   Kanata transmission line
23    
24    15.8           Mr. Marcello undertakes to            514
25                   provide a final figure on the
26                   poles and a total figure on
27                   the towers and the difference
28                   on the costs
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 1                          UNDERTAKINGS
 2    NO.                    DESCRIPTION                  PAGE
 3    15.9           To file a copy of the document        531
 4                   "Class Environmental Assessment
 5                   for Minor Transmission Projects"
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 1                             ERRATA
 2                  VOLUME 1 - November 22, 2000
 3    
 4    Page 13, line 9     Mr. Marritt  s/b  Mr. Merritt
 5    Page 14, line 5     Mr. Marritt  s/b  Mr. Merritt
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 8    PHB Hagler and Bailly    s/b    PHB Hagler Bailly
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