Welcome to RENEW, a quarterly publication of the Ontario Waterpower Association (OWA). This edition focuses on the important question of public perception and the evolving regulatory framework within which the waterpower industry operates. Though perhaps separate themes, their intersection is, of course, public policy.

In this context, our strategic positioning is not unlike our product itself – flexible and at the same time durable. This means that we must foster and maintain positive, productive and forward-looking relationships with other organizations and explore more opportunities to inform policy and deliver programs collaboratively and collectively. We must also continue to take the perspective that all aspects of our business are reputational – from existing operations to new developments – from the quality of our products and services to our interactions with government and the public.

It is this last point that this issue specifically considers – the public. Notwithstanding the emergence of renewable and “green” energy as topics of public interest in recent years, waterpower has not generally been on the public opinion radar (positive or negative). With our strategic objective of a 90% level of public acceptance of/support for waterpower by 2015, the time is now for a concerted public outreach campaign.

In the coming weeks and months, the OWA will be expanding the “public face” of waterpower by: engaging OWA generator members to encourage/facilitate plant tours; establishing linkages with provincial “Open Doors” initiatives to incorporate waterpower; participating at public events (e.g. water festivals, agricultural fairs); advancing the use of social media and our membership network; and building the waterpower brand through partnerships with other organizations.

These initiatives and others will undoubtedly bring more attention and focus to our sector and how we do business at a time when the province must make decisions of direct relevance to the expansion of waterpower. In the short term, projects under development must be completed by 2018, if 19,700 MW of renewable generation is to be in service. By 2020, the province faces a significant capacity and energy deficit. Beyond all of this are the opportunities associated with the Ring of Fire and the grid connection of remote northern First Nations. And at the same time, the notion of “willing hosts” is beginning to emerge. An interesting intersection of themes indeed. Perhaps a crossroads.

renewSPRING 2013ISSUE 36

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Wilson’s Falls before Upgrade

Wilson’s Falls after Upgrade

Bracebridge Generation Celebrates Upgrades On May 3rd of this year, Bracebridge Generation will be hosting a Grand Re-Opening of their Wilson’s Falls and Bracebridge Falls plants.

Under the province’s first two HCI contracts, Bracebridge Falls which was originally constructed in 1901 at 600 kilowatts was upgraded for $11M to 2600 kilowatts. Wilson’s Falls which was originally constructed in 1910 at 600 kilowatts was upgraded for $10M to 2900 kilowatts.

“We would have not been able to complete these upgrades without HCI contracts which provided us with pricing certainty. The OWA deserves a lot of credit for representing the needs of its members who will be able to generate and grow under a variety of long term contracts,” said CEO Chris Litschko.

Both upgrades were also used to improve generation station and waterfall aesthetics. “We guarantee a waterfall before generating electricity, something that did not occur for the past 100 years,” advised Manager Bryan Ingram.

Viewing platforms were also worked into the designs of the upgrades and the walleye spawning area was increased by 600% at the bottom of Bracebridge Falls. “We successfully worked closely with DFO and MNR on this initiative,” said COO Vince Kulchycki.

“Waterpower generation sites are located for the most part at some of the most beautiful places. It is imperative that for this green form of generation to grow, we take into consideration public enjoyment and aesthetics, along with ecology,” said Litschko. He went on to advise that generators should not only maintain the status quo at these sites but there should be a priority to improve them for the benefit of all.

All OWA members are welcome to join in the celebration of the Grand Re-Opening on Friday, May 3rd starting at 11:30 am at Bracebridge Falls. For more information or to RSVP, please email Janice Walker at jwalker@lakelandholding.com

Bracebridge Generation is a subsidiary of Lakeland Holding that is owned by the municipalities of Bracebridge, Huntsville, Burk’s Falls, Sundridge, and Magnetawan.

And perhaps most importantly, it is a story that is still being written. By the owners and operators of the 200 generating stations who continue to invest in their facilities to produce reliable, affordable power for decades to come. By the proponents and partnerships in new development, adding more made-in-Ontario waterpower to our changing electricity supply mix. And by the people of the province, who, it seems, may have forgotten the first few chapters.

Don Huff is President of Environmental Communication Options (www.ecostrategy.ca). He has been providing strategic counsel and media relations to politicians, ENGOs, First Nations, corporations and trade associations in Canada since 1997.

Adaptive Management and Regulatory ReformWhile most widely understood within the context of natural resource frameworks, the construct of “adaptive management” is equally and perhaps as importantly appropriate in its application to the legislative, regulatory and policy instruments which govern on the ground activities. At its core, adaptive management is a designed approach to continuous learning and improvement (see Figure 1, below). It is generally a challenge, however, to build such design into legislation, the result of which is a dependence on governments to periodically undertake a strategic assessment of the laws of the land considerate of social, economic and environmental priorities. The current “Modernization of Approvals” initiatives being led by both federal and provincial levels of government are examples of the intended application of adaptive management.

When one considers that most of the primary pieces of legislation of direct relevance to the waterpower sector date from the turn of the last century, it is not surprising that governments are reviewing their practical application in today’s climate. For example, the term “improvement” as originally used in the Lakes and Rivers Improvement Act was meant to be interpreted as infrastructure to enable log driving during a time when the province’s commerce was intimately related to the use of waterways for transportation. And while it may be argued that economic imperatives and fiscal realities have become key drivers for such evaluations and proposed improvements, most proponents of adaptive management would agree that the concept is of value regardless of political direction.

Why Every Waterpower Development is Important Guest article by Don Huff

As Paul Norris notes in another part of this newsletter, there is a disturbingly low awareness level of an energy source that has been serving this province for many generations—waterpower.

I contend that every waterpower site—whether in northern or southern Ontario, from the largest to the smallest—should have the biggest interpretive and informational signage installed that we can fit.

It is Ontarians that give energy producers the social license to operate. To make this work in favour of waterpower, Ontarians need to be informed. Success is having fans of waterpower, but having Ontarians neutral on the topic is not a failure.

Are we missing obvious opportunities? For instance, when motorists drive by the power dams on the Trent system do they see water control structures existing for the benefit of fishermen and recreational boaters? Or do they see these dams as structures that have been producing low-cost low-impact hydro electricity for a century? They should see both.

Clearly, the small and mid-size dams of southern Ontario are not the powerhouse of Ontario’s electrical network like the Niagara facilities. But for the industry, each one is a potential ambassador with an opportunity to demonstrate the associated benefits.

While it is critical that the economics work for any waterpower site, don’t ignore or forget to factor in the qualitative benefit of any waterpower facility or new development in making people more aware of waterpower’s contribution to the well-being of Ontario.

When advancing a project at an orphaned site or abandoned grist or sawmill, embrace the heritage of the site and remind people that you are building on what worked in our past, for a better future.

If the waterpower industry does not tell its own story, who will? And if someone else tells the story, what are the chances it will be the right one or that you will be happy with it? The truth is that the industry has a great story to tell. Across southern Ontario, where there are more than 100 waterpower facilities in operation, the stories of municipal growth and prosperity are integrally linked to electrification and, by definition, waterpower. In the north, where more than 75 percent of the electricity generated still comes from falling water, it is a story of industrial investment, again with entire towns and cities growing up around waterpower production.

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White Oaks Conference Resort • Niagara-on-the-Lake, Ontario • October 20-22, 2013

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Figure 1–The Adaptive Management Cycle

DesignAdjust

Evaluate

Monitor

Implement

Assessproblem

Canada

White Oaks Conference Resort • Niagara-on-the-Lake, Ontario • October 20-22, 2013

It is encouraging, therefore, that the Ministry of Natural Resources (MNR) has not limited the scope of its present assessment of its mandate to century-old legislation, but rather has included the implementation of more recent statutes such as the Fish and Wildlife Conservation Act and the Endangered Species Act (ESA) in the strategic review. It is also helpful that the Ministry first articulated and sought advice on an overarching governance model within which the regulatory approaches moving forward were to be positioned. From a public policy perspective, then, there are two distinct yet interrelated questions to be addressed. The first and regardless of the statute is “what is the role of government?” The answer to this question is always a continuum from intensive to limited direct government involvement. The second question is “How to achieve the desired outcomes?” In answering this question, governments must determine the spectrum of compliance and incentive measures appropriate and the confidence in the instruments applied to deliver intended results. Both these strategic decisions can then be differentially applied to the respective legislative and regulatory frameworks.

A case in point of importance to the waterpower sector is the proposed changes to the implementation of the ESA. Notwithstanding that the legislation was passed relatively recently, there had clearly been widespread acknowledgement of issues with implementation. This should neither be surprising nor disconcerting given the significance in the difference of the legislative framework from its predecessor.

In the posting on the Environmental Registry last fall, it was noted that MNR had “...heard from many sectors, organizations and individuals about challenges in implementing the Endangered Species Act (ESA).” (i.e. problem assessment).

In January, MNR provided further detail on the proposed implementation approach. It is important to recognize that there are already provisions specific to waterpower facility operation and construction outlined in Regulation 242/08. For waterpower, the updated EBR posting included:

“Rules in the regulation would include requirements for a person to register with the Ministry and the development and implementation of a mitigation plan that would be made available to MNR upon request. Monitoring measures would be required in order to assess the effects of the operation on the species and the effectiveness of techniques adopted to minimize adverse effects on the species. The regulation would also include but not be limited to requirements to take measures to minimize adverse effects on the species and their habitat.” (i.e. design)

Should the proposed regulatory approach move forward, “implementation” will necessarily follow, be it at a facility, ecosystem or sector level. Consciously creating and embedding a framework that requires monitoring and evaluation against desired outcomes can inform subsequent adjustments by future governments.

Once one understands and accepts the key questions of governance and the value of the application of an adaptive management framework to regulatory reform initiatives, the fundamental

proposition for those to whom regulation applies, be it in terms of public safety or species at risk, is one of responsibility for earning and maintaining a social license. In terms of the ESA, the waterpower sector has embraced this challenge from the outset.

The OWA and the waterpower industry are committed to environmentally sustainable economic development and the objectives of protecting and recovering species at risk in Ontario. In collaboration with federal and provincial agencies, the industry has advanced and is applying a series of Best Management Practices. The OWA is actively developing an effectiveness monitoring protocol for Lake Sturgeon and is proposing to undertake similar

initiatives for other target species. As governments continue to move forward in assessing issues and designing improvements, and as the importance of the contribution of existing and expanded waterpower generation increases, the OWA and its members will undoubtedly strive to lead by example.

Effectiveness Monitoring Framework for Lake Sturgeon MitigationBuilding on the success of the Best Management Practices Guide for Waterpower Projects for Lake Sturgeon (2009) produced by AECOM Canada Ltd., the OWA is now partnering with the Ministry of Natural Resources and Fisheries and Oceans Canada to develop an Effectiveness Monitoring Framework for Lake Sturgeon Mitigation and Waterpower. The purpose of effectiveness monitoring is to determine whether the measures taken achieve the objectives established. Information collected in support of effectiveness monitoring at individual sites using standardized frameworks can provide for evaluation of effectiveness both at the site-specific level and help inform broader questions at the regional and/or species level.

The OWA established a steering committee in September 2012 consisting of representation from Ontario Power Generation, H2O Power, the Ministry of Natural Resources, and Fisheries and Oceans Canada and retained Gordon Wichert from SLR Consulting Ltd. as the lead consultant on the project. The purpose of the project has been to establish a process for collecting data and information in a standardized manner and to help optimize the significant investment being made by the industry across a number of facilities. Currently, regulation under the Endangered Species Act provides that an operator of a built facility take reasonable steps to minimize adverse effects on the species and to monitor the effects of the waterpower facility’s operations on the species. The framework will be a useful tool for both operators of waterpower facilities and government agencies in establishing standardized protocols for the collection of information to support mitigation and monitoring objectives.

The sampling protocols will outline key techniques and approaches specifically for Lake Sturgeon such as the management of water flow, management of water elevation, spawning habitat creation and the monitoring techniques associated with them. The monitoring protocols synthesize industry leading techniques, building on the wealth of information provided by the steering committee and scientists working in the field.

Figure 1–The Adaptive Management Cycle

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The finalized framework will be available in the spring of 2013. It will outline the sampling protocol including the development of study questions, data collection, management, analysis, and interpretation. It will also provide recommendations for the role of the industry and the OWA in maintaining a database for use in future studies and evaluations of effectiveness at both the site specific and regional level of analysis. The OWA is currently using this model to seek support for additional effectiveness monitoring frameworks for key species such as American Eel. It is anticipated that over time, while addressing the short-term questions around effectiveness monitoring the collection of data using standardized techniques will help answer effectiveness questions at a larger geographic scale for key species and mitigation approaches.

In February, the OWA contributed to a public opinion poll undertaken by Oraclepoll Research with the insertion of a specific question regarding the degree of support for increasing Ontario’s production of waterpower (hydroelectricity). The standalone question yielded a strong majority of support (almost two-thirds) and while our objective is to increase that support, the result provides a useful snapshot and can help inform our communications and public outreach efforts. It was interesting to note for example that support was strongest in rural and northern Ontario as well as with the younger and older demographics.

Perhaps more interesting is the consideration of the outcome of this single question within the context of others posed in this omnibus poll. When asked to rank preferences for new electricity, solar and nuclear power were on opposite ends of the spectrum of support, with wind, natural gas and hydroelectricity in the middle. Taken together, and considerate of the earlier work undertaken by the OWA with respect to the electricity attributes people most value (see 2012 Year in Review – Public Outreach and Engagement), there appears to be a disconnect between what people support and what they want from their electricity.

This fundamental gap in awareness and understanding is a key challenge that must be addressed, particularly considerate of the geographic distribution of the 107 seats that currently make up Ontario’s legislature and the expansion planned for 2015. The challenge hydro often faces in terms of public opinion is that it’s taken for granted. Hydroelectricity has been providing renewable, affordable electricity to the province for more than a century – in most people’s minds it’s “old reliable.” The fact is that we have significant Made in Ontario waterpower opportunities remaining. The OWA has identified more than 3,000 MW of additional

untapped potential that, if developed, could help moderate electricity prices for decades to come. The Association uses the term “waterpower” deliberately, because we’ve also learned that the public often equates “hydro” with electricity – hydro bills, hydro lines, hydro poles and, of course, the former Ontario Hydro.

So while I would argue that our industry and Association have been very effective in taking a principled and collaborative approach to informing public policy across a broad range of energy, economic and environmental issues, and adopted a leadership position with respect to earning and maintaining a social licence to operate, it is imperative to recognize that, ultimately, the public elects the government and the government determines policy direction. How then to make our unique value proposition relevant to an increasingly urbanizing population who may only know our brand as Niagara Falls? How, when the very commodity we produce is itself taken for granted? Communicate, communicate, communicate. It has been observed that the single biggest problem in communication is the illusion that it has taken place. As an industry, we can ill afford to assume that the general public understands or appreciates what we bring to the table. While we are experiencing a renaissance of new waterpower development, it has been an entire generation since hydro last was at the forefront of energy policy. The province has some challenging decisions to make with respect to electricity options in the short and longer term. In almost any objective evaluative framework waterpower consistently outperforms alternatives. Power system planners recognize that. Power system operators recognize that. But public opinion and public policy needs to reflect that.

Paul Norris, President, Ontario Waterpower Association

Last Word Public Opinion and Public Policy

Upcoming EventsBiogas Association Forum | AGM | Tour March 26-28, 2013 Ottawa, ON www.biogasassociation.ca

National Hydropower Association Conference April 22-24, 2013 Capital Hilton, Washington D.C. www.nationalhydroconference.com

Canadian Hydropower Association 13th Annual Forum on Hydropower May 13-15, 2013 Ottawa, ON www.canadahydro.ca

Effectiveness Monitoring Framework continued from page 3