"Applied Science, Faculty of"@en . "Community and Regional Planning (SCARP), School of"@en . "DSpace"@en . "UBCV"@en . "Nicholls, William Graham"@en . "2010-03-17T20:36:15Z"@en . "1979"@en . "Master of Arts in Planning - MA (Plan)"@en . "University of British Columbia"@en . "The history of the Aishihik project begins in 1971, when the Northern Canada Power Commission (NCPC) first investigated the site of the project and selected it for hydroelectric development. The Minister of Indian Affairs and Northern Development required that licencing of the project be delayed until pending legislation - the \"Northern Inland Waters Act\" - became operable. The licencing process under this legislation involved the participation of an entirely new licencing authority, the Yukon Territory Water Board. As a consequence of the implemention of this new process, the construction of the project began about one year later than NCPC originally intended. When construction of the project did begin in April 1973, it was estimated to cost $17 million and take twenty months to complete. The project finally cost $39 million and was not completed for twenty-six months. Information presented in the study consists almost entirely of primary written materials. The documentation provided shows how different actors perceived, and dealt with the problems that were encountered in planning, licencing, and implementing the project. Objectives: The objectives of this study are: 1) to describe the history of the Aishihik project as accurately as possible, focusing on the decision processes and the most important problems that arose during the course of the history; and 2) to identify the main factors that were responsible for the development of these problems. Problems: The most important problems that are dealt with in this study relate to the selection of the project, to the water licencing process, and to the project planning, implementation and cost overruns. 1. Selection of the Project. Only a perfunctory investigation of alternatives was made. Thus a question has persisted as to whether the best alternative was chosen for development. 2. The Water Licencing Process. Since this was the first project made subject to the \"Northern Inland Waters Act\", none of the actors had previous experience with the licencing process. As a result, differences in perceptions were held by NCPC and the Water Board about the role of the Water Board, and this caused friction and delays in carrying out the licencing procedure. 3. Project Planning, Implementation and Cost Overruns. a) NCPC lacked experience in constructing hydro facilities, and was not well staffed to plan and implement a substantial hydroelectric power project. b) NCPC evidently misjudged the cost and time required to construct the project, as indicated by the cost overrun and the fact that construction took 30 per cent longer than estimated. c) Factors responsible for the cost overrun are not entirely clear. Reports on the cost overrun were written by the NCPC management, the consulting firm which designed the project and managed its construction, and an independent consultant, but a quantitative analysis showing what proportion of the cost overrun was caused by unforeseen inflation and what proportion was caused by other factors has never been carried out. Conclusions: The difficulties encountered during the licencing process are unlikely to be repeated because all actors are now familiar with its requirements. Countervailing influences that would ensure adequate consideration of alternatives, reliability of cost estimates, and efficient implementation of construction programs are necessary to give the public confidence in processes for supplying electric power in the Yukon."@en . "https://circle.library.ubc.ca/rest/handle/2429/22033?expand=metadata"@en . "9 1 H Y D R O - E L E C T R I C P O W E R P L A N N I N G I N T H E Y U K O N : A C A S E S T U D Y O F T H E A I S H I H I K P R O J E C T b y W I L L I A M G R A H A M N I C H O L L S B . A . U n i v e r s i t y o f B r i t i s h C o l u m b i a , 1 9 7 6 A T H E S I S S U B M I T T E D I N P A R T I A L F U L F I L L M E N T O F T H E R E Q U I R E M E N T S F O R T H E D E G R E E O F M A S T E R O F A R T S i n t h e S c h o o l o f C o m m u n i t y a n d R e g i o n a l P l a n n i n g W e a c c e p t t h i s t h e s i s a s c o n f o r m i n g t o t h e r e q u i r e d s t a n d a r d : M a y , 1 9 7 9 ( c ) W i l l i a m G r a h a m N i c h o l l s , 1 9 7 9 I n p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f t h e r e q u i r e m e n t s f o r an a d v a n c e d d e g r e e a t t h e U n i v e r s i t y o f B r i t i s h C o l u m b i a , I a g r e e t h a t t h e L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e a n d s t u d y . I f u r t h e r a g r e e t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r p o s e s may be g r a n t e d by t h e Head o f my D e p a r t m e n t o r by h i s r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l n o t be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . D e p a r t m e n t n f C o m m u n i t y a n d . R e g i o n a l P l a n n i n g The U n i v e r s i t y o f B r i t i s h C o l u m b i a 2075 W e s b r o o k P l a c e V a n c o u v e r , C a n a d a V6T 1W5 D a t e M a y 8, 1979 - i i -A B S T R A C T T h e h i s t o r y o f t h e A i s h i h i k p r o j e c t b e g i n s i n 1 9 7 1 , w h e n t h e N o r t h e r n C a n a d a P o w e r C o m m i s s i o n ( N C P C ) f i r s t i n v e s t i g a t e d t h e s i t e o f t h e p r o j e c t a n d s e l e c t e d i t f o r h y d r o e l e c t r i c d e v e l o p m e n t . T h e M i n i s t e r o f I n d i a n A f f a i r s a n d N o r t h e r n D e v e l o p m e n t r e q u i r e d t h a t l i c e n c i n g o f t h e p r o j e c t b e d e l a y e d u n t i l p e n d i n g l e g i s l a t i o n -t h e N o r t h e r n I n l a n d W a t e r s A c t - b e c a m e o p e r a b l e . T h e l i c e n c i n g p r o c e s s u n d e r t h i s l e g i s l a t i o n i n v o l v e d t h e p a r t i c i p a t i o n o f a n e n t i r e l y n e w l i c e n c i n g a u t h o r i t y , t h e Y u k o n T e r r i t o r y W a t e r B o a r d . A s a c o n s e q u e n c e o f t h e i m p l e m e n t i o n o f t h i s n e w p r o c e s s , t h e c o n s t r u c t i o n o f t h e p r o j e c t b e g a n a b o u t o n e y e a r l a t e r t h a n N C P C o r i g i n a l l y i n t e n d e d . W h e n c o n s t r u c t i o n o f t h e p r o j e c t d i d b e g i n i n A p r i l 1 9 7 3 , i t w a s e s t i m a t e d t o c o s t $ 1 7 m i l l i o n a n d t a k e t w e n t y m o n t h s t o c o m p l e t e . T h e p r o j e c t f i n a l l y c o s t $ 3 9 m i l l i o n a n d w a s n o t c o m p l e t e d f o r t w e n t y - s i x m o n t h s . I n f o r m a t i o n p r e s e n t e d i n t h e s t u d y c o n s i s t s a l m o s t e n t i r e l y o f p r i m a r y w r i t t e n m a t e r i a l s . T h e d o c u m e n t a t i o n p r o v i d e d s h o w s h o w d i f f e r e n t a c t o r s p e r c e i v e d , a n d d e a l t w i t h t h e p r o b l e m s t h a t w e r e e n c o u n t e r e d i n p l a n n i n g , l i c e n c i n g , a n d i m p l e m e n t i n g t h e p r o j e c t . - i i i -O b j e c t i v e s The o b j e c t i v e s o f t h i s study a r e : 1. to d e s c r i b e the h i s t o r y o f the A i s h i h i k p r o j e c t as a c c u r a t e l y as p o s s i b l e , f o c u s i n g on the d e c i s i o n processes and the most important problems t h a t arose d u r i n g the course of the h i s t o r y ; and 2 . to i d e n t i f y the main f a c t o r s t h a t were r e s p o n s i b l e f o r the development o f these problems. Problems The most important problems t h a t are d e a l t w i t h i n t h i s study r e l a t e to the s e l e c t i o n of the p r o j e c t , t o the water l i c e n c i n g p r o c e s s , and to the p r o j e c t p l a n n i n g , implementation and c o s t overruns. 1. S e l e c t i o n of the P r o j e c t Only a p e r f u n c t o r y i n v e s t i g a t i o n o f a l t e r n a t i v e s was made. Thus a q u e s t i o n has p e r s i s t e d as to whether the be s t a l t e r n a t i v e was chosen f o r development. 2 . The Water L i c e n c i n g Process Since t h i s was the f i r s t p r o j e c t made s u b j e c t to the Northern Inland Waters A c t , none of the a c t o r s had p r e v i o u s experience w i t h the l i c e n c i n g p r o c e s s . As a r e s u l t , d i f f e r e n c e s i n p e r c e p t i o n s were h e l d by NCPC and the Water Board about the r o l e o f the Water Board, and t h i s caused f r i c t i o n and de l a y s i n c a r r y i n g out the - i v -l i c e n c i n g p r o c e d u r e . 3 . P r o j e c t P l a n n i n g , I m p l e m e n t a t i o n a n d C o s t O v e r r u n s a . N C P C l a c k e d e x p e r i e n c e i n c o n s t r u c t i n g h y d r o f a c i l i t i e s , a n d w a s n o t w e l l s t a f f e d t o p l a n a n d i m p l e m e n t a s u b s t a n t i a l h y d r o e l e c t r i c p o w e r p r o j e c t . b . N C P C e v i d e n t l y m i s j u d g e d t h e c o s t a n d t i m e r e q u i r e d t o c o n s t r u c t t h e p r o j e c t , a s i n d i c a t e d b y t h e c o s t o v e r r u n a n d t h e f a c t t h a t c o n s t r u c t i o n t o o k 3 0 p e r c e n t l o n g e r t h a n e s t i m a t e d . c . F a c t o r s r e s p o n s i b l e f o r t h e c o s t o v e r r u n a r e n o t e n t i r e l y c l e a r . R e p o r t s o n t h e c o s t o v e r r u n w e r e w r i t t e n b y t h e N C P C m a n a g e m e n t , t h e c o n s u l t i n g f i r m w h i c h d e s i g n e d t h e p r o j e c t a n d m a n a g e d i t s c o n s t r u c t i o n , a n d a n i n d e p e n d e n t c o n s u l t a n t , b u t a q u a n t i t a t i v e a n a l y s i s s h o w i n g w h a t p r o p o r t i o n o f t h e c o s t o v e r r u n w a s c a u s e d b y u n f o r e s e e n i n f l a t i o n a n d w h a t p r o p o r t i o n w a s c a u s e d b y o t h e r f a c t o r s h a s n e v e r b e e n c a r r i e d o u t . C o n c l u s i o n s T h e d i f f i c u l t i e s e n c o u n t e r e d d u r i n g t h e l i c e n c i n g p r o c e s s a r e u n l i k e l y t o b e r e p e a t e d b e c a u s e a l l a c t o r s a r e n o w f a m i l i a r w i t h i t s r e q u i r e m e n t s . C o u n t e r v a i l i n g i n f l u e n c e s t h a t w o u l d e n s u r e a d e q u a t e c o n s i d e r a t i o n o f a l t e r n a t i v e s , r e l i a b i l i t y o f c o s t e s t i m a t e s , a n d e f f i c i e n t i m p l e m e n t a t i o n o f c o n s t r u c t i o n p r o g r a m s a r e n e c e s s a r y t o g i v e t h e p u b l i c c o n f i d e n c e i n p r o c e s s e s f o r s u p p l y i n g e l e c t r i c p o w e r i n t h e Y u k o n . - V -T A B L E O F C O N T E N T S A B S T R A C T T A B L E O F C O N T E N T S P A R T O N E C H A P T E R O N E P A R T T W O C H A P T E R T W O I N T R O D U C T I O N i I . O b j e c t i v e s I I . S y n o p s i s o f H i s t o r y I I I . P h y s i c a l D e s c r i p t i o n I V . H i s t o r y o f N C P C B e f o r e A i s h i h i k V . T h e W h i t e h o r s e S y s t e m A . T h e D e m a n d f o r P o w e r B . M i n i n g D e m a n d V I . A c t o r s i n t h e D e c i s i o n P r o c e s s A . N o r t h e r n C a n a d a P o w e r C o m m i s s i o n B . T h e W a t e r B o a r d - C T h e D e p a r t m e n t o f I n d i a n A f f a i r s a n d N o r t h e r n D e v e l o p m e n t V I I . O v e r v i e w S E L E C T I O N A N D A P P L I C A T I O N -J U N E 1 9 7 1 t o M A Y . 1 9 7 2 I . I n t r o d u c t i o n I I . S e l e c t i o n o f t h e S i t e A . P r e v i o u s K n o w l e d g e B . I n i t i a l S u r v e y s C . \u00E2\u0080\u00A2 S e l e c t i o n D . S t u d y o f t h e S i t e P a g e i i v 1 1 1 5 1 1 1 2 1 3 1 5 1 6 1 6 1 7 1 9 2 0 2 3 2 3 2 3 2 3 2 4 2 5 2 7 - v i -Page E. A p p l i c a t i o n f o r Water L i c e n c e 2 7 I I I . The Water L i c e n c e Process 2 9 A. I n t r o d u c t i o n 2 9 B. Previo u s Water L i c e n c e Process 2 9 C. D e c i s i o n to Use the N.I.W.A. 3 0 IV. Generation of Information 3 2 A. Environmental Study Delays 3 2 B. The Environmental Impact Study ] 3 4 C. E n g i n e e r i n g Design 3 6 D. E n g i n e e r i n g Study 3 9 V. Summary 4 0 CHAPTER THREE THE FIRST HEARING - MAY, 1 9 7 2 4 7 I. I n t r o d u c t i o n 4 7 I I . P r e p a r a t i o n f o r the Hearing 4 7 A. L e g a l C o n s t r a i n t s 4 7 B. N o t i c e o f the Hearing 5 0 C. A v a i l a b i l i t y o f Reports 5 2 I I I . The Water Board's Mandate 5 2 IV. The Hearing 5 5 V. Summary 6 0 CHAPTER FOUR OUTCOME OF THE FIRST HEARING AND PREPARATIONS FOR RE-APPLICATION - 6 3 MAY 1 9 7 2 TO JANUARY 1 9 7 3 I. Recommendation of the Water Board 6 3 I I . NCPC's Reaction 6 6 - V l l -I I I . IV. V. VI. VII. VIII. CHAPTER FIVE CHAPTER SIX Proposed Construction Schedule Study Delays Environmental Studies Changes i n the Water Licence Application The Pumping Scheme Summary SECOND HEARING AND OUTCOME, DECISION TO PROCEED - JANUARY TO APRIL, 1973 I. Introduction I I . Date of Hearing I I I . Terms of Application IV. Second Hearing V. The Water Board's Decision VI. NCPC's Reaction VII. Decision to Proceed VIII. Summary CONSTRUCTION OF THE PROJECT AND THE COST OVERRUN I. Compliance with Licence Conditions II. The Cost Overrun A. Introduction B. Formulation of Cost Estimates C. Economic Factors D. The Tunnel Contract E. The Construction Schedule Page 68 70 75 77 80 82 88 88 88 89 89 91 96 99 102 104 104 109 109 110 111 112 113 - V l l l -P a g e F . D e t a i l e d P r e p a r a t i o n s 1 1 5 G . I n f l u e n c e o f W a t e r 1 1 7 L i c e n c e D e l a y s H . T h e W a t e r B o a r d ' s 1 2 0 R e a c t i o n I . T h e D a l b y R e p o r t 1 2 1 I I I . S u m m a r y a n d C o n c l u s i o n s 1 2 3 C H A P T E R S E V E N F I N A L S T U D I E S A N D T H E T H I R D H E A R I N G 1 2 9 - A U G U S T , 1 9 7 5 I . I n t r o d u c t i o n 1 2 9 I I . T h e T h i r d H e a r i n g 1 3 0 I I I . I n f o r m a t i o n P r o v i d e d F o r T h e 1 3 3 H e a r i n g A . T h e S y s t e m s S t u d y 1 3 3 1 . E v a l u a t i o n o f B e n e f i t s 1 3 4 2 . A s s u m p t i o n s 1 3 5 3 . S t u d y F i n d i n g s 1 3 7 4 . P r e s e n t a t i o n o f S t u d y 1 3 8 F i n d i n g s B . A s s e s s m e n t o f E n v i r o n m e n t a l 1 3 9 C o s t s I V . S u m m a r y 1 4 4 P A R T T H R E E , . ; . , . C H A P T E R E I G H T C O N C L U S I O N S A N D R E C O M M E N D A T I O N S 1 4 9 I . I n t r o d u c t i o n 1 4 9 I T . R e v i e w o f t h e D e c i s i o n P r o c e s s 1 4 9 I I I . F a c t o r s A f f e c t i n g t h e D e c i s i o n 1 5 3 P r o c e s s a n d O u t c o m e A . S t r u c t u r e o f t h e D e c i s i o n 1 5 3 S y s t e m - i x 1. The A l l o c a t i o n of R e s p o n s i b i l i t y 2 . I n t e r - O r g a n i z a t i o n a l R e l a t i o n s h i p s B. D i f f e r e n c e s i n O b j e c t i v e s and P e r c e p t i o n s C. Experience w i t h the D e c i s i o n Process D. Lack of Resources IV. Problems A f f e c t i n g the Outcome A. Cost Estimates B. Lack of D e t a i l e d P r e p a r a t i o n s C. The Crash C o n s t r u c t i o n Schedule D. I n v e s t i g a t i o n o f A l t e r n a t i v e s V. Recommendations BIBLIOGRAPHY - x -LIST OF FIGURES Page FIGURE 1. AISHIHIK POWER DEVELOPMENT GENERAL LAYOUT FIGURE 2. ORIENTATION MAP OF THE AISHIHIK AREA 10 FIGURE 3. YUKON ENERGY DEMAND 14 FIGURE 4. NOTICE OF MAY 1972 HEARING IN YUKON NEWS, APRIL 28, 1972. 51 FIGURE 5. THE PUMPING SCHEME 81 - x i -ACKNOWLEDGEMENT I w o u l d l i k e t o t h a n k . P r o f e s s o r I r v i n g F o x f o r h i s g u i d a n c e a n d a s s i s t a n c e . , w i t h o u t w h i c h t h i s t h e s i s w o u l d n o t h a v e b e e n p o s s i b l e . . - 1 -PART ONE CHAPTER ONE INTRODUCTION T h i s study d e s c r i b e s the h i s t o r y of the A i s h i h i k p r o j e c t . I t d e a l s with how the p r o j e c t was planned and implemented by the Northern Canada Power Commission, and w i t h the procedure t h a t was f o l l o w e d t o o b t a i n a water l i c e n c e . The f i r s t chapter w i l l p r o v i d e a synopsis o f the p r o j e c t ' s h i s t o r y , a d e s c r i p t i o n o f the p r o j e c t i t s e l f and the system w i t h i n which i t opera t e s , and b r i e f l y d e s c r i b e the v a r i o u s a c t o r s i n the d e c i s i o n p r o c e s s . I. OBJECTIVES The o b j e c t i v e s o f t h i s study a r e : 1. to d e s c r i b e the h i s t o r y of the A i s h i h i k p r o j e c t as a c c u r a t e l y as p o s s i b l e , f o c u s i n g on the d e c i s i o n processes and the most important problems t h a t arose d u r i n g the course of the h i s t o r y ; and 2 . to i d e n t i f y the main f a c t o r s t h a t were r e s p o n s i b l e f o r the development of these problems. I I . SYNOPSIS OF HISTORY The h i s t o r y of the A i s h i h i k p r o j e c t spans about four y e a r s . During t h i s p e r i o d the p r o j e c t was s e l e c t e d , designed and c o n s t r u c t e d by the Northern Canada Power Commission (NCPC). The Yukon T e r r i t o r y Water Board a l s o p l a y e d - 2 -a very a c t i v e r o l e i n the p r o j e c t ' s h i s t o r y by determining the c o n d i t i o n s o f the water l i c e n c e on the b a s i s of i n f o r m a t i o n p r o v i d e d to i t by the Power Commission. Many of the main events i n the h i s t o r y are the r e s u l t o f i n t e r a c t i o n s between NCPC and the Water Board. The A i s h i h i k p r o j e c t i s of r e l a t i v e l y s m a l l s i z e , having a g e n e r a t i n g c a p a c i t y of 3 3 MW. The p r o j e c t i s l o c a t e d about n i n e t y m i l e s west of Whitehorse and u t i l i z e s a p o r t i o n of the flow of the Ea s t A i s h i h i k R i v e r . Two small dams were c o n s t r u c t e d to r e g u l a t e the water flows, and very l i t t l e f l o o d i n g has r e s u l t e d from the development. The p r o j e c t was o r i g i n a l l y conceived and s e l e c t e d d u r i n g the summer of 1971, and on August 31, 1971, NCPC a p p l i e d f o r a water l i c e n c e under the Dominion Water Power A c t . At t h i s time the e n g i n e e r i n g design of the p r o j e c t had not been e s t a b l i s h e d . The Department o f Indian A f f a i r s and Northern Development f e l t , however, t h a t s i n c e the procl a m a t i o n of the Northern Inland Waters Act (N.I.W.A.) was imminent, i t would be prudent to ensure t h a t NCPC not appear t o have r e c e i v e d any f a v o u r a b l e treatment by a v o i d i n g the new l e g i s l a t i o n . The Department t h e r e f o r e decided t h a t the a p p l i c a t i o n should be h e l d i n abeyance u n t i l the N.I.W.A. came i n t o e f f e c t . - 3 -Fo l l o w i n g some d e l a y i n the a n t i c i p a t e d date of procl a m a t i o n of the N.I.W.A., the f i r s t h e a r i n g f o r a water l i c e n c e took p l a c e i n May, 1972. I t was expected t h a t NCPC would r e c e i v e a water l i c e n c e a f t e r the h e a r i n g and t h a t c o n s t r u c t i o n would begin the next month. However, i t was determined immediately p r i o r t o the he a r i n g t h a t the Water Board d i d not have l e g a l j u r i s d i c t i o n to grant a water l i c e n c e , because the Reg u l a t i o n s f o r the N.I.W.A. had not y e t been promulgated. The h e a r i n g was t h e r e f o r e h e l d o n l y f o r p u b l i c i n f o r m a t i o n purposes. A f t e r the h e a r i n g , the Water Board found t h a t t h e r e was i n s u f f i c i e n t i n f o r m a t i o n to support the a p p l i c a t i o n , and p r o v i d e d NCPC with a l i s t o f i n f o r m a t i o n requirements t h a t would have to be f u l f i l l e d b e f o r e a water l i c e n c e c o u l d be i s s u e d . Although the Regulations were promulgated i n September, 1972, NCPC was not prepared to r e a p p l y f o r a water l i c e n c e by t h a t time. The second h e a r i n g took p l a c e on January 17, 1973. The second a p p l i c a t i o n c o n t a i n e d c e r t a i n m o d i f i c a t i o n s , i n c l u d i n g a request f o r a l a r g e r storage range on A i s h i h i k Lake and i n c r e a s e d flows to be used f o r power g e n e r a t i o n . NCPC i n d i c a t e d t h a t the economic v i a b i l i t y of the p r o j e c t depended on these r e q u e s t s being granted. - 4 -T h e W a t e r B o a r d d e c i d e d t o i s s u e a w a t e r l i c e n c e t o p e r m i t c o n s t r u c t i o n o f t h e p r o j e c t , b u t d i d n o t g r a n t N C P C ' s r e q u e s t s f o r a n i n c r e a s e d s t o r a g e r a n g e a n d a n i n c r e a s e d a m o u n t o f w a t e r t o b e d i v e r t e d , b e c a u s e t h e B o a r d d e t e r m i n e d t h a t a d e q u a t e i n f o r m a t i o n t o s u p p o r t t h e t e r m s o f t h e a p p l i c a t i o n h a d s t i l l n o t b e e n p r o v i d e d . T h e B o a r d ' s r e c o m m e n d a t i o n w a s s u b m i t t e d t o t h e M i n i s t e r o n F e b r u a r y 1 , 1 9 7 3 . A f t e r s o m e i n d e c i s i o n a b o u t w h a t t o d o , N C P C d e c i d e d i n A p r i l 1 9 7 3 t o b e g i n c o n s t r u c t i o n o f t h e p r o j e c t . T h e p r o j e c t w a s c o m p l e t e d i n t h e s u m m e r o f 1 9 7 5 . A t t h e s t a r t o f c o n s t r u c t i o n t h e p r o j e c t w a s e s t i m a t e d t o c o s t $ 1 7 m i l l i o n ; t h e f i n a l c o s t w a s $ 3 9 m i l l i o n , e x c l u d i n g t h e t r a n s m i s s i o n l i n e . I n o r d e r t o e x p l a i n t h e r e a s o n s b e h i n d t h e o v e r r u n , a r e p o r t w a s p r e p a r e d b y a n i n d e p e n d e n t c o n s u l t a n t , M r . R . N . D a l b y , a t t h e r e q u e s t o f t h e M i n i s t e r . A s a r e s u l t o f t h e f i n d i n g s o f t h i s r e p o r t , i t w a s d e c i d e d t h a t a p u b l i c i n q u i r y i n t o N C P C 1 s h a n d l i n g o f t h e p r o j e c t w o u l d n o t b e n e c e s s a r y . T h e t h i r d h e a r i n g w a s h e l d b y t h e W a t e r B o a r d i n A u g u s t 1 9 7 5 t o d e t e r m i n e w h e t h e r t h e i n c r e a s e d s t o r a g e r a n g e a n d i n c r e a s e d d i v e r s i o n o f w a t e r t o t h e p o w e r h o u s e s h o u l d b e a l l o w e d . N C P C p r o v i d e d t h e W a t e r B o a r d w i t h w h a t - 5 -was c o n s i d e r e d s u f f i c i e n t i n f o r m a t i o n to support these, r e q u e s t s , and they were granted. As of 1978, NCPC had not y e t taken advantage of the i n c r e a s e d storage range. I I I . PHYSICAL DESCRIPTION The A i s h i h i k p r o j e c t i s l o c a t e d i n southwestern Yukon i n the A i s h i h i k B a s i n , approximately 80 a i r m i l e s northwest o f Whitehorse. The A i s h i h i k B a s i n covers an area o f 1630. square m i l e s , and i t s p r i n c i p a l hydrographic f e a t u r e c o n s i s t s of a s e r i e s o f elongated lakes which are connected by s h o r t channels and e v e n t u a l l y d r a i n e d by the A i s h i h i k R i v e r , an 18-mile long t r i b u t a r y o f the Dezadeash R i v e r . The Main l a k e s i n the b a s i n are Sekulmun, A i s h i h i k and Canyon Lakes. A i s h i h i k Lake, the l a r g e s t i n the s e r i e s , i s 3 5 m i l e s long and, on the average, l e s s than 2 m i l e s wide. Sekulmun flows northeastwardly i n t o A i s h i h i k Lake, which then flows i n t o Canyon Lake. The East A i s h i h i k R i v e r , which flows out of Canyon Lake, i s the s i t e o f the hydro development. The p r o j e c t u t i l i z e s the 630 f o o t d i f f e r e n c e i n e l e v a t i o n between Canyon Lake and the confluence o f the Ea s t and West A i s h i h i k R i v e r s , The scheme i s t h e r e f o r e one t h a t i s ab l e t o make use of an e x c e p t i o n a l l y h i g h head and l a r g e water s t o r a g e . O t t e r F a l l s , a s m a l l r a p i d s l o c a t e d j u s t below Canyon Lake, i s an important f e a t u r e o f the p r o j e c t s i n c e i t used t o - 6 -be p i c t u r e d on the back of the f i v e d o l l a r b i l l . Because O t t e r F a l l s has been c o n s i d e r e d an important t o u r i s t s i g h t , and because f i s h p o p u l a t i o n s l i v e i n the R i v e r , not a l l o f the water a v a i l a b l e i s used f o r power p r o d u c t i o n . I t was r e c o g n i z e d a t the o u t s e t of the p r o j e c t t h a t some of the n a t u r a l flow would have to be maintained and t h a t not a l l of the water should be d i v e r t e d from the r i v e r . From O t t e r F a l l s , the r i v e r flows over a s e r i e s of r a p i d s and empties i n t o O t t e r Pool/ a s m a l l 1,000 f o o t wide pond, 55 f e e t below Canyon Lake. I t then drops another 12 0 f e e t t o the top of Rainbow F a l l s , which i s a cut through bedrock dropping another 120 f e e t i n a chute 1200 f e e t l ong. For the next two and one h a l f m i l e s the r i v e r meanders over a s e r i e s of r a p i d s u n t i l i t meets wit h the c o n f l u e n c e of the West A i s h i h i k R i v e r . The hydro scheme i s one t h a t i s p a r t i c u l a r l y a p p e a l i n g from both an e n g i n e e r i n g and a e s t h e t i c p o i n t of view. I t i n v o l v e s no major f l o o d i n g , the c o n t r o l s t r u c t u r e s are very s m a l l , and the powerhouse i s l o c a t e d underground. U n f o r t u n a t e l y , the p r o j e c t makes use of very low stream flows and i s l o c a t e d i n a s e m i - a r i d area. The mean average d i s c h a r g e of the E a s t A i s h i h i k River a t O t t e r F a l l s has been c a l c u l a t e d to be only 370 c . f . s . , and the average annual p r e c i p i t a t i o n over the b a s i n i s o n l y 10.1 i n c h e s . - 7 -Two smal l c o n t r o l dams were c o n s t r u c t e d a t the o u t l e t s of A i s h i h i k and Canyon Lakes. Storage i s developed mainly on A i s h i h i k Lake, and Canyon Lake i s used f o r pondage t o accommodate day-to-day d i v e r s i o n requirements. Water i s d i v e r t e d from Canyon Lake through a s m a l l i n t a k e s t r u c t u r e i n t o a 3.5 m i l e long c a n a l which f o l l o w s the contour o f the west bank of the r i v e r . The c a n a l i s b u i l t almost c o n t i n u o u s l y i n permafrost and c r e a t e s the most v i s i b l e evidence of the p r o j e c t , as i t i s l o c a t e d i n a c l e a r e d right-of-way averaging 3 00 f e e t i n width. At the end of the c a n a l , a v e r t i c a l 12-foot diameter i n t a k e s h a f t was c o n s t r u c t e d to a depth of 600 f e e t below the s u r f a c e . A 3000-foot long pressure t u n n e l c a r r i e s water from there to the powerhouse, which i s l o c a t e d 350 f e e t below the s u r f a c e . The powerhouse c o n t a i n s two F r a n c i s - t y p e t u r b i n e s d r i v i n g two 14.4 MW gen e r a t o r s , which have a continuous o v e r l o a d r a t i n g of about 10 per cent. The maximum g e n e r a t i n g c a p a c i t y o f the p l a n t i s t h e r e f o r e s l i g h t l y over 30 MW. A 14 by 14 f o o t t a i l r a c e t u n n e l leaves the powerhouse and extends 4750 f e e t southward to an opening h a l f a m i l e from the confluence of the East and West A i s h i h i k R i v e r s . The powerhouse i s a l s o connected to the s u r f a c e by an access s h a f t . Nearly 9000 f e e t o f underground t u n n e l l i n g o p e r a t i o n s were necessary to c o n s t r u c t the p r o j e c t . - 8 -Since the p r o j e c t was put i n o p e r a t i o n , no f l o o d i n g above the h i s t o r i c high e l e v a t i o n of A i s h i h i k Lake has taken p l a c e . The p l a n t appears not t o be l a r g e enough to p r o v i d e any measure of excess c a p a c i t y a f t e r b e i n g commissioned, and the continued use of d i e s e l g enerators has been necessary to meet the power demands of the Whitehorse system. - 11 -IV. HISTORY OF NCPC BEFORE AISHIHIK In 1948 the North-West T e r r i t o r i e s Power Commission- Act was passed by Parliament. The Power Commission was c r e a t e d f o r the purpose of f a c i l i t a t i n g the c o n s t r u c t i o n and o p e r a t i o n of e l e c t r i c power p l a n t s i n the North-West T e r r i t o r i e s . In 1949 the Act was amended to i n c l u d e the Yukon T e r r i t o r y , and was again amended i n 1956 to change the name of the Commission to the \"Northern Canada Power Commission\". P r i o r to the p l a n n i n g and development of the A i s h i h i k , NCPC had c o n s t r u c t e d the f o l l o w i n g p r o j e c t s : In 194 8 i t assumed r e s p o n s i b i l i t y f o r completing the Snare R i v e r p r o j e c t , l o c a t e d 90 m i l e s northwest of Y e l l o w k n i f e , which was a t t h a t time being c o n s t r u c t e d by the Department of Mines and Resources. NCPC began, c o n s t r u c t i o n of the Mayo R i v e r development i n the Yukon i n 1951 to serve mines i n the Keno H i l l area and the townsite of Mayo. The p r o j e c t was completed the f o l l o w i n g year, and i n 1957 a second g e n e r a t i n g u n i t was added, i n c r e a s i n g i t s g e n e r a t i n g c a p a c i t y to 5.1 MW. In 1956 NCPC begain c o n s t r u c t i o n of a hydro p l a n t a t Whitehorse Rapids on the Yukon R i v e r , two m i l e s upstream from Whitehorse. The p l a n t was commissioned i n 1958 with a g e n e r a t i n g c a p a c i t y of 11.4 MW. - 12 -Development of a second hydro e l e c t r i c power s i t e on the Snare River began i n 1959 and was completed i n 19 60. In 1964 NCPC began construction of the Taltson River project near Fort Smith i n the NWT, and the project was completed i n 1965. NCPC added an additional 9 MW generating unit at Whitehorse Rapids i n 1969. In addition to the planning and development of these hydro projects, NCPC's major operations consisted of the i n s t a l l a t i o n , maintenance and operation of a large number of d i e s e l generating plants. By 1976 NCPC was operating 52 d i e s e l plants, and was supplying power to 64 communities i n the Yukon and the Northwest T e r r i t o r i e s . V. THE WHITEHORSE SYSTEM When the Ais h i h i k project was completed i t added the t h i r d e l e c t r i c a l generation f a c i l i t y to the Whitehorse system. The other two f a c i l i t i e s consisted of the Whitehorse Rapids hydro plant, which produces about 20 MW, and a 20 MW d i e s e l plant located next to Whitehorse Rapids. The d i e s e l generators were seen at the time of t h e i r i n s t a l l a t i o n as an ad hoc means of supplying e l e c t r i c i t y . During the late 1960's i t was anticipated that a l a r g e -- 13 -s c a l e hydro p l a n t would probably be c o n s t r u c t e d i n the Yukon i n order to meet the demands of l a r g e power-consuming mining developments. These mines d i d not m a t e r i a l i z e , but e l e c t r i c a l demands continued t o grow i n sm a l l e r increments. Because of the u n c e r t a i n t y of the magnitude and l o c a t i o n of new growth, NCPC chose to meet the i n c r e a s i n g demands by u s i n g d i e s e l g e n e r a t i o n . ^ In the s h o r t term t h i s was c o n s i d e r e d to be a l e s s c o s t l y a l t e r n a t i v e , and enabled NCPC to keep i t s o p t i o n s open as to the ch o i c e o f the next p l a n t . A. The Demand f o r Power From 1960 to 1966 there was almost no growth i n energy needs i n the Whitehorse system, arid a l l of these needs were met by the Whitehorse Rapids p l a n t . In 1967 and 1968 the Whitehorse Copper Mine began, p r o d u c t i o n , f o l l o w e d by Cyprus A n v i l Mines at Faro i n 1969. The s t a r t of the A n v i l Mine r e q u i r e d t h a t NCPC supply an a d d i t i o n a l 9.3 MW bl o c k o f power. In response to these new demands, p l u s growing demands from the C i t y of Whitehorse, NCPC i n s t a l l e d an a d d i t i o n a l 8 MW g e n e r a t i n g u n i t at Whitehorse Rapids i n 1969, coupled w i t h 9 MW of d i e s e l g e n e r a t i n g c a p a c i t y . - 14 -A n v i l Mine Expansion A n v i l Mine S t a r t s \u00E2\u0080\u00A2Whitehorse Copper Mine S t a r t s l o g r-s c a l e o o o o \u00E2\u0080\u00A2n o o CN o in IT) T H O U S A N D K I L O W A T T H O U R S FIGURE 3. YUKON ENERGY DEMAND (Source: S t a t i s t i c s Canada, Cat. 57-001) - 15 -By 1971 i t was necessary to i n s t a l l an a d d i t i o n a l 10 MW o f d i e s e l peaking c a p a c i t y i n order to meet a c o n t i n u i n g l o a d growth. B. Mining Demand The demand f o r power i n the Whitehorse system i s very h e a v i l y i n f l u e n c e d by mining. In 1977-78 the Cyprus A n v i l Mine purchased 122 m i l l i o n k i l o w a t t hours, which i s c l o s e t o h a l f of the 27 0 m i l l i o n k i l o w a t t hours produced 2 by the system d u r i n g the same time p e r i o d . The General Manager of NCPC a l s o s t a t e d i n 1972 t h a t : ... d i r e c t and i n d i r e c t consumption by the mines connected t o the system c o n s t i t u t e s roughly 70% of the t o t a l energy g e n e r a t i o n from t h i s system. 3 The s t a r t of the A n v i l Mine i n 1969, and i t s expansion i n 1973 and 1974 has had a fundamental e f f e c t on the g e n e r a t i o n requirements of the Whitehorse system. There i s l i t t l e q u e s t i o n t h a t i f the A n v i l Mine d i d not e x i s t , then the A i s h i h i k p r o j e c t would not have been needed at the time t h a t i t was c o n s t r u c t e d . - 16 -VI. ACTORS IN THE DECISION PROCESS A. Northern Canada Power Commission The Northern Canada Power Commission (NCPC) i s a f e d e r a l Crown c o r p o r a t i o n which operates under the a u t h o r i t y o f i t s own l e g i s l a t i o n , the Northern Canada Power Commission A c t . I t i s concerned w i t h the p l a n n i n g , c o n s t r u c t i o n and management o f p u b l i c u t i l i t i e s , p r i m a r i l y 4 e l e c t r i c a l , on a commercial b a s i s . The Commission i s the p r i n c i p a l producer of e l e c t r i c i t y n o r t h of 60\u00C2\u00B0 and operates the main t r a n s m i s s i o n networks i n the Yukon and North-West T e r r i t o r i e s . In a d d i t i o n , i t operates community h e a t i n g , water and sewerage systems 5 i n s e v e r a l l o c a t i o n s . NCPC's b a s i c o b j e c t i v e i s to p r o v i d e u t i l i t y s e r v i c e s to Northern Canada at the lowest p o s s i b l e c o s t . I t i s r e q u i r e d to be s e l f - s u s t a i n i n g , and the accounts of the Commission are s u b j e c t to the a u d i t of the A u d i t o r General of Canada. Funds f o r c a p i t a l expenditures are r e c e i v e d by way of i n t e r e s t - b e a r i n g loans from the f e d e r a l government. The NCPC Act does not s p e c i f y any o p e r a t i n g p o l i c y of the Commission. Changes i n p o l i c i e s are reviewed and decided by the Board of D i r e c t o r s , the members of which are known as Commission Members. Because NCPC r e p o r t s to the M i n i s t e r of the Department of Indian A f f a i r s and Northern Development, the M i n i s t e r i s a l s o r e s p o n s i b l e f o r both - l i -the p o l i c i e s and o p e r a t i o n s of the Power Commission. When the A i s h i h i k p r o j e c t was planned and c o n s t r u c t e d , the Deputy M i n i s t e r of the Department of Indian A f f a i r s and Northern Development, Mr. B a s i l Robinson, was a l s o Chairman of NCPC; and the A s s i s t a n t Deputy M i n i s t e r of the Department r e s p o n s i b l e f o r the Northern A f f a i r s Program, Mr. Digby Hunt, was another Commission Member. B. The Water Board The Yukon T e r r i t o r y Water Board was e s t a b l i s h e d under s e c t i o n 7 o f the Northern Inland Waters Act (N.I,W.A.) which was proclaimed i n February, 1972. The o b j e c t i v e s of the Water Board are s p e c i f i e d i n s e c t i o n 9 of the A c t : The o b j e c t s of the boards are to p r o v i d e f o r the c o n s e r v a t i o n , development and u t i l i z a t i o n of the water res o u r c e s of the Yukon T e r r i t o r y and the Northwest T e r r i t o r i e s i n a manner t h a t w i l l p r o v i d e the optimum b e n e f i t therefrom f o r a l l Canadians and f o r the r e s i d e n t s of the Yukon T e r r i t o r y and Northwest T e r r i t o r i e s i n p a r t i c u l a r . 6 The membership of the Board i s determined by nominations from the Commissioner i n C o u n c i l of the Yukon T e r r i t o r y and by each of the departments of the f e d e r a l government t h a t are most d i r e c t l y concerned w i t h management of water reso u r c e s i n the T e r r i t o r y . - 18 -Nine i n d i v i d u a l s s i t on the Board. U n t i l 1977, s i x o f these people were appointed by the departments of the f e d e r a l government and thr e e by the T e r r i t o r i a l Commissioner. An Order i n C o u n c i l dated May 1977 reduced the number o f r e p r e s e n t a t i v e s from f e d e r a l departments t o th r e e , and i n c r e a s e d the number of l o c a l r e p r e s e n t a t i v e s by th r e e . S e c t i o n 3(2) of the N.I.W.A. s t a t e s t h a t : \"no person s h a l l d i v e r t the flow or storage of waters w i t h i n a water management area or otherwise use waters w i t h i n any such area except pursuant to a l i c e n c e h e l d by him or except as a u t h o r i z e d by r e g u l a t i o n s made pursuant to paragraph 26(g)\". The water management areas are e s t a b l i s h e d i n the R e g u l a t i o n s f o r the N.I.W.A., and paragraph 26(g) a u t h o r i z e s f o r r e g u l a t i o n s to be made p e r m i t t i n g water to be used without a l i c e n c e , depending on the q u a n t i t y of water, r a t e o f flow, or type o f use i n v o l v e d . S e c t i o n 15(2) a l s o s t a t e s t h a t a hea r i n g must be h e l d i n connection w i t h each a p p l i c a t i o n f o r a l i c e n c e . Once the Act was i n f o r c e , then, any change i n the use of the water r e s o u r c e s i n a water management area -except as a u t h o r i z e d by r e g u l a t i o n s made t o paragraph 26(g) - by NCPC or any other p r i v a t e or p u b l i c group, would r e q u i r e a l i c e n c e to be i s s u e d by the Water Board, and - 19 -a p u b l i c h e a r i n g t o be h e l d i n connection w i t h the l i c e n c e a p p l i c a t i o n . Since the Water Board i s a q u a s i - j u d i c i a l body, any d e c i s i o n i t makes a f t e r a h e a r i n g i s h e l d t h a t does not f o l l o w a l l of the r u l e s o f n a t u r a l j u s t i c e c o u l d c o n s t i t u t e grounds t o a t t a c k the d e c i s i o n . D e c i s i o n s made by the Board r e g a r d i n g the issuance o f a water l i c e n c e must be approved by the M i n i s t e r o f the Department of Indian A f f a i r s and Northern Development. C. The Department of Indian A f f a i r s and Northern Development The Department of Indian A f f a i r s and Northern Development Ac t , s e c t i o n 4, s t a t e s : The d u t i e s , powers and f u n c t i o n s o f the M i n i s t e r of Indian A f f a i r s and Northern Development extend to i n c l u d e a l l matters over which the Parliament o f Canada has j u r i s d i c t i o n , not by law a s s i g n e d to any other department, branch or agency of the Government of Canada, r e l a t i n g to (a) Indian A f f a i r s (b) The Northwest T e r r i t o r i e s and the Yukon T e r r i t o r y - a n d t h e i r r e s o u r c e s and a f f a i r s . . . 7 The Department (DIAND) has c o n t r o l over the a d m i n i s t r a t i o n of l a n d s , waters and of the n a t u r a l r e s o u r c e s i n fehe-two t e r r i t o r i e s . I t a l s o has c o n t r o l over t h e . . J a d m i n i s t r a t i o n o f the N.I.W.A., and NCPC r e p o r t s to the M i n i s t e r of DIAND. The M i n i s t e r , t h e r e f o r e , i s i n - 20 -the p o s i t i o n o f d e c i d i n g whether or not to accept the d e c i s i o n s o f the Water Board, and of being r e s p o n s i b l e g f o r the o p e r a t i o n s and p o l i c i e s o f NCPC. V I I . OVERVIEW The most important a c t o r s i n v o l v e d i n the h i s t o r y of the A i s h i h i k p r o j e c t were the Northern Canada Power Commission, Crippen E n g i n e e r i n g (NCPC's e n g i n e e r i n g consultant)., the Yukon T e r r i t o r y Water Board, and the Department of Indian A f f a i r s and Northern Development. NCPC was r e s p o n s i b l e f o r p l a n n i n g and implementing the A i s h i h i k p r o j e c t , and r e l i e d e x t e n s i v e l y on Crippen E n g i n e e r i n g t o he l p design the p r o j e c t and manage i t s c o n s t r u c t i o n . The Water Board and NCPC, of course, were key a c t o r s i n the water l i c e n c i n g process; and s e n i o r DIAND o f f i c i a l s and M i n i s t e r s of DIAND appear t o have i n f l u e n c e d many of the events t h a t took p l a c e d u r i n g the p r o j e c t ' s h i s t o r y . A number of a d d i t i o n a l a c t o r s a l s o i n f l u e n c e d the h i s t o r y of the p r o j e c t . Pearse Bowden Economic C o n s u l t a n t s were h i r e d by NCPC to prepare environmental impact statements and other r e p o r t s t h a t were used t o support NCPC's water l i c e n c e a p p l i c a t i o n s . The F i s h e r i e s and Marine S e r v i c e of the Department of the Environment a l s o p l a y e d - 21 -some p a r t i n d e s i g n i n g the p r o j e c t and conducted e x t e n s i v e s t u d i e s of the f i s h e r i e s i n the A i s h i h i k water SL system. A very important r o l e was pl a y e d by a s i n g l e i n t e r v e n o r a t the f i r s t h e a r i n g , Mr. R u s s e l l Anthony, who was a r e p r e s e n t a t i v e of the Canadian Environmental Law Research .. Foundation. Mr. Anthony o b j e c t e d to the h e a r i n g being h e l d to i s s u e a water l i c e n c e on the ground t h a t the N.I.W.A. Regulat i o n s had not y e t been promulgated. Because h i s o b j e c t i o n was s u s t a i n e d , Mr. Anthony may have fundamentally a l t e r e d the e n t i r e course of the p r o j e c t ' s h i s t o r y . N a t i v e Indian groups have a l s o had an important i n f l u e n c e on the p r o j e c t . A c l a i m has been made f o r the land occupied by A i s h i h i k V i l l a g e , which i s l o c a t e d on the shores of the A i s h i h i k Lake, and would be f l o o d e d i f the l e v e l of the lake i s r a i s e d above the h i s t o r i c h i g h . Although NCPC i s l i c e n c e d t o r a i s e the l e v e l o f the la k e above the h i s t o r i c h i g h , i t has not y e t done so/\"^'because of the land c l a i m . Another important a c t o r was Mr. R. N. Dalby, who wrote a r e p o r t a t the request of the M i n i s t e r on the c o s t overrun f o r the A i s h i h i k p r o j e c t . As a r e s u l t o f the r e p o r t ' s f i n d i n g s , the M i n i s t e r decided t h a t a p u b l i c i n q u i r y i n t o NCPC's h a n d l i n g of the p r o j e c t would not be necessary. CHAPTER ONE REFERENCES AND NOTES J . M. Lowe, NCPC General Manager, L i c e n c i n g Hearing T r a n s c r i p t , 17 January 1973, p.8. Interview, C. Pearson, Chairman, E l e c t r i c a l P u b l i c U t i l i t i e s Board, 18 August 1978. The E l e c t r i c a l P u b l i c U t i l i t i e s Board i s e s t a b l i s h e d under the Revised Ordinances of the Yukon T e r r i t o r y , and i t i s a purpose of the Board to r e p o r t t o the Commissioner of the Yukon on e l e c t r i c a l energy r a t e adjustments proposed by NCPC. The Board d i d not p l a y a s i g n i f i c a n t r o l e i n the h i s t o r y of the A i s h i h i k p r o j e c t . J . M. Lowe, A i s h i h i k General Hearing T r a n s c r i p t , 24 May 1972, Whitehorse, Y.T., p.5. NCPC, 29'th Annual Review, March 1977, p . l . I b i d . Northern Inland Waters A c t , 1970, c.28 (1st Supp.) S.9. Assented to 26 June 1970. Proclaimed i n f o r c e 28 February 19 72. Department o f Indian A f f a i r s and Northern Development Act, 1970, S.4. Although the name \"Department of Indian and Northern A f f a i r s \" i s used e x t e n s i v e l y by the department, the proper l e g a l d e s i g n a t i o n i s \"Department of Indian A f f a i r s and Northern Development\". The M i n i s t e r can o n l y approve the i s s u a n c e of a water use l i c e n c e , but cannot decide upon the c o n d i t i o n s a t t a c h e d t o i t . Because o f a l o n g - s t a n d i n g and well-known r i v a l r y between DIAND and the Department of the Environment (DOE) over northern n a t u r a l r e s o u r c e s management, the p a r t i c i p a t i o n of the F i s h e r i e s and Marine S e r v i c e of DOE, i n g a t h e r i n g e x t e n s i v e t e c h n i c a l i n f o r m a t i o n about the f i s h e r i e s o f the A i s h i h i k system, which was used by the Water Board i n s e t t l i n g the terms f o r the water use l i c e n c e s , a p p a r e n t l y gave r i s e to a number of problems. While there i s a l a c k of i n f o r m a t i o n concerning what these problems a c t u a l l y were and how they developed, they do not appear to have had a s i g n i f i c a n t e f f e c t on the course of events covered i n t h i s study. An e x c e p t i o n took p l a c e d u r i n g the c o n s t r u c t i o n of the p r o j e c t . See Chapter S i x . Interview, NCPC o f f i c i a l , 1 September 1978. - 23 -PART TWO CHAPTER TWO SELECTION AND APPLICATION - JUNE 19:71 to MAY 1972 I. INTRODUCTION Th i s chapter w i l l e x p l a i n the f o l l o w i n g ; how the A i s h i h i k p r o j e c t was s e l e c t e d by NCPC; - why the d e c i s i o n was taken to use the Northern Inland Waters Act t o i s s u e the A i s h i h i k water l i c e n c e ; and what i n f o r m a t i o n was generated p r i o r to the f i r s t h e a r i n g f o r a water l i c e n c e , I I . SELECTION OF THE SITE A. P r e v i o u s Knowledge The p o t e n t i a l o f the E a s t A i s h i h i k R i v e r f o r h y d r o e l e c t r i c development was known f o r many years p r i o r to 1971, when NCPC f i r s t began a c t i v e f i e l d i n v e s t i g a t i o n s at the s i t e . Although the A i s h i h i k . had been surveyed d u r i n g the 1950's, i t was l a r g e l y ignored u n t i l 1971, As mentioned, i t had been expected t h a t the next major hydro f a c i l i t y a f t e r Whitehorse Rapids would be a l a r g e r ^ s c a l e p r o j e c t t h a t would meet the demands o f a smelter and low-grade mines. P r i o r to the surveys conducted i n 19.71, the A i s h i h i k s i t e was not c o n s i d e r e d to have as l a r g e a power p o t e n t i a l as i t was l a t e r found capable o f producing. I n i t i a l e s timates made i n the 1950's o n l y had the b e n e f i t of a few years of water flow r e c o r d s , and these records were onl y taken d u r i n g a p e r i o d of abnormally dry y e a r s . More r e c e n t estimates s t i l l underestimated the power p o t e n t i a l of the s i t e because they d i d not r e c o g n i z e the p r a c t i c a b i l i t y of u t i l i z i n g more than the head of O t t e r and Rainbow F a l l s , thus n e g l e c t i n g the p o t e n t i a l of the very steep r i v e r g r a d i e n t between Rainbow F a l l s and the confluence o f the e a s t and west arms of the A i s h i h i k R i v e r . The high s i l t and t i l l banks i n the area a p p a r e n t l y discouraged p r o s p e c t s t h a t t h i s e x t r a head c o u l d be 2 developed. B. I n i t i a l Surveys In June 1971, NCPC began some p r e l i m i n a r y reconnaissance , surveys of p o t e n t i a l s m a l l - s c a l e hydro development s i t e s i n the south c e n t r a l Yukon i n response to s t e a d i l y growing base l o a d s , p l u s the s t a r t of the A n v i l Mine. At t h i s time the A i s h i h i k was earmarked f o r i n v e s t i g a t i o n f o r a p o s s i b l e 20 MW i n s t a l l a t i o n u s i n g a 330 f o o t net head. The surveys were conducted by Messrs. D. Steen, F. Mooney, J . Lowe and.B. Humphrys. With the e x c e p t i o n o f Mr. Humphry who was a j u n i o r member of the survey team, a l l h e l d s e n i o r management p o s i t i o n s and were key decision-makers i n NCPC. Mr. Steen was head of the p l a n n i n g department, Mr. Mooney was the r e g i o n a l manager and Mr. Lowe was the g e n e r a l manager f o r NCPC. - 25 -During the ten days f o l l o w i n g June 2, 1971, the A i s h i h i k , L i t t l e Salmon, T e s l i n and Long Lake systems were a l l surveyed f o r p o s s i b l e hydro development. I n v e s t i g a t i o n of the A i s h i h i k c o u l d not have taken more than a few days, 3 and was conducted u s i n g a i r c r a f t and on f o o t . The i n v e s t i g a t i o n s e s t a b l i s h e d t h a t a 630 f o o t n a t u r a l head might be a v a i l a b l e f o r development, an i n c r e a s e of . 4 3 00 f e e t over p r e v i o u s e s t i m a t e s . P o t e n t i a l a l t e r n a t i v e s i t e s r e c e i v e d no more a t t e n t i o n a f t e r these surveys were completed, and the r e p o r t t h a t was prepared on the f i e l d t r i p gave most o f i t s a t t e n t i o n 5 to the A i s h i h i k s i t e . C. S e l e c t i o n On June 11, immediately a f t e r the survey was made of the A i s h i h i k , NCPC submitted to DIAND an a p p l i c a t i o n f o r l a n d r e s e r v a t i o n at the s i t e . ^ T h i s step was taken i n o r d e r to ensure t h a t NCPC would have l e g a l r i g h t to use the necessary lan d area f o r surveys and development, and a l s o to prevent the p o s s i b i l i t y of s p e c u l a t i v e i n t e r e s t s s t a k i n g m i n e r a l c l a i m s on l a n d known to be needed f o r the p r o j e c t . The a p p l i c a t i o n f o r land r e s e r v a t i o n was taken very promptly, and o n l y f o r the A i s h i h i k s i t e . In a d d i t i o n , no f u r t h e r - 26 -f i e l d s t u d i e s were undertaken of a l t e r n a t i v e s i t e s . In e a r l y J u l y , Mr. Steen gave some c o n s i d e r a t i o n to the p o s s i b l e a l t e r n a t i v e of d e v e l o p i n g the N o r d e n s k i o l d c o a l d e p o s i t s . However, the a n a l y s i s t h a t was undertaken d i d not i n v o l v e any o n - s i t e i n v e s t i g a t i o n s , and was based on data s u p p l i e d by T e s l i n E x p l o r a t i o n L t d . In a d d i t i o n , the purpose of the a n a l y s i s was o n l y to make a c o s t comparison between the c o a l scheme and the A i s h i h i k p r o j e c t . The study found t h a t \"a c o a l - f i r e d p l a n t a t the N o r d e n s k i o l d R i v e r c o a l d e p o s i t would not compete e c o n o m i c a l l y w i t h A i s h i h i k Hydro Development\", and estimated t h a t the t o t a l c a p i t a l c o s t on an annual b a s i s of the c o a l scheme would be $710,000 p l u s 6.7 m i l l s per k i l o w a t t f o r f u e l , whereas the t o t a l annual c o s t f o r the A i s h i h i k p r o j e c t would be 7 $840,000, and, of course, no f u e l would be needed. The e stimated c o s t of the A i s h i h i k , which was used by Mr. Steen to assess the economic v i a b i l i t y of the p r o j e c t i n comparison w i t h one of i t s most c o m p e t i t i v e a l t e r n a t i v e s , 8 was $7 m i l l i o n e x c l u d i n g the t r a n s m i s s i o n l i n e . I t appears t h a t as e a r l y as June 1971, the same month when i t was e s t a b l i s h e d t h a t 300 f e e t of a d d i t i o n a l head c o u l d be u t i l i z e d f o r the p r o j e c t , NCPC decision-makers became convinced t h a t the A i s h i h i k was the most d e s i r a b l e s i t e a v a i l a b l e to meet the f o r e c a s t demands. Subsequent to - 27 -June 1971, no f u r t h e r f i e l d s t u d i e s were undertaken by NCPC of a l t e r n a t i v e s i t e s t o the A i s h i h i k . . D. Study of the S i t e No f u r t h e r s t u d i e s of the A i s h i h i k s i t e took p l a c e d u r i n g J u l y and August of 1971 except f o r a i r photo coverage and mapping. NCPC d i d not take advantage of the summer months to conduct b i o l o g i c a l , h y d r o l o g i c and g e o l o g i c a l surveys of the area. The reason f o r t h i s i s not known. E. . A p p l i c a t i o n f o r Water L i c e n c e NCPC a p p l i e d f o r a water l i c e n c e under the Dominion Water Power A c t f o r the A i s h i h i k p r o j e c t on August 31, 1971. In co n n e c t i o n with t h i s a p p l i c a t i o n , NCPC informed Mr. I. P e t r i e o f the Northern Economic Development Branch t h a t : F u r t h e r to the Power Commission's f e a s i b i l i t y s t u d i e s i n the Yukon, the A i s h i h i k R i v e r r e p r e s e n t s the most economic power development to meet growing lo a d i n the Yukon area. Compliant with the Dominion Water Power Re g u l a t i o n s , we hereby wish t o submit formal a p p l i c a t i o n f o r l i c e n c e t o u t i l i z e t h i s p a r t i c u l a r l a n d f o r purposes of hydro power development. 9 E v i d e n t l y , NCPC had decided by t h i s date t h a t , pending the r e c e i p t o f the necessary l i c e n c e s , i t would c o n s t r u c t the p r o j e c t , and t h a t s u f f i c i e n t i n f o r m a t i o n about the s i t e was a v a i l a b l e to support t h i s c o n c l u s i o n . In c o n t r a s t t o the d e c i s i v e nature o f t h i s a p p l i c a t i o n , NCPC's Report on A i s h i h i k s t a t e s t h a t : - 28 -In order to ev a l u a t e the e n g i n e e r i n g v a l i d i t y , R i p l e y , Klohn & Leonoff I n t e r n a t i o n a l was i n v i t e d on September 1st, 1971 to conduct a s i t e i n v e s t i g a t i o n on matters r e l a t i n g t o the s t r u c t u r e s as a f f e c t e d by s o i l c o n d i t i o n s . A c t i v i t i e s e s s e n t i a l to e s t a b l i s h i n g e n g i n e e r i n g v a l i d i t y were o u t l i n e d to Management September 3rd, 1971. These i n c l u d e d environmental s t u d i e s , i c e c o n d i t i o n s , survey, s o i l s and g e o l o g i c a l a n a l y s i s , D.W.P. Act a p p r o v a l , c r i t i c a l equipment order , d esign requirements, s c h e d u l i n g , c o n t r a c t o r involvement. 10 (emphasis added) There appears t o be an i n c o n s i s t e n c y here. NCPC informed DIAND on August 31 t h a t the A i s h i h i k r e p r e s e n t e d \"the most economic power development\" and a p p l i e d f o r a water l i c e n c e t o develop the s i t e . Yet, three days l a t e r i t o u t l i n e d those s t u d i e s t h a t would be e s s e n t i a l to e s t a b l i s h i n g the e n g i n e e r i n g v a l i d i t y of the p r o j e c t . Probably the most important reason why the v i a b i l i t y o f the p r o j e c t c o u l d not have been e s t a b l i s h e d a t t h i s time i s t h a t very l i t t l e was known of the geology of the s i t e . No g e o l o g i c a l surveys had been undertaken when NCPC a p p l i e d f o r the l i c e n c e , y e t the geology o f the s i t e was the f a c t o r which had p r e v i o u s l y discouraged the n o t i o n t h a t the f u l l head between the o u t l e t of Canyon Lake and the confluence o f the East and West A i s h i h i k R i v e r s c o u l d be developed. - 29 -I I I . THE WATER LICENCE PROCESS A. I n t r o d u c t i o n The process of a p p l y i n g f o r and r e c e i v i n g a water l i c e n c e proved to be the most important component of the o v e r a l l p l a n n i n g and decision-making process f o r the A i s h i h i k p r o j e c t . T h i s process i s a l s o of some h i s t o r i c a l s i g n i f i c a n c e as i t i n v o l v e d the f i r s t a p p l i c a t i o n ever made under the Northern Inland Waters Act . As a r e s u l t of i n e x p e r i e n c e w i t h the new l e g i s l a t i o n , t h r e e d i f f e r e n t h e a r i n g s were h e l d i n c o n n e c t i o n w i t h the p r o j e c t . S u b s t a n t i a l d e l a y s i n the s t a r t of the p r o j e c t ' s c o n s t r u c t i o n were caused by the water l i c e n c i n g p r o c e s s , and t h i s f a c t o r was l a t e r c i t e d by NCPC management as the s i n g l e most important reason behind the p r o j e c t ' s c o s t overrun. I t i s necessary, then, t h a t t h i s process be d e s c r i b e d i n some d e t a i l . B. P r e v i o u s Water L i c e n c e Process At the time of NCPC's f i r s t water l i c e n c e a p p l i c a t i o n on August 31, 1971, the Commission was l e g a l l y e n t i t l e d to r e c e i v e a l i c e n c e under the Dominion Water Power A c t . The Northern Canada Power Commission Act, which a p p l i e d a t the time reads: - 3 0 -T h e C o m m i s s i o n i s e n t i t l e d t o r e c e i v e u p o n a p p l i c a t i o n a n y l i c e n c e o r o t h e r a u t h o r i t y u n d e r t h e D o m i n i o n W a t e r P o w e r A c t n e c e s s a r y t o e n a b l e t h e C o m m i s s i o n t o c a r r y o u t t h i s A c t . 1 1 T h e p r e v i o u s a r r a n g e m e n t u n d e r w h i c h N C P C r e c e i v e d i t s w a t e r l i c e n c e s d i d n o t , t h e n , i n v o l v e a s t r i n g e n t r e v i e w p r o c e s s . R a t h e r , i t a p p e a r s t h a t u n d e r t h e p r e v i o u s a r r a n g e m e n t , N C P C w a s a b l e t o r e c e i v e a w a t e r l i c e n c e c o n t a i n i n g v i r t u a l l y a n y c o n d i t i o n s i t r e q u e s t e d . I n c o n t r a s t w i t h t h e m o r e d e m a n d i n g r e q u i r e m e n t s o f t h e N . I . W . A . , o b t a i n i n g a w a t e r l i c e n c e u n d e r t h e f o r m e r l e g i s l a t i o n w o u l d h a v e o n l y b e e n a l e g a l f o r m a l i t y . C . D e c i s i o n t o U s e t h e N . I . W . A . B e c a u s e N C P C w a s a C r o w n c o r p o r a t i o n r e p o r t i n g t o t h e s a m e M i n i s t e r r e s p o n s i b l e f o r t h e i m p l e m e n t a t i o n o f t h e N . I , W . A . , t h e M i n i s t e r , M r . J . C h r e t i e n , a p p a r e n t l y c o n s i d e r e d i t i m p o r t a n t t h a t N C P C n o t a p p e a r t o r e c e i v e a n y p r e f e r e n t i a l t r e a t m e n t b y a v o i d i n g t h e n e w l e g i s l a t i o n . S h o r t l y a f t e r N C P C s u b m i t t e d a p p l i c a t i o n f o r a w a t e r l i c e n c e o n A u g u s t 3 1 , 1 9 7 1 , t h e D e p a r t m e n t i n f o r m e d t h e C o m m i s s i o n t h a t n o c o n s i d e r a t i o n w o u l d b e g i v e n t o t h e i s s u i n g o f a 1 2 w a t e r l i c e n c e u n t i l t h e N . I , W . A . w a s p r o c l a i m e d . A t t h e t i m e t h a t M r . C h r e t i e n m a d e t h i s d e c i s i o n , i t w a s e x p e c t e d t h a t t h e A c t w a s t o c o m e i n t o e f f e c t w i t h i n t h e 1 3 n e x t f e w m o n t h s , a n d b e f o r e t h e e n d o f 1 9 7 1 . I n f a c t , - 31 -i t was not u n t i l February 28, 1972 t h a t the Act was proclaimed. The f o l l o w i n g statement, c o n t a i n e d i n an NCPC memorandum r e f e r r i n g to the minutes of a January 24, 1972 meeting between NCPC and DIAND o f f i c i a l s , e x p l a i n s the reas o n i n g behind t h i s d e c i s i o n . Yates f e l t t h a t IAND c o u l d not proceed to accept a water use program ( A i s h i h i k ) under the Dominion Water Power A c t wit h the Northern Inland Waters Act imminently to be put i n t o e f f e c t . Reason was t h a t p u b l i c and other Departmental o p i n i o n might be t h a t IAND squeezed the Commission i n under the wire so as to avoid the r e g u l a t i o n s as per impending Northern Inland Waters A c t . 14 The A s s i s t a n t Deputy M i n i s t e r , Mr. Digby Hunt, a l s o e x p l a i n e d t h a t : We would have a very d i f f i c u l t time t r y i n g to j u s t i f y l i c e n c i n g the p r i v a t e s e c t o r i f we chose t o make exceptions f o r government agencies and c o r p o r a t i o n s . 15 The f a c t t h a t i t would have t o apply f o r a water l i c e n c e under the N.I.W.A. should not have come as a complete s u r p r i s e to NCPC. Correspondence dated p r e v i o u s to NCPC's o r i g i n a l a p p l i c a t i o n on August 31 mentions t h a t h earings were to be h e l d b e f o r e the Water Board i n connect i o n w i t h the p r o j e c t , and names the Chairman of the Water Board. In a d d i t i o n , Mr. D. Hunt was a t the time the ADM f o r Northern Development f o r DIAND and a member of the Commission f o r NCPC, and Mr. B. Robinson - 32 -was the DM f o r DIAND and the Chairman o f the Commission f o r NCPC. I t would be reasonable to assume t h a t NCPC's management was aware of the p o s s i b i l i t y t h a t the N.I.W.A. would apply. N e v e r t h e l e s s , s i n c e NCPC was given no formal i n s t r u c t i o n s p r i o r t o August 31 to apply under the new l e g i s l a t i o n , i t s t i l l made i t s i n i t i a l a p p l i c a t i o n under the D.W.P.A. Copies of the N.I.W.A. were a v a i l a b l e to NCPC a t t h a t time and i t would not have been d i f f i c u l t f o r NCPC to a s c e r t a i n t h a t the use of the N.I.W.A. would complicate the a p p l i c a t i o n p r o c e s s . IV. GENERATION OF INFORMATION A. Environmental Study Delays S e c t i o n 11(2) of the Northern Inland Waters A c t s t a t e s : The a p p r o p r i a t e board s h a l l r e q u i r e an a p p l i c a n t f o r a l i c e n c e to pro v i d e i t w i t h such i n f o r m a t i o n and s t u d i e s concerning the use of waters proposed by the a p p l i c a n t as w i l l enable i t to e v a l u a t e any q u a l i t a t i v e and q u a n t i t a t i v e e f f e c t s of the proposed use on the water management area i n which the a p p l i c a n t proposes to use such waters. 17 In a d d i t i o n t o the wording o f s e c t i o n 11 of the N.I.W.A., NCPC was given c o n s i d e r a b l e advance warning t h a t an environmental impact statement would be needed. In a l e t t e r from Leo Brandon, Chairman of the Water Board t o NCPC on November 19, 1971, the f o l l o w i n g a d v i c e was gi v e n : - 33 -I . . . suggest t h a t the Regul a t i o n s w i l l i n a l l p r o b a b i l i t y c a l l f o r an environmental impact r e p o r t from the a p p l i c a n t and t h e r e f o r e I t h i n k i t would be wise i f you asked your C o n s u l t a n t s to s t a r t work on an environmental study and r e p o r t because t h i s would r e c o r d the concerns which you r e c o g n i z e i n water development schemes of t h i s nature. 18 With the help o f Crippen E n g i n e e r i n g , NCPC proceeded w i t h b a s i c e n g i n e e r i n g s t u d i e s d u r i n g the autumn and w i n t e r , but i t d i d not h i r e a c o n s u l t a n t t o undertake the p r e p a r a t i o n of an environmental impact statement u n t i l March 9, 1972. I t appears t h a t NCPC decision-makers were not aware of the l e n g t h o f time necessary t o complete an adequate environmental impact r e p o r t , s i n c e at t h a t time the Commission was anxious t o begin c o n s t r u c t i o n as soon as i t c o u l d . Perhaps owing to a l a c k of experience, the o v e r a l l concept o f what an environmental impact statement should accomplish and why i t would be an important component of the p l a n n i n g process f o r a h y d r o e l e c t r i c f a c i l i t y might not have been f u l l y a p p r e c i a t e d . I f NCPC r e c o g n i z e d t h i s need, i t c e r t a i n l y would have begun to undertake the f i e l d , and other necessary work f o r such a study at the same time as the e n g i n e e r i n g s t u d i e s . On February 15, 1972, Mr. Brandon again wrote to NCPC and e x p l a i n e d the need f o r an environmental impact.study, and s u p p l i e d a b r i e f o u t l i n e of what i t should c o n t a i n . - 34 -Included w i t h the NCPC 1s a p p l i c a t i o n f o r a water r i g h t on the A i s h i h i k R i v e r t h e r e must be an environmental impact statement. T h i s statement should c o v e r . t h r e e items: 1. The e f f e c t on w i l d l i f e and f i s h of any a l t e r a t i o n t o the flow or regime of the r i v e r and by the impoundment of any r e s e r v o i r . A B i o l o g i s t s r e p o r t w i l l be r e q u i r e d o u t l i n i n g the s p e c i e s of w i l d l i f e and f i s h p r esent which may be a f f e c t e d and r e f e r e n c e should be made to the seasonal movement of these c r e a t u r e s w i t h i n the water shed i f t h e r e i s an e f f e c t on t h i s movement. 2. The a e s t h e t i c e f f e c t of any new s t r u c t u r e s . I t would be necessary to d e s c r i b e the present scenery w i t h i n the v a l l e y and r e f e r e n c e should be made to the famous O t t e r F a l l s and other water f a l l s near by. The r e p o r t should a l s o d e s c r i b e any consequences to t h i s scenery as a r e s u l t of the h y d r o - e l e c t r i c development. 3. Items of human i n t e r e s t should be d e s c r i b e d . ... I t i s my understanding t h a t the shores of A i s h i h i k Lake have a number of a r c h a e o l o g i c a l s i t e s and a d e s c r i p t i o n of these i s necessary together w i t h the e f f e c t t h a t impoundment may have on them. 19 B. The Environmental Impact Study On March 9, 1972, NCPC h i r e d Pearse-Bowden Economic Co n s u l t a n t s L t d . to undertake the environmental s t u d i e s , and on A p r i l 30, 1972 the r e p o r t A P r e l i m i n a r y Environmental Impact Statement was completed by Pearse-Bowden and submitted t o the Water Board by NCPC, o n l y seven weeks a f t e r i t had been a u t h o r i z e d . - 35 -The impact statement c o n t a i n e d a comprehensive range of s u b j e c t areas, i n c l u d i n g the b i o l o g i c a l , s o c i a l and a e s t h e t i c e f f e c t s of the p r o j e c t , and o s t e n s i b l y met a l l of the requirements mentioned i n Brandon's o u t l i n e . Owing to the s h o r t time devoted to the study and the l a c k of b a s e l i n e data, the statement was intended by i t s authors t o be: regarded p r i m a r i l y as an assessment of the number, nature and r e l a t i v e magnitude of the environmental problems l i k e l y to be c r e a t e d by the h y d r o e l e c t r i c development r a t h e r than as an e v a l u a t i o n of s p e c i f i c causes and e f f e c t s . 20 The concept of a \" p r e l i m i n a r y environmental impact statement\" was a l s o d e s c r i b e d by Mr. Bowden, the p r i n c i p a l author of the r e p o r t , as: ... a study to d e s c r i b e the environmental consequences of an a c t i o n as r e v e a l e d by c a r e f u l a n a l y s i s of e x i s t i n g i n f o r m a t i o n , expert information,, expert o p i n i o n , and such reconnaissance surveys and s t u d i e s as may be f e a s i b l e w i t h i n the time a v a i l a b l e . 21 I t was c o n s i d e r e d by NCPC o f f i c i a l s t h a t the statement p r o v i d e d an adequate body of data to enable the Water Board to e v a l u a t e the a p p l i c a t i o n and grant a l i c e n c e t h a t would permit the c o n s t r u c t i o n of the p r o j e c t . As Mr. J . Lowe, General Manager of NCPC, s t a t e d d u r i n g the May 1972 h e a r i n g , f o r which the statement was prepared: - 36 -That i s the environmental impact statement as we see i t , Mr. Chairman. However, should something more e l a b o r a t e be r e q u i r e d , then c e r t a i n l y i t s h a l l be done. We f e e l t h a t ' s s u f f i c i e n t f o r l i c e n c i n g a t t h i s time. 22 C. E n g i n e e r i n g Design A d d i t i o n a l f i e l d s t u d i e s f o l l o w i n g the June 1971 surveys d i d not begin u n t i l September 1971. These s t u d i e s were intended to determine the s o i l and rock c o n d i t i o n s i n the area i n order to s e l e c t the most s u i t a b l e h y d r o e l e c t r i c scheme f o r the s i t e , and were conducted by R i p l e y , Klohn and Leonoff I n t e r n a t i o n a l L t d . , s o i l s c o n s u l t a n t s . Test h o l e p i t s were excavated on both s i d e s of the R i v e r to determine s u b s o i l c o n d i t i o n s and the extent of permafrost, and the surveys extended i n t o the w i n t e r of 1971-72. The e n g i n e e r i n g c o n s u l t a n t f o r the p r o j e c t was Crippen E n g i n e e r i n g L t d . of Vancouver. Crippen E n g i n e e r i n g was r e s p o n s i b l e f o r f e a s i b i l i t y s t u d i e s as w e l l as f o r the d e s i g n of the p r o j e c t and c o n s t r u c t i o n management. Consequently, i t p l a y e d a very c e n t r a l p a r t i n the p l a n n i n g and d e c i s i o n -making process f o r the p r o j e c t . The company had a l s o conducted i t s own s i t e i n v e s t i g a t i o n s p r i o r to being commissioned by NCPC. As NCPC management's Report on A i s h i h i k s t a t e s : F o l l o w i n g a September, 1971 s i t e i n v e s t i g a t i o n by the e n g i n e e r i n g c o n s u l t a n t - t o - b e , a r e p o r t was f i l e d on October 4, o u t l i n i n g the nature of the o r i g i n a l concept, i t s advantages and - 37 -p o s s i b l e c o n t i n g e n c i e s and an i n v e s t i g a t i o n program to e s t a b l i s h subsurface data, hydrology, topography, c o n s t r u c t i o n m a t e r i a l t e s t p i t t i n g . (emphasis added) 23 Minutes of a meeting h e l d on October 2 2 , 1 9 7 1 between NCPC o f f i c i a l s J . Lowe, J . Long and D. Steen w i t h Mr. D. Duguid of Crippen E n g i n e e r i n g , i n d i c a t e t h a t by t h i s time the g e n e r a l l o c a t i o n of the powerhouse had not y e t been determined. I t was not known on which s i d e of the r i v e r the powerhouse should be l o c a t e d , and i t was even suggested t h a t the p o s s i b i l i t y of l o c a t i n g the powerhouse j u s t below Rainbow F a l l s be i n v e s t i g a t e d f u r t h e r , which would enable o n l y a 30 0 f o o t head to be developed. As s t a t e d i n the minutes: 4) A penstock to powerhouse on west branch of A i s h i h i k R i v e r might be b e t t e r from a permafrost st a n d p o i n t ( l e s s e x t e n s i v e s i n c e south f a c i n g ) . 5) Powerhouse on West A i s h i h i k not f a v o u r a b l e due to u n c o n t r o l l e d nature of t h i s r i v e r and p o t e n t i a l slope f a i l u r e s i n the predominant steep banks. ... I t was noted t h a t o n l y 3 0 0 ' of head would be a v a i l a b l e by l o c a t i n g powerhouse below Rainbow F a l l s (approximately 50% of t h a t of the o r i g i n a l scheme or 10 MW c a p a c i t y t o t a l ) . More backhoe work was d i s c u s s e d and deemed u s e f u l a t the penstock routes and at the low p r o f i l e dam above Rainbow F a l l s . 24 I t i s not s u r p r i s i n g t h a t the l o c a t i o n o f the powerhouse and the c a n a l had not y e t been determined, s i n c e the s o i l s and g e o l o g i c a l surveys had o n l y begun the p r e v i o u s month. - 38 -An important f e a t u r e of the f i n a l d e s ign of the p r o j e c t i s t h a t the powerhouse i s l o c a t e d underground. D i s c u s s i o n s o f t h i s p o s s i b i l i t y d i d not, a p p a r e n t l y , begin u n t i l November, 1971. As mentioned i n NCPC management's Report on A i s h i h i k : In November, 1971 the concept of an underground powerhouse was d i s c u s s e d by the c o n s u l t a n t and work i n t h i s d i r e c t i o n continued. 25 Another very important f e a t u r e of the p r o j e c t concerns how w e l l i t i s a b l e to i n t e g r a t e w i t h the e x i s t i n g g e n e r a t i o n system. The storage c a p a c i t y of A i s h i h i k Lake enables the f a c i l i t y t o be used very e f f e c t i v e l y f o r w i n t e r peaking, when demands are very h i g h . I t appears t h a t t h i s concept had not been d i s c u s s e d by NCPC u n t i l l a t e March, 1972, two months p r i o r to the water l i c e n c e h e a r i n g s . An NCPC memorandum dated March 23, 1972 s t a t e s : Duguid suggests t h a t a 3rd u n i t p r o v i s i o n a t A i s h i h i k should be c o n s i d e r e d now s i n c e i t would f i r m up and balance system i n f o l l o w i n g way. Upper Yukon l a c k s s u f f i c i e n t water volume to m a i n t a i n hydro peaks i n w i n t e r . A i s h i h i k c o u l d p r o v i d e t h i s peak and cut back p r o d u c t i o n i n summer when p l e n t y of water i n Yukon R i v e r . A i s h i h i k water i s e a s i l y s t o r e d f o r w i n t e r p r o d u c t i o n and i s not s u s c e p t i b l e to l a c k of water s i n c e i t i s p r i m a r i l y a h i - h e a d - l o flow system. 26 The c o n s u l t a n t a l s o wrote to Mr. F. Mooney, NCPC's r e g i o n a l manager f o r the Yukon, on A p r i l 3, and e x p l a i n e d t h a t : - 39 -... one a d d i t i o n a l f a c t has come to l i g h t i n our r e c e n t s t u d i e s p r o v i d i n g another reason why A i s h i h i k should be b u i l t . ... By h o l d i n g back on g e n e r a t i o n a t A i s h i h i k d u r i n g the summer, water c o u l d be s t o r e d to generate a d d i t i o n a l power d u r i n g w i n t e r months, e f f e c t i v e l y f i r m i n g up the a d d i t i o n a l Whitehorse c a p a c i t y . A system study might show t h a t what amounts to s t o r i n g s u r p l u s Upper Yukon water i n A i s h i h i k Lake co u l d be such an advantage t h a t an e a r l y i n s t a l l a t i o n of a t h i r d u n i t c o u l d be j u s t i f i e d . 27 F i n a l l y , the NCPC management's Report on A i s h i k i k s t a t e s : The concept of winter peaking w i t h A i s h i h i k i n combination with Whitehorse Rapids was o u t l i n e d by the e n g i n e e r i n g c o n s u l t a n t A p r i l 3rd 1972. 28 D. E n g i n e e r i n g Study In A p r i l , 1972, the A i s h i h i k R i v e r Power Development E n g i n e e r i n g Report was completed by Crippen E n g i n e e r i n g . The purpose of the r e p o r t was to supply the Water Board with the necessary i n f o r m a t i o n to grant a water l i c e n c e , and the f o l l o w i n g areas of i n v e s t i g a t i o n were covered: d e s c r i p t i o n of the geology of the area, s o i l s , hydrology and power p o t e n t i a l , e f f e c t s on A i s h i h i k Lake and O t t e r and Rainbow F a l l s , and a d e s c r i p t i o n of the p h y s i c a l l a y o u t of the p r o j e c t . The r e p o r t mentions t h a t l i t t l e was known of the necessary storage requirements or of the p o s s i b l e environmental impacts of the p r o j e c t . As the r e p o r t s t a t e s : - 40 -S u f f i c i e n t i n v e s t i g a t i o n has been c a r r i e d out i n the j u s t completed program to e s t a b l i s h f e a s i b i l i t y o f the p r o j e c t . However, there are s t i l l many unknowns which should be i n v e s t i g a t e d p r i o r t o , or i n the e a r l y stages o f , c o n s t r u c t i o n . 29 The r e p o r t a l s o recommended t h a t a systems study, which would assess how the p r o j e c t c o u l d best f i t i n t o the e x i s t i n g g e n e r a t i o n system, should be c a r r i e d out as soon as p o s s i b l e . A systems study can a s s i s t i n deter m i n i n g the a d d i t i o n a l c a p a c i t y j u s t i f i e d a t both Whitehorse and A i s h i h i k . For the l a t t e r , t h i s i s immediately important s i n c e dimensions of co n d u i t s and powerhouse f o r the a d d i t i o n a l u n i t must be e s t a b l i s h e d . 30 V. SUMMARY In June, 1971, NCPC conducted p r e l i m i n a r y r econnaissance surveys at the A i s h i h i k and s e v e r a l o t h e r s i t e s . The f i e l d i n v e s t i g a t o r s determined t h a t almost twice as much head was a v a i l a b l e f o r development a t the A i s h i h i k s i t e than was p r e v i o u s l y thought p o s s i b l e . Immediately a f t e r the surveys were completed, NCPC a p p l i e d f o r a land r e s e r v a t i o n f o r onl y the A i s h i h i k s i t e . No ot h e r a l t e r n a t i v e s i t e s to the A i s h i h i k were i n v e s t i g a t e d d u r i n g the summer of 1971, and very l i t t l e f u r t h e r i n v e s t i g a t i o n s were made of the A i s h i h i k s i t e d u r i n g the same time p e r i o d . - 41 -In July, 1971, a cost comparison was made between the Aishih i k project and a c o a l - f i r e d a l t e r n a t i v e . The Aishihik project was calculated to cost $7.8 m i l l i o n , which made i t appear to be a much better a l t e r n a t i v e . On August 31, 1971, NCPC applied for a water licence under the Dominion Water Power Act to develop the s i t e , and stated i n i t s request that the Aishihik was the most economic of the available a l t e r n a t i v e s . At that time, the engineering f e a s i b i l i t y of the project had not, apparently, been established. Shortly a f t e r NCPC submitted i t s application, i t was informed by DIAND that the water licence would have to be processed through the Northern Inland Waters Act, which was not yet proclaimed. The contents of the N.I,W.A. were available to NCPC i n September, 1971, when i t was informed that the Aishi h i k water licence would not be issued under the D.W.P.A. The N.I.W.A. states that information about the q u a l i t a t i v e and quantitative e f f e c t s of a proposed water use has to be supplied by the applicant. On November 19, 1971, the Chairman of the Water Board informed NCPC that an environmental impact statement - 42 -would be r e q u i r e d , and advised NCPC t h a t i t should begin the necessary surveys and s t u d i e s to prepare one a t t h a t time. On February 15, 1972, the Chairman again wrote to NCPC and s t a t e d t h a t an impact statement would be r e q u i r e d , and a l s o e x p l a i n e d what items i t should c o n t a i n . NCPC d i d not h i r e a c o n s u l t a n t to begin p r e p a r a t i o n of an impact statement u n t i l March 9, 1972. On March 21, NCPC forwarded a formal a p p l i c a t i o n f o r a water l i c e n c e , and the h e a r i n g was scheduled f o r May 24-25, 1972. Owing to these time c o n s t r a i n t s , the study was completed i n on l y seven weeks and was p r e l i m i n a r y i n nature. The a p p l i c a t i o n proposed t h a t c o n s t r u c t i o n o f the p r o j e c t should begin i n May, 197 2, and would be completed i n December, 1973. Perhaps the bes t a v a i l a b l e e x p l a n a t i o n f o r why NCPC d i d not begin the environmental impact study sooner than i t d i d i s t h a t i t was not f u l l y aware o f the purpose and importance o f the i n f o r m a t i o n t h a t would be c o n t a i n e d i n such a statement. Consequently, the Power Commission c o n s i d e r e d t h a t an adequate statement would be r e l a t i v e l y easy to compile, and t h a t i t would not have an important b e a r i n g on whether or not the Board would i s s u e a water l i c e n c e . I t t h e r e f o r e d i d not gi v e p r i o r i t y t o the p r e p a r a t i o n of an environmental impact statement. NCPC d i d not begin the necessary f i e l d i n v e s t i g a t i o n s to e s t a b l i s h the e n g i n e e r i n g f e a s i b i l i t y of the p r o j e c t u n t i l September, 1971, and not u n t i l November, 1971, d i d NCPC and i t s e n g i n e e r i n g c o n s u l t a n t begin s e r i o u s c o n s i d e r a t i o n of the p o s s i b i l i t y of l o c a t i n g the powerhouse underground. In l a t e March and e a r l y A p r i l of 1972, the concept of adding t o the g e n e r a t i n g c a p a c i t y of the p r o j e c t , and u s i n g i t f o r wi n t e r peaking purposes by t a k i n g advantage o f the sto r a g e c a p a b i l i t y o f A i s h i h i k Lake, was f i r s t d i s c u s s e d . On March 15, 1972, NCPC a p p l i e d t o the Water Board f o r a water l i c e n c e , s t a t i n g i n the a p p l i c a t i o n t h a t i t proposed t o s t a r t c o n s t r u c t i o n i n May, 1972. The f i r s t e n g i n e e r i n g r e p o r t f o r the p r o j e c t was completed i n A p r i l , 1972. L i k e the environmental impact study, the e n g i n e e r i n g r e p o r t was p r e l i m i n a r y i n nature and cont a i n e d l a r g e amounts of t e n t a t i v e i n f o r m a t i o n . These two r e p o r t s t o g e t h e r formed the t o t a l body of w r i t t e n i n f o r m a t i o n made a v a i l a b l e to the p u b l i c b e f o r e the May, 197 2 h e a r i n g . In sum, i t might appear t h a t NCPC was i l l - p r e p a r e d f o r the f i r s t h e a r i n g . Very l i t t l e time and a t t e n t i o n was given to the p r e p a r a t i o n of the environmental impact - 4 4 -s t a t e m e n t , w h i c h t h e W a t e r B o a r d l a t e r f o u n d t o b e i n a d e q u a t e f o r t h e p u r p o s e o f d e c i d i n g u p o n a w a t e r u s e l i c e n c e . I t a l s o a p p e a r s t h a t t h e d e s i g n o f t h e p r o j e c t a n d t h e g e n e r a t i o n o f t e c h n i c a l i n f o r m a t i o n h a d n o t p r o g r e s s e d a s f a r a s i t p e r h a p s s h o u l d h a v e , g i v e n t h a t N C P C i n t e n d e d t o b e g i n c o n s t r u c t i o n i m m e d i a t e l y a f t e r t h e h e a r i n g . I f N C P C s e e m s t o h a v e b e e n i l l - p r e p a r e d , h o w e v e r , i t c e r t a i n l y d i d s h a r e t h i s p r o b l e m w i t h t h e m e m b e r s h i p o f t h e W a t e r B o a r d a n d t h e s e n i o r l e v e l s o f D I A N D , a s s h o w n i n t h e n e x t c h a p t e r . - 45 -CHAPTER TWO REFERENCES AND NOTES 1. G. E. Crippen & A s s o c i a t e s , \" A i s h i h i k R i v e r Power Development\", A p r i l 1972, p.2-1. 2. I b i d . 3. NCPC, \"Report on F i e l d T r i p t o A i s h i h i k & Ka k i s a R i v e r s , June 1971\", i n Report on A i s h i h i k , NCPC, March 1976, r e f . 1.04. 4. I b i d . , p.3. 5. I b i d . 6. NCPC, Report on A i s h i h i k , S e c t i o n 4, p . l . 7. D. Steen, P l a n n i n g Department, NCPC, to J . M. Lowe, General Manager, NCPC, \"Power P o t e n t i a l from N o r d e n s k i o l d Coal D e p o s i t s \" , 7 J u l y 1971, i n Report on A i s h i h i k , r e f . 2.0. 8. I b i d . 9. J . M. Lowe to I. P e t r i e , Land A d m i n i s t r a t i o n , DIAND, 31 August 1971, i n H y d r o - E l e c t r i c Development, A i s h i h i k Yukon, S t r u t t Lake NWT, and Northern Canada Power Commission, ( h e r e a f t e r r e f e r r e d to as the Dalby R e p o r t ) , R. N. Dalby & A s s o c i a t e s , A p r i l 1976, Attachment 1. 10. NCPC, Report on A i s h i h i k , S e c t i o n 1, p . l . 11. Northern Canada Power Commission A c t , Chapter N-21, S e c t i o n (2). 12. NCPC, Report on A i s h i h i k , S e c t i o n 4, p.2. 13. G. Olson, Manager, S p e c i a l P r o j e c t s , NCPC, to A. D. Hunt, A s s i s t a n t Deputy M i n i s t e r , DIAND, 5 A p r i l 1974, \"Notes Re Yukon Power\". Mr. Olson s t a t e d t h a t : \"N.C.P.C. was advised by D.I.A.N.D. to await coming i n t o e f f e c t of the Northern Inland Waters A c t which was expected to be i n the f a l l of 1971\". 14. D. Steen to J . Lowe, 25 January 1972, \"Minutes o f Meeting IAND/NCPC - January 24/72\", i n Report on A i s h i h i k , r e f . 4.08. 15. A. D. Hunt to J . M. Lowe, 5 December 1972. - 46 -16. J . H. Reynolds, NCPC to J . M. Lowe, \" A i s h i h i k Land and Water R e s e r v a t i o n \" , 18 August 1971; and J . K. Naysmith, Northern Economic Development Branch, to J . M. Lowe, 25 August 1971, both i n Report on A i s h i h i k , r e f s . 4.02 and 4.03. 17. Northern Inland Waters A ct, R.S.C. 1970, c.28, S e c t i o n 11(2). 18. L. V. Brandon, Chairman, Yukon T e r r i t o r y Water Board to F. Mooney, Regional Manager, NCPC, 19 November 1971. 19. L. Brandon to F. Mooney, Regional Manager NCPC, 15 February 1972, i n Report on A i s h i h i k , r e f . 4.09. 20. Pearse Bowden, Economic C o n s u l t a n t s L t d . , \" A i s h i h i k R i v e r Power Development, A P r e l i m i n a r y Environmental Impact Assessment\", 20 A p r i l 1972, p . i i i . 21. Pearse Bowden Economic C o n s u l t a n t s L t d . , \"Environmental I m p l i c a t i o n s of A i s h i h i k R i v e r Power Development, Yukon T e r r i t o r y , A Compendium Report\", 30 May 1975, p . l fn. 22. J . M. Lowe, General Hearing T r a n s c r i p t s , 24 May 1972, Whitehorse, Y.T., p.20. 23. NCPC, Report on A i s h i h i k , S e c t i o n 1, p . l . 24. D. Steen t o J . M. Lowe, \"Re: Meeting about A d d i t i o n a l Power to Whitehorse Area\", 1 November 1971, i n Report on A i s h i h i k , r e f . 1.13. 25. NCPC, Report on A i s h i h i k , S e c t i o n 1, p.2. 26. D. Steen to J . Lowe, 23 March 1972, i n Report on A i s h i h i k , r e f . 1.17. 27. D. Duguid, c o n s u l t i n g engineer, G. E. Crippen & A s s o c i a t e s L t d . , to F. Mooney, 3 A p r i l 1972, i n Report on A i s h i h i k , r e f . 1.18. 28. NCPC, Report on A i s h i h i k , S e c t i o n 1, p.2. 29. G. E. Crippen & A s s o c i a t e s , \" A i s h i h i k R i v e r Power Development\", p.8-1. 30. I b i d . , p.8-3. - 47 -CHAPTER THREE THE FIRST HEARING - MAY, 1972 I. INTRODUCTION T h i s chapter d e a l s w i t h the events t h a t took p l a c e immediately be f o r e and d u r i n g the f i r s t h e a r i n g . P r i o r t o the h e a r i n g , i t was expected by NCPC and by s e n i o r o f f i c i a l s i n DIAND t h a t a water l i c e n c e c o u l d , and probably would, be approved immediately f o l l o w i n g the he a r i n g . As Mr. Robinson, Deputy M i n i s t e r f o r the Department, and Chairman of the Commission f o r NCPC e x p l a i n e d t o the M i n i s t e r on March 9, 1972: I t i s h i g h l y d e s i r a b l e . . . t h a t approval be given b e f o r e the end of May. T h i s w i l l culminate i n v e s t i g a t i o n work c a r r i e d out by the Commission over the past twelve months. In our o p i n i o n the Water Board can perform a l l i t s f u n c t i o n s adequately and s t i l l p rocess the a p p l i c a t i o n i n s u f f i c i e n t time. 1 A number of problems a f f e c t e d the outcome of the f i r s t h e a r i n g , however, the most important of which was t h a t the Water Board d i d not y e t have l e g a l a u t h o r i t y t o i s s u e a water l i c e n c e . As a r e s u l t , NCPC d i d not r e c e i v e a water l i c e n c e f o l l o w i n g the h e a r i n g , and was not able t o begin c o n s t r u c t i o n t h a t summer. I I . PREPARATIONS FOR THE HEARING A. L e g a l C o n s t r a i n t s Under s e c t i o n 15 of the Northern Inland Waters A c t , a - 48 -water board may h o l d a p u b l i c h e a r i n g f o r two d i f f e r e n t reasons. 15. C.1). A p u b l i c h e a r i n g may be h e l d i n connection with any matter r e l a t i n g to i t s o b j e c t s where the board i s s a t i s f i e d t h a t such a h e a r i n g would be i n the p u b l i c i n t e r e s t . (2) A p u b l i c h e a r i n g s h a l l be h e l d by a board (a) i n connection w i t h each a p p l i c a t i o n f o r a l i c e n c e or f o r renewal of a l i c e n c e . 2 I t was intended t h a t the f i r s t h e a r i n g would be h e l d under s e c t i o n 15(2) and t h a t a l i c e n c e would be i s s u e d . However, s h o r t l y b e f o r e the h e a r i n g s , a Vancouver lawyer, Mr. R. Anthony, wrote to the Water Board and f o r m a l l y o b j e c t e d to a h e a r i n g being h e l d under s e c t i o n 15(2) on the grounds t h a t a l i c e n c e c o u l d not be i s s u e d u n t i l the N.I.W.A. Regula t i o n s were promulgated. The Board de c i d e d t h a t i t would have to uphold Mr. Anthony's o b j e c t i o n and the h e a r i n g was h e l d under s e c t i o n 15(1) i n s t e a d . The a c t i o n taken by Mr. Anthony may t h e r e f o r e have had a very s i g n i f i c a n t e f f e c t on the course of the h i s t o r y of the A i s h i h i k p r o j e c t . The d e c i s i o n to h o l d the h e a r i n g under s e c t i o n 15(1) must have come at a very l a t e hour. The f o l l o w i n g q u o t a t i o n comes from the minutes of a meeting of the Water Board, which began d u r i n g the a f t e r n o o n of May 24. The h e a r i n g was to begin at 7:00 t h a t evening. - 49 -Mr. Lightbody e x p l a i n e d t o the Board t h a t the procedure on NCPC's a p p l i c a t i o n was c a l l e d under S e c t i o n 15(1) of the NIWA. No a c t i o n c o u l d be taken under 15(2) u n t i l the r e g u l a t i o n s are e f f e c t i v e . The Chairman informed the Board t h a t the r e g u l a t i o n s would not be promulgated u n t i l the Northwest T e r r i t o r i e s , the Inter-Departmental Committee on Water, and the Department of J u s t i c e had pr o v i d e d t h e i r i n p u t and t h a t i t would probably be J u l y when they were complete. ... i t was decided t h a t the Chairman would s t a r t the proceedings by e x p l a i n i n g t o the p u b l i c t h a t the h e a r i n g was not to grant a l i c e n c e but to a s c e r t a i n from the p u b l i c what they f e e l a l i c e n c e a p p l i c a t i o n should c o n t a i n . 3 On the same day t h a t the h e a r i n g was to be h e l d , the Water Board had to info r m NCPC t h a t a l i c e n c e c o u l d not be i s s u e d a t t h a t time. An assumption appears to have been made by a l l major a c t o r s t h a t the h e a r i n g c o u l d be h e l d under s e c t i o n 15(2). A l e t t e r from A. B. Yates t o D. Hunt on March 29, 1972, e x p l a i n s some of the b a s i s f o r t h i s assumption. In r e f e r e n c e to the advice of the D i r e c t o r o f L e g a l S e r v i c e s , the f o l l o w i n g i n f o r m a t i o n was p r o v i d e d : We wish to process the NCPC a p p l i c a t i o n f o r the A i s h i h i k development under the NIWA but i n advance o f the promulgation of the Reg u l a t i o n s . In doing so, do we stand on s o l i d l e g a l grounds? The L e g a l A d v i s o r expressed the o p i n i o n t h a t the a p p l i c a t i o n c o u l d be processed and the l i c e n c e i s s u e d without the p r i o r making o f r e g u l a t i o n s . 4 - 50 -B. N o t i c e of the Hearing The n o t i c e of the h e a r i n g was p u b l i s h e d by the Board i n the Yukon News i n Whitehorse on A p r i l 28, and i n the Canada Gazette on May 16. NCPC a l s o p u b l i s h e d a n o t i c e of the h e a r i n g i n the Canada Gazette on A p r i l 1, but never d i d g i v e n o t i c e i n the l o c a l p r e s s . As a r e s u l t , i t d i d not meet a l l of the requirements of s e c t i o n 17 of the N.I.W.A. which s t a t e s : The a p p r o p r i a t e board s h a l l r e q u i r e an a p p l i c a n t f o r a l i c e n c e . . . to g i v e n o t i c e o f such a p p l i c a t i o n and i n such one or more newspapers, i n c l u d i n g a t l e a s t one t h a t i s i n c i r c u l a t i o n w i t h i n the area a f f e c t e d . . . 5 The f a c t t h a t NCPC d i d not p u b l i s h a n o t i c e i n the l o c a l p ress p r o v i d e d f u r t h e r grounds f o r the r u l i n g by the Water Board t h a t i t was without j u r i s d i c t i o n to proceed w i t h a l i c e n c e h e a r i n g . I t a l s o appears t h a t the n o t i c e t h a t was p u b l i s h e d i n the Yukon News by the Water Board d i d not d e s c r i b e the nature and scope of the proposed development to the p u b l i c very w e l l . - 51 -. . \u00E2\u0080\u00A2,:!N-\u00C2\u00A9T-ItSE. ... \u00E2\u0080\u00A2 NORTHERN INLAND W A T E R S ACT ' -'.'\u00E2\u0080\u00A2/ NOTICE OF PUBLIC H E A R I N G : The N o r t h e r n Canada Power CommissIon has \u00E2\u0080\u00A2 made a w a t e r r i g h t s a p p l i c a t i o n f o r a w a t e r - H c e n c e i n t h e A i s i h i k d r a i n a g e b a s i n t o d i v e r t : a s u p p l y ' o f . 3 5 0 c . f . s . f r o m Canyon L a k e . T h e -p r o j e c t p r o p o s e s t h a t .waters a r e t o b e -with-drawn I n t o a 31/2 m i l e cans'] a n d d i v e r t e d t o , an u n d e r g r o u n d powerhouse downstream f r o m Canyon Lake b e f o r e b e i n g r e t u r n e d t o t h e \u00E2\u0080\u00A2 E a s t A i s i h i k R i v e r a p p r o x i m a t e l y , o n e m i l e ctbove t h e c o n f l u e n c e w i t h t h e V/est A i s h i h i k . r ? \u00E2\u0080\u00A2. A c o n t r o l s t r u c t u r e on A i s h i h i k L ake v i l s ~ s s o p r o p o s e d f o r w a t e r s t o r a g e . P u b l i c h e a r i n g s o n t h i s a p p l i o a t J o n . wi11 b e h e l d i n t h e Y . V.C.A. B u i l d i n g i n White-\u00E2\u0080\u00A2horse on May 2 i t t h a t 7 : 3 0 p . m . and a t t h e fCcmmunity. Ha 11 i n H a i n e s J u n c t i o n a t 2 : 3 0 ' p . m . on May 2 5 t h b e f o r e t h e Chairman and mem-b e r s o f t h e Yukon T e r r i t o r y Water B o a r d . Those v / i s h i n g t o speak on b e h a l f o r a g a i n s t t h i s a p p l i c a t i o n s h o u l d r e c o r d t h e i r i n t e n t i o n a t t h e o f f i c e o f t h e Yukon T e r r i t o r y Water Board b e f o r e m i d - d a y on May 1 9 t . h . B r i e f s w i l l b e p r e s e n t e d a t t h e h e a r i n g I n t h e i r \u00E2\u0080\u0094 ;, o r d e r o f ' j d a j i v e r y t o t h e ' B o a r d ' s o f f i c e s , .'\"\". E n g i n e e r i n g r e p o r t s on t h e p r o p o s e d p r e - \" J e c t and t h e . a p p l i c a t i o n i t s e l f may b e s t u d -i e d a t t h e V h i t e h o r s e B r a n c h o f t h e Yukon R e g i o n a l L i b r a r y , and i n t h e o f f i c e s o f t h e Water B o a r d . T h e r e w i l l a l s o b e a, c o p y i n t h e g e n e r a l s t o r e a t H a i n e s J u n c t i o n .An\" e n v i r o n m e n t -a l r e p o r t w i l l b e a v a i l a b l e on .May 5 t h a t t h e same o f f i c e s . v . 'Room 101 /Dept. o f P u b l i c Works B l d g !T~ < \u00C2\u00AB =>\u00E2\u0080\u00A2 System Loss $14,5 m i l l i o n $5 m i l l i o n $5,5 m i l l i o n T o t a l Loss; $25 m i l l i o n i n the 16-year study p e r i o d . T h i s t o t a l l o s s i s the r e s u l t of an average, e a r l i e r requirement f o r P l a n t 'X' by 3 1/2 years and P l a n t 'Z' by 1 1/2 y e a r s . . . The. power l o s s e s due to i n c r e a s e d r e q u i r e d minimum flows over O t t e r F a l l s are approximately as below; Minimum Summer Flow -. n n c - i n n n c _ ' . . \u00E2\u0080\u009E ,, 100 cfs^m 60.0 c f s-m 1000 cfs-m Over O t t e r F a l l s System Loss $3 m i l l i o n $3,5 m i l l i o n T o t a l Loss; $6,5 m i l l i o n i n the 16_^year study period.\"*\"^ I t i s not mentioned how much: accuracy c o u l d be a t t a c h e d to these f i n d i n g s . 4. P r e s e n t a t i o n of Study F i n d i n g s On the. b a s i s of the f i n d i n g s of the. Phase I I study, NCPC's Regional Manager s t a t e d d u r i n g the t h i r d h e a r i n g t h a t : .,. a d d i t i o n a l revenue, with a present worth, of about 28 m i l l i o n d o l l a r s would have to be o b t a i n e d from i n d i v i d u a l and c o r p o r a t e Yukon consumers over the next s i x t e e n years- and a d d i t i o n a l c o s t s would continue beyond t h a t time as long as the water r e s t r i c t i o n s are made. 17 Another NCPC o f f i c i a l s t a t e d d u r i n g the h e a r i n g t h a t the present l i c e n c e r e s t r i c t i o n s i n e f f e c t doubled the c o s t of power produced from the p r o j e c t : Here are the s o b e r i n g f a c t s . The busbar c o s t at A i s h i h i k p l a n t w i l l , w ith the e x i s t i n g l i c e n c e , be about 6 cents per k i l o w a t t hour. The busbar c o s t of A i s h i h i k p l a n t w i t h the amended l i c e n c e as o u t l i n e d i n our a p p l i c a t i o n w i l l be about 3 cents per k i l o w a t t hour. 18 - 139 -Despite the l a r g e number of d i f f i c u l t assumptions and p r e d i c t i o n s made i n the systems study, NCPC o f f i c i a l s appear to have presented the f i n d i n g s o f the study i n a manner t h a t purported a gr e a t d e a l of accuracy. B. Assessment of Environmental Costs In May 1975, Pearse Bowden completed \"Environmental I m p l i c a t i o n s of A i s h i h i k R i v e r Power Development, A 19 Compendium Report\". The f i n d i n g s o f t h i s r e p o r t i n c l u d e d a q u a n t i f i e d assessment of the environmental c o s t s t h a t would r e s u l t from an i n c r e a s e d storage range and decreased flows over O t t e r F a l l s . The purpose of p r o v i d i n g t h i s assessment of environmental c o s t s was so t h a t they c o u l d be \"compared w i t h the va l u e of power p r o d u c t i o n i n determining the optimum use of A i s h i h i k 20 water\". As the r e p o r t e x p l a i n e d : I t i s r a t i o n a l t o continue use of the A i s h i h i k system and i n c r e a s e the d i v e r s i o n of water f o r power p r o d u c t i o n o n l y i f the va l u e of the energy o b t a i n e d from doing so i s i n excess of the c o s t s o f o b t a i n i n g i t . An a n a l y s i s of how environmental c o s t s i n c r e a s e as the degree to which the system i s used f o r power g e n e r a t i o n i n c r e a s e s has been undertaken, to a s s i s t i n d e c i d i n g on the optimum use of A i s h i h i k water. 21 I t was intended, then, t h a t the a n a l y s i s would i d e n t i f y and e v a l u a t e a l l o f the important c o s t s i n v o l v e d w i t h the implemention of the proposed water l i c e n c e . - 140 -The r e s u l t s of Pearse Bowden's assessments of environmental c o s t s were compared with the r e s u l t s of the Phase I I study i n another r e p o r t , \"Review of Power System and Environmental S t u d i e s and Recommended Water L i c e n c e A p p l i c a t i o n \" , which was j o i n t l y authored by Pearse Bowden and Crippen E n g i n e e r i n g . The b e n e f i t s t h a t would accrue from the l i c e n c e a p p l i c a t i o n , as determined from the Phase I I study, f a r exceeded the v a r i o u s environmental c o s t s t h a t were c a l c u l a t e d by Pearse Bowden. For i n s t a n c e , i t was found by the Phase I I study t h a t a 17.5 f o o t storage range would r e s u l t i n about $25 m i l l i o n i n power b e n e f i t s , whereas the t o t a l q u a n t i f i e d c o s t t h a t would r e s u l t from u s i n g 22 t h i s storage range would be o n l y $531,000. T h i s t o t a l q u a n t i f i e d c o s t c o n s i s t e d of an assessment of the c o s t o f c l e a r i n g the l a k e s h o r e , r e p a i r c o s t s f o r the A i s h i h i k V i l l a g e , e r o s i o n p r o t e c t i o n f a c i l i t i e s , and the v a l u e of f i s h e r y and w i l d l i f e l o s s e s . The r e p o r t d i d r e c o g n i z e t h a t some allowance had to be made f o r n o n - q u a n t i f i e d c o s t s a s s o c i a t e d w i t h i n c r e a s i n g the storage range. Estimated c o s t s were t h e r e f o r e a r b i t r a r i l y doubled. T h i s approach was c o n s i d e r e d to more than adequately account f o r n o n - q u a n t i f i e d c o s t s . As the r e p o r t e x p l a i n s : - 141 -Since the main component of the estimated storage c o s t s i s f o r e r o s i o n p r e v e n t i v e work and p r o t e c t i o n o f A i s h i h i k V i l l a g e , which can be estimated reasonably a c c u r a t e l y , the e f f e c t o f d o u b l i n g a l l c o s t s i n t h i s manner i s r e a l l y t o expand the c o s t s estimated f o r f i s h e r i e s and w i l d l i f e by a f a c t o r of about 12. 23 I t was a l s o s t a t e d i n the \"Compendium Report\" t h a t non-q u a n t i f i e d a e s t h e t i c e f f e c t s were not of importance: ... while the estimates do not i n c l u d e n o n - q u a n t i f i e d a e s t h e t i c impacts, i t i s not b e l i e v e d t h a t these would add s i g n i f i c a n t l y to the values estimated. 24 NCPC's c o n s u l t a n t s determined t h a t the p o p u l a t i o n of the Yukon T e r r i t o r y would, from an a e s t h e t i c p o i n t of view, be r e l a t i v e l y i n d i f f e r e n t as to whether or not A i s h i h i k Lake was r a i s e d above the h i s t o r i c high l e v e l . The e v a l u a t i o n of environmental c o s t s p r o v i d e d by NCPC's c o n s u l t a n t s appears o n l y to have r e c o g n i z e d those v a l u e s t h a t c o u l d be r e a d i l y q u a n t i f i e d i n economic terms. For example, the t o t a l value of the beaver and muskrat p o p u l a t i o n s was c a l c u l a t e d on the b a s i s o f economic r e t u r n s f o r t r a p p i n g , 25 and was determined to be $1,000. The value of the s u b s i s t e n c e f i s h e r y was c a l c u l a t e d i n the f o l l o w i n g manner: In terms of the f i s h f ed to dogs, approximately f i v e thousand pounds, replacement dog food c o u l d e a s i l y be d e l i v e r e d to the v i l l a g e f o r 25c per pound. The value of the f i s h used as dog food would thus be $1,250. To r e p l a c e the f i s h taken f o r human consumption would probably c o s t more i n the order o f $1.00 per pound, i n d i c a t i n g a t o t a l value o f $1,500. - 1 4 2 -The t o t a l annual value o f the s u b s i s t e n c e f i s h e r y i n terms of i t s replacement c o s t , i s thus about $ 2 , 7 5 0 . With a d i s c o u n t r a t e of nine per cent the presen t c a p i t a l i z e d value over the 1 6 year p e r i o d i s $ 2 3 , 0 0 0 . 2 6 The r e p o r t a l s o mentions t h a t : I t i s re c o g n i z e d t h a t the r i g h t to f i s h has i n i t s e l f a value t o the Indian people which transcends the replacement c o s t of the a c t u a l f i s h e x t r a c t e d over any p e r i o d o f time. 27 T h i s a d d i t i o n a l value was giv e n no f u r t h e r c o n s i d e r a t i o n , however. Thus, f o r the purpose of determining the optimum use of water, the value of the A i s h i h i k system f i s h e r y to the Indian people was c a l c u l a t e d i n terms of the c o s t of replacement f o o d s t u f f s . I t i s i n t e r e s t i n g to note t h a t , w h i l e the r e p o r t prepared by Pearse Bowden determined t h a t the t o t a l l o s s e s to the f i s h e r y would have a value o f $ 4 0 , 0 0 0 i f a 1 7 . 5 f o o t 2 8 storage range was used, the F i s h e r i e s and Marine S e r v i c e spent i n the order o f $ 2 5 0 , 0 0 0 to assess the f i s h e r i e s 29 i m p l i c a t i o n s a r i s i n g from the p r o j e c t . I t i s a l s o i n t e r e s t i n g to note t h a t the f o l l o w i n g statement was made by an NCPC o f f i c i a l d u r i n g the t h i r d h e a r i n g , i n response to a q u e s t i o n concerning the c o s t o f power produced from the p r o j e c t : - 143 -... to g i v e a p r e c i s e answer i s not p o s s i b l e i n t h a t the p r o j e c t i s not y e t completed and a l l the environmental c o s t s and c l a i m s f o r damages have not y e t been f i n a l i z e d . 30 There appears t o be some i n c o n s i s t e n c y between the f a c t t h a t NCPC o f f i c i a l s f e l t t h a t they c o u l d not y e t determine the c o s t o f the p r o j e c t because \"environmental c o s t s and c l a i m s f o r damages\" had not y e t been r e c e i v e d , w h i l e at the same time NCPC's c o n s u l t a n t s had completed a r e p o r t which pr o v i d e d t o t a l q u a n t i f i e d c o s t s f o r i n c r e a s i n g the storage range. T h i s i n c o n s i s t e n c y i s even more s t r i k i n g i n view of the f a c t t h a t i n order to s u b s t a n t i a l l y change the f i n a l c o s t of the p r o j e c t , these c o s t s would have to be i n the order of s e v e r a l m i l l i o n d o l l a r s , even though there had not been any s u b s t a n t i a l f l o o d i n g . The h i s t o r i c h i g h had o n l y been exceeded by 1.5 f e e t d u r i n g the c o n s t r u c t i o n p e r i o d . Yet, the t o t a l q u a n t i f i e d c o s t f o r m a i n t a i n i n g the l e v e l a t 2.5 f e e t above the h i s t o r i c high was determined i n Pearse Bowden's \"Compendium Report\",to be o n l y $316,000. The NCPC o f f i c i a l s had some j u s t i f i c a t i o n f o r a n t i c i p a t i n g t h a t damage claims c o u l d s i g n i f i c a n t l y a f f e c t the c o s t of the p r o j e c t . On June 16, 1976, the Yukon Na t i v e Brotherhood f i l e d a c l a i m f o r $4,850,000 f o r damage done to the A i s h i h i k V i l l a g e r e s u l t i n g from the maintenance - 144 -of water l e v e l s above the n a t u r a l l e v e l s and the i l l e g a l 31 i n c r e a s e s d u r i n g the c o n s t r u c t i o n p e r i o d . The Pearse Bowden r e p o r t d i d not d e a l w i t h t h i s type of q u e s t i o n , and q u a n t i f i e d c o s t s r e s u l t i n g from damages to A i s h i h i k V i l l a g e o n l y i n terms of the c o s t of undertaking c e r t a i n remedial measures. IV. SUMMARY The r e s u l t s o f the s t u d i e s undertaken by NCPC's c o n s u l t a n t s were found adequate by the Water Board f o r the purpose o f i s s u i n g an amended water l i c e n c e . These s t u d i e s i n d i c a t e d t h a t the b e n e f i t s t h a t would r e s u l t from an i n c r e a s e d storage range and reduced flows over O t t e r F a l l s would g r e a t l y exceed the environmental c o s t s t h a t would be caused by these changes. I f any degree of r e l i a b i l i t y can be p l a c e d i n the f i n d i n g s of these s t u d i e s , then NCPC c l e a r l y should be making use of the 12.5 f o o t storage range. Close to $25 m i l l i o n (.1975 $) would have been gained, a c c o r d i n g to the f i n d i n g s of these s t u d i e s , i f the 12.5 f o o t storage range was used a f t e r NCPC r e c e i v e d a l i c e n c e to do so i n the f a l l of 1975. NCPC has not y e t taken advantage of t h i s a u t h o r i z a t i o n , d e s p i t e what appears to be a c o n s i d e r a b l e economic s a c r i f i c e . - 145 -The reason why NCPC has not made use of the 12.5 f o o t storage range appears t o be because of a concern about what the r e a c t i o n of the Native Indian o r g a n i z a t i o n s might be. I t would be i n t e r e s t i n g to know whether t h i s course has been chosen f r e e l y by NCPC or whether NCPC i s responding to i n s t r u c t i o n s from the M i n i s t e r of Indian A f f a i r s and Northern Development. - 146 -CHAPTER SEVEN REFERENCES AND NOTES 1. W.J. Shouwenburg, F i s h e r i e s and Marine S e r v i c e , Northern Operations Branch, A i s h i h i k T r a n s c r i p t , 28 August, 1975, p. 11. 2. B. Boyd, Chairman, Yukon T e r r i t o r y Water Board, A i s h i h i k T r a n s c r i p t , 28 August, 1975, p. 74. Although Mr. Boyd understood t h a t the Department of the Environment and the Department of Indian and Northern A f f a i r s had entered i n t o an agreement, there i s no r e c o r d t h a t such an agreement was f o r m a l l y made. 3. I b i d . , p. 75. 4. Department of the Environment, F i s h e r i e s and Marine S e r v i c e , Northern Operations Branch, \" P r e s e n t a t i o n t o the Yukon T e r r i t o r i a l Water Board I n q u i r y i n t o the A i s h i h i k H y d r o e l e c t r i c P r o j e c t \" , i n A i s h i h i k T r a n s c r i p t , 28 August, 1975, E x h i b i t #7, p. 2. 5. I b i d . 6. Ibid.,, p. 19. 7. Crippen E n g i n e e r i n g L t d . , \" A i s h i h i k R i v e r Power Development, A i s h i h i k - Whitehorse System Study Phase II Report, 2 May, 1975, p. 1-1. 8. Acres C o n s u l t i n g S e r v i c e s L t d . , \"Review of Submission M a t e r i a l P e r t a i n i n g to the A i s h i h i k H y d r o - E l e c t r i c P r o j e c t NCPC A p p l i c a t i o n For Amendment of Water Use L i c e n c e \" , August, 1975, p. 1. 9. I b i d . , p. 7. 10. I b i d . , p. 4. 11. Crippen E n g i n e e r i n g L t d . , \"Phase I I Report\", p. 4-1. 12. I b i d . , Appendix I I , p. v i . 13. I b i d . , Appendix I I , p. v. 14. I b i d . , Appendix I I I , p. i i . The assumption of uniform load growth r a t e s seems i n c o s i s t e n t with the f o l l o w i n g assessment made by the NCPC|;s General Manager of the expected lo a d growth i n the Whitehorse system made d u r i n g the May 1972 h e a r i n g : - 147 -\"I would l i k e t o p o i n t out two f a c t o r s which u n d e r l i n e the complexity of l o a d f o r e c a s t i n g f o r the Whitehorse system. These a r e : a. The m i n e r a l o r i e n t e d nature of the economy with i t s i n h e r e n t dependence on world m i n e r a l p r i c i n g . Moreover, d i r e c t and i n d i r e c t consumption by the mine connected to the system c o n s t i t u t e s roughly 70% of the t o t a l energy g e n e r a t i o n from t h i s system. b. The r e l a t i v e l y s m a l l s i z e of the system as w e l l as i t s i s o l a t i o n from any other system means t h a t new loads and l a r g e i n c r e m e n t a l b l o c k s has a h i g h percentage e f f e c t on l o a d growth\" John Lowe, General Manager, NCPC, A i s h i h i k General Hearing T r a n s c r i p t , 24 May, 1972. 15. Crippen E n g i n e e r i n g L t d . , \"Phase I I Report\", Appendix I I , p . i . 16. I b i d . , p.5-1. 17. F. Mooney, Regional Manager, NCPC, A i s h i h i k T r a n s c r i p t , 28 August, 1975, p.3. 18. D. Steen, P l a n n i n g Department, NCPC, A i s h i h i k T r a n s c r i p t , p.88. 19. Pearse Bowden Economic C o n s u l t a n t s , \"Environmental I m p l i c a t i o n s of A i s h i h i k Power Development, A Compendium Report\", May, 197 5. 20. Crippen E n g i n e e r i n g L t d . , and Pearse Bowden Economic C o n s u l t a n t s , \" A i s h i h i k Power Development, Review of Power System and Environmental S t u d i e s and Recommended Water L i c e n c e A p p l i c a t i o n \" , June, 1975, p.2-1. 21. Pearse Bowden Economic C o n s u l t a n t s , \"Compendium Report\", May, 1975, p.57. 22. I b i d . , p.58. 23. Crippen E n g i n e e r i n g L t d . , and Pearse Bowden Economic C o n s u l t a n t s , \"Review of Power System\", p.3-6. 24. Pearse Bowden Economic C o n s u l t a n t s , May, 1975, p.44-45. \"Compendium Report\", - 148 -25. I b i d . , p.43. 26. I b i d . , p.42. 27. I b i d . 28. I b i d . 29. W. F. S i n c l a i r , F i s h e r i e s and Marine S e r v i c e , \" P r e s e n t a t i o n to the Yukon T e r r i t o r i a l Water Board\", i n A i s h i h i k T r a n s c r i p t , 28 August, 1975, E x h i b i t #7, p.4. 30. D. Steen, A i s h i h i k T r a n s c r i p t , 28 August, 1975, p.88. Another NCPC o f f i c i a l , Mr. Watkiss, a l s o mentioned d u r i n g the h e a r i n g t h a t the c o s t of the p r o j e c t c o u l d not be determined a t t h a t time because damage cl a i m s had not yet.been r e c e i v e d : \"The c o s t of the p r o j e c t cannot be f i n a l l y determined u n t i l we know what we are going to do on the p r o j e c t . We've r e c e i v e d no claims from the Indians y e t d e s p i t e seven months of w a i t i n g . There are suggestions t h a t c l a i m s are going to be very g r e a t . \" A i s h i h i k T r a n s c r i p t , p.85. 31. Interview, David Joe, Yukon Native Brotherhood, August, 197 8. - 149 -PART THREE CHAPTER EIGHT CONCLUSIONS AND RECOMMENDATIONS I. INTRODUCTION I t i s e v i d e n t t h a t a number of problems were encountered d u r i n g the course o f the h i s t o r y of the A i s h i h i k p r o j e c t . These problems may be br o a d l y c a t e g o r i z e d i n t o those t h a t were experienced d u r i n g the d e c i s i o n p r o c e s s , and those t h a t a f f e c t e d the p r o j e c t ' s outcome. T h i s chapter w i l l review the d e c i s i o n process and i d e n t i f y the major f a c t o r s t h a t c o n t r i b u t e d t o the development of problems concerning both the d e c i s i o n process and the outcome of the p r o j e c t . More s p e c i f i c e x p l a n a t i o n s w i l l a l s o be pro v i d e d f o r why the problems t h a t a f f e c t e d the outcome of the p r o j e c t o c c u r r e d . F i n a l l y , a b r i e f s e t o f recommendations w i l l be given. I I . REVIEW OF THE DECISION PROCESS A number of events took p l a c e d u r i n g the p l a n n i n g and development of the A i s h i h i k p r o j e c t which i n d i c a t e t h a t the d e c i s i o n process d i d not proceed smoothly, e f f i c i e n t l y , and i n a manner t h a t was s a t i s f a c t o r y to a l l p a r t i c i p a n t s . F o l l o w i n g NCPC's f i r s t a p p l i c a t i o n f o r a water l i c e n c e on August 31, 1971, i t was informed by s e n i o r DIAND - 150 -o f f i c i a l s t h a t an e n t i r e l y new procedure would be used to process the water l i c e n c e a p p l i c a t i o n . I t does not appear t h a t NCPC expected t h a t t h i s change would occur. Despite advice given by the Chairman of the Water Board as e a r l y as November, 1971 t h a t an environmental impact statement would need to be prepared and t h a t work on the p r e p a r a t i o n o f one should have begun a t t h a t time, NCPC d i d not h i r e a c o n s u l t a n t to undertake the p r e p a r a t i o n o f such a statement u n t i l March, 1972. The p r e l i m i n a r y environmental impact statement which was s u p p l i e d t o the Water Board f o r the May, 1972 h e a r i n g was found to be inadequate f o r the purpose of i s s u i n g a water l i c e n c e . The May, 197 2 h e a r i n g was not h e l d as a l i c e n c e h e a r i n g , c o n t r a r y to the e x p e c t a t i o n s of a l l p a r t i c i p a n t s i n the d e c i s i o n p r o c e s s . On the same day t h a t the h e a r i n g was to be h e l d , the Water Board decided t h a t i t would not be p o s s i b l e to i s s u e a l i c e n c e at t h a t time because the Regulations f o r the N.I.W.A. had not been promulgated. Immediately a f t e r the h e a r i n g the Water Board informed NCPC t h a t more i n f o r m a t i o n about the environmental e f f e c t s of the p r o j e c t would have to be s u p p l i e d before a l i c e n c e c o u l d be i s s u e d . NCPC d i d not i n i t i a t e f u r t h e r b i o l o g i c a l and b o t a n i c a l surveys u n t i l a f t e r the Regulations had - 151 -a c t u a l l y been promulgated, which was i n September, 1972, f o u r months a f t e r the h e a r i n g . A h e a r i n g c o u l d have been h e l d immediately a f t e r the R e g u l a t i o n s were promulgated and the Water Board c o u l d have recommended on the issuance of a water l i c e n c e a t t h a t time. Due to NCPC's own d e l a y s i n the completion of the necessary s t u d i e s , the next h e a r i n g was not h e l d u n t i l January, 197 3. NCPC changed the terms o f i t s a p p l i c a t i o n between the May, 1972 and January, 1973 h e a r i n g s , and i n d i c a t e d t h a t the economic v i a b i l i t y of the p r o j e c t depended on the Water Board g r a n t i n g i t s new requests f o r an i n c r e a s e d storage range on A i s h i h i k Lake and reduced compensation flows over O t t e r F a l l s . F o l l o w i n g the January, 1973 h e a r i n g , the Water Board decided t o i s s u e a water l i c e n c e to permit c o n s t r u c t i o n of the p r o j e c t . The Water Board d i d not grant NCPC's new r e q u e s t s , however, s i n c e i t determined t h a t i n s u f f i c i e n t i n f o r m a t i o n had been s u p p l i e d to support these changes. Ac c o r d i n g to s t u d i e s made by the Water Board's c o n s u l t a n t , the economic v i a b i l i t y of the p r o j e c t would not be s e v e r e l y a f f e c t e d by the r e s t r i c t i o n s imposed i n the l i c e n c e . NCPC d i d not decide to accept the water l i c e n c e and d i d not undertake the d e t a i l e d d e s i g n of the p r o j e c t u n t i l A p r i l , 1973. Although NCPC d i d not have any a l t e r n a t i v e p l a n s , i t f e l t t h a t the c o n d i t i o n s of the water l i c e n c e were so severe t h a t the p r o j e c t should perhaps not be c o n s t r u c t e d at a l l . As a r e s u l t , i t chose not to make the necessary expenditures on d e t a i l e d d e s i g n and oth e r p r e p a r a t i o n s f o r c o n s t r u c t i o n u n t i l i t decided t o begin c o n s t r u c t i o n on the p r o j e c t . NCPC a l s o decided t o adopt a c r a s h c o n s t r u c t i o n schedule i n order to prevent the n e c e s s i t y o f i n s t a l l i n g and o p e r a t i n g d i e s e l generators d u r i n g the wint e r of 1974-75. Th i s c r a s h program was implemented d e s p i t e the f a c t t h a t the d e t a i l e d p r e p a r a t i o n s f o r c o n s t r u c t i o n had not been completed. The c r a s h schedule was a l s o u n s u c c e s s f u l i n meeting i t s o b j e c t i v e , and the a d d i t i o n a l c o s t of i n s t a l l i n g and o p e r a t i n g d i e s e l generators d u r i n g the wint e r of 1974-75 was $4 m i l l i o n . I t i s l i k e l y t h a t the d e c i s i o n to adopt the c r a s h schedule be f o r e d e t a i l e d p r e p a r a t i o n s f o r the c o n s t r u c t i o n of the p r o j e c t had been completed r e s u l t e d i n a s i g n i f i c a n t i n c r e a s e i n the f i n a l c o s t of the p r o j e c t . The p r o j e c t was estimated to c o s t $17 m i l l i o n a t the s t a r t o f c o n s t r u c t i o n , and f i n a l l y c o s t $39 m i l l i o n . - 153 -The d e c i s i o n process i s marked, then, by a c o n f u s i n g and g e n e r a l l y u n s a t i s f a c t o r y water l i c e n c i n g process and an i n e f f i c i e n t and c o s t l y c o n s t r u c t i o n phase. I I I . FACTORS AFFECTING THE DECISION PROCESS AND OUTCOME A. S t r u c t u r e o f the D e c i s i o n System There are two d i f f e r e n t c h a r a c t e r i s t i c s of the d e c i s i o n system which a f f e c t e d the progress o f the decision-making process and the outcome of the p r o j e c t . The f i r s t concerns the a l l o c a t i o n of f u n c t i o n s and r e s p o n s i b i l i t i e s t h a t were taken d u r i n g the course of p l a n n i n g and development of the p r o j e c t , and the second concerns the nature of the r e l a t i o n s h i p between the Water Board, NCPC and DIAND. 1. The A l l o c a t i o n o f R e s p o n s i b i l i t y C e r t a i n r e s p o n s i b i l i t i e s were assumed by each of the major a c t o r s i n the d e c i s i o n process f o r the A i s h i h i k p r o j e c t . The a c t u a l d i v i s i o n of r e s p o n s i b i l i t i e s appears to have been an important element t h a t c o n t r i b u t e d t o many of the problems t h a t arose d u r i n g the p r o j e c t ' s h i s t o r y , s i n c e i t a l l o c a t e d a l a r g e p r o p o r t i o n o f the a c t i v i t i e s e s s e n t i a l t o the p l a n n i n g and development of the p r o j e c t e x c l u s i v e l y to NCPC. NCPC had the r e s p o n s i b i l i t y of undertaking the f o l l o w i n g t a s k s : e s t i m a t i o n of demand, s e l e c t i o n of the p r o j e c t , design of the p r o j e c t , s u p p l y i n g t h e necessary i n f o r m a t i o n to support i t s a p p l i c a t i o n f o r a water l i c e n c e , f o r m u l a t i n g c o s t e s t i m a t e s , and implementing the p r o j e c t . A l l of the stages o f p l a n n i n g and development o f the p r o j e c t came under the purview of NCPC and, as shown below, no other agency became i n v o l v e d i n many of these t a s k s . In order to accomplish t h i s range of r e s p o n s i b i l i t i e s , NCPC r e l i e d e x t e n s i v e l y on i t s c o n s u l t a n t s . The Water Board was charged w i t h the r e s p o n s i b i l i t y of implementing the N.I,W.A., and t h e r e f o r e had t o deci d e whether NCPC's p r o p o s a l r e p r e s e n t e d the optimum use of the water r e s o u r c e s , and to a c q u i r e from NCPC the necessary i n f o r m a t i o n to make t h i s d e c i s i o n . The M i n i s t e r s who were i n p l a c e between 1971 and 1976 were u l t i m a t e l y r e s p o n s i b l e f o r a l l o f NCPC's a c t i o n s , and f o r the acceptance or r e j e c t i o n o f the Water Board's recommendations. The d i r e c t r o l e p l a y e d by these M i n i s t e r s c o n s i s t e d o f making s p e c i f i c d e c i s i o n s , which i n c l u d e : the d e c i s i o n t o use the N.I.W.A. i n September, 1971, the d e c i s i o n s to accept a l l of the Water Board's recommendations, the d e c i s i o n to request an independent r e p o r t on the co s t overrun, and the d e c i s i o n not to ho l d a p u b l i c i n q u i r y i n t o NCPC's h a n d l i n g of the p r o j e c t . - 155 -By v i r t u e of the p o s i t i o n s they h e l d , c e r t a i n s e n i o r DIAND o f f i c i a l s may have pla y e d important r o l e s i n the p r o j e c t ' s h i s t o r y , although there are few r e c o r d s a v a i l a b l e t h a t these i n d i v i d u a l s s i g n i f i c a n t l y a f f e c t e d the progress of the d e c i s i o n process and the outcome of the p r o j e c t . The most noteworthy c h a r a c t e r i s t i c of the a l l o c a t i o n of r e s p o n s i b i l i t i e s i s t h a t no a c t o r s e x t e r n a l to NCPC and i t s c o n s u l t a n t s i n f l u e n c e d many of the most important d e c i s i o n s t h a t were made d u r i n g the p l a n n i n g and development of the p r o j e c t . The absence of such c o u n t e r v a i l i n g i n f l u e n c e s may have l i m i t e d NCPC's i n c e n t i v e to thoroughly i n v e s t i g a t e a l t e r n a t i v e s , to p r o v i d e more ac c u r a t e c o s t e s t i m a t e s , and to schedule the implementation of the p r o j e c t more c a r e f u l l y than i t d i d . Thus, the problems a s s o c i a t e d w i t h each of these f u n c t i o n s may be p a r t i a l l y ^ a t t r i b u t a b l e to t h i s p o s s i b l e weakness i n the d e c i s i o n system. I t i s concluded t h a t the p a r t i c i p a t i o n o f a d d i t i o n a l o r g a n i z a t i o n s i n these stages i n the p l a n n i n g and development of the p r o j e c t may have l e d to a more s a t i s f a c t o r y outcome. Although there were no s t r o n g c o u n t e r v a i l i n g i n f l u e n c e s t h a t a f f e c t e d some of NCPC's a c t i o n s , the Water Board and i n t e r v e n o r s at the Water Board's hearings may s t i l l have had a s u b s t a n t i a l i n f l u e n c e on the course of the h i s t o r y of the p r o j e c t and i t s f i n a l outcomes. - 156 -F i r s t , the i n t e r v e n t i o n of Mr. R u s s e l l Anthony a t the May, 1972 h e a r i n g appears to be the f a c t o r t h a t caused the Water Board to decide t h a t i t c o u l d not i s s u e a water l i c e n c e at t h a t time. T h i s s i n g l e i n t e r v e n t i o n may have been r e s p o n s i b l e f o r d e l a y i n g the issuance o f the l i c e n c e , although the Board might s t i l l have decided t h a t the i n f o r m a t i o n s u p p l i e d by NCPC was inadequate f o r the purpose o f d e c i d i n g upon a water l i c e n c e . N e v e r t h e l e s s , t h i s i n t e r v e n t i o n was s u f f i c i e n t to cause a de l a y i n the issuance of a water l i c e n c e , and gave the Water Board the o p p o r t u n i t y to request more i n f o r m a t i o n without making i t d i r e c t l y r e s p o n s i b l e f o r d e l a y i n g the l i c e n c i n g p r o c e s s . As a r e s u l t o f t h i s d e l a y , NCPC was able t o gather more i n f o r m a t i o n . T h i s a d d i t i o n a l i n f o r m a t i o n caused NCPC to s u b s t a n t i a l l y change the c o n d i t i o n s o f i t s water l i c e n c e a p p l i c a t i o n : The de l a y r e s u l t i n g from Mr. Anthony's i n t e r v e n t i o n c o u l d t h e r e f o r e have l e d to the c o n c e p t u a l i z a t i o n of a b e t t e r p l a n f o r the p r o j e c t . Second, the c r i t i c i s m s of the adequacy of i n f o r m a t i o n p r o v i d e d by NCPC concerning the environmental e f f e c t s of the. p r o j e c t which, were l e v e l l e d by a number of p a r t i c i p a n t s a t the Water Board's hearings may have helped to support the Water Board i n r e q u i r i n g t h a t the l i c e n c e adhere to environmental c o n s t r a i n t s . - 157 -The W a t e r B o a r d a n d i t s p r o c e d u r e s r e s u l t e d i n m o r e t h o r o u g h c o n s i d e r a t i o n o f t h e p r o p o s e d p r o j e c t t h a n m i g h t o t h e r w i s e h a v e b e e n t h e c a s e . The w a t e r l i c e n c i n g p r o c e s s d i d n o t , h o w e v e r , h a v e a s i g n i f i c a n t e f f e c t o n t h e s e l e c t i o n o f t h e p r o j e c t , o n some o f t h e k e y f e a t u r e s o f t h e p r o j e c t d e s i g n , o n t h e r e l i a b i l i t y o f c o s t e s t i m a t e s , a n d d i d n o t d i r e c t l y a f f e c t how t h e p r o j e c t was i m p l e m e n t e d . 2 . I n t e r - O r g a n i z a t i o n a l R e l a t i o n s h i p s A n o t h e r f a c t o r t h a t may h a v e p r e v e n t e d t h e d e c i s i o n - m a k i n g p r o c e s s f r o m p r o g r e s s i n g m o r e s m o o t h l y i s t h a t b o t h NCPC a n d t h e W a t e r B o a r d r e p o r t t o t h e same M i n i s t e r . T h i s a r r a n g e m e n t may h a v e h i n d e r e d t h e d e c i s i o n - m a k i n g p r o c e s s b y p r o v i d i n g NCPC w i t h a g r e a t e r o p p o r t u n i t y t o q u e s t i o n w h e t h e r i t was n e c e s s a r y t o f u l f i l l a l l o f t h e o b l i g a t i o n s a n d r e s p o n s i b i l i t i e s o f a n a p p l i c a n t f o r a w a t e r l i c e n c e u n d e r t h e N . I . W . A . , a n d i t d i r e c t l y q u e s t i o n e d t h i s n e e d o n s e v e r a l o c c a s i o n s . P e r h a p s i f t h e W a t e r B o a r d a n d NCPC d i d n o t r e p o r t t o t h e same M i n i s t e r , t h e n N C P C ' s a c t i o n s w o u l d h a v e t a k e n m o r e c a r e f u l l y i n t o a c c o u n t t h e a u t h o r i t y o f t h e W a t e r B o a r d . I f NCPC was a p r i v a t e company a n d n o t a C r o w n c o r p o r a t i o n , i t i s p e r h a p s e v e n m o r e l i k e l y t h a t - i t w o u l d h a v e a p p r o a c h e d t h e w a t e r l i c e n c i n g p r o c e s s w i t h m o r e c a r e . - 158 -B. D i f f e r e n c e s i n O b j e c t i v e s and P e r c e p t i o n s I t i s ev i d e n t t h a t major d i f f e r e n c e s i n o b j e c t i v e s and pe r c e p t i o n s between NCPC and the Water Board i n h i b i t e d the smooth progress o f the d e c i s i o n process, The most important o p e r a t i o n a l o b j e c t i v e t h a t NCPC pursued over most of the course of the A i s h i h i k p r o j e c t , b e g i n n i n g i n i t s i n i t i a l p l a n n i n g stages, was to develop the A i s h i h i k s i t e . As a r e s u l t , another o f NCPC's o b j e c t i v e s was to r e c e i v e a s u i t a b l e l i c e n c e t h a t would permit c o n s t r u c t i o n of the p r o j e c t t o proceed without any unnecessary d e l a y s . The o b j e c t i v e s of the Water Board were not as s t r a i g h t f o r w a r d . S e c t i o n 9 of the N.I.W.A. s t a t e s t h a t : The o b j e c t s o f the boards are to pr o v i d e f o r the co n s e r v a t i o n development and u t i l i z a t i o n o f the water reso u r c e s of the Yukon T e r r i t o r y and the Northwest T e r r i t o r i e s i n a manner t h a t w i l l p r o v i d e the optimum b e n e f i t therefrom f o r a l l Canadians and f o r the f u t u r e r e s i d e n t s o f the Yukon T e r r i t o r y and the Northwest T e r r i t o r i e s i n p a r t i c u l a r . 1 The o b j e c t i v e s pursued by the Water Board were t h e r e f o r e a f u n c t i o n of i t s judgements as to what c o n s t i t u t e d the optimum use o f the water r e s o u r c e s o f the Ea s t A i s h i h i k R i v e r . Another of the Water Board's o b j e c t i v e s was to ensure t h a t i t f u l f i l l e d the p r o v i s i o n s and d u t i e s o u t l i n e d i n the N.I.W.A. as f u l l y as p o s s i b l e , and t h a t i t was s u c c e s s f u l i n e s t a b l i s h i n g i t s e l f as an e f f e c t i v e water management agency. Consequently, i t intended t h a t - 159 -NCPC w o u l d h a v e t o m e e t a l l o f i t s r e q u e s t s f o r i n f o r m a t i o n a b o u t t h e e f f e c t s o f t h e p r o j e c t b e f o r e a w a t e r l i c e n c e was t o b e i s s u e d . NCPC d e c i d e d t h a t t h e A i s h i h i k p r o j e c t s h o u l d b e i m p l e m e n t e d w e l l b e f o r e i t s u p p l i e d s u f f i c i e n t i n f o r m a t i o n t o t h e W a t e r B o a r d t o h a v e a w a t e r l i c e n c e i s s u e d . I t a p p e a r s t h a t b e c a u s e NCPC h a d a l r e a d y made t h i s d e c i s i o n , i t p e r c e i v e d t h a t t h e W a t e r B o a r d ' s r e q u e s t s f o r m o r e i n f o r m a t i o n , a n d t h e B o a r d ' s r e s p e c t f o r t h e p r o c e d u r a l r e q u i r e m e n t s e s t a b l i s h e d u n d e r t h e N . I . W . A . , a m o u n t e d t o a n u n n e c e s s a r y e n c u m b r a n c e . The f o l l o w i n g s t a t e m e n t made i n t h e NCPC m a n a g e m e n t ' s R e p o r t o n A i s h i h i k , may b e i n d i c a t i v e o f N C P C ' s a t t i t u d e t o w a r d s t h e i n f l u e n c e o f t h e W a t e r B o a r d : The w a t e r l i c e n c i n g p r o c e s s s t i l l r e m a i n s o n e o f t h e m o s t u n p r e d i c t a b l e a n d c h a l l e n g i n g o b s t a c l e s i n t h e way o f p r o g r e s s i v e p l a n n i n g a n d i m p l e m e n t a t i o n o f f u t u r e ( a n d c u r r e n t ) p r o j e c t s n e c e s s a r y f o r t h e o r d e r l y a n d e c o n o m i c a l d e v e l o p m e n t o f p o w e r r e s o u r c e s i n t h e T e r r i t o r y . 2 T h i s s t a t e m e n t , i n a d d i t i o n t o a n u m b e r o f o t h e r s t a t e m e n t s a n d a c t i o n s made b y NCPC d u r i n g t h e h i s t o r y o f t h e p r o j e c t , i n d i c a t e s t h a t NCPC p e r c e i v e d o f t h e W a t e r B o a r d a s a n a d v e r s a r y . S u c h a n a t t i t u d e c e r t a i n l y w o u l d h a v e h i n d e r e d t h e p r o g r e s s o f t h e d e c i s i o n p r o c e s s . r- 160 r-C. Experience w i t h the D e c i s i o n Process An e n t i r e l y new water l i c e n c i n g process was f o l l o w e d f o r the A i s h i h i k p r o j e c t . The A i s h i h i k p r o j e c t was a l s o the f i r s t h y d r o e l e c t r i c p r o j e c t o f comparable s i z e b u i l t by NCPC f o r many y e a r s . Lack of experience with the water l i c e n c i n g process and w i t h the design and c o n s t r u c t i o n of a hydro f a c i l i t y such as the A s i h i h i k was probably an important cause o f many of the problems t h a t were encountered d u r i n g the h i s t o r y o f the p r o j e c t . Although some i n d i v i d u a l s i n v o l v e d i n the d e c i s i o n process may have expected t h a t the A i s h i h i k water l i c e n c e was l i k e l y t o be i s s u e d a c c o r d i n g t o the .pro v i s i o n s of the N.I.W.A., i t i s apparent t h a t very few of these p a r t i c i p a n t s had any experience i n d e a l i n g w i t h t h i s new type of pr o c e s s . Inexperience w i t h the implementation o f the N.I,W.A. l e d to misunderstandings of c e r t a i n p r o c e d u r a l requirements, and to c o n f l i c t i n g p e r c e p t i o n s of the r o l e and purpose o f the Water Board. Some of the main problems encountered d u r i n g the d e c i s i o n process f o r the water l i c e n c e i n c l u d e : The apparent f a i l u r e of a l l p a r t i c i p a n t s to r e a l i z e t h a t i t was not p o s s i b l e t o i s s u e a water l i c e n c e under s e c t i o n 15(2) of the N.I.W.A. without the Reg u l a t i o n s having been promulgated. - 161 -NCPC's r e l u c t a n c e to supply adequate i n f o r m a t i o n to the Water Board. Given the M i n i s t e r ' s acceptance of the Water Board's recommendations, i t was i n NCPC's best i n t e r e s t t o pr o v i d e a l l o f the i n f o r m a t i o n r e q u i r e d by the Water Board as promptly as p o s s i b l e . F a i l u r e to do so r e s u l t e d i n de l a y s i n the issuance o f a water l i c e n c e , and i n the issuance of a l i c e n c e which d i d not grant a l l of NCPC's r e q u e s t s . NCPC a l s o d i r e c t l y questioned the n e c e s s i t y o f p r o v i d i n g the Water Board w i t h the i n f o r m a t i o n i t requested, d e s p i t e the d i r e c t i o n g i v e n by the M i n i s t e r t o do so, and d e s p i t e the f a c t t h a t the Water Board's a u t h o r i t y t o r e q u i r e any i n f o r m a t i o n i t deems necessary i s very c l e a r l y s t a t e d i n the N.I.W.A. T h i s a c t i o n i n d i c a t e s t h a t NCPC decision-makers d i d not have a very good understanding of the extent of the Water Board's j u r i s d i c t i o n . The f a c t t h a t s e n i o r DIAND o f f i c i a l s d i d not pr o v i d e NCPC wi t h g r e a t e r d i r e c t i o n i n the process may a l s o i n d i c a t e a l a c k o f experience on the p a r t o f these i n d i v i d u a l s . I t appears reasonable to assume t h a t i f persons such as Mr. D. Hunt, who was a member of the Commission f o r NCPC and A s s i s t a n t Deputy M i n i s t e r f o r Northern Development, and Mr. B. Robinson, who was Chairman of the Commission and Deputy M i n i s t e r of DIAND, were co g n i z a n t o f the l i k e l y r e s u l t s of NCPC's a c t i o n s with r e s p e c t to the water l i c e n c i n g p r o c e s s , they would have i n s t r u c t e d NCPC to undertake the necessary surveys and s t u d i e s promptly, and to r e s p e c t a l l o f the p r o c e d u r a l requirements i n a p p l y i n g f o r a water l i c e n c e . NCPC's a c t i o n s do not, however, appear to have been s c r u t i n i z e d by these i n d i v i d u a l s . Had the v a r i o u s p a r t i c i p a n t s had g r e a t e r experience w i t h the water l i c e n c i n g process, the e n t i r e d e c i s i o n process f o r the A i s h i h i k p r o j e c t would probably have progressed much more smoothly than i t d i d . In t h i s r e g ard i t must be s t r e s s e d t h a t the A i s h i h i k water l i c e n c e process was not o n l y the f i r s t one ever made under the N.I.W.A., but the l i c e n c i n g process a l s o took p l a c e d u r i n g an e a r l y stage i n the development of environmental assessments and review proceedings i n Canada i n g e n e r a l . I t i s t h e r e f o r e not s u r p r i s i n g t h a t the major a c t o r s appear to have had very l i t t l e experience w i t h the type o f process p r e s c r i b e d by the N.I.W.A. At the same time t h a t NCPC was d e a l i n g w i t h t h i s new water l i c e n c i n g p r o c e s s , i t was a l s o r e s p o n s i b l e f o r the e n g i n e e r i n g design and c o n s t r u c t i o n o f the p r o j e c t . In c o n t r a s t w i t h most p u b l i c power u t i l i t i e s , NCPC was not accustomed t o an on-going process of d e s i g n i n g and c o n s t r u c t i n g hydro p r o j e c t s . The A i s h i h i k p r o j e c t was the f i r s t o f i t s s i z e b u i l t by NCPC s i n c e the Whitehorse Rapids p l a n t was i n s t a l l e d i n the 1950's. NCPC's l a c k o f experience w i t h the d e s i g n and c o n s t r u c t i o n of p r o j e c t s such as the A i s h i h i k may t h e r e f o r e have had s i g n i f i c a n t adverse e f f e c t s on the outcome of the p r o j e c t . As a r e s u l t of a l a c k of experience i n t h i s area, f o r i n s t a n c e , NCPC decision-makers may have p e r c e i v e d t h a t the task o f d e s i g n i n g and c o n s t r u c t i n g the p r o j e c t was going t o be much simpl e r than i t a c t u a l l y was, and t h a t i t c o u l d a f f o r d to r e l y very h e a v i l y on i t s c o n s u l t a n t s t o de s i g n the p r o j e c t and to manage i t s c o n s t r u c t i o n . Greater experience may, on the other hand, have encouraged NCPC to i n v e s t i g a t e a l t e r n a t i v e s i n g r e a t e r d e t a i l , prepare c o s t estimates f o r the p r o j e c t more c a r e f u l l y , have the d e t a i l e d p r e p a r a t i o n s f o r c o n s t r u c t i o n of the p r o j e c t completed p r i o r t o c o n s t r u c t i o n , and to av o i d the c r a s h c o n s t r u c t i o n schedule. D. Lack of Resources In a d d i t i o n to l a c k i n g experience i n the p l a n n i n g and development of h y d r o e l e c t r i c p r o j e c t s , NCPC a l s o l a c k e d other t e c h n i c a l and p r o f e s s i o n a l r e s o u r c e s . NCPC d i d not have a lawyer, h y d r o l o g i s t or g e o l o g i s t , and i t may have b e n e f i t t e d g r e a t l y from having people w i t h these backgrounds on i t s s t a f f . Because i t l a c k e d such r e s o u r c e s , NCPC was completely dependent upon i t s c o n s u l t a n t s f o r important elements i n the p l a n n i n g and de s i g n of the p r o j e c t . The s m a l l p r o f e s s i o n a l and t e c h n i c a l s t a f f NCPC had r a i s e s a s e r i o u s q u e s t i o n about the c a p a c i t y i t had to p l a n , d e s i g n and c o n s t r u c t the p r o j e c t . - 164 -IV. PROBLEMS AFFECTING THE OUTCOME The f o l l o w i n g problems had s i g n i f i c a n t e f f e c t s on the outcome of the p r o j e c t : Inaccurate c o s t estimates were formulated. NCPC made c e r t a i n d e c i s i o n s which independently added to the c o s t o f the p r o j e c t . NCPC d i d not undertake any thorough i n v e s t i g a t i o n of a l t e r n a t i v e s . The reasons behind why each of these problems o c c u r r e d are, f o r the most p a r t , very d i f f i c u l t t o a s c e r t a i n , s i n c e an adequate body of i n f o r m a t i o n on the reasons why each of these problems developed i s not a v a i l a b l e . I t must t h e r e f o r e be s t r e s s e d t h a t the f o l l o w i n g s et of e x p l a n a t i o n s can on l y be t e n t a t i v e . A. Cost Estimates The f a c t t h a t i n a c c u r a t e c o s t estimates were formulated may have been the r e s u l t of the f o l l o w i n g f a c t o r s : Over-optimism on the p a r t of NCPC decision-makers about the l i k e l y c o s t o f the p r o j e c t . The f o l l o w i n g statement made by Mr. Steen o f NCPC to Mr. Lowe, NCPC's General Manager, on October 23, 1972 on the s u b j e c t o f the l a t e s t c o s t estimate p r o v i d e s an example of the presence of t h i s f a c t o r : Since the estimate f o r the t r a n s m i s s i o n l i n e i n t o the g r i d from the A i s h i h i k s i t e i s $1.5 m i l l i o n , we co u l d be l o o k i n g a t a t o t a l c a p i t a l c o s t o f $17.7 m i l l i o n - i f Duguid's estimate i s r i g h t . I f e e l we should be ab l e to cut t h i s down by c e r t a i n e n g i n e e r i n g and a d m i n i s t r a t i v e t a c t i . e . we've got Mooney on our s i d e ! 3 Crippen E n g i n e e r i n g was p l a c e d i n a s i t u a t i o n which gave i t an i n c e n t i v e to produce estimates t h a t would he l p assure approval o f the p r o j e c t , s i n c e i t was to be r e s p o n s i b l e f o r de s i g n s t u d i e s and management of c o n s t r u c t i o n . The response t o such an i n c e n t i v e can be q u i t e unconscious; t h e r e i s no evidence t h a t Crippen i n t e n t i o n a l l y minimized estimates of c o s t s to assure approval o f the p r o j e c t . Inadequate c o n s i d e r a t i o n g i v e n to the e f f e c t o f the cr a s h c o n s t r u c t i o n schedule, and to the e f f e c t of the l a c k of d e t a i l e d p r e p a r a t i o n s being made p r i o r t o the s t a r t o f c o n s t r u c t i o n i n the f o r m u l a t i o n o f c o s t e s t i m a t e s . The d e c i s i o n t o h o l d back on d e t a i l e d p r e p a r a t i o n s and the d e c i s i o n t o adopt a c r a s h c o n s t r u c t i o n schedule were both made d u r i n g the s p r i n g o f 1973. Evidence o f t h i s l a c k o f c o n s i d e r a t i o n i s t h e r e f o r e g i v e n by the f a c t t h a t i n October, 1972 the estimated c o s t of the p r o j e c t was $16.2 m i l l i o n , and i n December, 1973 the estimated c o s t was s t i l l o n l y $17.82 m i l l i o n -both e x c l u d i n g the c o s t o f the t r a n s m i s s i o n l i n e . I f these d e c i s i o n s had a s i g n i f i c a n t e f f e c t on the c o s t of the p r o j e c t , then t h i s e f f e c t i s not r e f l e c t e d i n - 166 -the c o s t estimates t h a t were prepared subsequent to the time t h a t these d e c i s i o n s were made. B. hack of D e t a i l e d P r e p a r a t i o n s The reasons behind NCPC's d e c i s i o n t o a v o i d making expenditures on d e t a i l e d d e s i g n , p r e p a r a t i o n of c o n t r a c t s p e c i f i c a t i o n s , t e n d e r i n g c o n t r a c t s and other d e t a i l e d p r e p a r a t i o n s are very d i f f i c u l t to a s c e r t a i n . The NCPC management's r e p o r t e x p l a i n s t h a t : \"... the l a c k o f answers and i n d e c i s i o n s d i c t a t e d a much slower approach t o ensure t h a t e n g i n e e r i n g money was not wasted i n case a s u i t a b l e 4 l i c e n c e was not forthcoming\". The Dalby Report p r o v i d e s a s i m i l a r e x p l a n a t i o n f o r t h i s d e c i s i o n . ^ This e x p l a n a t i o n i s very d i f f i c u l t to accept, however, s i n c e NCPC d i d not have any a l t e r n a t i v e plans t o u t i l i z e i n case a \" s u i t a b l e \" l i c e n c e was not ob t a i n e d , except to use d i e s e l g e n e r a t i o n . In a d d i t i o n , i t i s apparent t h a t the l i c e n c e t h a t the Water Board d i d i s s u e - the c o n d i t i o n s o f which prompted NCPC to avoid undertaking d e t a i l e d p r e p a r a t i o n s f o r c o n s t r u c t i o n - d i d not s e v e r e l y a f f e c t the g e n e r a t i o n c a p a b i l i t y o f the p r o j e c t i n the s h o r t term. The Water Board a l s o i n d i c a t e d i n very c l e a r terms t h a t these c o n d i t i o n s c o u l d be removed once NCPC pr o v i d e d the necessary i n f o r m a t i o n t o support i t s r e q u e s t s . I t i s concluded t h a t NCPG d i d not have s u f f i c i e n t reason to av o i d these p r e p a r a t i o n s , which were so important t o ens u r i n g a smooth c o n s t r u c t i o n schedule. There are two p o s s i b l e but p a r t i a l e x p l a n a t i o n s f o r why t h i s d e c i s i o n t o h o l d back on d e t a i l e d p r e p a r a t i o n s was made. The f i r s t concerns the p o s s i b i l i t y t h a t NCPC may have c o n s i d e r e d t h a t i n comparison t o the amount of expenditures i t was accustomed t o making, the c o s t s of d e t a i l e d d e s i g n and other p r e p a r a t i o n s were very h i g h . The sense of p r o p o r t i o n c o u l d have motivated NCPC d e c i s i o n -makers to c o n s i d e r t h a t these expenditures should o n l y be made once i t was a b s o l u t e l y necessary. The second p o s s i b l e e x p l a n a t i o n i s t h a t . t h e avoidance of these expenditures may have been the r e s u l t o f an emotional r e a c t i o n on the p a r t of NCPC decision-makers. The issuance of a r e s t r i c t e d water l i c e n c e may have been p e r c e i v e d as the l a s t of a long s e r i e s o f f r u s t r a t i o n s , disappointments and unnecessary encumbrances r e s u l t i n g from the presence of the Water Board. NCPC decision-makers may not have r e a c t e d i n a manner t h a t was e n t i r e l y r a t i o n a l and o b j e c t i v e . C. The Crash C o n s t r u c t i o n Schedule NCPC's j u s t i f i c a t i o n f o r i t s d e c i s i o n to adopt a c r a s h schedule i s t h a t i t would reduce the c o s t o f e l e c t r i c i t y - 168 -by p r e v e n t i n g the need t o i n s t a l l and operate d i e s e l generators f o r the wint e r of 1974-75. I t was ap p a r e n t l y b e l i e v e d t h a t the a d d i t i o n a l c o s t s r e s u l t i n g from the cr a s h c o n s t r u c t i o n schedule would not be as g r e a t as the c o s t o f the e x t r a use of d i e s e l g e n e r a t o r s , and t h a t there was a st r o n g p o s s i b i l i t y t h a t the c r a s h c o n s t r u c t i o n schedule would be s u c c e s s f u l i n meeting i t s o b j e c t i v e . The c r a s h c o n s t r u c t i o n schedule was not s u c c e s s f u l i n meeting i t s o b j e c t i v e , however, and although no q u a n t i t a t i v e -i n f o r m a t i o n i s a v a i l a b l e , i t i s l i k e l y t h a t the c o s t of implementing t h i s program was s u b s t a n t i a l l y g r e a t e r than the $4 m i l l i o n i t s t i l l c o s t to use e x t r a d i e s e l g e n e r a t o r s . In a d d i t i o n , the f a c t t h a t there was a st r o n g p o s s i b i l i t y t h a t the p r o j e c t c o u l d not be completed b e f o r e the w i n t e r o f 1974-75 was appa r e n t l y a s c e r t a i n a b l e . The r i s k s i n v o l v e d i n t h i s d e c i s i o n appear t o have c o n s i d e r a b l y outweighed any p o s s i b l e b e n e f i t . Why, then, would NCPC have deci d e d to embark on t h i s c r a s h c o n s t r u c t i o n schedule? One p o s s i b l e e x p l a n a t i o n f o r t h i s d e c i s i o n concerns the pr e v i o u s experience of NCPC decision-makers. P r i o r to the c o n s t r u c t i o n o f the A i s h i h i k p r o j e c t , the c o s t o f i n s t a l l i n g and o p e r a t i n g d i e s e l generators was by f a r the most expensive component o f NCPC 1s t o t a l o p e r a t i o n s . - 169 -The NCPC decision-makers may t h e r e f o r e have p e r c e i v e d t h a t these c o s t s would continue to be the most important of NCPC's expen d i t u r e s , and t h a t any e f f o r t t o prevent the use of d i e s e l generators would a u t o m a t i c a l l y serve t o reduce the c o s t of s u p p l y i n g e l e c t r i c i t y . The p e r c e i v e d r e l a t i v e importance o f d i e s e l g e n e r a t i o n c o s t s may a l s o have been strengthened by the absence of accu r a t e c o s t estimates f o r the A i s h i h i k p r o j e c t . I t would have been very d i f f i c u l t to make an informed d e c i s i o n about the b e s t c o n s t r u c t i o n schedule t o f o l l o w i f a c c u r a t e i n f o r m a t i o n about the c o s t o f the p r o j e c t i t s e l f was not a v a i l a b l e . The l i k e l y c o s t s r e s u l t i n g from the implementation of the c r a s h program would have been reduced i n p r o p o r t i o n to the degree to which the c o s t of the p r o j e c t was underestimated. F i n a l l y , the l a c k of e x t e n s i v e experience on the p a r t of NCPC decision-makers w i t h the c o n s t r u c t i o n of h y d r o e l e c t r i c p r o j e c t s c o n t r a s t s with the f a m i l i a r i t y they had w i t h the c o s t of i n s t a l l i n g and o p e r a t i n g d i e s e l g e n e r a t o r s . The NCPC decision-makers may have taken more s t r o n g l y i n t o account those f a c t o r s with which they had most experience and f a m i l i a r i t y . As a r e s u l t , the p r e v e n t i o n of known c o s t s a s s o c i a t e d with d i e s e l g e n e r a t i o n may have been c o n s i d e r e d more h e a v i l y than thecosts 1\" t o be a s s o c i a t e d w i t h a c r a s h c o n s t r u c t i o n schedule. - 170 -D. I n v e s t i g a t i o n of A l t e r n a t i v e s I t i s very d i f f i c u l t t o e x p l a i n why NCPC d i d not undertake any d e t a i l e d i n v e s t i g a t i o n s of a l t e r n a t i v e g e n e r a t i o n schemes. E x p l a n a t i o n f o r t h i s d e c i s i o n i s p a r t i c u l a r l y d i f f i c u l t c o n s i d e r i n g the f a c t t h a t very l i t t l e was known about the A i s h i h i k s i t e when NCPC f i r s t a p p l i e d f o r a water l i c e n c e t o develop the s i t e on August 31, 1971. Between June, 1971, when NCPC made i t s f i r s t f i e l d i n v e s t i g a t i o n o f the A i s h i h i k s i t e , and A p r i l , 1973, when NCPC began c o n s t r u c t i o n of the p r o j e c t , t h e r e i s no r e c o r d t h a t any f i e l d i n v e s t i g a t i o n s of a l t e r n a t i v e p r o j e c t s were undertaken. I t i s s u r p r i s i n g t h a t NCPC s e l e c t e d the A i s h i h i k s i t e so r e a d i l y . The l a c k o f i n v e s t i g a t i o n of a l t e r n a t i v e s may have r e s u l t e d i n the development of a p r o j e c t t h a t i s i n f e r i o r to some oth e r a l t e r n a t i v e , and i t w i l l i n e v i t a b l y c a l l t o q u e s t i o n the v e r a c i t y of NCPC's own judgements. The b e s t a v a i l a b l e e x p l a n a t i o n i s not one t h a t i s c h a r i t a b l e to NCPC decision-makers, but i t i s p o s s i b l e t h a t NCPC d i d not f u l l y r e c o g n i z e the importance o f i n v e s t i g a t i n g a l t e r n a t i v e s t o the A i s h i h i k . Once NCPC determined t h a t a new g e n e r a t i o n f a c i l i t y was needed, and once i t had e s t a b l i s h e d t h a t the A i s h i h i k appeared to be a v i a b l e s i t e , i t may have c o n s i d e r e d t h a t the c o s t s i n v o l v e d i n the i n v e s t i g a t i o n o f a l t e r n a t i v e s were g r e a t e r than the l i k e l y - 171 -b e n e f i t s to be d e r i v e d from such i n v e s t i g a t i o n s . NCPC may have p e r c e i v e d t h a t i t was so u n l i k e l y t h a t a s u p e r i o r a l t e r n a t i v e to the A i s h i h i k c o u l d be found t h a t the i n v e s t i g a t i o n o f a l t e r n a t i v e s would probably be a wasted e f f o r t . In a d d i t i o n , by s e l e c t i n g the A i s h i h i k s i t e so r e a d i l y , the e n t i r e process of the p l a n n i n g and development of the next a d d i t i o n to the ge n e r a t i o n system was g r e a t l y s i m p l i f i e d and expedited. NCPC decision-makers may a l s o have c o n s i d e r e d t h i s to be an important b e n e f i t . NCPC's p e r c e p t i o n s of l i k e l y b e n e f i t s and c o s t s may, then, have g r e a t l y i n h i b i t e d i t s m o t i v a t i o n t o i n v e s t i g a t e a l t e r n a t i v e s . V. RECOMMENDATIONS Some time has ela p s e d between the completion of the A i s h i h i k p r o j e c t and the time o f w r i t i n g f o r t h i s study. I t i s t h e r e f o r e not p o s s i b l e to make d e t a i l e d recommendations w i t h r e s p e c t t o h y d r o e l e c t r i c power p l a n n i n g i n the Yukon, owing to changes t h a t may have a l r e a d y taken p l a c e . Recommendations concerning the water l i c e n c i n g process are a l s o not necessary, s i n c e the primary reason why so many problems were encountered d u r i n g the water l i c e n c i n g process f o r the A i s h i h i k p r o j e c t i s t h a t a l l p a r t i c i p a n t s l a c k e d experience i n d e a l i n g with i t . Greater experience i s the most important means by which t h i s process may be improved. - 172 -However, i n view of the problems t h a t were encountered d u r i n g the h i s t o r y of the A i s h i h i k p r o j e c t , some ge n e r a l recommendations can be made w i t h r e s p e c t t o the s e l e c t i o n , d e s i g n and implementation of f u t u r e water power p r o j e c t s i n the Yukon. These a r e : 1. C o n s u l t i n g f i r m s employed to undertake f e a s i b i l i t y s t u d i e s f o r a p r o j e c t should be i n e l i g i b l e f o r c o n t r a c t s to undertake d e t a i l e d d e s i g n s t u d i e s and to h e l p manage c o n s t r u c t i o n o f the p r o j e c t . 2. An independent panel of experts should be e s t a b l i s h e d to advise the M i n i s t e r and the p u b l i c on: a. whether r e l e v a n t a l t e r n a t i v e s are being c o n s i d e r e d , and b. the adequacy and r e l i a b i l i t y o f s t u d i e s being undertaken on the c o s t of the p r o j e c t , i t s b e n e f i t s and i t s socio-economic and environmental e f f e c t s . T h i s panel should be gi v e n adequate funding t o h i r e c o n s u l t a n t s , but should m a i ntain o n l y an a d v i s o r y c a p a c i t y . 3. NCPC should prepare a r e p o r t f o r the M i n i s t e r on i t s s h o r t , medium and long term p l a n s f o r e l e c t r i c power development i n the Yukon, based on a d e t a i l e d i n v e n t o r y of a l l r e l e v a n t a l t e r n a t i v e sources of e l e c t r i c power ge n e r a t i o n . - 173 -CHAPTER EIGHT REFERENCES AND NOTES 1. Northern Inland Waters Act, S e c t i o n 9. 2. NCPC, Report on A i s h i h i k , p.4-0. 3. D. Steen to J . Lowe, 23 October 1972, i n Report on A i s h i h i k . 4. NCPC, Report on A i s h i h i k , p.4-0. 5. R. N. Dalby & A s s o c i a t e s , Dalby Report, p.4. - 174 -BIBLIOGRAPHY Acres C o n s u l t i n g S e r v i c e s L i m i t e d , August 1975, \"Review of Submission M a t e r i a l P e r t a i n i n g t o the A i s h i h i k H y d r o - E l e c t r i c P r o j e c t , NCPC A p p l i c a t i o n f o r Amendment of Water Use L i c e n c e \" . \" A i s h i h i k Supplement\", 3 September 1975, Yukon News. 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Y u k o n T e r r i t o r y W a t e r B o a r d , 24, 25 M a y 1972, A i s h i h i k G e n e r a l H e a r i n g T r a n s c r i p t , W h i t e h o r s e a n d H a i n e s J u n c t i o n . , 17 J a n u a r y 1973, L i c e n c i n g H e a r i n g T r a n s c r i p t , W h i t e h o r s e . , 28 , 29 A u g u s t , 17 S e p t e m b e r 1975, A i s h i h i k H e a r i n g T r a n s c r i p t , W h i t e h o r s e . , 11 F e b r u a r y 1976, W h i t e h o r s e R a p i d s L i c e n c i n g H e a r i n g T r a n s c r i p t . "@en . "Thesis/Dissertation"@en . "10.14288/1.0100243"@en . "eng"@en . "Planning"@en . "Vancouver : University of British Columbia Library"@en . "University of British Columbia"@en . "For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use."@en . "Graduate"@en . "Hydro-electric power planning in the Yukon : a case study of the Aishihik Project"@en . "Text"@en . "http://hdl.handle.net/2429/22033"@en .