Real Regulatory ReformP7

Climate Change: On the Front Burner P11

Parks Canada: In the Hydro Business P19

Renewable, Reliable, Responsive

2014 Year in Review

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In This IssueCover Stories 7 | Real Regulatory Reform

11 | Climate Change: On the Front Burner

19 | Parks Canada: In the Hydro Business

Articles 3 | Message from the Chair

5 | Wasdell Falls Redevelopment – A North American First

9 | Power of Water Canada Conference Adapts to a Changing Landscape

13 | First Nation Challenges to Hydroelectric Development – A Tale of Two Provinces

17 | Engaging and Informing the Political Process

21 | Water & Energy: A Delicate Balancing Act

23 | Worth Repeating – the Growing Aboriginal Market

25 | 2015 – A Year of Stability and Differentiation

27 | Proud OWA Members

29 | 2015 Industry Events Listings

2014 Year in Review President Paul Norris pnorris@owa.ca

Marketing and Events Coordinator Janelle Bates jbates@owa.ca

Executive Assistant Marie Lummiss mlummiss@owa.ca

Communications and Public Outreach Coordinator Stephanie Landers slanders@owa.ca

Contributing Writers Zach Vorvis, Project Manager and Paul Kemp, President, Canadian Projects Limited www.canprojects.com

Julie Abouchar, Partner and Certified Environmental Law Specialist and Nicole Petersen, Associate Lawyer, Willms & Shier Environmental Lawyers LLP www.willmsshier.com

Jamison Romano, Hydrology Specialist, Aquatic Informatics Inc. www.aquaticinformatics.com

Visit our website: www.owa.ca Email: info@owa.ca Phone: 1-866-743-1500

Year in Review is published annually by the Ontario Waterpower Association. Distribution is free of charge within North America. Subscription enquires or changes to subscriptions should be directed to Marie Lummiss mlummiss@owa.ca. The contents of this publication may not be reproduced in whole or in part without the prior permission of the publisher.

Cover Photo courtesy of Axor Group Inc.

As seems to be the case when one looks back on any year in the electricity sector in Ontario, 2014 was again one

of considerable action. Led by the re-election of a Liberal government, and this time in a majority position, the sector

now has the additional certainty prescribed by the ongoing implementation of the 2013 Long-Term Energy Plan, with

waterpower targeted to contribute 9,300 Megawatts (MW) by the end of the planning horizon. More importantly, the

steady, sustained procurements that are the foundation of the plan for new generation investment provide improved

certainty and predictability.

In addition, and increasingly, there is specific and separate recognition of the unique attributes of waterpower in broader

energy policy. In 2014, an additional twenty-five (25) MW of waterpower was added to the first Large Renewables

Procurement, contracts for thirty-five (35) Megawatts of municipal projects were awarded through the Hydroelectric

Standard Offer Program, proposals are now being accepted for up to forty (40) Megawatts through the HESOP expansion

initiative and, most recently, the price offered to small FIT waterpower projects was substantially adjusted. Collectively,

this represents new investment opportunities in the industry approaching $600 Million.

More broadly, the very institutions that have come to help define the management of the province’s electricity system

are undergoing fundamental change. Beginning in 2015, the Ontario Power Authority and the Independent Electricity

System Operator will be merged into a single entity, with direct oversight both for market operation and evolution, as

well as for energy procurement and contract management. The merger represents a significant shift in governance and

must be accompanied by internal mechanisms that ensure appropriate relationships between contracts and markets.

For the Association, 2014 was a year of continued advancement toward the achievement of our strategic objectives. This

year, the OWA and Parks Canada struck a “New Business Relationship” focused on waterpower production on federal

waterways. The Association’s partnership with Ducks Unlimited Canada has been expanded to include collaborative

support for First Nations leading land use planning in Ontario’s Boreal North. And relationships with Chiefs of Ontario

and Queen’s University premised on Aboriginal capacity building continued to grow and yield results.

Message from the ChairValerie Helbronner, OWA Board Chair

Also in 2014, the OWA, with the leadership of several OWA members, published Best Management Practices on

wetlands, waterfowl, water quality and ecological flows. In addition, and in support of the government’s Modernization

of Approvals agenda, the Association established a roster of “Subject Matter Expertise”, now containing more than fifty

(50) member professionals across a wide range of disciplines.

Looking forward, 2015 will see the implementation of the first “Large Renewables Procurement” and an expected

increase in the participation of waterpower in the small Feed-in-Tariff Program. The promise of transmission expansion

to Ontario’s Far North continues to gain momentum, bolstered by First Nations-led development corporations and by

the recent reaffirmation of the economic business case by the Ontario Power Authority. It will also be a year of active

implementation of the Ministers’ mandate letters, published by the government for the first time. Across Ministries

themes of direct relevance to the waterpower industry (Moving Forward on Climate Change, Improving Aboriginal

Outcomes, Developing the Ring of Fire, Championing Renewable Energy) have strong resonance with the OWA’s

Strategic Plan and the industry is well positioned to contribute to the government’s policy priorities.

I have been honoured to serve as Chair of the Ontario Waterpower Association and to work with its committed and

dedicated Board of Directors, staff and members. I look forward to continued industry and organizational success.

Valerie Helbronner

OWA Chair

Wasdell Falls Redevelopment – A North American First The Next 100 Years of Waterpower

enables high quality electricity to be delivered to the ‘grid,’ while the VLH Turbine slowly rotates at about 40 revolutions per minute. The large size of the turbine and the blades, in addition to its slow speed, make the turbine extremely ‘fish-friendly’. Testing in Europe has proven safe fish passage approaching 100%, with further testing planned for North American species once the Wasdell site is commissioned.

The VLH Turbine design is applicable at sites where the head is the range of 1.4 to 4.2 m. Deployment opportunities are vast for the VLH, with an estimated 80,000 existing structures within North America that could utilize low-head hydro development. Integrating the turbines into existing structures such as these greatly minimizes the cost of the civil works, significantly reduces environmental impacts and lessens the effort required to obtain regulatory approvals, and design and build the facility.

Over thirty-five (35) VLH units have been successfully deployed across Europe since March 2007, but units have yet to be deployed in North America due to its varying climate, hydraulic, environmental, electrical and societal requirements. It is well recognized that even if an otherwise worthy technical solution cannot meet all of the necessary technical and regulatory requirements it will not be able to be successfully deployed. Hence, deployment of the VLH Turbine in Canada had multiple challenges and required considerable technical effort to adapt the turbine to meet North American requirements.

Adaptation for North America

Adaptation of the VLH technology for deployment in North America required significant work. Deployment within the cold regions of North America, including Canada and the northern United States, required an evaluation and mitigation of a number of cold-climate issues that do not exist at the European installations. Consequently, with support from Natural Resources Canada, CPL initiated a Cold Climate Adaptation (CCA) study to examine cold-climate issues and recommend appropriate mitigation measures to adapt the VLH Turbine to North American conditions. The CCA package facilitates a new turbine extraction method

In 1914, Wasdell Falls, a small drop in the Severn River just north of Washago, Ontario, was the site of the first generating station constructed by the Hydro-Electric Power Commission of Ontario, which was the precursor to Ontario Hydro and today’s Ontario Power Generation (OPG) and Hydro One. Exactly 100 years later, Wasdell

Falls is the site for construction of a new generating station that represents another first in waterpower for both Canada and for North America. Today’s development is based on the deployment of the Very Low Head (VLH) Turbine for the Wasdell Falls Power Corporation (WFPC), with the adaptation of the technology for North America and engineering being completed by Canadian Projects Limited (CPL).

The VLH Technology

The innovative VLH Turbine was developed in France in 2004, by MJ2 Technologies (MJ2), with the intent to generate energy at existing hydraulic structures with very low water level differential from upstream to downstream (i.e. Very Low Head).

The VLH Turbine has been designed to reduce, or completely eliminate, the need for intake, powerhouse or outlet structures required for conventional hydropower plants. The typical deployment involves installing the turbine in, or adjacent to, existing water control structures such as diversion weirs, navigation locks, drop structures, small dams and spillways. When operating, the turbine sits submerged in the water, with only structural components associated with turbine extraction actually visible.

The VLH technology involves a large, eight-bladed Kaplan turbine integrated with a Permanent Magnet Generator (PMG). With electrical industry advancements over the past few decades, the PMG coupled with a frequency converter

Guest article by Zach Vorvis, Project Manager and Paul Kemp, President of Canadian Projects Limited

and accommodates ice forces, frazil ice, ad-freezing and colder temperatures that are not present at European sites. In addition, several studies were completed to assess

some of the unique hydraulic conditions present at many existing water control structures in North America. A hydraulic model study was performed with the University of Calgary to quantify the effects of upstream obstructions and conditions on turbine performance. The two year study included both numeric modeling and physical modeling in a water tunnel. Further site studies are planned using the operating Wasdell turbines to further assess performance

characteristics including fish passage on North American species and other deployment effects.

The Wasdell Hydro Project

Minimizing the impact on the environment has been a driving factor in the design of the VLH Turbine, as well as its deployment at the Wasdell site. In designing the Wasdell Hydro project, aesthetic considerations included low noise, disguised control buildings, minimized construction footprint and a low profile structure consistent with the existing structures at the site. The resulting design was accepted for deployment at the historic Wasdell site. Continued integration of all of these design elements will support future successful deployment of the VLH technology in Canada.

The Wasdell Hydro project involves the installation of three VLH Turbines in a new spillway structure constructed adjacent to the existing water control structure at the site. Other than the low profile spillway structure, the project involves a small building that will house the required control equipment and a small substation for grid interconnection. The turbines are designed to be mounted at 45 degrees in the spillway structures and, being submerged, are generally not visible nor do they introduce any noise other than the sound of flowing water.

The construction and operating footprints are small. The Wasdell Hydro project has its structure constructed adjacent to the existing structure within an excavated short rock channel that slightly widens the Severn River in this location. The control building and substation are no larger

than the cottages and garages down the street. Overall, the minimal construction footprint and fish friendly turbines result in a project having a very low environmental impact.

This initial development involved all the Ontario and Canadian regulatory review and approval requirements. It is planned, based on the experience from the Wasdell Hydro project and the opportunity to complete further fish testing, that the regulatory review process for future similar developments will be streamlined substantially. In addition, the Wasdell Hydro project enabled the development of standardized integration with existing structures and standard structural, mechanical and control building designs, such that a construction deployment period of less than six months can be achieved.

With three VLH Turbines being deployed, the Wasdell Hydro project has a capacity of 1.65 MW with a high capacity factor that will provide over 8.46 GWh of renewable energy annually.

Summary

Waterpower is clean and renewable. Canada, with 60% of its electricity being generated by hydro, has the cleanest and most renewable electricity system of all the G8 countries. Small hydro represents a significant opportunity for continued development of hydropower in Ontario and in Canada. The innovative VLH Turbine technology enables economic, low impact construction of low-head energy generation by minimizing the civil works typically associated with hydropower projects. With the completion and commissioning of the Wasdell project, the technology is well positioned for further deployment across Canada. With abundant existing, suitable water control structures within North America, there exists great potential for Very Low Head hydro deployment in our backyard.

By all accounts, 2014 was to be a year that saw significant advancements in one of the industry’s core objectives – reducing the time and cost of the pre-construction approvals processes for waterpower projects. Driven by the explicit recognition in the Minister of Energy’s June 2013 Directive to extend five (5) year Feed-in Tariff Contracts to eight (8) years “in acknowledgement of the unique regulatory approvals requirements for waterpower,” the Ministries of Environment and Climate Change (MOECC) and Natural Resources and Forestry (MNRF) proposed new guidance ostensibly intended to simplify and clarify their respective approvals requirements.

In October 2013, a proposed Coordinated Policy Guidance for Waterpower Projects was posted on the Environmental Registry by the Ministries. The proposed Guidance document was to provide clarification of Ministry specific roles and responsibilities for waterpower projects in reviewing and issuing authorizations. The policy guidance was developed to assist proponents of waterpower projects which require approvals under the Lakes and Rivers Improvement Act (LRIA) and Permits to Take Water (PTTW) under the Ontario Water Resources Act (OWRA) for waterpower facility construction and operation. It outlined the ministries’ intention to clearly identify which ministry will conduct reviews in areas of shared responsibility; and the intention of each ministry to use the review of the

other in order to avoid unnecessary duplication, while not altering the statutory responsibilities of either ministry in areas of shared responsibility. In essence, the approach to address the overlap and duplication between the legislative responsibilities of the two ministries was to be one of “trust” in the subject matter expertise of one another in areas of core competency (e.g., MNRF – aquatic ecosystems, MOECC – water quality).

A year has passed, however, since the proposal was made, and there has been little or no progress toward its practical implementation. Why? The key issue appears to be the challenge in realizing the intent of the initiative within the context of the existing regulatory framework and, hence, the need for real regulatory reform.

MNRF is recognized as having the lead legislative responsibility for the waterpower sector by virtue of the Public Lands Act (tenure) and the Lakes and Rivers Improvement Act (LRIA) (construction and operation of dams). The LRIA’s broad purposes include:

a) The management, protection, preservation and use of the waters of the lakes and rivers of Ontario and the land under them;

b) The protection and equitable exercise of public rights in or over the waters of the lakes and rivers of Ontario;

Real Regulatory Reform

takings, the overlap and duplication to those covered by the LRIA are obvious. To address this issue, and given the well intentioned but as yet unimplemented Coordinated Policy approach, real Regulatory Reform is required.

The OWA (and other dam owners) have, in the past, brought forward formal amendments to the Ontario Water Resources Act, building on the exception provisions already contained in the legislation. Waterpower and conservation structures in particular have been the subject of such proposals. Another option is to improve the OWRA Regulation to align with the policy proposal for those matters to be considered by the Director in issuing a permit for waterpower projects. In this approach, the Permit for waterpower would be exclusively focused on Water Availability, Water Quality and Groundwater/Surface Water Interaction, as outlined in the Environmental Bill of Rights (EBR) posting. Given the apparent inability to carry the policy proposal into action, both of these alternatives must be explored and will be a key area of advocacy focus for the OWA in 2015.

c) The protection of interests of riparian owners;

d) The management, perpetuation and use of the fish, wildlife and other natural resources dependent on the lakes and rivers;

e) The protection of the natural amenities of the lakes and rivers and their shores and banks; and

f) The protection of persons and of property by ensuring that dams are suitably located, constructed, operated and maintained and are of an appropriate nature with regard to the purposes of clauses (a) to (e).

In 2011, the Ministry introduced new and modernized standards and technical guidelines with strong support from the industry and other dam owners and has since published a series of technical bulletins to further inform the application of the legislation. Of critical importance in this regard is the proposed technical bulletin on “Location Approval,” posted as one of a series of four (4) on the Environmental Registry in November 2013. Location Approval immediately follows and is informed by the Environmental Assessment process – the stage at which the vast majority of FIT contracted waterpower projects presently are.

While the MNRF legislative requirements are comprehensive and specific to dams and/or waterpower facilities, MOECC’s regulatory role with respect to water creates complications and is the overlap intended to be addressed by the Coordinated Guidance Policy framework. Specifically, under the Ontario Water Resources Act dams are considered a “water taking,” despite the fact that they don’t consume water. The instrument which implements this framework is a “Permit to Take Water” (PTTW), pursuant to Ontario Regulation 387/04 – and herein lies the rub.

While historically the PTTW was treated primarily as an administrative instrument, recognizing the breadth of objectives under the LRIA, the 2004 regulation introduced new considerations for the issuance of permits, including the impact or potential impact of the water taking or proposed water taking on; the natural variability of water flow or water levels, minimum stream flow, habitat that depends on water flow or water levels, and ground water and surface water and their interrelationships – all areas traditionally addressed for dam owners by MNRF and/or Fisheries and Oceans Canada. While the inclusion of such considerations may certainly be relevant to other water

w w w . h y d r o 9 1 1 . c o m

NEW Canadian Oce 905-581-1828Main Oce 717-747-1402

As with previous years, the Association held its annual gala dinner and awards ceremony on the evening of October 20th to recognize the accomplishments of the leaders in the sector whose efforts and vision have helped pave the way for future growth.

The Stewardship Award, which recognizes those organizations that have made a commitment to environmentally responsible and sustainable waterpower development, was presented to Ontario Power Generation and Moose Cree First Nation. The award recognized the efforts of these organizations to provide clean, renewable energy to the province through the development of the Lower Mattagami project. The development introduced environmental protection measures that went beyond regulatory requirements and significant public safety measures and plans that were developed and implemented throughout the development of the project.

The Innovation Award, which recognizes those organizations that have shown leadership in innovation through the development of important advancements was presented to GreenBug Power. GreenBug has recently designed, constructed, installed and commissioned a 7 kW waterpower project on private property located on Nanticoke Creek in Norfolk County, utilizing “Archimedes’ Screw” technology. This project is the first commercially operational project using this ancient, yet very current approach and technology in North America.

Finally, the evening concluded with the presentation of the R.R. Dodokin Award. This year’s award was presented to Paul Young, Director of Generation Operations, Orillia Power Generation. Paul has been involved in the waterpower industry for more than thirty-seven (37) years, acting as both a consultant and as an operator of waterpower facilities. He has been part of more than fifty (50) projects and exemplifies dedication, commitment and passion towards waterpower every day in his career.

Power of Water Canada Conference Adapts to a Changing LandscapeWith almost four hundred (400) delegates from across Canada and beyond, the annual Power of Water Canada (POWC) continues to be the primary networking and educational event for the waterpower sector. This year’s conference was again held in Niagara-on-the-Lake, and featured several informative sessions highlighting some of the major advancements in waterpower facility development and energy production.

As many of the delegates noticed, there was a strategic shift in the conference program this year which featured more technical sessions than ever before. This change was a direct reflection of the transformation of the waterpower industry itself. The sector has moved from a phase of procurement and planning, into a new chapter of development and commissioning.

The transition of the waterpower sector was not only recognized the industry, but by government as well. In his keynote address, the Honourable Bill Mauro, Minister of Natural Resources and Forestry recognized the growth of the industry and noted how his Ministry is working to support investment in the sector.

“This conference gives us a valuable opportunity to look at the progress we’ve made and to see what more we can do to move forward on the next steps. I’m glad that my Ministry, along with our partner ministries and in close consultation with stakeholders, have begun to align our permitting policies and processes making it easier to navigate through the system for a new project. We are

strengthening our policies to support a healthy climate for capital investment in sustainable, renewable energy. We are working together, across government, and with industry and with our community partners to help Ontario produce the power we need for economic growth.”

The Honourable Bill Mauro, Minister of Natural Resources and Forestry

Tony Bouk, GreenBug Power (left) and Paul Norris, OWA (right)

The award was presented to Paul by Keith McAllister, President, Orillia Power, who stated, “Paul’s appetite for knowledge and growth continue to be a real strength. He has a natural ability to work with all levels of people; members of the public, staff and senior management of companies. His enthusiasm related to waterpower can easily be seen in any dealings you may have with him. Just talk to him about waterpower and you will see his eyes light up.”

Congratulations to all award winners!

The 2015 Power of Water Conference will be held from October 18th – 20th, 2015 again at the White Oaks Conference resort in Niagara-on-the-Lake. Registration will be open soon – save the dates!

Paul Young, Orillia Power (left) and Keith McAllister, Orillia Power (right)

Though hardly at the forefront of pre-election platforms and policies for any political party in 2014, Climate Change has clearly re-emerged as a top priority for the majority Liberal government of Ontario. The newly named Ministry of Environment and Climate Change is perhaps the most visible example of the renewed emphasis but more telling are the clear objectives outlined in the mandate letter from the Premier to the Minister. Two, in particular, warrant consideration in the context of the considerable contribution that existing and potential waterpower production can make to the provincial Climate Change objectives.

1. A Comprehensive Strategy for Ontario

Building on, and supporting, the most current science, the Ministry has been tasked with leading the development of a new long term climate change strategy for Ontario. Implementing the strategy is to involve an all-of-government approach including the Ministries of Finance, Energy, Transportation, Municipal Affairs and Housing, Economic Development, Employment and Infrastructure, Agriculture, Food and Rural Affairs, Research and Innovation, and Natural Resources and Forestry. The strategy is to be completed by 2015.

As illustrated in the figure to the right, the contribution of Ontario’s electricity to Greenhouse gas (GHG) production has decreased substantially in recent decades and yet it still remains significant.

Implementing the Long-Term Energy Plan will add another 1,000 MW of clean “Made in Ontario Waterpower” and there remains significant untapped potential, particularly in the north, where load growth is predicted.

2. A Pan-Canadian Approach

The Minister of Intergovernmental Affairs and the Minister of Energy, working together with other provinces and territories, will contribute to the development of a Canadian Energy Strategy that includes co-ordinated efforts to reduce GHG emissions.

As noted in the figure on the following page, Canada is blessed to have the majority of its electricity already coming from renewable, reliable hydropower (74,000 MW). According to the Canadian Hydropower Association, there is more than double the current installed capacity in remaining technical potential.

As Ontario prepares to contribute to the development and implementation of a Canadian Energy Strategy, the foundation of waterpower and its potential expansion will be of critical importance.

Climate Change: On the Front Burner

Source: Environmental Commissioner’s Annual Climate Change Report, 2014

Climate change has, appropriately, been called the challenge of this generation. Extreme weather and overall warming trends of today are attributed to anthropogenic influences dating back decades and, similarly, the actions of today will be felt in decades to come. Ontario’s initial economic prosperity was built upon its primary renewable resource – waterpower – and, as such, the province is in a strong starting position in the electricity sector. The sustainable development of waterpower potential in Ontario and across Canada can continue to make a significant contribution to achieving climate change objectives for the benefit of both present and future generations.

Source: Canadian Electricity Association

FROM THE MEn and wOMEn wHO HELP KEEP THE LIGHTS On.

The Power workers’ Union:The Voice of Ontario’s

Electricity Sector workersFor almost 70 years the Power Workers’ Union (PWU) has worked hard to improve the quality of life of electricity sector

employees and retirees. We’ve toiled to ensure: public safety; accident-free workplaces; good working conditions, wages and

benefits; and, that employees are treated with fairness and respect. The PWU knows that Ontario’s Electricity Sector will continue

to change and that we still face many workplace challenges. Today, the PWU is a modern multifaceted union representing

members in 49 Bargaining Units at companies throughout Ontario. The Power Workers’ Union is the voice of people who work

in Ontario’s electricity production and delivery system.

Ontario and British Columbia have both invested heavily in infrastructure to generate inexpensive power. Each province considers hydroelectric development a central component of its long term energy policy. Both provinces have longstanding legacy issues arising from a failure to consult First Nations about large provincial hydroelectric developments in the 1960s.

The proposed Site C Clean Energy Project (Site C) in British Columbia offers an opportunity to consider how the two provinces differ in their modern approach to hydroelectric development. The environmental approvals of Site C have generated applications for judicial review filed at the provincial and federal courts. Among the parties challenging the hydro development are several First Nation communities, including Treaty 8 Tribal Association, the Athabasca Chipewyan First Nation and the Mikisew Cree First Nation. The Peace Valley Landowners Association is also challenging Site C.

Several large hydro developments have taken place in Ontario and proceeded without the vigorous political and legal challenges advanced by First Nation communities. This article reflects on the historical, policy and legal reasons for the challenge to Site C in British Columbia and makes a comparison with hydro development in Ontario.

The Proposed Site C Project

BC Hydro’s proposed Site C is a hydroelectric generating station providing 1,100 megawatts (MW) of capacity, producing approximately 5,100 GW/h of electricity per year. The project would be the third dam on the Peace River, constructed near Fort St John in British Columbia. The accompanying reservoir would flood approximately 13,000 acres of land.

An independent Joint Review Panel by agreement of the federal and provincial governments conducted an environmental assessment, releasing its Report on May 1, 2014. The Joint Review Panel found that Site C would provide benefits, including “a large and long-

term increment of firm energy and capacity at a price that would benefit future generations”. The Joint Review Panel commented on the significant adverse effects of Site C, including cumulative impacts to the environment, the exercise of Aboriginal rights and treaty rights, and to farmland. The Joint Review Panel also questioned whether BC Hydro had adequately assessed the cost associated with alternatives to Site C.

The Site C project received conditional environmental approvals from the federal and provincial governments. The project is currently undergoing an investment review. Minister Bill Bennett has indicated that a decision about whether to construct the dam will be made by December 2014.

Key Differences Between Ontario and British Columbia Hydropower

Hydroelectric development in Ontario has proceeded on a different basis from British Columbia for some years. Currently, several hydropower projects in Ontario are moving forward through the regulatory and construction processes. Recent Ontario projects have advanced with increased social licence. Ontario’s hydro projects differ from Site C in their overall size, the regional cumulative impacts of development on treaty rights, the involvement of First Nations in the planning process, the perceived and actual benefits that flow to First Nations from the projects, and settlement of past grievances related to hydro development.

Individual Project Size

A simple but important factor distinguishing hydro development in Ontario from British Columbia is the project size. The scale of the largest hydroelectric development in British Columbia and in Ontario are of entirely different magnitudes – those in British Columbia are more than twice as large as those in Ontario. Ontario’s largest hydroelectric project is the Lower Mattagami Complex, which is broken up over four existing power stations on the Mattagami River. Total added capacity from the four

First Nation Challenges to Hydroelectric Development – A Tale of Two ProvincesGuest article by Julie Abouchar, Partner and Certified Environmental Law Specialist and Nicole Petersen, Associate Lawyer, Willms & Shier Environmental Lawyers LLP.

The applications for judicial review question the federal government’s approval of Site C on the grounds that the Joint Review Panel found significant adverse impacts from Site C, while the “unambiguous need for the power” has not been demonstrated. The test to justify infringement involves demonstrating a “compelling and substantial public interest”, as articulated in the recent Supreme Court of Canada decision in Tsilhqot’in Nation v British Columbia.ii

If the federal and provincial governments cannot justify the impacts to treaty rights that would be caused by Site C, the Court may quash the environmental approval.

Co-Planning

Both Ontario and British Columbia embarked on extensive hydroelectric development in the 1960s. The unmitigated impacts of this development caused considerable anger among First Nations and is a residual issue that both provinces have faced in opposition to hydro projects. Both provinces have paid out substantial settlements to address past grievances associated with the 1960s development. However, a key difference between the two provinces was how hydro development planning took place after the past grievance resolution process commenced.

When Ontario committed itself to negotiations to resolve past grievances, it also committed itself to co-planning with First Nations about future hydroelectric developments that would affect First Nations. The co-planning initiative arose as part of Ontario’s 25 Year Demand/Supply Plan initiative. This policy shift recognized the need for First Nations’ support for development.

power stations is 438 MW – less than half the 1,100 MW capacity of British Columbia’s proposed Site C project. The average capacity of the Ontario projects contracted through the Feed-in Tariff Program is less than 10 MW. The size of a project influences the level of regional impact at a basic level.

Cumulative Impacts on Treaty Rights

Hydroelectric development has the potential to adversely affect or infringe constitutionally-protected Aboriginal treaty rights. Where the Crown proposes activity that will infringe an Aboriginal treaty right, the Crown must justify infringement of the treaty right or obtain the consent of the First Nation. In Ontario, most hydroelectric development takes place in areas that are not as developed as Site C’s proposed location in the Peace Valley.

BC Hydro will likely need to demonstrate that the Site C dam justifies infringing Aboriginal treaty rights. This may be more difficult in light of case law about cumulative impacts of development near the proposed Site C location.

In 2011, the British Columbia Court of Appeal’s decision in West Moberly First Nation v British Columbiai discussed the cumulative impacts of development on the exercise of Aboriginal treaty rights in Treaty 8 territory. The First Nation asserted that allowing sampling – with a view to allowing coal mining – would affect treaty rights to hunt caribou in the First Nation’s traditional territory. The Court found that further development in the area would likely lead to the extirpation of a herd of caribou to which the First Nation claimed a harvesting right under Treaty 8. The Court found that British Columbia and the proponent failed to properly address these concerns during consultation, and that extirpation of the herd would improperly result in the effective extinguishment of the right.

The Joint Review Panel found that cumulative impacts from surrounding projects will compound the adverse effects from Site C. The Peace Valley region’s existing development includes both hydro development as well as mining and petroleum/natural gas projects. Site C would be constructed downstream of the existing WAC Bennett dam and the Peace Canyon dam. Constructed in the 1960s, the two dams are fed by the large Williston Reservoir, which, when it was constructed, flooded 350,000 acres of land.

Julie Abouchar Nicole Petersen

While BC Hydro has engaged with First Nations on the Site C project, consultation and engagement have taken place as part of the Joint Review Panel process instead of on a co-planning level. Minister Bill Bennett is hopeful that, while First Nations may not support the project, they will recognize the potential for economic opportunities that could arise from its construction and operation. Contrast this with the fact that in Ontario’s Far North, where significant transmission expansion is planned to connect diesel dependant First Nation Communities, the ability to develop hydropower in the first instance is premised on proponency by or partnership with local First Nations.

Partnerships with First Nations

Since the development of co-planning in the 1990s, most hydroelectric development in northern Ontario has either provided direct benefits to, or been constructed and operated in partnership with, First Nations.

Examples of two recent large developments include the Lower Mattagami Complex and the Umbata Falls Generating Project. The Lower Mattagami Complex is a 438 MW project that offers First Nation community investment. It has provided significant opportunities for Aboriginal business development, including over $300 million in contracts. Ontario Power Generation has also committed to and implemented a training program for First Nations, creating a database of trained candidates for employment. Human Resources and Skills Development Canada, Ontario Power Generation, the Ministry of Skills Development and Training and the project contractors together provided $8 million for training. Ontario Power Generation says the training program trained 350 persons with a 96% successful completion rate. The Umbata Falls Generating Project is another example of successful First Nations partnerships. The project is a 23 MW project that is majority-owned by Ojibways of Pic River through the Begetekong Power Corporation.

BC Hydro is moving to a similar model of negotiating impact benefit agreements with First Nations on capital projects, where appropriate. British Columbia is in negotiations with local First Nation communities about mitigating impacts to those communities. In addition, the conditions attached to the provincial environmental approval include exploring economic opportunities for First Nations. To our

knowledge, there have been no impact benefit agreements nor partnerships created in relation to Site C. The Joint Review Panel noted BC Hydro identified training and business opportunities for First Nations as planned project benefits. Some commentators, such as Clean Energy BC, have suggested that smaller projects would offer greater opportunities for economic development to First Nations than Site C.

Conclusion

Site C demonstrates the powerful need for a social licence for projects. Ontario’s modern hydro development has benefitted from a planning approach that provides for early consultation and often includes First Nations as partners. This approach, as well as the comparative size and location of Ontario’s projects, has helped to partially insulate Ontario’s hydro providers from legal challenges based on impacts to treaty rights. However, individual projects may still be vulnerable to challenges on the basis of treaty right infringement. Ontario and hydropower producers within the province should remain committed to early engagement with First Nations during the planning process to ensure minimal risk to hydro projects and positive relationships with local communities.

Julie Abouchar is a partner at Willms & Shier Environmental Lawyers LLP in Toronto and is certified as a Specialist in Environmental Law by The Law Society of Upper Canada. She can be reached at 416-862-4836 or by e-mail at jabouchar@willmsshier.com.

Nicole Petersen is an associate lawyer at Willms & Shier Environmental Lawyers LLP in Toronto. Nicole may be reached at 416-642-4872 or by e-mail at npetersen@willmsshier.com.

The information and comments herein are for the general information of the reader only and do not constitute legal advice or opinion. The reader should seek specific legal advice for particular applications of the law to specific situations.

i West Moberly First Nation v British Columbia (Chief Inspector of Mines), 2011 BCCA 247.

ii 2014 SCC 44.

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Engaging and Informing the Political ProcessWhat many people regard as lobbying — the actual communication with elected officials — represents a small piece of what the Association does. A far greater proportion is devoted to the other aspects of advocacy including preparation, information gathering and communication. OWA’s Queen’s Park Day provided members with the opportunity to connect with provincial leaders to discuss views and, importantly, provide insight regarding the important work the Association does with MPPs.

Key messaging at the event included;

• Waterpower Moderates Electricity Prices

• Waterpower Makes a Significant Contribution to the Economy

• Waterpower is the Backbone of Grid Reliability

• Waterpower Expansion is Key to Northern Aboriginal Economic Opportunity

Political decisions affect both people and organizations, facts must be provided to our legislators in order for them to make informed decisions. Public officials cannot make fair decisions without considering all the information from a broad range of interested parties. All sides of an issue must be explored in order to produce good public policy. OWA members have seen firsthand the importance of an organized event at Queen’s Park and opportunities like this are beneficial for building positive relationships. We recognize the value in this, which is why plans are already underway for 2015.

A key element of the Ontario Waterpower Association’s value proposition is to represent our members’ interests and work with all political parties to advance the role of waterpower to help meet the province’s economic, environmental and energy objectives.

To further this objective, on March 26, 2014, the OWA hosted its inaugural “Queen’s Park Day,” outreaching to and engaging key Members of Provincial Parliament. With more than fifty (50) OWA members, dozens of MPPs and their political staff participating, the event reinforced the importance of waterpower as Ontario’s First Choice.

Events like Queen’s Park Day provide the opportunity to inform legislators of the importance of waterpower, but building these relationships is not limited to one day of the year. Key to building positive and productive government relationships is;

• Constantly researching, analyzing and understanding legislation or regulatory proposals;

• Developing and providing detailed input and advice from the industry perspective;

• Identifying key issues affecting the sector;

• Working with others interested in the same issues; and,

• Developing and proposing collaborative solutions to issues identified.

OWA Members and Government Officials Networking on Queen’s Park Day

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In early 2014, the Ontario Waterpower Association (OWA) and Parks Canada released a report tabled with the federal Minister of the Environment and announced a “New Business Relationship” between the Ontario’s waterpower sector and the federal government. The report represented the culmination of efforts initiated in 2012, with the shared objective of developing a more structured and collective approach to addressing key policy issues that pertain to the support of waterpower development. Parks Canada and the OWA collaborated for the purpose of assessing the existing business relationship and identifying recommendations related to a number of key policies and procedures that govern the federal government and the waterpower industry.

The focus of the report is to provide policy and procedural recommendations to promote policy, regulatory, investment, and revenue certainty and consistency, benefiting both the federal government and waterpower industry.

Importantly, the analysis and advice presented has been undertaken collaboratively, the result of which is consensus on the key recommendations. In fact, the process in and of itself created momentum with respect to an improved business relationship between the two parties. Advancing key priorities has already gained momentum, as evidenced by improved operational collaboration in 2014.

The effort to advance the relationship was informed by the mutual recognition of the need for improved clarity and certainty with respect to key areas of public policy relevant to the use of federal waterways for waterpower production. To guide the process and the development of a strategic policy framework, four (4) core interrelated questions were posed:

1. How can tenure and permitting instruments contribute to shared objectives?

2. What is the appropriate approach to the valuation of federal waterways for the production of hydroelectricity?

3. How should the federal government provide resource access for new waterpower development? and

4. What improvements can be made in communications protocols and procedures between operators of water management infrastructure?

Underlying each of these questions is the fundamental premise that the federal government (i.e. Parks Canada) is in and should be in the hydro business on federal waterways. As of the fall of 2013, the Parks Canada Agency administered twenty (20) waterpower licences, three (3) priority permits and twelve (12) related waterpower agreements. On average, the occupation of federal waterways by waterpower facilities accounts for approximately $1.3 million annually in dedicated revenue to Parks Canada’s Ontario Waterways Directorate. Approximately 100 MW of installed capacity is present on federal waterways in Ontario.

In addressing these questions, government / industry working groups adopted a common evaluative approach that involved:

• Documenting the current state (e.g. policies, protocols, procedures);

• Evaluating the approaches taken by other jurisdictions, notably the provincial government;

• Assessing alternatives; and

• Providing advice and recommended improvements.

Parks Canada: In the Hydro Business

Specific recommendations from the working groups in each of the four policy themes were provided in the body of this report. Given the inherent interrelationship between the themes, a number of common observations and recommendations were made, and are considered Key Findings, as follows:

• There is clear recognition of shared financial interest in optimizing existing waterpower production and expanding development opportunities.

• There is a need to further build on the existing consistency between federal and provincial instruments, policies and procedures.

• There is a need to formalize and institutionalize communications policies, procedures and protocols in a number of critical areas including water management, annual capital investment and public safety.

• There is a need to define the parameters under which opportunities for shared investment in water management infrastructure that can achieve mutual benefit can be explored and pursued.

While more than forty (40) detailed recommendations were included in the working group reports, highlights of each include:

1. Permits and Licences

- Ensure operational agreements are included in all licences

- Adopt a standardized format for operational agreements

- Incorporate the terms and conditions of the generic provincial waterpower lease agreement into the federal licence to the extent possible and practical

2. Resource Revenues and Fees

- Adopt the terms and conditions of the provincial waterpower rental regulations as federal policy to the extent possible and practical

- Implement a clear and consistent policy approach to capital investments made by industry in federal infrastructure

- Implement a clear and consistent approach to operational agreements and cost sharing

3. Site Release and Development

- Complete the inventory of potential waterpower development sites on federal waterways as soon as possible

- Make development opportunities available on a systematic basis, considerate of the capacity of the Parks Canada Agency

- Make new development opportunities available through a competitive process for larger sites and through unsolicited proposals for smaller sites

4. Communications and Information Management

- Develop and share emergency preparedness planning and public safety measures collaboratively to the extent possible and practical

- Standardize key information with respect to contacts, communications methods, protocols and processes across industry and federal facility managers

- Leverage and share federal and industry use of communication and information management tools

In order to move forward on the New Business Relationship and the Strategic Policy Framework for Water Power, the Parks Canada Agency has created dedicated “Business Development” positions, including positions with a specific focus on waterpower. Work is underway to support the provision of new development opportunities in anticipation of the Large Renewables Procurement. And information and knowledge exchange has been regularized on operational priorities such as public safety.

The New Business Relationship represents a paradigm shift with respect the recognition of the value of waterpower on federal waterways and sets the direction for a future defined by collaboration and cooperation toward the achievement of shared objectives.

mitigate some of the demand but not all. Forecasts of more unpredictable weather and less rain will add further pressure on water resources. Planning is more important now than it has ever been.

Plans need to be adaptive and in order to be adaptive you need real-time data. To get real-time data you need monitoring. Monitoring is vital to planning and management, by monitoring we enable informed decisions that can put the right projects in the right places and allow for the protection of important and sensitive areas. Having modern adaptive systems in place to track, report, disseminate and protect data is vital. Integrated systems with current data regarding usage and supply that can also feed into forecasting tools and models can provide mangers with the information they need to make decisions. Water resource management is not going to get any easier as demands grow and the climate changes. The need not just for data but information will become more and more important.

Jamison Romano is a Hydrology Specialist at Aquatic Informatics Inc. He can be reached at 604-873-2782 or by email at jamison.romano@aquaticinformatics.com.

There has been a lot of talk lately about the water, energy and food security nexus. The recognition that these three things are connected and can’t be managed independently as a management decision in one sector inevitably has an effect in another. Think of it this way.

Water is used in many of our energy generation methods. Whether it’s hydro power, thermal generation, oil extraction, etc., water is vital to most current energy production methods. That might not be a problem except water is also vital for agriculture, industry, drinking water, domestic use, waste removal and recreation. Energy is also required for many of those exact same things. How do we decide who gets the water? Population increases and worldwide development are putting more pressure on energy and water worldwide. How do we plan development to alleviate or at least mitigate these pressures? The human and financial ramifications of decisions today will have impacts long into the future.

The World Bank has taken notice of the energy/water crisis that is approaching. At the World Future Energy Summit and the International Water Summit in Abu Dhabi, William Rex, lead water resources specialist at the bank, explained with the world’s energy consumption expected to increase by 35 per cent by 2035, the pressure on water resources is likely to increase, as well he said, while continuing urbanization, industries and agriculture will also continue to exert pressure on water resources. “We see, for example, thermal power plants in several countries around the world that have had to stop generating because they lack the water used for cooling,” Mr. Rex said. The World Bank has launched an initiative to tackle the water footprint of energy generation called Thirsty Energy. Mr. Rex said the objective was “to develop water-efficient energy, energy-efficient water and, most importantly, the tools to plan and manage these two critical resources together”. (Todorova, 2014)

We all require energy for heat, transportation, light and other day to day activities. We also require clean water to drink, clean and grow food. This conflict between water usages isn’t going away anytime soon. Water treatment, recycling, use reduction and process efficiency can help

Food Security

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Edward Island combined. While households and community governments have been participating in this growth, the most significant expansion of the overall Aboriginal market is being recorded within the business sector.

Many non-Aboriginal businesses already recognize the contribution that Aboriginal people can make to fill growing labour shortages, especially as the Canadian population ages. However, there is less recognition of the fact that the Aboriginal segment of the overall population represents a rapidly growing consumer market and a potentially lucrative one for Canadian businesses.

Still, one cannot overlook the significant challenges that remain. When income gains are adjusted for the rapid population growth among Aboriginal people, little progress is being made in reducing the disparity in living standards relative to the Canadian average. In fact, the Canadian Centre for Policy Alternatives noted that the median income for Aboriginal people was 30% lower than the median income for all other Canadians in 2006. For Aboriginal people to truly put a dent in this divergence over the long run, the gap in education attainment needs to be closed.

Total business income hits $9 billion

A decade ago, the business share of the total Aboriginal market represented was 35% and small businesses accounted for the dominant share. Fast forward to today, and the number of economic development corporations (EDCs) has increased and so too have annual earnings. Small businesses and EDCs combined now contribute about 37% to aggregate annual income.

Starting with the income of small businesses, anecdotal evidence suggests that most Aboriginal-owned entities have less than a hundred employees. According to TD estimates, there are nearly 25,000 Aboriginal-owned entities across the country and collectively, they would bring in about $974 million in earnings in 2011. EDCs are now the other key player in this income category. These entities are the economic and business development arm of an Aboriginal government that pursues economic activity. In almost all cases, the firm is located in the community the corporation represents. In fact, the enterprise is often owned by the Aboriginal government. In recent years, these community businesses have taken on greater economic importance.

While the waterpower industry and the OWA continue to work to advance partnerships with Aboriginal communities, particularly in Northern Ontario, and while efforts are ongoing to build capacity collaboratively, the fact that the Aboriginal market itself is growing significantly in the context of the Canadian economy is often overlooked. As evidenced in this excerpt from a 2011 TD Economics Report, undertaken with the support of the Canadian Council of Aboriginal Business (CCAB), investors and employers would be wise to look to the opportunities this emergent and growing market can provide. The report also points to the importance of innovative approaches to education, from both governments and businesses, as a key to realizing the significant untapped potential of the Aboriginal market, an observation the OWA has embedded in our partnerships with the Chiefs of Ontario and Queen’s Aboriginal Access to Engineering Program.

$32 billion in combined income across households, businesses and governments by 2016

Over the past decade, Aboriginal people in Canada – both on- and off-reserve – have been increasingly flexing their economic muscle. TD Economics estimated that the combined total income of Aboriginal households, business and government sectors would reach $24 billion in 2011, double the $12 billion tally recorded in 2001. By 2016, it is estimated that this overall income pie could eclipse $32 billion, or roughly 50% above the 2011 level. If achieved, total Aboriginal income would be greater than the level of nominal GDP of Newfoundland and Labrador and Prince

Worth Repeating – the Growing Aboriginal Market

Special ReportJune 17, 2011

TD Economicswww.td.com/economics 4

A decade ago, the business share of the total Aboriginal market represented was 35% and small businesses accounted for the dominant share. Fast forward to today, and the number of economic development corporations (EDCs) has increased and so too have annual earnings. Small businesses and EDCs combined now contribute about 37% to aggregate annual income. However, it is important to stress that data limitations are particularly challenging for quantifying this category, although we believe our forecasts to be on the prudent end of the spectrum.

Let us start with the income of small businesses. Anec-dotal evidence suggests that most Aboriginal-owned enti-ties have less than a hundred employees. In arriving at our figure, we use Census estimates of the number of Aboriginal small businesses and calculate the corresponding share of total Canadian businesses in those years. Projected shares are then applied to subsequent data on the number of Cana-dian small-business enterprises as well as average revenues. In carrying out this crude estimate, we make the simplifying assumption that Aboriginal small businesses are similar and comparable to other small businesses across the country. This might not be the case given the resource-based nature of many First Nation, Inuit and Métis businesses. What’s more, if the small business is still quite young in its operat-ing cycle, profit generation may still be in the exponential growth phase. According to our estimates, there are nearly 25,000 Aboriginal-owned entities across the country and collectively, they will bring in about $974 million in earn-ings in 2011.

EDCs are now the other key player in this income category. These entities are the economic and business development arm of an Aboriginal government that pursues

economic activity. In almost all cases, the firm is located in the community the corporation represents. In fact, the enterprise is often owned by the Aboriginal government.

In recent years, these community businesses have taken on greater economic importance. In response, and to better understand the nature of this type of commerce, the Canadian Council for Aboriginal Business (CCAB) commissioned a survey in 2010. From an estimated 262 active economic development corporations, CCAB, in partnership with En-vironics Research Group, randomly selected fifty businesses for a telephone or in-person survey. The results find that EDCs are based in all provinces and territories. In terms of industry, EDCs cover both goods and services-producing sectors in roughly equal proportion.

At the time the CCAB survey was commissioned, each community-based business had on average 185 employees and had been in business for 17 years. The average annual gross sales in 2010 were roughly $28 million per firm. The point in time estimate and the maturity of each business sug-gests that a moderate expansion in the number of organiza-tions has probably taken effect over the last several years. We have estimated that roughly ten new EDCs have been set up each year since 2001, consistent with the historical trend. Still, the small number of corporations has led rev-enues to more than double over the past decade. In 2011, annual earnings (before expenses) should reach $8.1 billion. Going forward, we expect to see outsized revenue gains as well as more communities adopting this type of business.

Governmentincomehasalsogrown

Federal and provincial government spending on Ab-original people and communities has long been an important income source. As such, we have reviewed planning and fi-

ABORIGINALLABOURmARKETOUTCOmESImPROVING

35

36

37

38

39

40

41

42

2001 2006 2011F 2016F20

22

24

26

28

Note: Forecasts by TD Economics as at June 2011.Source: Census, Aboriginal Labour Market Estimates.

Unemployment Rate (rhs)

EmploymentRate (lhs)

% %

ABORIGINALBUSINESSINCOmEREPRESENTSGROWINGSHARE

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2001 2006 2011F 2016F0

200

400

600

800

1000

1200

1400EDC Revenues (lhs)

Small Business Earnings (rhs)

$, millions $, millions

Note: Forecasts by TD Economics as at June 2011.Source: Statistics Canada, Industry Canada, CCAB.

From a survey commissioned by the CCAB, each community-based business had on average 185 employees and had been in business for 17 years. The average annual gross sales in 2010 were roughly $28 million per firm. The point in time estimate and the maturity of each business suggests that a moderate expansion in the number of organizations had probably taken effect over several years. The report estimated that roughly ten new EDCs have been set up each year since 2001, consistent with the historical trend. Still, the small number of corporations has led revenues to more than double over the past decade. In 2011, annual earnings (before expenses) were projected to reach $8.1 billion. Going forward, TD expected to see outsized revenue gains as well as more communities adopting this type of business.

Income pie to grow to $32 billion by 2016

With decade-long trends in hand, and given the view on the national and regional economic outlook, TD projected what market income (including discretionary government funding) might be in 2016. Key factors indicating that positive winds of change were in place, included: (1) bright long-term prospects for the resource sector; (2) growing skills shortages; and (3) 2004 Supreme Court decisions that established that governments have a legal obligation to consult Aboriginal communities about potential resource development projects. And while off-reserve Aboriginal people enjoy the brightest income prospects, impact benefit agreements and corporate investments into communities are increasingly bringing in more financial benefits to communities. Going forward, it is expected that these types of relationships and financial arrangements will continue to blossom.

Closing the education gap key to long-term growth

Between 2001 and 2011, the size of the Aboriginal income market (+7% per year) has grown at a faster pace than over-all Canadian nominal GDP (+4% per year). The near-term outlook suggests that this trend will continue. By 2016, the $32 billion tally will be a lucrative market to non-Aboriginal and Aboriginal companies alike. Despite the growing pie, the level of total income on a per-capita basis is not only unlikely to narrow the gap with that of non-Aboriginal people (as measured by nominal GDP) but it

could widen further. Over the long haul, the most important impediment to closing the gap in living standards is the sub-par education attainment levels recorded by Aboriginal people. The recent outperformance and sizeable gains can be connected to the recent resource and construction booms that offered Aboriginal people well-paying jobs without necessarily having high school certification. As was the case in the 2008-09 downturn, these individuals often have little certification or training to fall back on when the boom sours.

Recent developments in e-learning programs and adult education programs are important steps in the right direction. Still, to ensure that individuals and communities take advantage of all the income potential ahead of them, policy makers in connection with businesses and academics will need to think of inventive ways to educate individuals and communities.

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2014 was a year of significant activity for the waterpower sector, particularly in new procurement and policy. The year began with the awarding of contracts under the Municipal Hydroelectric Standard Offer Program (HESOP) and the development of new projects in Ottawa, Renfrew and St. Catharines. The HESOP expansion initiative followed, providing for the procurement of up to 40 MW of additional capacity at existing facilities. FIT 3.0 for small projects extended 100 MW with an additional 200 MW to be procured in 2015, both at a new price for waterpower that is more reflective of input costs for projects at that scale. And throughout the year the OPA led the development of the design of the Large Renewables Procurement, with results to date of the Request for Qualifications yielding six (6) waterpower proponents competing for 75 MW in 2015. And while there is considerable work left to do to help inform the LRP procurement, Small FIT and potential subsequent rounds of HESOP, 2015 and beyond is relatively well mapped out with respect to the timetable of opportunities to bring new projects forward.

On the policy side, notwithstanding that direction is still required on approvals under the Lakes and Rivers Improvement Act, the OWA and government have landed on guidance with respect to defining baseline conditions against which new projects will be assessed, as well as the determination of the downstream zone of influence. Industry experts have led the development and publication of additional best practices on wetlands, migratory birds, water quality and ecological flows. The OWA’s Five Year Review of the Class EA was approved, as were a number of minor amendments brought forward by both practitioners and third parties. Mitigation and monitoring plans pursuant to the Endangered Species Act have been prepared and registered. And work is underway to develop a collective and collaborative approach to pre- and post-construction monitoring to help inform science and information gaps and improve predictive modeling.

Add to this incremental progress the reality of a majority government with clear and public ministry mandates and one can presume, relative to the alternative, a coming year of relative stability in the industry. No better time, then, to advance the differentiation of waterpower from other technologies.

Put simply, waterpower has not fared well in the “one size fits all” approaches to procurements and policies. Far more productive have been the separate and distinct initiatives focused specifically on hydro, such as the HESOP initiatives and the Hydroelectric Supply Agreements with OPG. The necessary extension of the waterpower FIT contracts from five (5) to eight (8) years due to “unique regulatory and approvals requirements” is but one example of how very different the development of a waterpower project is.

Take, for example, the generic policy which provides no indexation against inflation until commercial operation and consider this significant difference in risk profile for a technology that can be built in two (2) or three (3) years and one that takes seven (7) or eight (8). Add to that the reality that virtually all waterpower projects are on Crown land while the majority of the other renewable projects are on private land. Current Crown land policy provides that resource access (i.e. a site) is premised on securing a procurement contract, yet evolving procurement policy (e.g. LRP) emphasizes the early engagement of the public and stakeholders as a pre-condition to obtaining a contract. A waterpower proponent is caught in a Catch 22 – having to communicate and consult on a proposed project for which no access can be granted! Layer on the fact that waterpower is not subject to the Renewable Energy Approvals process, but rather the Class Environmental Assessment and the policy differentiation becomes even more stark.

The OWA has consistently and constantly brought forward the unique aspects and ancillary values of waterpower in the context of broad electricity, environmental and economic policy. Measures designed to resolve issues associated with other technologies have had and may continue to have unintended consequences for the waterpower industry. The most rational, reasonable path forward is one of increased differentiation, both in terms of procurement and policy. The relative stability of 2015 provides the opportunity to take this message forward.

2015 – A Year of Stability and Differentiation

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OP-3421_LMP_ResizeB.indd 1 2014-11-14 2:58 PM

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providing comprehensive multidiscipline technical capabilities on a wide range of water

resources, hydropower, dams, transportation, and tunnel projects using design-bid-

build and design-build delivery methods. The firm has 380 employees and 19 offices

throughout North America, Australia, and New Zealand.

Biogas Association Value of Biogas Workshop and Tours March 25-26 Hamilton, ON

National Hydropower Association Annual Conference April 27-29 Capital Hilton, Washington, D.C.

Canadian Hydropower Association Forum on Hydropower May 14-15 Ottawa, ON

HydroVision International July 14-17 Oregon Convention Centre Portland, Oregon

Canadian Wind Energy Association CanWEA 2015 October 5-7 Toronto, ON

CanSIA Solar Canada 2015 October 7-8 Toronto, ON

Ontario Waterpower Association Power of Water Canada Conference October 18-20 Niagara-on-the-Lake, ON

APPrO Annual Canadian Power Conference and Networking Centre November 17-18 Toronto, ON

2015 Industry Events Listings

Order your signs now to have in hand by February 2015

Best ManagementPractices for Waterpower

OWA guides have been developed to provide practical and current Best Management Practices (BMPs) that will assist proponents in determining how best to construct, rehabilitate or repair waterpower facilities in an environmentally sustainable manner.

Mitigation of Impacts of Waterpower Facility Construction $59.95 CANIncludes 38 BMPs outlining legislation, environmental management, construction, contingency plans and MUCH MORE!

NEW EDITIONS:

Wetlands, Migratory Birds, Surface Water Quality and Fish Sampling

Species at Risk BMPs $29.95/each CAN• American Eel• Channel Darter • Lake Sturgeon

www.owa.ca

SPECIAL

LIMITED TIME

OFFER:

Four BMPs set

for $125.00 CAN*

*Taxes not included

To order OWA BMP guides, please call 1-866-743-1500. To be informed of new BMPs released, please email info@owa.ca

Niagara-on-the-Lake, Ontario | October 18-20, 2015 The 15th annual Power of Water Canada Conference will take place from October 18-20, 2015 in Niagara-on-the-Lake. Don’t miss out! Register early by contacting Janelle Bates, Marketing and Event Coordinator, jbates@owa.ca or 1-866-743-1500 ext. 23.

Canada 15th annual power of

water

Ontario Waterpower Association Annual Conference and Tradeshow2015

conference.owa.ca

OCTOBER 18-20, 2015SAVE THE DATE!

airdberlis.com

With a wealth of insight and experience in the waterpower industry, Aird & Berlis LLP provides practical legal advice to developers and operators on a broad spectrum of energy issues.

Rely on us for optimal results.

Send Your Complex Energy Matters Downstream

Scott Stoll | sstoll@airdberlis.com | 416.865.4703