For the information of those of you who may be new to the NATIVE-L
list and/or Native rights struggles, you should know that there have
been intense struggles by aboriginal people in Quebec during the
past several decades to assert their own rights in the matter of the
damming of rivers to build hydroelectric projects in that province
of Canada. Materials are available in the NativeNet archives that
provide an account of those struggles. When I get a chance, I'll
try to produce a better directory to those background materials.
--Gary (gst@gnosys.svle.ma.us) ]
From: Native Forest Network-ENA <nfnena@igc.apc.org>
From t.holzinger@netaxis.qc.ca Wed Jun 25 05:47:29 1997
Subject: Hydro-Quebec bulletin!
Friends: this letter was sent this morning to numerous friends
and colleagues in the United States and the rest of Canada.
Tom
* * * * *
Montreal, 24 June 1997
Dear Fellow Environmentalists,
As you know, here in Quebec we have recently entered a period
of crisis with Hydro-Quebec and Quebec's Ministry of Natural
Resources. These agencies wish to leap headlong into the newly
deregulated American market for electricity, including greatly
expanding electricity production for export. This expansion is
almost entirely predicated on damming and diverting more rivers,
here in Quebec and in Labrador.
This letter describes the most urgent threat, that of additional
near-term diversions into existing hydroelectric facilities. For
those of you in the rest of Canada and the United States, it is
suggested that you act immediately in solidarity by faxing to our
Environment Minister opposing the diversions of the Carheil and
Aux Pkans rivers, as he is under pressure to authorize them as
early as the first week of July.
To obtain further information, please contact me or the person
who has forwarded this bulletin to you. Thank you.
For the earth,
Tom
Tom Holzinger tel 514-271-0564
5160 Jeanne-Mance fax 514-271-0564
Montreal, Quebec e-mail: t.holzinger@netaxis.qc.ca
Canada H2V 4K1 coalition: energie@netaxis.qc.ca
* * * * *
BACKGROUND TO OUR URGENT SITUATION IN Quebec
This year has seen Hydro-Quebec mount a full-scale offensive for more
hydro generation. Under the leadership of Andr Caill, appointed nine
months ago, the state-owned utility company has made a 180-degree turn
towards the American export market and has revived many of the hydro
projects that had been put on ice with the emergence of regional
electricity surpluses in the early 90s.
In 1997 alone there have been the following developments:
HQ and the Quebec Government have cooperated on a new law (Bill 50) and
new regulations under the Hydro-Quebec Act that mirror the provisions of
FERC's Order 888, thus allowing third-party access to HQ's transmission
lines, and permitting a very limited degree of wholesale competition in
Quebec. (Since HQ controls virtually all retail distribution of
electricity in Quebec, only 3% of Quebec's market was in fact opened to
competition.) The explicit purpose of these regulations was to gain FERC
approval for HQ's unregulated exports to the U.S.; in fact, they were
adopted in total secrecy, without even the standard 60-day comment period
before regulations take effect.
Hydro-Quebec's FERC application via its subsidiary H.Q. Energy Services
(U.S.) Inc. has been partially approved; it is presently under scrutiny to
see if it meets FERC's "market power" test of not being too dominating a
player. In the meantime HQ not only continues to sell a high volume of
contract and spot electricity under its old arrangements but also has
signed five new contracts whose terms remain secret, i.e. it is not known
when deliveries are to begin, for how long, for what amounts, at what
price. The purchasers are Long Island Lighting Company, Montaup Electric
Company, Boston Edison Company, United Illuminating Company, and Central
Maine Power Company; the government decrees ratifying these contracts were
all issued between December 1996 and April 1997.
In addition, HQ has also acquired a controlling interest in a natural gas
holding company, Noverco, that owns the principal natural gas suppliers
and retailers in Quebec and parts of New England. Mr. Caill rose to
prominence as the CEO of Gaz Metropolitain, the largest Noverco operating
subsidiary, before being appointed to HQ. He has justified this purchase
by invoking the trend toward "convergence" of electricity and gas; the
anticompetitive aspects of the acquisition in Quebec have been largely
ignored.
The Quebec government has set up a new Rgie de l'nergie (Energy Board) to
oversee all future public and private activities in the production,
transmission, distribution, and marketing of electricity and natural gas.
This board of seven appointed members was named at the beginning of June
and will begin its public work in September. The only commissioner
expected to promote environmental protection is Franois Tanguay, the
ex-director of Greenpeace Quebec, whereas most the others are expected to
take a dollars-and-cents view. The chairman is reportedly a close personal
friend of Andr Caill, and served on the Board of Gaz Mtropolitain when Mr.
Caill was CEO. One board member was previously employed by Hydro-Quebec;
another was for many years in charge of electricity rates at the Ministry
of Natural Resources and more recently worked in the office of Premier
Lucien Bouchard. The Rgie has wide-ranging powers to regulate retail
prices, exports, investments, and investment priorities, and it is also
mandated to advise the government on the further deregulation and
restructuring of Hydro-Quebec. Its decisions are final and are not subject
to judicial review.
HQ has announced a commercial orientation, including a renewed emphasis on
both sales and profitability. Mr. Caill has detailed a goal of earning a
yield on investment of 11% and has promised to provide the government with
a dividend of some $400 million i n 1997. He has not asked for new rate
hikes, but he continues to cut costs and to look for new sources of
revenue. He has revised the mandate of HQ from being the secure
fountainhead of Quebec electricity to being a wide-ranging commercial (and
risk-taking) enterprise on the large North American playing field. He has
announced the goal of making HQ one of the five major energy companies in
North America, on the scale of Enron and Duke/PanEnergy. He has spoken of
export revenues in the billions of dollars and of overcoming transmission
constraints by purchasing equity interests in U.S. transmission-owning
companies, in order to facilitate the building of new lines. To feed these
new exports, he has spoken of massive new hydro construction in Quebec and
rumours abound of another Churchill Falls complex in Labrador/
Newfoundland, though specific plans (apart from the river diversions
discussed below) will not be known until September. He has also mentioned
the desirability of building gas generators in the USA, using HQ's new
acquisition Noverco to supply the fuel.
HQ continues, however, to take one specific risk in its daily operations
that startles all observers -- it "turbines" more water during the course
of the year than flows into its reservoirs, thus steadily drawing down its
reserves. Because of four consecutive years of below-average rainfall and
snowfall, its current electricity exports are in effect being borrowed
against uncertain future inflows. Quebec may well live to regret this
gamble. The pattern of risk-bearing exports began in January 1994 and has
continued until recently with minimal public comment. Le Devoir, an
influential newspaper, recently published figures indicating that current
reserves are well below the danger level. Last week another paper
reported that the Manic-5 generating station is now largely idle because
of a lack of water. In public, Hydro-Quebec has recently begun to refuse
to give out information concerning its water reserves, on the grounds that
this is "commercial information" that might be useful to its competitors.
It is known, however, that in the first three months of 1997 it actually
increased exports to 5 TWh, one of the highest quarterly figures on
record. It is not known whether HQ has informed either its export
customers or its investment bankers of the accompanying risk. (Under a
strict interpretation of NAFTA rules, if HQ were to curtail supplies due
to drought, it would probably be obliged to cut both its Quebec and
American deliveries by the same proportion, a NAFTA provision which has
never been tested and a potential outcome of which most Quebecers are
quite unaware.)
HQ has become very aggressive about acquiring additional water for its
existing reservoirs and for the Sainte-Marguerite-3 dam now under
construction. Since the beginning of the year it has announced plans to
divert no fewer than eight rivers into four separate reservoirs.
THE BERSIMIS REGION
The first proposals are for diversions of the Portneuf, Manouane, Sault-
aux-Cochons, and Boucher rivers into existing dams of the Bersimis and Aux
Outardes complexes, all in the same region north of Lac St-Jean. Hydro-
Quebec submitted detailed plans to the government early in the year
without making them public, and neither HQ's CEO Caill nor the Minister of
Natural Resources Guy Chevrette acknowledged them to the parliamentary
oversight committee that met in April. At that time these officials
mentioned only the "optimization" of an existing project. It has since
emerged (via Quebec's Freedom of Information Act) that all four proposals
state explicitly that the additional energy is "to take advantage of the
growing opportunities of the American export market". This marks the first
time that HQ has justified environmental impacts for the sole purpose of
exports.
Furthermore, HQ wants to dispense with environmental hearings. (A river
diversion, though not as irreversible as a dam, is more devastating to the
downstream region, since the riverbed below a diversion may be virtually
dry.) Instead, it has proposed to overcome local opposition by offering a
2% annual revenue share to the affected county council. (Note below that
revenue sharing instead of one-time compensation will probably be offered
to the James Bay Cree as well, for the proposed further environmental
damage to their territory.) There are also Innu communities in the
Bersimis/Outardes region, and HQ is undertaking negotiations with them, in
the hope of circumventing public hearings. Under the law, avoiding
hearings should not be possible, since Quebec's Environmental Quality Act
gives any citizen the right to request them, but the Environment Ministry
has made it a practice to dismiss as "frivolous" any request coming from
individuals who do not live in the region directly affected by the
project. (This practice was denounced by the Doyon Commission of inquiry,
whose report in 1996 was a major indictment of the government and HQ of
complicity with private promoters).
The diversions would deal a direct blow to a number of downstream
commercial interests, among them several independent power producers. The
owners of private dams on two of these four rivers include Alcan, the
major aluminum corporation. Hydro-Quebec would compensate these owners for
their lost electricity generation. Although HQ would gain no capacity (its
peak power would remain unchanged), it might gain as much as 1.2
terawatt-hours annually in total energy. As the capital cost of the
diversions is estimated at $100 million, amortized over 20 years, the
immediate dollar cost of this additional energy is seemingly very low, low
enough to reward HQ for overcoming the environmental and political
obstacles described above. Because the timetable submitted to the
government includes no months allocated to public review, HQ hopes to
complete the Portneuf and Sault-aux- Cochons diversions by November next
year (!), with Boucher following in 2001 and Manouane in 2002.
Although the authorization process for these diversions has not been
announced, there has already been public bickering between the Minister of
Natural Resources Guy Chevrette and the Minister of the Environment David
Cliche. As far as possible, Mr. Chevrette and HQ want these and similar
hydro projects to be examined only by the new Rgie de l'nergie (Energy
Board) and not by the B.A.P.E. (Quebec's environmental review office).
Mr. Cliche recently vetoed a private sector proposal to harness a
well-known waterfalls on the Chaudire River, and he has supported the
Heritage Rivers project to identify and classify those rivers to be saved
from commercial development. While Mr. Cliche may be a tactical ally, his
instincts are political, and the experience of the environmental movement
is that he cannot be relied upon to mount a principled defence of Quebec's
wild places.
THE MOISIE RIVER TRIBUTARIES
Within days of the Bersimis revelations, Hydro-Quebec was back in the news
when it approached the Uashat/Mani-Utenam Band Council (Innu) about
diverting two of the headwaters of the famed Moisie River, the Carheil and
Aux Pkans rivers, into the neighbouring Ste-Marguerite river basin. This
latter river, much larger than the others, has several existing dams and a
third under construction, SM-3, which would receive the proposed
diversions. The additional water would add an estimated 1.2 TWh/year to
HQ's energy supplies, i.e. the same amount as the four Bersimis
diversions. In the case of SM-3, however, the generating plant has been
designed so that an additional bank of turbines can easily be added. If HQ
goes ahead with more turbines, it would gain an extra 440 MW of peak power
for only a moderately increased investment. The low unit cost of the
additional energy and power would bring the overall cost of SM-3 down to a
potentially profitable level; without the diversions SM-3 electricity
would cost 3.5/kWh, more than the current (and anticipated) export price.
All of these works and proposed works have been the subject of intense and
prolonged debate. In the late 80s, when HQ first drew up its plans for the
upper Ste-Marguerite, it hoped to dam the Moisie River itself, a critical
spawning area for Atlantic salmon. Public opinion and international
opinion was so strongly against this that HQ resubmitted its project, this
time asking to divert the two tributaries but leaving the Moisie
free-flowing albeit much reduced. In 1993 a B.A.P.E. commission rejected
this plan and expressed serious reservations about the justification for
the Ste-Marguerite dam itself. In one of its final pre-election acts, the
soon-to-be-defeated Liberal government went ahead and authorized the
building of the dam without the diversions. The same day HQ announced
drastically reduced load forecasts and cutbacks to its plans for future
projects. While the authorization excluded the diversions "for now", it
allowed for them to be authorized at a later date.
Meanwhile, a joint federal-provincial committee was formed to examine
scientifically the diversions' impacts on the Moisie's salmon. (Other
impacts on the river system were ignored.) A three-man committee
commissioned an expert report, which through complex modelling determined
that the risk was minimal. This model was severely criticized by
biologists from the Atlantic Salmon Federation, who argued that the
conclusions depended on unjustified assumptions and that there were
insufficient data and thus an unacceptable level of risk. On April 14 of
this year, the committee dismissed that opinion and advised the government
that there was no evident risk. The MEF (Environment Ministry) received
their report and initiated the standard 60-day waiting period during which
comments were to be made by interested parties, but the interested parties
were not informed, leading to suspicions that the government wanted to
slip this project past its critics.
This suspicion has been further fueled by recent changes in HQ's and the
government's timetables. At the beginning of the year they reassured
critics that any construction would be years away and that there would be
fresh environmental hearings before diversions were authorized. Last week
HQ announced that it was speeding up construction of the SM-3 dam and
power plant so that it could impound water and come on line in May 2001
instead of November 2001. On June 20 a spokesman told Le Devoir that HQ
wanted the government to authorize the Carheil/Pkans diversions
immediately following a 2-week delay after the 60-day comment period, i.e.
at any time after June 29. Earlier HQ had said that once the government
gave its go-ahead, negotiations with the Mani-Utenam band council could be
completed within 45 days.
Thus all external indications are that HQ now considers the SM-3 project
explicitly to include the diversions of the Carheil and Aux Pkans rivers,
and that the full project is on their fastest possible track. (Quite
possibly driven by drought: a race for additional water reserves before a
partial system shutdown). Thus environment minister Cliche may be under
intense pressure to authorize these diversions without having them be
examined by his ministry for impacts or waiting for the new Rgie to
scrutinize their rationale under integrated resource planning. If HQ and
the Quebec government override due process on a renowned river like the
Moisie and its tributaries, they may choose to do on the four proposed
Bersimis diversions as well.
The most critical period for influencing environment minister David Cliche
is probably now, the final few days of June 1997. (See faxing information
at the end of this bulletin). He should be supported in his recent
statements that all the proposed diversions should be publicly examined by
his ministry's B.A.P.E. process. Messages can be worded so as to
strengthen his resolve not to be pushed into overriding the principle of
public review. They can also support the widely held view, and one which
Mr. Cliche has publicly supported, that the Moisie and its watershed
should be declared a Quebec Heritage River and thus permanently protected
from commercial development.
THE GREAT WHALE AND RUPERT RIVERS
Quebecers woke up to a shocking headline on Saturday June 7: "Hydro
Reviving Great Whale". Leaked by Cree leaders, the story revealed (and was
later confirmed by Hydro-Quebec and Minister Chevrette's office) that HQ
wishes to divert the Great Whale River southwards and the Rupert River
northwards so that both would flow into the La Grande River complex of
dams and power stations which lies between them on the east side of James
Bay.
Under current treaty and law, jurisdiction over the affected land and
water is shared between the Quebec government, the Canadian government,
and the James Bay Cree of Quebec. A previous attempt by Hydro-Quebec to
dam the Great Whale foundered in December 1995 when solidarity with the
Crees, strong domestic and international opposition, a cancelled New York
export contract, and a projected high cost per kilowatt-hour caused the
Parti Qubcois government to put the project "on ice".
Now, 18 months later with low water and only its export markets likely to
grow, HQ is investing in additional kilowatt-hours of energy, not
additional peak power capacity. River diversions, where they are possible,
meet this goal at low dollar cost but at great environmental cost. First
signs are that HQ will pursue this new production strategy tenaciously,
including at James Bay. It has initiated talks with Cree leaders before
going public with any detailed engineering or cost studies, and both
Minister Chevrette and Premier Bouchard have become personally involved in
these talks. Two weeks ago Mr. Bouchard flew north to the Cree community
of Waswanipi to meet with a group of Cree leaders, a significant gesture
by the government. Furthermore, he apparently offered the broad outline of
a revenue-sharing plan whereby Cree communities would receive a guaranteed
share of proceeds (and control) from resource exploitation on their land,
a notable improvement over the terms of the James Bay and Northern Quebec
Agreement in force now.
Because of the possibility of such a revenue plan, the Cree may not be
unanimous in immediately opposing the river diversions. Some Cree leaders
have already predicted, however, that within a few months their resistance
to hydro development will again be high, especially if their international
solidarity movement springs back to life. (Note: at the same time the
Cree may well accept forest and mineral exploitation together with a share
in its revenues and control).
"What are the next moves on Great Whale?" For Hydro-Quebec they are to
talk privately with the Cree, hoping to deflect their resistance and
forestall any international outcry. For the government, to try to have the
broad outline of a tentative agreement before the next elections and
referendum, but only if no group is too aggrieved at the result. For the
Cree, to negotiate in broad scope and at length while achieving consensus
among themselves as to what they want: environmental integrity, resource
control, self-government, revenue, or some combination of all of these.
THE ENVIRONMENTAL ACTIVIST RESPONSE
Paradoxically, it is only the environmental movement -- who have not been
in any way consulted or informed -- who stand to gain from making
hard-edged criticisms immediately. Quebec's environmental groups have
called for a suspension of the deregulation policy and of any planning for
new hydroelectric works until the policy issues and their implications
have been thoroughly aired. They have particularly attacked the Carheil
and Aux Pkans diversions on procedural grounds (lack of adequate public
review, leapfrogging over Rgie jurisdiction, making meaningless a Heritage
River status for the Moisie before it could even be considered) and on
environmental grounds (huge unknown risk to unique salmon breeding
grounds). Traditional Innu band members who dissent from their band
council's cooperation with HQ, together with their supporters in Quebec
and the United States, have been vociferous in opposition to SM-3 and now
the diversions proposed to be added on.
The Quebec environmental movement is working in an economic context of
high unemployment and a political context of cultural nationalism. It
argues that it is crazy for Quebec to destroy its free-flowing rivers to
generate cheap electricity for non-Quebecers, that the monetary investment
should instead be made in energy efficiency and wind farms.
Fortunately the Quebec movement is gaining allies. The Parti Qubcois
government is alienating its own grassroots through numerous clumsy
belt-tightening and budget-cutting policies, and some of these are
perceived as betraying Quebec's national interest. The swing in energy
policy is already seen as such by a number of consumer, union, and
professional groups, and they have joined environmentalists in making
public denunciations. One week ago over 30 of these groups unveiled a
"Coalition contre la dnationalisation de l'lectricit" which intends to
wage a strong campaign at both the popular and political levels until the
worst features of the new policy have been reversed. Given the present
dynamic of Quebec society, it may achieve much of what it wants after a
new government is sworn in, perhaps in mid-1999. In the meantime it must
obstruct and delay any proposals for fast-track river diversions.
The American environmental movement can help in the medium term by working
to block electricity imports from Quebec. It can be shown that these
imports are tainted, because of the wilderness areas and living things
that were destroyed in their production. Each increased level of imports
is directly paid for, in a clear one-to-one correspondence, by another
North American watershed lost to wildlife and recreation.
In the very short term -- the next two weeks -- both movements can apply
the pressure of media coverage and a whirlwind fax and phone campaign to
insist that the government of Quebec not authorize the diversion of the
Carheil and Aux Pkans rivers.
* * * * *
FAXING INFORMATION
Fax to: Copy to:
Minister David Cliche Premier Lucien Bouchard
Ministry of Environment Premier's Office, Government
and Wildlife of Quebec
Quebec City, Quebec Quebec City, Quebec
Canada Canada
fax 418-643-4143 fax 418-643-3924
tel 418-643-8259 tel 418-643-5321
-------------------------------------------------------------
Information transferred via:
NATIVE FOREST NETWORK
Eastern North American Resource Center
POB 57
Burlington, VT 05402 USA
(802)863-0571
(802)863-2532 Fax
email: nfnena@igc.apc.org