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Hydro-electric power planning in the Yukon : a case study of the Aishihik Project Nicholls, William Graham

Abstract

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.

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