BC Hydro response to BC Utilities Commission WAC Bennett repairs

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British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3

www.bchydro.com

Tom A. LoskiChief Regulatory OfficerPhone: 604-623-4046Fax: 604-623-4407

[email protected]

January 14, 2016

Ms. Erica HamiltonCommission SecretaryBritish Columbia Utilities CommissionSixth Floor – 900 Howe StreetVancouver, BC V6Z 2N3

Dear Ms. Hamilton:

RE: Project No. 3698854 British Columbia Utilities Commission (BCUC or Commission)British Columbia Hydro and Power Authority (BC Hydro)W.A.C Bennett Riprap Upgrade ProjectResponse to Commission and Interveners Information Request No. 1

BC Hydro writes in compliance with Commission Order No. G-182-15 to provide itsresponses to Round 1 information requests as follows:

Exhibit B-3 Responses to Commission and Intervener IRs (Public Version)

Exhibit B-3-1 Responses to Commission and Intervener IRs (Confidential Version)

Exhibit B-3-2 Responses to British Columbia Old Age Pensioners’ Organization IRs(Confidential Version)

For further information, please contact Geoff Higgins at 604-623-4121 or by email [email protected] .

Yours sincerely,

Original signed

Tom Loski

Chief Regulatory Officer

gh/ma

Enclosure

Copy to: BCUC Project No. 3698854 (W.A.C. Bennett Riprap Upgrade Project)Registered Intervener Distribution List.

323 Pages B-3

BC HYDROW.A.C. BENNETT

RIPRAPUPGRADE PROJECT EXHIBIT

mailto:[email protected]








ERICA HAMILTON

COMMISSION SECRETARY

[email protected]

web site: http://www.bcuc.com

SIXTH FLOOR, 900 HOWE STREET, BOX 250

VANCOUVER, BC CANADA V6Z 2N3

TELEPHONE: (604) 660-4700

BC TOLL FREE: 1-800-663-1385

FACSIMILE: (604) 660-1102

Log No. 51549

PF/BCH-WAC Bennett Riprap Project/GC/A-3_BCUC IR No. 1 to BCH

VIA EMAIL

[email protected]

December 11, 2015


RIPRAPUPGRADE PROJECT EXHIBIT A-3

Mr. Tom A. Loski

Chief Regulatory Officer

BC Hydro and Power Authority

333 Dunsmuir Street

Vancouver, BC V6B 5R3

Dear Mr. Loski:

Re: British Columbia Hydro and Power Authority

Project No. 3698854 / Order G-182-15

W.A.C. Bennett Riprap Upgrade Project

Further to Commission Order G-182-15, which established a Regulatory Timetable with respect to the above

noted Application, enclosed please find Commission Information Request No. 1.

In accordance with the Regulatory Timetable, please file your responses electronically with the Commission onor before Thursday, January 14, 2016.

Yours truly,

Erica Hamilton

JR/dg

Enclosure

cc: Registered Interveners



BC Hydro W.A.C. Bennett Dam Upgrade Project 1 BCUC IR No. 1

BRITISH COLUMBIA UTILITIES COMMISSION

INFORMATION REQUEST NO. 1

British Columbia Hydro and Power Authority

W.A.C. Bennett Dam Riprap Upgrade Project

Table of Contents Page No.

A. PROJECT JUSTIFICATION .........................................................................................................................1

B. PROJECT DESCRIPTION AND COST ...........................................................................................................4

C. PROJECT ACCOUNTING AND RATE IMPACT ..............................................................................................6

D. FIRST NATION CONSULTATION AND ACCOMMODATION .........................................................................8

E. PROJECT RISK MANAGEMENT ............................................................................................................... 16

A. PROJECT JUSTIFICATION

Reference: W.A.C. BENNETT DAM DESIGN AND CONDITION1.0

Exhibit B-1, Section 2.2; British Columbia Dam Safety Regulation 44/2000

B.C. Dam Safety Regulation

In Exhibit B-1, page 1-4,the British Columbia Hydro and Power Authority (BC Hydro) states W.A.C.

Bennett Dam (the Dam) is categorized:

… as “Extreme Consequence” pursuant to the B.C. Dam Safety Regulation and BC

Hydro’s internal evaluation (based on the Canadian Dam Association Guidelines). Such a

characterization means that the downstream impacts of a breach may include

extremely high economic losses affecting critical infrastructure, public transportation, or

services or commercial facilities, or some destruction of or severe damage to residential

areas, significant environmental impacts, and loss of life.

The B.C. Dam Safety Regulation requires BC Hydro and other owners of Extreme Consequence dams to

have a professional engineer carry out a review to determine whether the dam is safe and submit a dam

safety report for acceptance by the dam safety officer every seven years. If a dam safety review or any

other inspection, test or review carried out with respect to a dam reveals a potential safety hazard, the

dam owner must prepare a plan that identifies and prioritizes any actions required to correct the

potential safety hazard and must implement the plan in a timely manner. 1

1.1 Please list the dam safety reports submitted to the dam safety officer by date that mention the

deteriorating status of the riprap and briefly summarize the status of the riprap and any related

safety hazard identified in each report.

1.2 Please list all safety hazard correction plans that involve riprap repair, its priority level and

expected completion date as stated in the plan.

1.3 If BC Hydro has received any orders from the dam safety officer relating to the Dam riprap

please provide a list with a summary of each order.

1 British Columbia Dam Safety Regulation 44/2000.





Exhibit B-1, Section 2.2; Exhibit B-1-3, Attachment 1, p. 4

Dam status and risk

In Exhibit B-1, section 2.2, BC Hydro reports “Significant damage to the riprap was highlighted in

BC Hydro’s performance review of the Dam in 1998, and the Upstream Riprap Emergency Plan then

developed” and goes on to state “BC Hydro believes that, in view of the level of erosion of the Dam face,

this is the appropriate time to remediate the riprap condition.”

In Exhibit B-1-3, Attachment 1, page 4, the WAC Bennett Dam: Expert Engineering Panel report notes:

Wind generated waves have eroded Zone 5 material through gaps in the damaged

riprap. The erosion has been severe between Stations 20+00 and 60+00. The damage to

the riprap and the erosion of gravel in Zone 5 have seriously undercut the upper part of

the upstream slope as shallow sliding has occurred, and Zone 5 is now exposed in the

slide head scarps. Continued wave action, floods and relatively minor earthquake loads

may trigger deeper sliding that could endanger the integrity of the crest and even cause

overtopping and eventual breaching of the dam.

In Exhibit B-1, section 2.2.2, page 2-8, BC Hydro states:

The Upstream Riprap Emergency Plan was incorporated into a more general Enhanced

Surveillance and Response Plan (ESRP), Abnormal Conditions, issued in June 2009.

In the event that riprap damage extending to or near the crest of the Dam occurs, the

ESRP calls for end-dumping and bulldozing or placing rock from the top of the Dam.

2.1 Please summarize the erosional events of the upstream face since 1998.

2.2 List any previous repair work done to the riprap and the approximate cost.

2.3 What are the risk categories that were most recently used to assess dam safety?

2.3.1 Please characterize the level of dam face degradation as it relates to the risk categories.

2.3.2 As was done for the section between Stations 20+00 and 60+00 by the Expert

Engineering Panel, please characterize the damage levels along the other sections of the

dam face proposed for repair. Or alternatively, provide a plan diagram of the dam face

showing the extent of the damage levels.

2.4 What is the expected damage from a 1-10,000 year storm event to the Dam in its current state?

2.5 Is the end-dumping and bulldozing or placing rock from the top of the Dam outlined Enhanced

Surveillance and Response Plan sufficient for dealing with a storm, flood or earthquake event as

contemplated in the Expert Engineering Panel report?

2.6 Was the formation of the two sink holes stated in section 2.2 of Exhibit B-1 in any way related to

the degradation of the riprap layer?

2.7 BC Hydro’s website states that it is investing $1.9 billion in its seismic upgrade program. Are

there any other major projects that are ongoing, planned or under consideration for the Dam?

Describe the projects, if any, and identify any cost, schedule, risk or dam safety implications for

this project.





Exhibit B-1, Section 2.1.2, p. 2-2

Dam status and risk

In Exhibit B-1, section 2.1.2, page 2-2, BC Hydro states, “In 1969, the upstream slope was steepened

locally near the Dam crest to support widening the road to two-lanes, this resulted in over steepening of

existing slopes in some areas above 672 m (2205 ft) to about 1H:1V (100 per cent grade).”

3.1 Please discuss the contribution, if any, of the steepening of the slopes to the degradation of theriprap and the current risk state of the dam.

3.1.1 If the slopes had not been steepened would the proposed riprap repair have the same

urgency?

Reference: ALTERNATIVES TO THE PROJECT4.0

Exhibit B-1, Section 2.2.6

Reliance on existing emergency plans

BC Hydro estimates the P50 Revenue short fall resulting from the project to be $9 million once the

project is complete in F2021.2

4.1 Is the P50 F2021 $9 million revenue shortfall a good estimate of the expected ratepayer savings

that would result if the project were to be delayed by one year? If not, please explain.

4.2 Given that significant riprap degradation was noted in 1998, is the need to upgrade at the

present time a result of recent erosion, a change in acceptable risk, change in understanding of

the risk or some other change?

4.3 What is the estimated annual probability of an erosional event that would require

implementation of the Upstream Riprap Emergency Plan?

4.4 What is the estimated range of costs that would be incurred if the Upstream Riprap Emergency

Plan needed to be implemented?

4.5 Briefly describe the expected state of the Dam after the implementation of the Upstream Riprap

Emergency Plan.

4.5.1 Would the Dam then require further non-emergency repairs, be similar to its current

state or be better able to withstand future erosional events?


Exhibit B-1, Section 2.2.6

Partial repair

5.1 Was the alternative of repairing a smaller portion of the dam face considered? If not, why not?

5.2 If only the section between Stations 20+00 to 60+00 where the Expert Engineering Panel report

noted severe erosion was repaired would that address the drivers for proceeding with the whole

project now?

2 Exhibit B-1, Appendix B-3, tab 1.0, cell N45.





Exhibit B-1, Section 2.2.6; Section 3.2.1.6, p. 3-7

Sandstone option

The Reconnaissance of Potential Riprap Sources report classifies the Portage Mountain East sandstone

as “Good” and the Sand Flat limestone as “Excellent.”3

On page 3-11 of Exhibit B-1, BC Hydro states:

If the Portage Mountain East sandstone was used for the Project, riprap breakdownsimilar to the existing sandstone riprap would be expected to occur due to freeze-thaw

action. Furthermore, it was determined that the sandstone strata at this location is

underlain by a mudstone unit (up to 7.9 m thick), which is not suitable for use as riprap

due to its low durability, and as such sandstone quantity at this location could be

insufficient for the Project.

In Exhibit B-1, section 3.2.1.6, page 3-7, BC Hydro states, “The new riprap is expected to meet

performance expectations for 75 to 100 years (or longer) when combined with a civil maintenance

program where, if damage is observed, additional riprap will be placed to repair these localized areas.”

6.1

Please confirm that though the Portage Mountain East sandstone does not meet the rock

property criteria stated for this project, it is still “good” rock for riprap and has similar properties

to the original riprap.

6.1.1 Please confirm that the Portage Mountain East sandstone could be used for this project

albeit with a shorter service life than the 75-100 years expected from the Sand Flat

limestone. If not, please explain.

6.2 How long is it estimated that the original riprap preformed as designed?

6.3 What would be the expected life if the Portage Mountain East sandstone were to be used given

that the rock properties are similar to the original riprap layer but the new design is with narrow

graded larger rocks applied in a thicker layer?

6.4 What is the expected range of cost savings if sandstone were to be used from the Portage

Mountain East quarry?

6.5 From the perspective of ratepayer impact, please comment on the difference between using

limestone and sandstone riprap considering future repair costs, timing and probability over the

remaining life of the dam.

B. PROJECT DESCRIPTION AND COST

Reference: PROPOSED REGULATORY REVIEW PROCESS7.0Exhibit B-1, Section 1.4.1, p. 1-23

Project delay

In Exhibit B-1, section 1.4.1, BC Hydro states that:

A delay in the issuance of a Commission Decision beyond the end of May 2016 could

result in a delay of one year to the completion of the Project due to the short

3 Exhibit B-1, Appendix D-2, Table 3-3.




construction time period for setting the riprap materials (March to June). The expected

financial impact of a one year delay in the Project is expected to be in the range of $3.5

to $5.5 million.

7.1 Is BC Hydro required to delay construction until this Application is approved by the Commission?

7.2 Please explain the source of the $3.5 to $5.5 million financial impact that is expected if the

project is delayed by a year.

7.2.1 Assuming net impact to ratepayers equals the addition project costs minus ratepayer

savings; is the stated expected impact additional project costs or net impact to

ratepayers?

7.2.2 Is the financial impact of delay roughly proportional to time? If not, please explain.

Reference: PROJECT DESIGN8.0


Toe berm

In Exhibit B-1, section 3.23, page 3-9, BC Hydro states:

Leaving the depositional materials in place and re-using the existing sandstone riprapremoved from the critical erosion zone reduces Project costs by reducing the volume of

new material required from the quarry and avoiding the costs for removing and

disposing of materials below 661 m (2170 ft). The cost reduction achieved by re-using

the depositional material and relocation of existing sandstone riprap to the depositional

zone is forecast at approximately $17 to $11 million.

8.1 Discuss the possibility the dam will be operated to a lower water level in the future and the

suitability of the toe berm design in such a scenario.

Reference: PROJECT DESIGN9.0

Exhibit B-1, Section 3.2

Riprap stockpile

In Exhibit B-1, section 3.2, page 2-8, BC Hydro states, “In addition to rock available at local sources, BC

Hydro has stockpiled approximately 6,700 m3 of well graded (various sized) sandstone rock fill near the

Dam site for such emergency use.”

In Exhibit B-1, section 3.2, page 3-7, BC Hydro states, “As part of the Project, a stockpile of

approximately 8,000 cubic meters of riprap will be stored at site for maintenance use.”

9.1 What will happen to the existing stockpile of sandstone riprap?

9.2 Given that this project will reduce the risk of erosion, discuss the benefits and costs ofstockpiling riprap now compared to the alternatives of acquiring rock from the West Pine or

other suitable quarry either after the need has been identified or stockpiling at a later date

trigged by criteria based on dam monitoring.

9.2.1 Is the need or preference for a riprap stockpile documented in any dam safety

requirements or guidelines?




9.2.2 How long is the proposed riprap layer expected to perform without the benefit of

repair?

C. PROJECT ACCOUNTING AND RATE IMPACT

Reference: CAPITAL ASSET EVALUATION10.0

Exhibit B-1, Section 3, Appendix B-3-1

Capital expenditures

10.1 Are all capital expenditures shown in Appendix B-3-1 of Exhibit B-1 also capitalized for financial

reporting purposes?

10.1.1 If not, please explain any differences between the treatment for financial reporting and

regulatory purposes.

10.2 Do all capital expenditures shown in Appendix B-3-1 of Exhibit B-1 meet the criteria for

capitalization as per CPA Canada Handbook, IAS 16 – Property Plant and Equipment? If so,

please explain how.

10.2.1 If not, please list the expenditures that do not meet the criteria and explain why theyare being capitalized (i.e. not expensed).

10.2.1.1 Specifically comment on the treatment of the 8,000 cubic meter stockpile of

additional riprap.

Reference: CAPITAL ASSET EVALUATION11.0

Exhibit B-1, Section 3.7, pp. 3-25 to 3-26

Accounting and regulatory treatment

11.1 Similar to what was provided in BC Hydro’s 2012-2014 RRA responses to BCUC IR 1, please

provide a copy of the current policies and procedures from BC Hydro’s Management and

Accounting Policies and Procedures (MAPP), if applicable, such as:(i) Criteria for Capitalization Policy

(ii) Capital vs. Expense

(iii) Capitalization Criteria for Betterments

(iv) Capital Assets in Service

(v) Amortization

(vi) Useful Life Estimates

11.2 Please discuss if BC Hydro has considered guidance from CPA Canada Handbook, IAS 16.67-72

(Derecognition) to be applicable in relation to this project for financial reporting purposes? If

not, why not?

11.2.1 If so, please explain the impact this guidance has on the accounting treatment of this

project for both financial reporting and regulatory purposes, if different.

11.3 Please discuss if BC Hydro has considered guidance from CPA Canada Handbook, IAS 36 –

Impairment to be applicable in relation to this project for financial reporting purposes? If not,

why not?




11.3.1 If so, please explain the impact this guidance has on the accounting treatment of this

project for both financial reporting and regulatory purposes, if different.

Reference: RATE IMPACT ANALYSIS12.0

Exhibit B-1, Section 1, p. 1-5; Section 3, p. 3-7

Useful life estimate

In Exhibit B-1, section 3, page 3-7, BC Hydro states, “the new riprap is expected to meet performance

expectations for 75 to 100 years (or longer) when combined with a civil maintenance program, where, if

damage is observed, additional riprap will be placed to repair these localized areas.”

12.1 For useful life estimates and amortization for financial reporting purposes, are the riprap and

the Dam considered separately? Please discuss.

12.1.1 If so, please explain the useful life estimate for the riprap, and why this useful life

estimate is considered appropriate.

12.1.2 If so, please provide evidence (i.e. depreciation study, historical trends, etc.) to support

the useful life estimate of the riprap, or explain otherwise.

On page 1-5 of Exhibit B-1, BC Hydro states, “the project will extend the life of the Dam, a key, cost-

effective Heritage Asset.”

12.2 What is the remaining useful life of the Dam, both with and without the Project?

12.2.1 By what percentage will the useful life of the Dam be extended by this Project?

12.3 Please explain how this project will extend the useful life of the Dam, and provide evidence, if

any, to support the assertion.

12.4 Will the riprap be amortized over the remaining useful life of the Dam? If not, why not?

12.4.1 If not, what is the period over which the riprap will be amortized, and why is this

amortization period considered appropriate? Please explain the applicable amortization

method that BC Hydro proposes to use.

Reference: ESTIMATE OF RATE IMPACT13.0

Exhibit B-1, Section 3.7, pp. 3-25 to 3-26; Appendix B-3-1

Rate impact

13.1 In reference to Appendix B-3-1 in Exhibit B-1, please clarify what is meant by the term

“incremental cumulative impact on future rates.”

13.2 What is the incremental impact, if any, on an average residential customer’s monthly bill when

this project goes into service? Please provide both the percent change and the dollar amount.

13.3 In addition to the amounts shown in Appendix B-3-1 of Exhibit B-1, are there other incremental

operating and maintenance costs and/or impacts that are to be incurred to maintain the riprap

over its estimated useful life? If not, please explain.




13.3.1 If so, please provide the following information for any incremental costs:

(i) Description

(ii) Amount

13.4 If there are any material changes to the cost estimate or accounting treatment since the original

application was filed, please submit revisions of the financial models provided in Appendix B-3

of Exhibit B-1.

Reference: ESTIMATE OF RATE IMPACT14.0Exhibit B-1, Section 3, Table 3-3, p. 3-21

Capitalized overhead

14.1 In reference to the capitalized overhead amounts shown in Table 3-3 on page 3-21 of Exhibit

B-1, are all capital overhead costs directly attributable to the project? If so, please explain how.

14.1.1 If not, please explain which costs are not directly attributable to the project.

14.1.1.1 Why are these costs being capitalized and included in the project cost

estimate? Please explain.

D. FIRST NATION CONSULTATION AND ACCOMMODATION

Reference: FIRST NATIONS CONSULTATION15.0

Exhibit B-1, p. 4-2; Appendix F, pp. 60, 65, 73

Other permits and approvals


BC Hydro notes that it is not the sole Crown actor involved in this Project. [Ministry of

Forests, Lands and Natural resource Operations] FLNRO consulted directly with First

Nations prior to issuing permits for the Project… FLNRO considered all of the

information before it, including BC Hydro’s consultation process, and determined that

consultation was adequate before issuing the permits.

15.1 Did FLNRO delegate consultation duties to BC Hydro?

15.2 Please confirm that FLNRO assessed the adequacy of its own consultation process and did not

assess the adequacy of BC Hydro’s consultation when determining that consultation was

adequate before issuing its permits.

On pages 60 and 65 of Appendix F in Exhibit B-1, BC Hydro shows a proposed project schedule in two

letters to First Nations that includes “Submit BCUC application & Crown Land Tenure application.” In a

subsequent letter from August 14, 2015, page 73 of Appendix F in Exhibit B-1, the Crown Land Tenure

application is removed from the project schedule.

15.3 Please explain why the Crown Land Tenure application was removed from the project schedule?

Is it no longer required? If so, why is it no longer required?

15.3.1 If it is still required, please explain the approval process for this application. Who is the

approver? When is approval expected? Does the approval process consider First

Nations’ consultation and the adequacy of it?




15.4 Will any other Crown agencies assess the adequacy of BC Hydro’s First Nations’ consultation for

this project after or concurrent with the Commission’s assessment?


Exhibit B-1, Appendix E-2(d), p. 4

Commitment to not start construction

In Exhibit B-1, Appendix E-2(d), page 4, Ecofor states, “Although every attempt was made to locate and

record all archaeological and cultural heritage features located within the specified survey area, the

possibility exists that remains may have been missed.”

16.1 Does BC Hydro agree that some sites which are archaeologically or culturally significant to First

Nations may not be known by BC Hydro at this point?

16.2 Does BC Hydro agree that it is prudent to postpone the start of construction on the project until

the Commission issues its decision on the adequacy of First Nations’ consultation on the

project? If not, please justify BC Hydro’s position.

16.3 Does BC Hydro agree that if it starts construction and a currently unknown archeological or

culturally significant site is disturbed or damaged during construction prior to the Commission

issuing its decision on the adequacy of First Nations’ consultation for this project, thatpotentially higher accommodation measures could be required compared to a situation where

the Commission had issued its decision before unknown sites were disturbed or damaged?

16.3.1 Will BC Hydro commit to not start construction until the Commission’s decision on this

application is issued?


Exhibit B-1, pp. 4-16, 4-28; Appendix F, p. 21

Independent Technical Review


McLeod Lake Indian Band is leading an Independent Technical Revew (ITR) which is

expected to be completed in December 2015. The ITR is a multi-First Nation initiative

and at present McLeod Lake Indian Band and Saulteau, West Moberly and Doig River

First Nations are expected to participate. BC Hydro has committed to funding this

review.


Saulteau First Nations will be participating in the ITR of the Project (in collaboration with

McLeod Lake Indian Band and West Moberly and Doig River First Nations) in order to

identify any further potential impacts.

On page 21 of Appendix F in Exhibit B-1, BC Hydro states:

Also on May 14, 2015, LGL Limited, the consultant for the Independent Technical

Review, sent an email to BC Hydro, McLeod Lake, Saulteau and West Moberly with a

proposal for the Independent Technical Review.

17.1 Please provide the detailed scope and terms of reference for the Independent Technical Review.

What specifically will it be reviewing or what questions will it answer?




17.2 Please describe the expertise or qualifications of LGL Limited to conduct such a review? Will

anyone else be contributing to it or otherwise participating in it?

17.2.1 How will the ITR identify further potential impacts?

17.2.2 How will BC Hydro incorporate the ITR findings into the project plan?


Exhibit B-1, pp. 4-16, 4-27 and 4-28; Appendix F, p. 23

Traditional use studies

On page 4-16 of Exhibit B-1, BC Hydro states, “No heritage or archaeological sites have been identified at

either the Sand Flat Quarry or road sites.”

On page 4-27 of Exhibit B-1, BC Hydro states, “West Moberly and Saulteau First Nations indicated a

desire to undertake a TUS to more fully understand the implication of the potential impacts for the

Project.”

On page 4-28 of Exhibit B-1, BC Hydro states, “BC Hydro expects the results of the TUS will

further refine existing mitigation plans.”


On September 28, 2015 McLeod Lake emailed BC Hydro and stated that McLeod Lake is

aware of potential impacts related to the Project, but also noted that the Independent

Technical Review and TUS will inform any outstanding impacts that may have been

overlooked.

18.1 Please explain how BC Hydro will alter its assessed scope of consultation duty or its project plan

if the TUS’ identify heritage or cultural sites at the Sand Flat Quarry or road sites.

18.2 Does BC Hydro expect the pending TUS’ to provide more information on impacts to First

Nations’ treaty rights? If not, please explain why West Moberly and Saulteau both requested a

TUS to “fully understand the implication of the potential impacts.”

18.3 BC Hydro expects to use the TUS’ to refine mitigation plans. Does BC Hydro consider its

mitigation plans as part of its assessment of the level of impact of a project?


Exhibit B-1, pp. 4-16, 4-30; Appendix F, p. 24

Knowledge and understanding of Project impacts


BC Hydro will consult with First Nations on the findings of [the Independent Technical

Review and the Traditional Use] studies. The results will be used to further refinemitigation measures prior to construction. Furthermore, the results and BC Hydro’s

further consultation with First Nations on them will inform BC Hydro’s decision on

whether or not to implement the Project.


On November 6, 2015, BC Hydro met with McLeod Lake, Saulteau and West Moberly to




discuss the Project. West Moberly raised a new concern related to the Road Option.

They noted that the road upgrades will result in unmitigatable impacts to the land which

will facilitate ongoing access and development to their territory. West Moberly noted

that they may challenge Canfor’s Table Road license and that this may result in BC Hydro

not being able to proceed with the Road option.

On page 4-30 of Exhibit B-1, BC Hydro states, “BC Hydro has requested a meeting with all three

of the First Nations to address [West Moberly’s] concern [regarding the road transport option

raised at the November 6, 2015 meeting].”

19.1 Is BC Hydro’s knowledge of the potential impacts of the project adequate at this point? If not,

please explain how it can assess the duty to consult at this point and state that consultation is

adequate.

19.1.1 If yes, please justify BC Hydro’s position given that there are pending studies that may

identify further potential impacts of the project and that the First Nations’ have

requested to “fully understand the implication of the potential impacts for the Project”

and “to identify any further potential impacts”.

19.1.2 If yes, please justify BC Hydro’s position given that West Moberly stated on November 6,

2015 that there are unmitigable impacts from the project and BC Hydro has requested ameeting to address this concern.


Exhibit B-1, pp. 4-15 and 4-31; West Moberly First Nations v. British Columbia (Chief

Inspector of Mines), 2011 BCCA 247, para. 117

Cumulative effects


BC Hydro does not anticipate any cumulative effects given that no residual

environmental impacts are anticipated with the implementation of appropriate

environmental management plans, reclamation of the Sand Flats quarry site anddeactivation of the Spur Road, and adherence to federal and provincial permitting,

environmental regulations and guidelines.


Cumulative Effects: Concerns that the road upgrades will facilitate ongoing access and

development in their territory. The issue of increased access was first identified early in

the consultation process, and BC Hydro has committed to taking steps to mitigate this

impact. However, the residual aspect of this potential impact was only recently raised

and BC Hydro has requested a meeting with West Moberly First Nations to address and

mitigate this concern.

West Moberly at para. 117 states:

I do not understand Rio Tinto to be authority for saying that when the “current decision

under consideration” will have an adverse impact on a First Nations right, as in this case,

that what has gone before is irrelevant. Here, the exploration and sampling projects will

have an adverse impact on the petitioners’ treaty right, and the historical context is

essential to a proper understanding of the seriousness of the potential impacts on the

petitioners’ treaty right to hunt.




20.1 Does BC Hydro equate cumulative effects with residual effects? If so, please justify and support

this position.

20.2 West Moberly directs that in cases where the current contemplated activity results in new

adverse impacts, past effects are relevant in order to fully understand the severity of the new

effects. Did BC Hydro consider past effects when making its assessment of the new impacts of

the project?

20.3

Does BC Hydro agree that temporary, new impacts of a project could be assessed differently

when viewing them in the context of cumulative effects?

20.3.1 Does BC Hydro agree that the temporary nature of a project impact does not necessarily

lessen the level of the impact?


Exhibit B-1, pp. 3-10, 4-12, 4-16 to 4-17; Appendix E-2(a), pp. 29, 31-32

Assessment of impacts – Sand Flat Quarry

On page 4-12 of Exhibit B-1, BC Hydro states, “The Sand Flat quarry site is composed of disturbed lands

that were previously part of commercial forestry operations.”

On pages 4-16 and 4-17 of Exhibit B-1, BC Hydro states:

BC Hydro believes the seriousness of the potential impacts arising from the Project on

First Nations’ Treaty 8 rights to be low. In coming to this conclusion, BC Hydro relies on

the following:

• The Project Environmental Assessment prepared by Ecofor concluded that

there would be no residual environmental effects arising from the Project;…

• The Sand Flat quarry site is comprised of disturbed land that was previously

harvested for commercial timber;…

• BC Hydro plans to reclaim the quarry site after use;

In Exhibit B-1, Appendix E-2(a), pages 29, 31 and 32, Ecofor states:

The Project area is primarily composed of young and mature forest… The forested areas

adjacent the cut blocks have significant quantities of coarse woody debris at varying

stages of decay. This coarse woody debris creates habitat for wildlife…Given the habitat

in the Project area, various mammals are expected to be present. Of the mammals

whose ranges potentially overlap the Project area, there are eight provincially or

federally listed species that include: caribou, eastern red bat, fisher, grizzly bear, little

brown myotis, northern myotis, bison, and wolverine...The Project is located in a forest

setting…There is minimal active industrial development in the area and there is no

urban development.


BC Hydro’s selection of the preferred quarry was based on an evaluation of rock

characteristics, costs to develop the quarry site (e.g., improve site access) and costs to

transport materials to the Dam.

21.1 Please explain how there can be no residual effects from blasting and removing material from a

quarry site, even if the site is reclaimed according to the Mines Act. Is that quarry site not

forever different than it was before the quarrying and the reclamation?







Exhibit B-1, p. 4-11; Appendix F, pp. 86, 88

Mitigation of impacts


The Project Environmental Assessment prepared by Ecofor (Appendix E-2(a)) found that

all identified environmental impacts are mitigable, and no residual impacts are

anticipated with the implementation of appropriate environmental management plans

and adherence to federal and provincial permitting requirements, and environmentalregulations and guidelines.

On pages 86 and 88 of Appendix F in Exhibit B-1, BC Hydro states “contractor will develop an

Environmental Protection Plan (EPP)” for identified road, quarry and rock placement impacts.

23.1 Are the EPPs referred to on pages 86 and 88 of Appendix F the “environmental management

plans” referenced on page 4-11? If not, please explain the difference in the content and who will

be preparing and responsible for the environmental management plans.

23.2 Please describe Ecofor’s involvement with the development of these EPPs?

23.3 Please describe BC Hydro’s involvement with the development and/or approval of these EPPs?

23.4 Please describe the First Nations’ involvement with the development and/or approval of these

EPPs?

23.5 It appears that BC Hydro’s contractors will be responsible for the mitigation of potential impacts

from the project and that the assessment that there will be no residual impacts from the project

is dependent on appropriate environmental management plans being implemented. Please

explain how BC Hydro will ensure that these plans are appropriately designed, implemented and

managed.

23.5.1 Who is ultimately responsible for the proper design and implementation of these plans?

23.5.2 How will BC Hydro ensure these plans are designed in accordance with Ecofor’s Project

Environmental Assessment?


Exhibit B-1, pp. 4-12 to 4-13; Appendix E-2(b), pp. 8, 10, 11

Assessment of impacts - Caribou


The Caribou Mitigation Plan in place during field investigations (Golder Associates in

2012) focused on specific mitigations in the event of an encounter with caribou. The

plan also reported that the nearest caribou Ungulate Winter Range is approximately 7.5

km southeast of the project, and 2.5 km south of the access roads. Two caribou calving

Wildlife Habitat Areas were identified: one approximately 10 km north and the other

approximately 23 km south of the Sand Flat quarry.


Accordingly, Ecofor concluded there is a low likelihood of caribou wandering into the

Project area, including on the access roads, and that the caribou are most likely to




occupy the core caribou habitats that are well to the south of the Project. Ecofor

developed a mitigation plan that BC Hydro will implement to ensure any caribou that

are encountered are protected from impacts arising from the Project.

In Exhibit B-1, Appendix E-2(b), page page 8, Ecofor states:

The Moberly herd is part of the Special Concern Northern Mountain population. The

population estimates for the Moberly herd have been in decline since 1997, when 191

caribou were counted in the Moberly area (MOE 2014). The herd has since declined to a

population with a total count of 22 as of March 2014…

In Exhibit B-1, Appendix E-2(b), page 10, Ecofor states:

Caribou are sensitive to disturbance and to changes in habitat. The project is not located

within or near any identified caribou winter or summer habitats, so project works are

not anticipated to cause any effect on caribou habitat.

In Exhibit B-1, Appendix E-2(b), page 11 Ecofor states:

Critical period: January 15 – July 15

• Calving / Post parturition Late Winter – development activities are not

appropriate during this timeframe. Aerial activities should adhere to guidelines.If working within a critical window is unavoidable, proponent should discuss

alternatives, and potential for mitigation and monitoring plans.

Cautionary period: September 15 – January 14

• Rutting / Early winter - Proponents should minimize development activities

during these timeframes.

24.1 Please explain how BC Hydro will ensure its contractors on the project abide by Ecofor’s Caribou

Mitigation plans.

24.2 The Caribou Mitigation Plan concluded there is a low likelihood of caribou wandering into theproject areas. Are there impacts to the caribou from other activities such as blasting, noise, etc.,

especially given that caribou are sensitive to disturbance? How were these impacts incorporated

into the assessment of impacts?

24.2.1 What mitigation plans have been developed to mitigate these impacts?

24.3 Did Ecofor assess the potential impacts of this project in consideration of cumulative impacts? In

other words did Ecofor consider the past effects on the caribou and especially the Moberly Herd

which has declined to a population of 22, when assessing the impacts of the project? If not, why

not?

24.3.1 If not, what are the potential impacts of the project on the caribou in consideration of acumulative impact perspective?

24.4 How specifically will BC Hydro address Ecofor’s critical and cautionary timing windows in its

project schedule? What “development activities” will be prohibited during these times? Will

blasting be prohibited?





Exhibit B-1, Appendix F, p. 40

Procurement opportunities

In Exhibit B-1, Appendix F, page 40, BC Hydro states:

On March 3, 2013, BC Hydro emailed Dunne-za Ventures regarding the limestone mine.

BC Hydro indicated that a number of riprap quarry sites had been identified and two

selected for further investigation. BC Hydro inquired as to whether the limestone mine

referenced by Dunne-za Ventures was a different location than any of those previouslyidentified.

On March 5, 2013 BC Hydro sent a letter providing an update on the Project noting that

drilling investigations had indicated good quality riprap at the Sand Flat site, and

that trial blasting investigations were planned for summer 2013.

25.1 Please explain whether the limestone at the Dunne-za Ventures mine was ever investigated for

use in the Project? If not, why not?

25.2 Was the only communication to Dunne-za Ventures regarding BC Hydro’s decision to not

investigate or use their limestone through the March 5, 2013 letter indicating that the Sand Flat

quarry site indicated good quality riprap?

E. PROJECT RISK MANAGEMENT

Reference: IMPLEMENTATION PHASE RISKS26.0

Exhibit B-1, Section 5.3

Quarry yield

Knight Piesold reviewed the site investigation information from the Sand Flat quarry and

confirmed that the quarry yield should be between 10 per cent and 15 per cent after handling

losses. Based on Knight Piesold’s recommendation, BC Hydro has used a 13 per cent quarry yield

in preparation of the cost estimate.4

In discussing its plans to manage quarry yield risk BC Hydro states, “The ECI process will arrive at a

mutually agreeable contract structure, including the treatment of specific contract risks such as yield.

The general principal that will be followed is that risks will be assigned to the party best able to manage

the particular risk.”5

26.1 Quarry yield impacts several of the modeled costs. It is not clear how the project base cost

varies as a function of riprap yield. What are the modeled project costs if the riprap yield is 10

percent, 13 percent and 15percent?

26.2 BC Hydro has identified contractor performance as a major factor in project success and plans to

draft the construction contracts so that risks are born by the party best suited to manage them.

Given one of the major risks is rock yield, how does BC Hydro propose to structure the quarry

contract to separate the rock yield variance resulting from the in-situ rock characteristics from

yield variance resulting from contractor performance?

4 Exhibit B-1, p. 5-12.

5 Exhibit B-1, p. 5-6.





Exhibit B-1, Appendix B-1, p. 14

First Nations costs

27.1 BC Hydro includes a cost estimate for Aboriginal Relations and First Nations. Please list all costs

that are included in this estimate such as Aboriginal Relations staff costs, capacity funding,

traditional use or other study funding, etc. As this appendix is confidential, there is no need to

include dollar amounts.

27.2 Does this estimate include any accommodation costs? If not, where are potential

accommodation costs captured?

27.3 Does BC Hydro believe that the cost contingencies as stated in the Application are adequate to

cover any additional costs associated with mitigating First Nations impacts given the

Independent Technical Review and the Traditional Use Studies have not been completed?

27.3.1 What portion of the P50 contingency relates to First Nation impact mitigation and

accommodation?

27.4 In determining that the Application is in the public interest the Commission will assess the

adequacy of the First Nations consultation on the project configuration outlined in theApplication. After the Commission issues its decision and if for any reason BC Hydro were to

decide to pursue a different quarry site or riprap transportation route would BC Hydro reapply

for approval of the revised project?



British Columbia Utilities CommissionInformation Request No. 1.1.1 Dated: December 11, 2015British Columbia Hydro & Power AuthorityResponse issued January 14, 2016

Page 1of 4

British Columbia Hydro & Power AuthorityW.A.C. Bennett Riprap Upgrade Project

Exhibit:B-3

1.0 A. PROJECT JUSTIFICATION

Reference: W.A.C. BENNETT DAM DESIGN AND CONDITIONExhibit B-1, Section 2.2; British Columbia Dam SafetyRegulation 44/2000B.C. Dam Safety Regulation

In Exhibit B-1, page 1-4, the British Columbia Hydro and Power Authority(BC Hydro) states W.A.C. Bennett Dam (the Dam) is categorized:

… as “Extreme Consequence” pursuant to the B.C. Dam Safety Regulation andBC Hydro’s internal evaluation (based on the Canadian Dam AssociationGuidelines). Such a characterization means that the downstream impacts of abreach may include extremely high economic losses affecting criticalinfrastructure, public transportation, or services or commercial facilities, or somedestruction of or severe damage to residential areas, significant environmentalimpacts, and loss of life.

The B.C. Dam Safety Regulation requires BC Hydro and other owners ofExtreme Consequence dams to have a professional engineer carry out a reviewto determine whether the dam is safe and submit a dam safety report foracceptance by the dam safety officer every seven years. If a dam safety reviewor any other inspection, test or review carried out with respect to a dam reveals apotential safety hazard, the dam owner must prepare a plan that identifies andprioritizes any actions required to correct the potential safety hazard and mustimplement the plan in a timely manner. 0F

1

1.1.1 Please list the dam safety reports submitted to the dam safetyofficer by date that mention the deteriorating status of the riprapand briefly summarize the status of the riprap and any relatedsafety hazard identified in each report.

RESPONSE:

The Dam Safety reports that BC Hydro has submitted to the dam safety officer thatmentions the performance of the riprap has been categorized under three types of

reports, listed below. The Dam Safety Review Reports are provided to the DamSafety Officer approximately every seven years. BC Hydro also files annual DamSafety Reports, and Annual Surveillance Reports.





Page 2of 4


Exhibit:B-3

1. Dam Safety Reviews (DSR)

1998/99 Dam Safety Review (WAC Bennett Dam): No specific mention of ripraperosion. However in response to an external reviewer’s comment on the lack of ariprap recommendation, the author assures the reviewer that the ongoing riprapDeficiency Investigation will make an appropriate strong recommendation to dealwith this dam safety concern.

2003 Dam Safety Review (WAC Bennett Dam): The reviewer refers to the recentlycompleted riprap Deficiency Investigation which recommends remedial riprap andbedding as the preferred option to address upstream slope protection andstability. The reviewer suggests that that the decision to repair the riprap ormonitor and repair as necessary should be made following a detailed modeling

study to determine if the dam crest could fail as a result of a single major storm.

2011 Dam Safety Review (WAC Bennett Dam): The reviewer concludes that theupstream slope of the dam is in poor condition. Many blocks have decomposedand there are signs of localized sloughing in steeper areas. The slope’s ability toresist erosion in severe storm conditions has been compromised.

2. Dam Safety Program Annual Reports

Report year Activity

1998 - 1999

1999 - 2000

2000 - 2001 Riprap Deficiency Investigation ongoing

2001 - 2002

2002 - 2003

2003 - 2004 Borrow material investigation

2004 - 2005

2005 - 2006

2006 - 2007

2007 - 2008 Listed under Future Capital

2008 - 2009

2009 - 20102010 - 2011

2011 - 2012 Reconnaissance of potential riprap material

2012 - 2013 Durability tests of riprap material

2013 - 2014 Wave studies and riprap materials investigation

2014 - 2015 Preliminary design of riprap remediation




Page 3of 4


Exhibit:B-3

3. Annual Surveillance Reports

1997 Fall Inspection Report (WAC Bennett Dam): Riprap is of variousgradations, segregated and sloughing in some locations.

1998 Fall Intermediate Surveillance Report: Upstream slope has numerousareas of erosion and benching in the riprap which require repair.

2001 Spring Intermediate Inspection Report: The inspection makes thefollowing observations about the upstream slope of the dam:

The upstream slope has numerous areas of erosion areas and benchingin the riprap which require repair (ongoing review as part of theDeficiency Investigations). Wind monitoring in place and on ADASalarm to assist in monitoring any conditions which could result inupstream slope erosion. (Refer to file BDPDI-RIPRAP for UpstreamRiprap Emergency Plan). Some minor exposure of bedding occurs inthe areas east of the intake bridge in the more protected areas.Chainage signs facing the reservoir are required to facilitate properinspection.

2003 Annual Surveillance Review: Until riprap improvements are implemented,visual inspections of the upstream slope continue to be carried out regularlyand after storm events. In the spring of 2004, it is planned to establish surveymarkers on larger riprap blocks to provide better reference for periodicsurveys of the upstream face.

2004 Annual Surveillance Review: Continued visual inspections and anenhanced surveillance procedure remain in effect to provide prompt detectionof wind-generated wave damage.

2006 Fall Intermediate Inspection Report: Upstream slope has numerous areasof erosion and benching in the riprap which require repair.

2008 Fall Intermediate Inspection Report: The inspection makes the followingobservations about the upstream slope of the dam:

• The upstream slope has numerous areas of erosion and benching in

the riprap which require repair. Cross-sections were last surveyedand detailed crest inspection carried out May 13 and May 21, 2008.(GMS08DS delayed, interim risk management plans are beingconsidered, GMS00-17). Significant changes were not noted sinceMay 13, 2008.

• Many small erosion channels have been fixed by GT crew.




Page 4of 4


Exhibit:B-3

2010 Semi-Annual (Fall) Inspection Report. The inspection makes the following

observations about the upstream face of the dam:

The upstream slope has numerous areas of erosion and benching in theriprap. Nine cross-sections were surveyed May 6 to 7, 2010. Visualinspection of upstream face was conducted September 30, on foot.Major changes have not been noted since last intermediate inspection,however, erosion and undercutting continues, with generally minorsloughing of the undercut slope being noticeable near the crest inseveral areas.

2012 Semi-Annual (Fall) Inspection Report. The inspection makes the followingobservations about the upstream face of the dam:

The upstream slope has numerous areas of erosion and benching in theriprap. Nine cross-sections were surveyed May6 to 7, 2010. Lastdetailed visual inspection of upstream face was May 16, 2011, on foot.Major changes have not been noted since last intermediate inspection,however, erosion and undercutting continues, with generally minorsloughing of the undercut slope noticeable near the crest in severalareas. Slope has become eroded at no post barriers at Station 33+50and erosion continues.

2014 Semi-Annual (Fall) Inspection Report memo dated 20 February 2015. Theinspection makes the following observations about the upstream slope of thedam:

• The upstream slope has numerous areas of erosion and benchingwithin the riprap and zone 5. Nine cross-sections were re-surveyedin May 2014, and did not show any major changes. Major changeshave not been noted since last intermediate inspection, however,erosion and undercutting continues, with generally minor sloughingof the undercut slope noticeable near the crest in several areas. Theslope has become eroded at the no-post barriers at Station 33+50and erosion continues at this location.

• Inspection of the upstream slope from a boat was last carried out onMay 14, 2013. An inspection by foot was carried out May 5, 2014. Ahelicopter fly-over was conducted, and photographs last taken onSeptember 25, 2014. A photographic record is on the GMS drive(\Civil\pictures\Photos\GMS). Next helicopter fly-over planned forSeptember 2015.






Page 1of 1


Exhibit:B-3


Reference: W.A.C. BENNETT DAM DESIGN AND CONDITIONExhibit B-1, Section 2.2; British Columbia Dam SafetyRegulation 44/2000B.C. Dam Safety Regulation

In Exhibit B-1, page 1-4, the British Columbia Hydro and Power Authority(BC Hydro) states W.A.C. Bennett Dam (the Dam) is categorized:

… as “Extreme Consequence” pursuant to the B.C. Dam Safety Regulation andBC Hydro’s internal evaluation (based on the Canadian Dam AssociationGuidelines). Such a characterization means that the downstream impacts of abreach may include extremely high economic losses affecting criticalinfrastructure, public transportation, or services or commercial facilities, or somedestruction of or severe damage to residential areas, significant environmentalimpacts, and loss of life.

The B.C. Dam Safety Regulation requires BC Hydro and other owners ofExtreme Consequence dams to have a professional engineer carry out a reviewto determine whether the dam is safe and submit a dam safety report foracceptance by the dam safety officer every seven years. If a dam safety reviewor any other inspection, test or review carried out with respect to a dam reveals apotential safety hazard, the dam owner must prepare a plan that identifies andprioritizes any actions required to correct the potential safety hazard and mustimplement the plan in a timely manner. 0F

1

1.1.3 If BC Hydro has received any orders from the dam safety officerrelating to the Dam riprap please provide a list with a summary ofeach order.

RESPONSE:

BC Hydro has received one order from the Comptroller of Water Rights relating tothe WAC Bennett Dam Riprap in response to a request under section 4 of the DamSafety Regulations as follows: Re: WAC Bennett Dam Riprap Project Test Pits

Authorization dated April 9, 2014, Dam Safety File 76915-20/D5300000. This orderauthorized BC Hydro to carry out investigations on the upstream face of WACBennett Dam to provide information for the Riprap Upgrade Project.







Page 2of 2


Exhibit:B-3

Northern quadrant, which are the directional winds with the potential to cause erosion tothe dam face. It is expected that significant erosion can occur in the future during more

severe wind events (such as a 100-year or higher wind event with wind speeds exceeding78 km/hr).

From the reservoir filling in 1971 to today, a maximum of about 2.4 m (8 ft) of erosion hasoccurred perpendicular to the face of the dam and the maximum wind speed recordedsince 1999 is 65 km/hr.






Page 1of 1


Exhibit:B-3


Reference: W.A.C. BENNETT DAM DESIGN AND CONDITIONExhibit B-1, Section 2.2; Exhibit B-1-3, Attachment 1, p. 4Dam status and risk

In Exhibit B-1, section 2.2, BC Hydro reports “Significant damage to the riprapwas highlighted inBC Hydro’s performance review of the Dam in 1998, and the Upstream RiprapEmergency Plan then developed” and goes on to state “BC Hydro believes that,in view of the level of erosion of the Dam face, this is the appropriate time toremediate the riprap condition.”

In Exhibit B-1-3, Attachment 1, page 4, the WAC Bennett Dam: Expert

Engineering Panel report notes:

Wind generated waves have eroded Zone 5 material through gaps in thedamaged riprap. The erosion has been severe between Stations 20+00 and60+00. The damage to the riprap and the erosion of gravel in Zone 5 haveseriously undercut the upper part of the upstream slope as shallow sliding hasoccurred, and Zone 5 is now exposed in the slide head scarps. Continued waveaction, floods and relatively minor earthquake loads may trigger deeper slidingthat could endanger the integrity of the crest and even cause overtopping andeventual breaching of the dam.


The Upstream Riprap Emergency Plan was incorporated into a more generalEnhanced Surveillance and Response Plan (ESRP), Abnormal Conditions,issued in June 2009.

In the event that riprap damage extending to or near the crest of the Dam occurs,the ESRP calls for end-dumping and bulldozing or placing rock from the top ofthe Dam.

1.2.3 What are the risk categories that were most recently used toassess dam safety?

RESPONSE:

British Columbia Dam Safety Regulation 44/2000 classifies dams according totheir downstream consequences. The classifications are low, significant, high,very high and extreme. The WAC Bennett Dam is classified as an “extreme”consequence dam.



British Columbia Utilities CommissionInformation Request No. 1.2.3.1 Dated: December 11, 2015British Columbia Hydro & Power AuthorityResponse issued January 14, 2016

Page 1of 1


Exhibit:B-3




In Exhibit B-1-3, Attachment 1, page 4, the WAC Bennett Dam: Expert

Engineering Panel report notes:





1.2.3.1 Please characterize the level of dam face degradation as it relatesto the risk categories.

RESPONSE:

Since the dams are classified according to the downstream consequences, thecondition of the riprap does not have an impact on the classification. The WACBennett Dam will always be classified as an extreme consequence dam under thecurrent Dam Safety Regulation irrespective of the condition of the riprap.




Page 1of 1


Exhibit:B-3



In Exhibit B-1, section 2.2, BC Hydro reports “Significant damage to the riprap washighlighted inBC Hydro’s performance review of the Dam in 1998, and the Upstream RiprapEmergency Plan then developed” and goes on to state “BC Hydro believes that, in viewof the level of erosion of the Dam face, this is the appropriate time to remediate theriprap condition.”

In Exhibit B-1-3, Attachment 1, page 4, the WAC Bennett Dam: Expert Engineering

Panel report notes:

Wind generated waves have eroded Zone 5 material through gaps in the damagedriprap. The erosion has been severe between Stations 20+00 and 60+00. The damageto the riprap and the erosion of gravel in Zone 5 have seriously undercut the upper partof the upstream slope as shallow sliding has occurred, and Zone 5 is now exposed in theslide head scarps. Continued wave action, floods and relatively minor earthquake loadsmay trigger deeper sliding that could endanger the integrity of the crest and even causeovertopping and eventual breaching of the dam.


The Upstream Riprap Emergency Plan was incorporated into a more general EnhancedSurveillance and Response Plan (ESRP), Abnormal Conditions, issued in June 2009.

In the event that riprap damage extending to or near the crest of the Dam occurs, theESRP calls for end-dumping and bulldozing or placing rock from the top of the Dam.

1.2.3.2 As was done for the section between Stations 20+00 and 60+00 by theExpert Engineering Panel, please characterize the damage levels alongthe other sections of the dam face proposed for repair. Or alternatively,provide a plan diagram of the dam face showing the extent of the damagelevels.

RESPONSE:

The proposed section for repair extends from Station 20+00 to 64+50 for a length of4450 ft (about 1360 m), compared to the 4000 ft long section from 20+00 to 60+00 byExpert Engineering Panel (EEP). The damage level along the EEP section wascharacterized as “severe” by EEP; the proposed section outside the EEP section (i.e.,from 60+00 to 64+50) does show slightly less damage compared to the EEP section butthe damage is considered significant.




Page 1of 2


Exhibit:B-3





Panel report notes:





1.2.4 What is the expected damage from a 1-10,000 year storm event to theDam in its current state?

RESPONSE:

As part of the riprap design, performance modeling was conducted to assess the

susceptibility of various riprap sizes to damage. This modeling indicated that the existingriprap would reach a ‘failure’ condition at the beginning of a 10,000-year storm event thatexposes the underlying Zone 5 fill. Following exposure of the underlying Zone 5 fill,damage would progress through a combination of shallow sliding of material locatedabove the zone of wave attack followed by further erosion of this material which wouldinfill the eroded area. Over time during the storm event the eroded depth would graduallyincrease and materials located above would be transported downslope by progressivesliding and erosion.






Page 1of 1


Exhibit:B-3





Panel report notes:





1.2.5 Is the end-dumping and bulldozing or placing rock from the top of theDam outlined Enhanced Surveillance and Response Plan sufficient fordealing with a storm, flood or earthquake event as contemplated in theExpert Engineering Panel report?

RESPONSE:

No, end-dumping and bulldozing or placing rock from the top of the Dam would not besufficient for dealing with a storm, flood or earthquake event as contemplated in theExpert Engineering Panel report. The repairs that are possible by these methods arelimited, and are meant to address an emergency situation only.

Please refer to BC Hydro’s response to BCUC IR 1.4.3 for probability of an event thatwould require implementation of the Enhanced Surveillance and Response Plan.




Page 1of 1


Exhibit:B-3




In Exhibit B-1-3, Attachment 1, page 4, the WAC Bennett Dam: ExpertEngineering Panel report notes:





1.2.6 Was the formation of the two sink holes stated in section 2.2 ofExhibit B-1 in any way related to the degradation of the ripraplayer?

RESPONSE:

No.




Page 1of 3


Exhibit:B-3





Panel report notes:





1.2.7 BC Hydro’s website states that it is investing $1.9 billion in its seismicupgrade program. Are there any other major projects that are ongoing,planned or under consideration for the Dam? Describe the projects, ifany, and identify any cost, schedule, risk or dam safety implications forthis project.

RESPONSE:

The referenced amount of $1.9 billion in the question is for dam safety work that isconsidered for the entire BC Hydro system. The following is a list of projects that areongoing or contemplated future projects for the WAC Bennett Dam only.

Ongoing projects:

1. Upgrade Spillway Chute Rehabilitation – The objective of this project is toupgrade the damaged portions of the concrete chute. The project is currentlyin Implementation phase.




Page 2of 3


Exhibit:B-3

Forecast Capital Cost: $27.2 million to $23.2 million

Schedule: Phase 1 – completed in 2014, remainder planned to be completedin 2016 (depending on the risk of spilling).

Risk or dam safety implications to rip rap project: None, if completed in 2016;if not, some coordination in construction activities may be required.

2. Spillway Gate Upgrades – The objective of this project is to improve the overallspillway gate reliability, with this project focussing only on the immediateconcerns associated with selected electrical, hoist room mechanical and P&Ccomponents. The project is currently in Definition phase.

Forecast Capital Cost: $30.7 million to $19.0 million

Schedule: Forecast in-service date is F2019

Risk or dam safety implication to rip rap project: Coordination of site activitiesmay be required, if construction schedules overlap.

3. Core Upgrades – a number of open casings were left in place in the dam coreduring construction and previous investigations. The objective of this projectis to eliminate the potential for water ingress into the core through these opencasings. The project is currently in Identification phase.

Forecast Capital Cost: To be determined

Schedule: The observation wells and selected drill hole casings were groutedup in 2015. The other casings are planned for grouting in 2016 and 2017.

Risk or dam safety implications to rip rap project: Coordination of siteactivities may be required.

4. Embankment Dam Investigations – The objective of this project is to betterunderstand the current performance of the dam.

Forecast Capital Cost: Approximately $1 million/year, O&M funded initiative

Schedule: Started in F2011, with the performance assessment update report

scheduled for completion in F2016 or early F2017. However, ongoing reviewswill continue in future years, as required.

Risk or dam safety implication to riprap project: None, at this time.

Future Projects:

1. Dam Instrumentation Project – The objective of this project is to update thedam monitoring network. Scope still to be defined.




Page 3of 3


Exhibit:B-3


Schedule: Planned to start in F2017.

Risk or dam safety implication to riprap project: Coordination of site activitiesmay be required, if construction schedules overlap.

2. Low Level Outlets and Sluice Gates Projects – The objective of these projectsare to seal the outlets and to upgrade or seal the sluice gates. Scope still to bedefined.


Schedule: Planned to start in F2017

Risk or dam safety implication to riprap project: None

3. Spillway Gates Upgrade – Further electrical and mechanical upgrades. Scopestill to be determined.


Schedule: To be determined

Risk or dam implication to riprap project: To be determined

4. Dam and Related Structures – seismic upgrade. Scope still to be determined.


Schedule: To be determined

Risk or dam safety implication to riprap project: To be determined






Page 1of 1


Exhibit:B-3


Reference: W.A.C. BENNETT DAM DESIGN AND CONDITIONExhibit B-1, Section 2.1.2, p. 2-2Dam status and risk

In Exhibit B-1, section 2.1.2, page 2-2, BC Hydro states, “In 1969, the upstreamslope was steepened locally near the Dam crest to support widening the road totwo-lanes, this resulted in over steepening of existing slopes in some areasabove 672 m (2205 ft) to about 1H:1V (100 per cent grade).”

1.3.1.1 If the slopes had not been steepened would the proposed ripraprepair have the same urgency?

RESPONSE:

Yes, even if the slopes had not been steepened, the riprap repair would have thesame urgency. As stated in BC Hydro’s response to BCUC IR 1.3.1, oversteepening of the upper section has little impact to the performance of the riprap.Therefore, the proposed riprap remediation and upgrade will have the sameurgency irrespective of the steepening of the slopes.




Page 1of 1


Exhibit:B-3


Reference: ALTERNATIVES TO THE PROJECTExhibit B-1, Section 2.2.6Reliance on existing emergency plans

BC Hydro estimates the P50 Revenue short fall resulting from the project to be$9 million once the project is complete in F2021. 0F

1

1.4.1 Is the P50 F2021 $9 million revenue shortfall a good estimate ofthe expected ratepayer savings that would result if the projectwere to be delayed by one year? If not, please explain.

RESPONSE:

A project delay of one year would not result in savings to the rate payer. As statedin Exhibit B-1, section 1.4.1, the expected financial impact of a one year delay inthe Project is expected to be in the range of $3.5 to $5.5 million. The financialimpact is an expected increase in Project costs as discussed in BC Hydro’sresponse to BCUR IR 1.7.2.





Page 1of 1


Exhibit:B-3




1

1.4.2 Given that significant riprap degradation was noted in 1998, is theneed to upgrade at the present time a result of recent erosion, achange in acceptable risk, change in understanding of the risk orsome other change?

RESPONSE:

The need to undertake the Project now is a result of the observation of thelong-term erosion and condition of the Dam, combined with BC Hydro’s CapitalPlanning process, project sequencing, and prioritization of resources andavailable funding.





Page 1of 1


Exhibit:B-3




1

1.4.3 What is the estimated annual probability of an erosional event thatwould require implementation of the Upstream Riprap EmergencyPlan?

RESPONSE:

The Upstream Riprap Emergency Plan calls for implementation of emergencyriprap repairs in the event of riprap damage extending to or near the crest of theDam. The riprap damage is determined from visual inspections during andimmediately after a significant storm event when the measured wind speed on theDam crest exceeds 60 km/hr, which is the wind speed that triggers the visualinspection, as stated in the Plan. It is estimated that an erosion event from a stormwith annual probability of about 1/100 or less (wind speed at 78 km/hr or higher)may cause slope damage to extend to the Dam crest and may triggerimplementation of the emergency riprap repair. However this estimation of slope

damage would have to be checked by field observations.







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1

1.4.5 Briefly describe the expected state of the Dam after theimplementation of the Upstream Riprap Emergency Plan.

RESPONSE:

The emergency riprap repair will only be implemented in a storm event wheresignificant damage to the upstream slope of the Dam has occurred. This type ofemergency repair would not completely restore the existing condition of the Damas the emergency repair will focus on fixing the most severely damaged area, andpossibly leave some less severely damaged areas not repaired. The quality ofrepair in an emergency will not be as good as in a controlled environment.





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1

1.4.5.1 Would the Dam then require further non-emergency repairs, besimilar to its current state or be better able to withstand futureerosional events?

RESPONSE:

After an emergency repair, the Dam would be less likely to withstand futureerosional events because the Dam condition will become worse after thedamaging event. Emergency repair can only repair the riprap, not the erodedZone 5 fill. Non-emergency repairs such as the proposed Project, would still berequired to address the riprap deficiency for the long term.





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Reference: ALTERNATIVES TO THE PROJECTExhibit B-1, Section 2.2.6Partial repair

1.5.1 Was the alternative of repairing a smaller portion of the dam faceconsidered? If not, why not?

RESPONSE:

The proposed section for repair extends from Station 20+00 to 64+50 for a lengthof 4450 ft (about 136 m), compared to the 4000 ft long section from 20+00 to60+00 by the Expert Engineering Panel (EEP). The option of only repairing the4000 ft long EEP section (which is about 11 per cent smaller than the proposedsection) was considered in the design process, but it was determined that it wasnecessary to repair the additional 450 ft long section, which also showssignificant damage. Please refer to BC Hydro’s response to BCUC IR 1.2.3.2.




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Reference: ALTERNATIVES TO THE PROJECTExhibit B-1, Section 2.2.6Partial repair

1.5.2 If only the section between Stations 20+00 to 60+00 where theExpert Engineering Panel report noted severe erosion wasrepaired would that address the drivers for proceeding with thewhole project now?

RESPONSE:

If the smaller section where the EEP noted severe erosion were only repaired atthis time, it would improve the site conditions but would not protect the Dam up tothe performance expectations as, depending on the storm event (size of wave anddirection of wind), severe damage could still occur in the unrepaired sections,requiring future repairs. Also please refer to BC Hydro’s response toBCUC IR 1.5.1.




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Reference: ALTERNATIVES TO THE PROJECTExhibit B-1, Section 2.2.6; Section 3.2.1.6, p. 3-7Sandstone option

The Reconnaissance of Potential Riprap Sources report classifies the PortageMountain East sandstone as “Good” and the Sand Flat limestone as “Excellent.”0F

1


If the Portage Mountain East sandstone was used for the Project, riprapbreakdown similar to the existing sandstone riprap would be expected to occurdue to freeze-thaw action. Furthermore, it was determined that the sandstonestrata at this location is underlain by a mudstone unit (up to 7.9 m thick), which isnot suitable for use as riprap due to its low durability, and as such sandstonequantity at this location could be insufficient for the Project.

In Exhibit B-1, section 3.2.1.6, page 3-7, BC Hydro states, “The new riprap isexpected to meet performance expectations for 75 to 100 years (or longer) whencombined with a civil maintenance program where, if damage is observed,additional riprap will be placed to repair these localized areas.”

1.6.1 Please confirm that though the Portage Mountain East sandstonedoes not meet the rock property criteria stated for this project, it isstill “good” rock for riprap and has similar properties to the original

riprap.

RESPONSE:

Confirmed.





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1.6.1.1 Please confirm that the Portage Mountain East sandstone couldbe used for this project albeit with a shorter service life than the75-100 years expected from the Sand Flat limestone. If not,

please explain.

RESPONSE:

Confirmed.





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1




1.6.2 How long is it estimated that the original riprap preformed asdesigned?

RESPONSE:

The design life for the original riprap placed during the Dam construction in1960’s was not documented. Recent performance analysis of the existing riprapduring the design of the upgraded/new riprap indicated that the original riprapwould fail under a ten-year to 100-year storm event with an hourly wind speedbetween 62 to 78 km/hr. Field observations indicated that the original riprapperformed about 15 years prior to observed failure in 1986, caused by acombination of the absence of a separate filter material between the Zone 5surface and the riprap, undersizing of the riprap, insufficient riprap thickness, and

the sandstone does not meet durability requirements at the Dam (e.g., degradationof the sandstone riprap under cycles of freeze/thaw actions).







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1.6.4 What is the expected range of cost savings if sandstone were tobe used from the Portage Mountain East quarry?

RESPONSE:

While material from Portage Mountain East does not meet design criteria fordurability and the sandstone strata is underlain with unsuitable mudstone, a highorder cost savings range of $9.2 million to $28.6 million was estimated in anearlier feasibility level study conducted in 2011 to identify potential quarries forthe Project.





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1.6.5 From the perspective of ratepayer impact, please comment on thedifference between using limestone and sandstone riprapconsidering future repair costs, timing and probability over the

remaining life of the dam.

RESPONSE:

As discussed in BC Hydro’s response to BCUC IR 1.12.2, BC Hydro expects thatthe WAC Bennett Dam can continue indefinitely with the appropriate investment ofupgrades and continued maintenance. BC Hydro provides the following responsein the context of the 75 to 100 year (or longer) performance expectation for thenew riprap.

Future Incremental Planned Operating and Maintenance Costs:

As discussed in BC Hydro’s response to BCUC IR 1.13.3, there are no plannedincremental operating and maintenance costs associated with the Project.BC Hydro’s response in BCUC IR 1.13.3 remains the same regardless of the typeof riprap material used.





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Future Incremental Emergency Repair Costs:

As discussed in BC Hydro’s response to BCUC IR 1.4.4, the cost range to executethe Upstream Riprap Emergency Plan is between $900,000 and $300,000.BC Hydro’s response in BCUC IR 1.4.4 remains the same regardless of the type ofriprap material used.

Timing and Probability of Repairs:

The increased durability of limestone riprap will likely reduce the frequency ofrepairs over the life of the riprap, compared to sandstone riprap. If the PortageMountain East sandstone was used for the Project, riprap breakdown (requiringrepair) similar to the existing sandstone riprap would be expected to occur due tofreeze-thaw action. Refer to BC Hydro’s response to CEC IRs 1.6.5 and 1.17.2 for adiscussion of sandstone and limestone durability and performance.

Future Capital Investment:

If the Portage Mountain East sandstone was used for the Project, the design lifewould be in the order of 30 years; as such, new/upgraded sandstone riprap viafuture capital projects would be required. Refer to BC Hydro’s response toBCUC IR 1.6.3 for a discussion of the expected design life of Portage MountainEast sandstone.




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7.0 B. PROJECT DESCRIPTION AND COST

Reference: PROPOSED REGULATORY REVIEW PROCESSExhibit B-1, Section 1.4.1, p. 1-23Project delay


A delay in the issuance of a Commission Decision beyond the end of May 2016could result in a delay of one year to the completion of the Project due to theshort

construction time period for setting the riprap materials (March to June). Theexpected financial impact of a one year delay in the Project is expected to be inthe range of $3.5 to $5.5 million.

1.7.1 Is BC Hydro required to delay construction until this Application isapproved by the Commission?

RESPONSE:

No. Section 44.2(1)(b) of the Utilities Commission Act (the UCA) is permissive. Itprovides public utilities discretion as to whether or not to seek Commissionacceptance of capital expenditure schedules. BC Hydro sought such acceptance

through the Application. BC Hydro submitted its determination request pursuantto its 2010 Capital Project Filing Guidelines (the Guidelines) because the Project isa generation project with Definition phase funding that exceeds the $100 millionthreshold set out in the Guidelines (Attachment 1 to this IR). The Project is not anextension as that term is used in sections 45 and 46 of the UCA. There is noprohibition in section 44.2 of the UCA concerning commencement of constructionof a capital project prior to receipt of a Commission capital expendituredetermination. However, commencing construction prior to receiving Commissiondetermination ultimately increases the risk of project cost disallowance, shouldthe Commission find that the Project is not in the public interest.

BC Hydro timed submission of the Application to enable receipt of the

Commission determination in sufficient time to implement the Project. However,should the Commission not be able to issue its determination in time forBC Hydro to meet the Project’s late spring/early summer 2016 constructionwindow, BC Hydro would have to make a determination at that time as to whetheror not it would commence construction without a Commission determination orwait until it is received.



Capital Project Filing Guidelines – July 23, 2010Page 1 of 3

Capital Project Filing Guidelines

Background

In Directive 31 of the 2008 Long-Term Acquisition Plan (LTAP) Decision,1

the British ColumbiaUtilities Commission (BCUC) requested that BC Hydro develop a set of guidelines for the filingand review of capital projects by the BCUC. This document sets out BC Hydro’s Capital ProjectFiling Guidelines (Guidelines). With the integration of British Columbia TransmissionCorporation (BCTC), a single regulatory filing approach is being established for all BC Hydrocapital projects, including transmission.

1. Expenditure Thresholds

BC Hydro has established three different expenditure threshold levels for capital projects, asfollows:

· $100 million for generation and transmission (including Substation Distribution Asset(SDA) components2) projects;

· $50 million for distribution and building projects; and

· $20 million for information technology and telecommunication (IT&T) projects.

The expenditure threshold trigger is the Authorized cost estimate. There may be exceptions tothis approach; BC Hydro may file applications with the BCUC for capital projects below theseexpenditure threshold levels.

2. Certificate of Public Convenience and Necessity (CPCN) and Section 44.2Expenditure Schedule Acceptance

Background

The BCUC can require that BC Hydro file for CPCNs in two instances:

(1) To construct and operate plant or system required to serve new service areas. BC Hydrowill file for a CPCN pursuant to subsection 46(1) of the Utilities Commission Act (UCA)with respect to BC Hydro plant or system required to serve a new service area (e.g. notpart of the existing BC Hydro integrated system). There will be no expenditure thresholdtrigger for these filings. This instance is not addressed any further in the Guidelines.

(2) To construct and operate “extensions” to the existing BC Hydro plant or system. As aresult of subsection 45(2) of the UCA, BC Hydro is deemed to have a CPCN authorizing

1 In the Matter of British Columbia Hydro and Power Authority and An Application for Approval of the 2008 Long-

Term Acquisition Plan, Decision, July 27, 2009 (LTAP Decision), page 183.2 SDA projects will not typically be filed as stand-alone applications; rather, the SDA expenditures will be included

as part of a transmission project. The Vancouver City Central Transmission Project CPCN filing is a recentexample.

BCUC IR 1.7.1 Attachment 1

BC Hydro W.A.C. Bennett Riprap Upgrade Project Page 1 of 3



Capital Project Filing Guidelines – July 23, 2010Page 2 of 3

it to operate the plant or system that existed on September 11, 1980, and subject tosubsection 45(5) of the UCA, to construct and operate extensions to that plant orsystem. Subsection 45(5) of the UCA empowers the BCUC to order that subsection45(2) no longer applies to certain extensions to the BC Hydro plant or system; such an

order must be made not later than 30 days after construction of the particular extensionhas begun. The term extension is not defined in the UCA. This instance is addressedbelow under “BC Hydro Approach”.

Section 44.2 of the UCA provides that a public utility “may” file with the BCUC an expenditureschedule with respect to capital expenditures. If BC Hydro files an expenditure schedule for acapital project, subsection 44.2(3) gives the BCUC the discretion to either accept the schedule ifthe BCUC considers making the expenditure “would be in the public interest”, or reject theexpenditure schedule.

There are two key differences between section 44.2 and the UCA’s CPCN provisions (sections45 and 46): (a) Where a CPCN is required BC Hydro is not able to start construction in advance

of the BCUC granting a CPCN; and (b) In the event that the CPCN is not granted, BC Hydro isunable to construct the project. There is no difference in the cost recovery protection afforded.In both cases, the need for the project will have been proven if accepted by the BCUC; thesubsequent cost recovery issue is a prudency (execution of project) issue.

BC Hydro Approach

With respect to instance (2) above, in general BC Hydro will file for:

1. A CPCN pursuant to subsection 46(1) of the UCA for capital projects which are clearlyextensions and which are above the expenditure thresholds set out in the Guidelines.Examples include facility end-of-life replacement projects (as opposed to individual

component(s) that have reached end-of-life), and new projects designed to serveincremental energy and/or peak load growth.

2. Expenditure schedule(s) acceptance pursuant to subsection 44.2(1)(b) of the UCA forcapital projects that are not extensions and that are above the expenditure thresholds.Examples include IT&T and buildings, and seismic and environmentally-drivenrefurbishment generation and transmission projects that do not result in additionalMegawatts (MW) and/or Gigawatt hours per year (GWh/year ) of output on a planningbasis. These capital project filings will be supported by “CPCN-like” evidence; BC Hydrowill follow the content requirements of the BCUC’s 2010 CPCN Application Guidelinesand the 2010 First Nations Information Filing Guidelines,3 to the extent applicable.

3. Either a CPCN or expenditure schedule(s) acceptance for projects that are above theexpenditure thresholds and that may be extensions. Examples include refurbishmentprojects that are not undertaken to serve incremental load growth, but throughefficiencies may result in additional MWs and/or GWhs/year on a planning basis.

3 Adopted by the BCUC pursuant to Order No. G-50-10 and Order No. G-51-10, March 18, 2010.








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A delay in the issuance of a Commission Decision beyond the end of May 2016could result in a delay of one year to the completion of the Project due to theshort construction time period for setting the riprap materials (March to June).The expected financial impact of a one year delay in the Project is expected to bein the range of $3.5 to $5.5 million.

1.7.2 Please explain the source of the $3.5 to $5.5 million financialimpact that is expected if the project is delayed by a year.

RESPONSE:

A Project delay of one year would result in increases to various cost elements, forexample:

• Additional internal BC Hydro costs due to the inefficiencies inherent instopping and restarting the Project;

• Additional inflation costs due to the impact of Project delays on the valueof the construction work and all other cost elements;

• Other than inflation, possible external contractor costs for equipmentstand-by and lost opportunity to take on other work; and

• Additional Capital Overhead and Interest During Construction costs due todelay in Project in-service.

The magnitude of the increase to each cost element is dependent on the stage ofthe Project at the time of the decision to delay.






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A delay in the issuance of a Commission Decision beyond the end of May 2016could result in a delay of one year to the completion of the Project due to theshort construction time period for setting the riprap materials (March to June).The expected financial impact of a one year delay in the Project is expected to bein the range of $3.5 to $5.5 million.

1.7.2.2 Is the financial impact of delay roughly proportional to time? If not,please explain.

RESPONSE:

No, the expected financial impact of a one year delay is not roughly proportionalto time.

If the construction window for placement of rock on the Dam from approximatelyMarch to June is missed, then a one year delay would occur. Therefore a

three month delay at this critical time could delay the Project by a full year.

Refer to BC Hydro’s response to BCUC IR 1.7.2.




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Reference: PROJECT DESIGNExhibit B-1, Section 3.2.3, p. 3-9Toe berm

In Exhibit B-1, section 3.23, page 3-9, BC Hydro states:

Leaving the depositional materials in place and re-using the existing sandstone riprapremoved from the critical erosion zone reduces Project costs by reducing the volume ofnew material required from the quarry and avoiding the costs for removing and disposingof materials below 661 m (2170 ft). The cost reduction achieved by re-using thedepositional material and relocation of existing sandstone riprap to the depositional zoneis forecast at approximately $17 to $11 million.

1.8.1 Discuss the possibility the dam will be operated to a lower water level inthe future and the suitability of the toe berm design in such a scenario.

RESPONSE:

Operation of the Williston Reservoir is governed by BC Hydro’s Final Water Licensesunder the Water Act . Licensed storage is between 672.1 m (2205 ft) and 641.9 m (2106 ft).BC Hydro requires permission from the Comptroller of Water Rights prior to draft below655.3 m (2150 ft) and drafts below the threshold elevation of 654.4 m (2147 ft) are onlypermitted under force majeure and low system inflow conditions. BC Hydro estimatesthat the low system inflow condition criteria may be met about one year in 20. Even when

the criteria are met, BC Hydro may elect not to take the drawdown, depending on loads,local inflows, and market conditions.

The Peace River Water Use Plan envisions a potential change to the water license thatwould reduce the 654.4 m (2147 ft) threshold elevation to 652.3 m (2140 ft). The proposedriprap and toe berm design are expected to be suitable for and be able to accommodatesuch an adjustment in reservoir operation where reservoir levels could occasionally dropto below 2147 ft.

Below elevation 656.1 m (2153 ft) the existing riprap has rarely been exposed to windgenerated waves or freeze-thaw cycles and therefore the riprap was assessed to be nearits ‘as constructed’ condition, which is capable of resisting a one to 100 year (low

reservoir in spring season) storm event with no damage. Below elevation 655.3 m(2150 ft) the slope of the dam face decreases to 2.5H:1V from 2H:1V. This change in slopealso increases the effectiveness of the existing riprap to protect against wave action.

The toe berm extends from elevation 656.1 m (2153 ft) at the toe to elevation 661.4 m(2170 ft) at the crest. Design components, including a wide and thick upper portion of theberm and a key-in immediately above the berm, were incorporated to ensure the toe bermcan tolerate low water levels (lower than 2170 ft) which would expose the toe berm towind generated waves. Although some displacements of the berm are expected understorm events, the flattened slope will be in a more stable condition.




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Reference: PROJECT DESIGNExhibit B-1, Section 3.2Riprap stockpile

In Exhibit B-1, section 3.2, page 2-8, BC Hydro states, “In addition to rockavailable at local sources, BC Hydro has stockpiled approximately 6,700 m3 ofwell graded (various sized) sandstone rock fill near the Dam site for suchemergency use.”

In Exhibit B-1, section 3.2, page 3-7, BC Hydro states, “As part of the Project, astockpile of approximately 8,000 cubic meters of riprap will be stored at site formaintenance use.”

1.9.1 What will happen to the existing stockpile of sandstone riprap?

RESPONSE:

BC Hydro plans to leave the existing sandstone stockpile in place, as is, for anyfuture use that may be required at the site.




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1.9.2 Given that this project will reduce the risk of erosion, discuss thebenefits and costs of stockpiling riprap now compared to thealternatives of acquiring rock from the West Pine or other suitablequarry either after the need has been identified or stockpiling at alater date trigged by criteria based on dam monitoring.

RESPONSE:

Future repairs are expected at the Dam, and it would be prudent to stockpile the

riprap now rather than trying to source riprap at some time in the future under areactionary scenario. This stockpile can also serve as a source for any future Damemergencies, if required.

There has been considerable effort and cost expended to date into theassessment of rock quality and acceptance of the Sand Flat quarry rock as asuitable riprap quarry, and that development of the quarry (including obtaining allthe approvals) will also require a great deal of cost. The benefit of stockpilingappropriate riprap now prevents duplicating the associated considerable effortand cost in the future and eliminates the risk of not being able to obtain futurepermits.




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1.9.2.1 Is the need or preference for a riprap stockpile documented in anydam safety requirements or guidelines?

RESPONSE:

No, there is no dam safety requirement or guideline that requires a riprapstockpile. However, BC Hydro has a general Enhanced Surveillance and ResponsePlan that includes a stockpile. Refer to BC Hydro’s response to BCUC IR 1.9.2 thatsupports the stockpiling of riprap at the Dam.




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1.9.2.2 How long is the proposed riprap layer expected to perform withoutthe benefit of repair?

RESPONSE:

The expected performance life of the proposed riprap layer using the Sand Flatlimestone is in the order of 50 years or longer without the benefit of repair.




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10.0 C. PROJECT ACCOUNTING AND RATE IMPACT

Reference: CAPITAL ASSET EVALUATIONExhibit B-1, Section 3, Appendix B-3-1Capital expenditures

1.10.1 Are all capital expenditures shown in Appendix B-3-1 ofExhibit B-1 also capitalized for financial reporting purposes?

RESPONSE:

No.




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1.10.1.1 If not, please explain any differences between the treatment forfinancial reporting and regulatory purposes.

RESPONSE:

Capital expenditures shown in Appendix B-3-1 of Exhibit B-1 include Identificationphase costs of $1 million that will be expensed for financial reporting purposes inkeeping with BC Hydro Management and Accounting Policies and Procedures(MAPP 3.1.1B.1). There is no difference in the treatment of these costs forfinancial reporting or regulatory purposes.




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1.10.2 Do all capital expenditures shown in Appendix B-3-1 of Exhibit B-1meet the criteria for capitalization as per CPA Canada Handbook,IAS 16 – Property Plant and Equipment? If so, please explainhow.

RESPONSE:

With the exception of the $1 million in Identification phase costs noted inBC Hydro’s response to BCUC IR 10.1.1, all capital expenditures inAppendix B-3-1 meet the criteria for capitalization as per CPA Canada Handbook,IAS 16.

BC Hydro considers the riprap upgrade to be an improvement to the Dam. Animprovement of the asset meets the recognition criteria in IAS 16 paragraph 7 thatstates:

“The cost of an item of property, plant and equipment shall be recognized as anasset if, and only if:

a) It is probable that future economic benefits associated with the itemwill flow to the entity; and

b) The cost of the item can be measured reliably.”

Also, regarding costs associated with replacing the existing riprap, IAS 16paragraph 13 states “Under the recognition principle in paragraph 7, an entityrecognizes in the carrying amount of an item of property, plant and equipment thecost of replacing part of such item when that cost is incurred if the recognitioncriteria are met”.

Per IAS 16 paragraph 16(b) the cost of an item of property, plant and equipment

includes any cost directly attributable to bringing the asset to the location andcondition necessary for it to be capable of operating in the manner intended bymanagement. All costs required for the production, transport and placement ofriprap / filter materials on the upstream Dam face are directly attributable to theDam improvement; therefore, these costs are eligible for capitalization.

Refer to BC Hydro’s response to BCUC IR 1.14.1 for discussion of capitalizedoverhead.




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1.10.2.1 If not, please list the expenditures that do not meet the criteria andexplain why they are being capitalized (i.e. not expensed).

RESPONSE:

Please refer to BC Hydro’s response to BCUC IR 1.10.2.



British Columbia Utilities CommissionInformation Request No. 1.10.2.1.1 Dated: December 11,2015British Columbia Hydro & Power AuthorityResponse issued January 14, 2016

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Specifically comment on the treatment of the 8,000 cubic meter1.10.2.1.1stockpile of additional riprap.

RESPONSE:

The 8,000 cubic meters of stockpiled riprap will be available for future use. Itmeets the recognition criteria stated in CPA Canada Handbook, IAS 16.




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Reference: CAPITAL ASSET EVALUATIONExhibit B-1, Section 3.7, pp. 3-25 to 3-26Accounting and regulatory treatment

1.11.1 Similar to what was provided in BC Hydro’s 2012-2014 RRA responses toBCUC IR 1, please provide a copy of the current policies and proceduresfrom BC Hydro’s Management and Accounting Policies and Procedures(MAPP), if applicable, such as:

i. Criteria for Capitalization Policyii. Capital vs. Expenseiii. Capitalization Criteria for Bettermentsiv. Capital Assets in Servicev. Amortizationvi. Useful Life Estimates

RESPONSE:

The following requested Management and Accounting Policies and Procedures are attached.

• Attachment 1 - Criteria for Capitalization Policy MAPP 3.1.1A;

• Attachment 2 - Capital vs. Expense MAPP 3.1.1B.1;

• Attachment 3 - Betterments & Partial Replacements MAPP 3.1.2A;

• Attachment 4 - Capitalization – Betterments and Partial Replacements MAPP 3.1.2B.1;

• Attachment 5 - Capital Assets in Service Policy MAPP 3.2.1A;

• Attachment 6 - Amortization and Depreciation Policy MAPP 3.2.4A; and

• Attachment 7 - Depreciation Studies MAPP 3.2.4B.2.





Management and Accounting Policies and Procedures ( MAPP )

MAPP 3.1.1A Printed Copies are Uncontrolled Page 2 of 3

2010-Apr-01

IMPLEMENTATION PROCEDURES25

No. Title and Document Number

[1] MAPP 3.1.1B.1 – Capital vs. Expense

[2] MAPP 3.1.1B.2 – Asset Class

OTHER SUPPORTING DOCUMENTATION26


[1] MAPP 3.1.2A - Betterments & Partial Replacements Policy

[2] MAPP 3.1.8A - Intangible Assets Policy

EXAMPLES AND GUIDELINES27


[1] MAPP 3.1.8E.1 – Guidelines for Capitalizing IT Project Costs

[2]

RELEVANT ACCOUNTING PRONOUNCEMENTS28


[1] IAS 16 Property, Plant & Equipment

[2] IAS 38 Intangible Assets

NEXT SCHEDULED REVIEW29

The next scheduled review can be found in the document information box in the MAPP. Earlier review30will be conducted if warranted due to changes in GAAP or regulatory direction.31

LAST REVISION32

Author / date Description of Changes

Maria Tannenbaum/Grace Mok/Joy Dol

June 2015

Corrected hyperlinks. Changed the title “Finance Leads” to “Finance Directors.” Updated “Contact” section.

Darin Hale

Mar 2012

Updated financial statement presentation description and review date.

Wes Gale Changed PID to ACC for SAP. Changed Group controller to Finance Lead.



http://w3filenet/MAPP.3.1.1B.1


http://w3filenet/MAPP.3.1.2A


http://w3filenet/MAPP.3.1.8E.1















2010-Apr-01

Author / date Description of Changes

July 2010

Wes Gale

Apr 2009

Revised to comply with CICA 3064 – April 1, 2009 – identify separate intangible asset policy and definitionof such.

Jeremy Jarvis Revision of previous policy – APM 5.01, Criteria for Capitalization.

Key changes:

Removal of Profile ID as a policy determinant

Removal of Meeting Safety requirements as a criteria for capitalization

Remove reference to regulatory assets within intangible assets (replaced by separate regulatoryaccounting policy

Revise definitions.

33






MAPP 3.1.1B.1 Printed Copies are Uncontrolled Page 1 of 5

2012-Apr-01

CAPITAL VS. EXPENSE

Ref. #: MAPP 3.1.1B.1 Effective Date: 2012-Apr-01

Intended Readers: Finance Staff, Project Managers

Contact: Corporate Finance – Financial Reporting & Policy

PURPOSE 1

This section describes the concepts and the key factors or criteria used to determine if an expenditure is2capital or expense. This is intended to assist business units with the capital versus expense decision.3

GOVERNING POLICY 4

Accounting Policy: MAPP 3.1.1A – Criteria for Capitalization Policy 5

PROCEDURE 6

The determination of whether an expenditure is capital or expense requires the application of professional7 judgement to the particular circumstances, therefore each expenditure should be evaluated on an8individual basis. The cost of abnormal waste (material, labour or other resources) should be expensed as9incurred.10

Decision Criteria11

A step-by-step approach to assist users to determine if the capitalization criteria are satisfied is provided12below. These numbered steps refer to the flow chart provided in Appendix A. Costs incurred for the13identification phase of a project should not be capitalised (see treatment of Project Costs below).14

Step One: I s the expenditur e greater than $5,000?15

Items costing less than $5,000 are not capitalized.16

Exceptions to the $5,000 threshold are as follows:17

Personal computer hardware and related software purchased externally – limit $1,00018

Recurring Capital expenditures - No threshold19

Bulk purchases of over $100,000 in one fiscal year – No threshold for individual items20

Step Two: I s it an I nternal ly Generated Intangible Asset ?21

Internally Generated Intangible Assets are only capitalized if they are in the Development Phase and are22expected to generate future benefits (Step Four). Their capitalization is not dependent on their inclusion in23the Asset Class catalogue; so Step Three is skipped for these assets. Expenditures on Internally24

Generated Intangibles incurred prior to the Development Phase are expensed. See MAPP 3.1.8B.1 –25Recognition of Intangible Assets for a more detailed discussion.26

Step Three: I s the expenditur e li sted in the Asset Class Catalogue (ACC)?27

The ACC contains a list of expenditures that have been determined to be capital. Any expenditure (other28than an Internally Generated Intangible Asset Expenditure) listed in the ACC automatically meets the29criteria for capitalization if it meets the expenditure thresholds noted in Step One.30






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2012-Apr-01

Approvals likely to be obtained – sufficient assessment has been performed regarding72environmental, regulatory, First Nations and any other necessary approval issues to support an73assessment that necessary approvals are likely to be obtained.74

Necessary resources available – technical, financial and other resources necessary to75

complete the project will be available. 76

Internal and external costs incurred to construct or acquire capital assets should be capitalized if they77

meet the capitalization criteria.78

Training and other change management costs should be expensed as incurred, regardless of when the79activities take place.80

In general, costs that are incurred in the operating stage are to be expensed as incurred. For example,81operating costs would include, but are not limited to, administration, rollout, communication and routine82maintenance costs. However, costs that are incurred in the operational stage that enhance the asset or83result in replacement of part of an asset should be accounted for in accordance with BC Hydro's capital84betterment and partial replacements policy (MAPP 3.1.2A).85

SCOPE 86

This policy applies to expenditures incurred by BC Hydro to acquire or construct tangible and intangible87assets.88

Exceptions89

Assets intended for sale in the ordinary course of business90

ROLES AND RESPONSIBILITY 91

Finance Directors or their delegates are responsible for the proper application of BC Hydro's Accounting92Policies as they relate to the capitalization of expenditures.93

IMPACT /RISK 94

Incorrectly capitalizing an expense will result in an understatement of Operating Expenses, and an95overstatement of Capital Assets and amortization expense over the life of the associated asset.96

OTHER SUPPORTING DOCUMENTATION 97


[1] MAPP 3.1.1B.2 - Asset Class

EXAMPLES AND GUIDELINES 98


[1] MAPP 3.1.8E.1 – Guidelines for Capitalizing IT Project Costs

[2] MAPP 3.1.1E.6 – Identification of Abnormal Waste

























2012-Apr-01

APPENDIX A: GENERAL CRITERIA FOR CAPITALIZATION 1051106

Step One

Step Two

Step Three

Step Four

Step Five

Is the Expenditure greater than $5,000(see Procedure details for exceptions)?

Is it anInternally Generated Intangible Asset

(See MAPP 3.1.8A for definition)?

Does the expendituregenerate future benefits?

Is there a reasonable degree of

certainty that future benefits will berecovered?

Expenditure provides benefits with a service life ofgreater than 3 years?

Was the Expenditure incurred inrespect of an

Existing Capital Asset?

Capitalize

Expense

Expense

Expense

Expense

Expense

Yes

No

No

Yes

No

Yes

No

Yes

No

Yes

Yes

No

Is the Expenditure listed in the

Asset Class Catalogue?

No

No

Step Six

Step Seven

ConsiderCapitalization –

Betterments & PartReplacements

(see MAPP 3.1.2A)

Yes Capitalize

Is it in the Development Phase(see MAPP 3.1.8B.1 for definition)?

Yes

107108









2011-Apr-01

ROLES AND RESPONSIBILITY30

Finance Directors.31

IMPLEMENTATION PROCEDURES32


[1] MAPP 3.1.2B.1 – Capitalization Criteria for Betterments & Partial Replacements

[2] MAPP 3.1.2B.2 – Recording a Betterment

OTHER SUPPORTING DOCUMENTATION33


[1] MAPP 3.1.1A - Criteria for Capitalization Policy

RELEVANT ACCOUNTING PRONOUNCEMENTS34





The next scheduled review can be found in the document information box in the MAPP. Earlier review36will be conducted if warranted due to changes in IFRS.37

LAST REVISION38

Author / Date Description of Changes


June 2015

Corrected MAPP titles. Updated title from “Finance Leads” to “Finance Directors.”

Darin Hale

March 2012

Clarified treatment of removal and installation costs incurred for replacement of part of an asset andrevised financial statement classification of maintenance costs to reflect the nature based income

statement classification.Jeremy Jarvis

July 2010

Change reference to Group Controller to Finance Lead.

Wes Gale

Jan 2010

Added IAS 16.13,70 guidance for partial replacement. Detailed guidance added to procedure.

Jeremy Jarvis Revision of previous policy – APM 5.02 Betterments.

Key changes:

Streamline policy requirements over capitalization of betterments
















2011-Apr-01


Remove reference to Profile ID

For costs that have the attributes of both maintenance and a betterment, replace “the portionconsidered to be a betterment is included in the cost of the capital asset.” with “if the greater partrelates to a betterment, then the entire amount should be considered a betterment”

Revise and update definitions.

39







2011-Apr-01

CAPITALIZATION CRITERIA FOR BETTERMENTS & PARTIAL REPLACEMENTS

Ref. #: MAPP 3.1.2B.1 Effective Date: 2011-Apr-01

Intended Readers: Financial Analysts, Project Managers, Business Service Managers


PURPOSE1

This procedure provides guidelines on deciding whether to capitalize expenditures on existing assets.2

GOVERNING POLICY3

Accounting Policy: MAPP 3.1.2A - Betterments & Partial Replacements Policy4

PROCEDURE5

In order to qualify as capital, expenditures must meet the criteria of betterments or partial replacements:6

7

Betterments8

Betterments must meet the general capitalization criteria outlined in MAPP 3.1.1B.1 – Capital vs Expense9and the additional criteria for betterments.10

An expenditure made on an existing capital asset is capitalized as a betterment if it meets the general11capitalization criteria and at least one of the criteria below:12

a) adds to the service value of the asset or,13

b) reduces the associated operating costs of the asset by an amount significantly greater than the14 expenditure or,15

c) extends the original estimated service life of the asset by the greater of (i) 2 years or (ii) 10% of16the original service life and the cost of the betterment must exceed the applicable threshold17below:18

Individual asset betterments - the greater of: (i) $100,000 or (ii) 10% of the original cost of each19asset.20

Individual asset betterments performed as a program – annual program expenditures for one21asset class must exceed $1 million and the cost per asset must exceed 10% of the original cost22of each asset.23

For “Mass (M)” assets, the betterment criteria for life extension will be applied to all units within a24mass asset number. Annual expenditures for one asset class must exceed $1 million and the25

cost per asset must exceed 10% of the original cost of each asset. .26The determination of whether an expenditure made on an existing capital asset is a betterment or an27expense is a matter often requiring the application of judgment to particular circumstances. For example,28an expenditure may increase the service capacity of an asset, but not in a significant manner. In such a29case, the expenditure would be considered a maintenance cost and would not be capitalized. See MAPP303.1.2E.1 – Betterments – Guidelines and Examples.31

32




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2011-Apr-01

EXAMPLES AND GUIDELINES68


[1] MAPP 3.1.2E.1 – Betterments – Guidelines and Examples

[2] MAPP 3.1.2E.2 – Major Overhauls & Inspections - Guideline (IFRS)


The next scheduled review of this document can be found in the document information box in the MAPP.70Earlier review will be conducted if warranted due to changes in GAAP71

LAST REVISION72


Maria Tannenbaum/Grace Mok/ Joy Dol

June 2015

Updated hyperlinks, MAPP titles and other minor spelling corrections. Updated titles in the “Contact” and“Roles and Responsibility” sections.

Darin Hale

November 2013

Added betterment expenditure threshold for individual asset betterments performed as part of a program.

Darin Hale

September 2013

Added clarification that partial replacements of mass assets exclude day-to-day servicing and minor orinsignificant parts.

Darin Hale

June 2012

Clarified the vintage classification of replacements of part of mass assets and the treatment removalcosts associated with the replacement of part of an asset.

Jeremy Jarvis

July 31, 2009

Updating link.

Jeremy Jarvis Redrafting of sections of CAAM 10.01 and 3.03 relating to capitalization of existing assets.

Wes Gale

Jan 2010

Added IFRS partial replacement guidance.

73

74













2011-Apr-01

Appendix A: Criteria for Capitalizing Expenditures incurred on an75

existing Capital Asset as a Betterment 76

77

To determine if the expenditure enhances the service potential of an existing capital asset:78

79

Does the expenditure meet the generalcapitalisation criteria in MAPP 3.1.1A ?

Expenditure Improves the Service Value ofan Existing Capital Asset?

Expenditure Reduces Operating Costs of anExisting Capital Asset by an Amount

Significantly Greater than the Expenditure?

Expenditure extends original estimatedservice life of the asset by the greater of (i) 2

years or (ii) 10% of the original service lifeand exceeds the greater of: (i)$100,000 or(ii) 10% of the original cost of the asset?

Expense

Expense

Capitalize as aBetterment



No

Yes

Yes

Yes

No

No

No

Yes







2011-Apr-01

CAPITAL ASSETS IN SERVICE POLICY

Ref. #: MAPP 3.2.1A Revision Date: 2011-Apr-01

Intended Readers: Finance Directors, Financial Analysts, Project Managers, Business ServiceManagers


PURPOSE 1

This document establishes policies for recognition, measurement, presentation and disclosure of2property, plant and equipment (tangible capital assets) that are actively used in BC Hydro’s operations.3

POLICY 4

1. Project costs are transferred to Capital Assets in Service when a completed project (or particular5

phase or stage of a project) has resulted in an asset that is available for use. 6

2. Capital assets in service are recorded at cost in accordance with MAPP 3.1.1A – Criteria for7Capitalization Policy.8

3. Capital Assets in Service are amortized over their service lives in a rational and systematic basis9in accordance with MAPP 3.2.4A – Amortization and Depreciation Policy. 10

4. When the carrying value of a capital asset in service is impaired, the asset will be written down in11accordance with MAPP 3.2.2A – Impairment Policy. 12

FINANCIAL STATEMENT PRESENTATION 13

Capital Assets in Service are classified on the Balance Sheet net of accumulated amortization.14

SCOPE 15

Applies to all Capital Assets in Service.16

EXCEPTIONS 17

This policy does not apply to goodwill or other intangible assets.18


Finance Directors are responsible for the correct presentation of Capital Assets in Service.20

IMPLEMENTATION PROCEDURES 21


[1] MAPP 3.2.1B.1 – Trailing Costs



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2011-Apr-01



[1] MAPP 3.1.1A – Criteria for Capitalization Policy

[2] MAPP 3.1.6A – Unfinished Construction Policy

[3] MAPP 3.2.2A – Impairment Policy

[4] MAPP 3.2.4A – Amortization and Depreciation Policy

RELEVANT ACCOUNTING PRONOUNCEMENTS 23



24

NEXT SCHEDULED REVIEW 25

The next scheduled review of this document can be found in the document information box in the MAPP.26Earlier review will be conducted if warranted due to changes in IFRS.27

LAST REVISION 28



Aug 2015

Corrected hyperlinks and added and corrected policy references. Updated the title “Finance Leads” to“Finance Directors”.

Darin Hale

Mar 2012

Revised effective date to align with IFRS adoption date and changed group controllers to finance leads

Wes Gale

Sept 2009

Revised to comply with IAS 16

Jeremy Jarvis Transfer of policy from APM 5.03 Capital Assets in Service

Key changes:

Transfer of Impairment details to a separate policy dealing specifically with impairment

Addition of reference to link with unfinished Construction

Addition of Financial Statement Presentation policy

29























2011-Apr-01

AMORTIZATION AND DEPRECIATION POLICY

Ref. #: MAPP 3.2.4A Effective Date: 2011-Apr-01

Intended Readers: Finance Directors, Financial Analysts, Corporate Finance

Contact: Corporate Finance - Financial Reporting & Policy

PURPOSE 1

To identify the methods, timing and financial statement presentation of depreciation (in the case of2intangible assets, the term “amortization” is used instead of “depreciation”), on BC Hydro (tangible and3intangible ) assets.4

POLICY 5

1. Depreciation is applied to all in-service depreciable assets owned by BC Hydro.62. Depreciation is applied on an individual or pooled basis over the useful life of the assets, using the7

straight-line method.8

3. Depreciation is calculated on cost less estimated salvage value. 9

4. When assets are sold or transferred to “Held for Sale”, depreciation expense is recorded up to the10end of the month of sale of transfer. Depreciation does not cease when an asset becomes idle or is11retired from active use unless the asset is fully depreciated12

5. Capitalized (finance) leases will be depreciated over the period of expected use of the asset. If there13is reasonable certainty that ownership will be obtained by the end of the lease term, the period of14expected use is the useful life of the asset; otherwise the leased asset is depreciated over the shorter15of the useful life of the asset and the lease term.16

6. A leasehold improvement will be depreciated over the term of the lease, unless the improvement can17 be transferred and used at another location. Transferable leasehold improvements will be depreciated18over their estimated service lives.19

7. The useful lives and/or salvage values of assets are revised when new information or events arise20that warrant a change to the useful lives or salvage values. MAPP 3.2.4B.1 Amortization &21Depreciation procedure identifies events that may indicate that changes in useful lives or salvage22values are necessary.23


1. The annual depreciation of Property Plant and Equipment (PP&E) and amortization of Intangible25 Assets is included within “Operating Expenses” on the Statement of Operations and within26 Amortization and Depreciation in the notes to the Financial Statements.27

2. PP&E and Intangible Assets shall be disclosed separately on the Balance Sheet, net of accumulated28depreciation or amortization.29

3. The following components of depreciation and amortization expense shall be disclosed separately in30the Notes to the Financial Statements:31

Depreciation of PP&E32

Amortization of intangible assets.33

4. The estimated useful lives of assets shall be disclosed in the Notes to Financial Statements.34






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2011-Apr-01

SCOPE35

Applies to all Depreciable Assets, including asset retirement obligations (see MAPP 3.4.1A - Asset36Retirement Obligations Policy).37

EXCEPTIONS 38

This policy does not apply to Regulatory assets.39


Finance Directors are responsible for ensuring that assets are depreciated in accordance with this policy.41



[1] MAPP 3.2.4B.1 – Amortization & Depreciation Procedure

[2] MAPP 3.2.4B.2 – Depreciation Studies



[1] MAPP 3.1.8A – Intangible Assets Policy



[1] MAPP 3.2.4E.1 – Depreciation Calculation Methodology

































2011-Apr-01



LAST REVISION 49

Author Date Description of Changes

Darin Hale

December 2015

Changed policy item 7 f rom annual review of depreciation methods, useful lives and salvage values torevising useful lives and salvage values when new information or events indicate that changes arenecessary.


Sept 2015

Changed the title “Finance Leads” to “Finance Directors”. Updated the Contact section, correctedhyperlink and MAPP titles.

Darin Hale

Mar 2012

Revised to conform with IFRS. Key changes:

1. Depreciation does not cease when an asset is idle or removed from service unless it is fullydepreciated or held for sale.

2. Adjust terminology for consistent wording of depreciation (Tangible assets) and amortization(Intangible assets).

3. Amortization of contributions-in-aid no longer included in amortization expense. Amortizationof CIA is included in revenue.

Wes Gale

Apr 2009

To conform with 3064 (effective Apr 1/09) – included intangible references and annual review ofamortization

Jeremy Jarvis Material transferred from APM 10.02 Rates and Methods of Depreciation re-organized, andreformatted for the MAPP. MAPP reformatting includes the addition of: Intended Users, Purpose,Scope and Role Responsibilities in a common policy format.

Key changes:

1. Removal of references to declining-balance method of calculating amortization.

2. Adjustment to amortization of capital lease, from “Capital leases will be amortized over the leaseterm unless ownership passes to BC Hydro or the lease contains a bargain purchase option, inwhich case the lease will be depreciated over its estimated service life” to “Capital leases will beamortized over the estimated service life of the associated asset”.

3. Transfer of procedures relating to amortization calculations to Procedures

4. Addition of Financial Statement presentation requirements

5. Addition of reference to treatment of depreciable intangible assets

50








MAPP 3.2.4B.2 Printed Copies are Uncontrolled Page 2 of 22006-Dec-31

Useful life changes and/or amortization policy changes recommended in a depreciation study are31submitted to the BCUC, generally included in a Revenue Requirement Application, for approval.32

SCOPE 33

All depreciation studies on BC Hydro assets, whether performed internally or using external consultants.34


Financial Report ing & Policy is responsible for:36

(a) The co-ordination of depreciation studies for general assets and, ultimately, for the selection of37appropriate amortization policies.38

(b) Establishing policies for the frequency of business units conducting depreciation studies.39

Busin ess Group f inance representat ives are responsible for:40

(a) Conducting depreciation studies of Electric System assets and providing technical support for the41preparation of depreciation studies on general assets.42

(b) Notifying Financial Reporting & Policy when changes in circumstances may warrant a review of43existing useful lives.44

IMPACT /RISK 45

Because of the size of the capital asset base, failure to regularly update and monitor useful lives could46have a significant impact on amortization expense, resulting in over/under statement of Operating Income.47


The next scheduled review of this document can be found in the document information box in the MAPP.49

LAST REVISION 50

Author /

Date

Description of Changes

Darin HaleDec 2015

Updated organization and role names.

Darin HaleJune 2012 Changed terminology from depreciation rates to useful lives to align with the BC Hydro’s method of depreciatingassets.

Jeremy Jarvis Initial Draft

51






Page 1of 1


Exhibit:B-3



1.11.2 Please discuss if BC Hydro has considered guidance from CPACanada Handbook, IAS 16.67-72 (Derecognition) to be applicablein relation to this project for financial reporting purposes? If not,why not?

RESPONSE:

BC Hydro has considered guidance from CPA Canada Handbook, IAS 16.67-72Derecognition. The carrying amount of the existing riprap that no longer performsits intended function is approximately $58,000 or approximately 0.07 per cent ofthe original Dam fill. No derecognition adjustment will be made due to materialityand recognizing that the depositional zone (which will remain in-service) has beencreated as a result of some portion of this original riprap.

The assessment of derecognition excludes the existing sandstone riprap that willbe reused by the Project to create a toe berm as discussed in Exhibit B-1,section 3.2.3.




Page 1of 1


Exhibit:B-3



1.11.2.1 If so, please explain the impact this guidance has on theaccounting treatment of this project for both financial reporting andregulatory purposes, if different.

RESPONSE:





Page 1of 1


Exhibit:B-3



1.11.3 Please discuss if BC Hydro has considered guidance from CPACanada Handbook, IAS 36 – Impairment to be applicable inrelation to this project for financial reporting purposes? If not, whynot?

RESPONSE:

BC Hydro does not consider guidance from CPA Canada Handbook,IAS 36 - Impairment to be applicable to this Project for financial reportingpurposes. BC Hydro considers the BC Hydro legal entity to be the lowest cashgenerating unit, unless an individual or group of assets is to be sold, for purposesof assessing impairments in accordance with IAS 36. BC Hydro does not assessfor impairments at individual assets or facilities level. Attachment 1 is theapplicable BC Hydro MAPP 3.2.2A Impairment Policy.




Page 1of 1


Exhibit:B-3



1.11.3.1 If so, please explain the impact this guidance has on theaccounting treatment of this project for both financial reporting andregulatory purposes, if different.

RESPONSE:






2011-Apr-01

IMPAIRMENT POLICY

Ref. #: MAPP 3.2.2A Effective Date: 2011-Apr-01

Intended Readers: Finance Directors, Financial Analysts, Business Service Managers

Contact: Corporate Finance - Financial Reporting & Policy

PURPOSE 1

Long-lived assets are recorded at cost less any accumulated amortization (the net carrying amount)2except those cases where the carrying amount exceeds the recoverable amount. When the carrying3amount of an asset or group of assets exceeds the recoverable amount, the asset(s) are considered to be4impaired. This policy describes the accounting treatment for impairments.5

POLICY 6

Assets are assessed for impairment only to the extent they represent a cash generating unit (CGU). BC7Hydro considers the BC Hydro legal entity to be the lowest level of CGU unless an individual or group of8assets is to be sold. Therefore, impairment assessments are performed by corporate except in cases9where asset(s) are to be sold.10

Impairment Ass essment of Capita l Assets In-Service (excluding assets to be sold )11

1. Assets will be assessed at each reporting date for any indication of impairment. If an indication12exists, an estimate of the recoverable amount must be used to test the CGU. If the recoverable13amount of the CGU is lower than the carrying value, the difference shall be recorded as a loss in14the current period and spread over the entire asset base of the CGU. Intangible assets with15indefinite useful lives must be tested for impairment annually.16

2. A write-down is only reversed if the recoverable amount of the CGU subsequently increases. The17

reversal shall not exceed the original cost.18

3. If an impairment loss is recognized, the adjusted carrying amount becomes the new cost basis.19

Assets Held for Sale20

1. When Individual capital assets are designated as being “assets held for sale”, they are written21down to their Fair Value less costs to sell. The write-down is recorded at the time management22makes the decision to sell the asset(s).23

Treatment of A sset Specif ic Events Impact ing Asset Value24

The scope of impairments is narrowly defined for IFRS. Beyond the scope of impairments, asset specific25events or factors may require adjustment to the accounting for an asset. Examples of these events or26factors include asset damage, physical deterioration, replacement before end of life and abandonment.27The accounting treatment for these circumstances are addressed in the following policies and related28procedures.29

Damaged asset30

See MAPP 3.3.1A - Disposal of Capital Asset Policy if the asset will be removed from31service.32

See MAPP 3.1.2A - Betterments & Partial Replacements Policy if expenditures for33corrective actions will be incurred.34



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2011-Apr-01

See MAPP 3.2.4A - Amortization & Depreciation Policy if the asset will remain in service35but the expected remaining useful life has changed.36

Physical deterioration37

See MAPP 3.2.4A - Amortization & Depreciation Policy if the expected life has changed.38

Replacement before end of life39

See MAPP 3.3.1A Disposal of Capital Assets Policy item 2.40

Abandonment41

See MAPP 3.3.1A - Disposal of Capital Assets Policy for assets in service.42

See MAPP 3.1.6A - Unfinished Construction Policy for assets under construction.43

44


1. Losses on the write-down of assets are included in Other Operating expenses in the Statement of46

Operations and Other Costs in the financial statement notes. If the amount is material, it is47 disclosed separately in the Notes to the Financial Statements48

2. The recoverable amount of an impaired asset is included as a component of "Capital Assets in49Service" on the Balance Sheet.50

SCOPE 51

This policy applies to non-monetary long-lived assets, including property, plant and equipment, and52intangible assets.53


Finance Directors are responsible for identifying write-downs of assets held for sale and applying the55appropriate treatment for asset specific events impacting asset values.56

Manager, Financial Reporting & Policy is responsible for identifying and quantifying impairments in Cash57Generating Units.58



[1] MAPP 3.2.2B.1 – Recording Asset Impairment Adjustments



[1] MAPP 3.3.1A – Disposal of Capital Assets Policy







































2011-Apr-01



[2] MAPP 3.2.2E.1 – Accounting Entries to Write Down a Capital Asset



[1] IAS 36 Impairment of Assets





LAST REVISION 66

Author /Date Description of Changes

Darin Hale

December 2015

Added example for assets replaced before end of useful life to events impacting asset values section.


Sept 2015

Corrected the MAPP titles and deleted reference to MAPP 3.2.2F.1 – Asset Adjustment Form. Changedthe title “Finance Leads” to “Finance Directors” and changed the reference to “Chief Accounting Officer” to“Manager, Financial Reporting & Policy”.

Darin Hale Mar 2012 Updated effective date to align with IFRS transition date, revised the financial statement presentation andreplaced group controllers with finance leads.

Wes Gale

Nov 09

Updated to reflect IAS 36 (impairments will only be assessed at a CGU level; individual asset changes willnot be impairments, they will be change in estimates, retirements, or held for sale). Added ref to newFSRP form

Jeremy Jarvis Replaces APM 5.10 – Abandoned Capital Assets; APM 5.19 Abandoned or Indefinitely Deferred Projectsand amalgamates sections included within APM 5.03 Capital Assets in Service, APM 5.08 Assets Held forFuture Use, and APM 5.09 Capital Assets Held for Sale.

Key Changes:

Removal of reference to deferral of indefinitely deferred projects, which are covered under a newsection of regulatory accounting.

67










Page 1of 1


Exhibit:B-3


Reference: RATE IMPACT ANALYSISExhibit B-1, Section 1, p. 1-5; Section 3, p. 3-7Useful life estimate

In Exhibit B-1, section 3, page 3-7, BC Hydro states, “the new riprap is expectedto meet performance expectations for 75 to 100 years (or longer) when combinedwith a civil maintenance program, where, if damage is observed, additional riprapwill be placed to repair these localized areas.”

1.12.1 For useful life estimates and amortization for financial reportingpurposes, are the riprap and the Dam considered separately?Please discuss.

RESPONSE:

No, for useful life estimates and amortization accounting purposes, the Dam andriprap will be considered as one asset.




Page 1of 1


Exhibit:B-3




1.12.1.1 If so, please explain the useful life estimate for the riprap, and whythis useful life estimate is considered appropriate.

RESPONSE:





Page 1of 1


Exhibit:B-3




1.12.1.2 If so, please provide evidence (i.e. depreciation study, historicaltrends, etc.) to support the useful life estimate of the riprap, orexplain otherwise.

RESPONSE:





Page 1of 1


Exhibit:B-3



On page 1-5 of Exhibit B-1, BC Hydro states, “the project will extend the life ofthe Dam, a key, cost-effective Heritage Asset.”

1.12.2 What is the remaining useful life of the Dam, both with and withoutthe Project?

RESPONSE:

For civil structures such as dams, it is impossible to quantify the useful life. Theuseful life would depend on the type of structure, the ongoing performance, thenumber and extent of maintenance and upgrades carried out over the course ofthe life to address the deficiencies. For the WAC Bennett Dam, BC Hydro expectsthat the dam can continue indefinitely, with the appropriate investment ofupgrades and continued maintenance over the generations.

With the Project, the useful life will be extended. Without the Project, the usefullife would be dependent on the actual events that the dam experiences and thelevel of damage resulting from the loading. Without the Project, there will be an

ongoing risk of the dam sustaining severe damage such that an emergency repairis not sufficient in maintaining the safety of the dam, and that this event couldoccur in any year.




Page 1of 1


Exhibit:B-3




1.12.2.1 By what percentage will the useful life of the Dam be extended bythis Project?

RESPONSE:





Page 1of 1


Exhibit:B-3




1.12.3 Please explain how this project will extend the useful life of theDam, and provide evidence, if any, to support the assertion.

RESPONSE:

As discussed in Exhibit B-1, section 2.2.1, the function of the riprap is to protectthe Dam shell (i.e., Zone 5 fill as illustrated in Exhibit B-1, Figure 2-4) from erodingdue to wave action of the reservoir. The Dam shell supports the dam core, whichretains the reservoir. By upgrading the riprap, the integrity of the Dam ispreserved, and the Dam can continue to operate safely, extending its life. Pleaserefer to BC Hydro’s response to BCUC IR 1.12.2 for a discussion of the useful lifeof the Dam with and without the Project.

The riprap has been designed to meet modern-day performance criteria, assummarized in Exhibit B-1, section 3.2.1.6 and in BC Hydro’s response to

BCOPA IR 1.8.1. As discussed in Appendix D-1 (Preliminary Design Report), thereare numerous engineering design and construction elements that will result inimproved riprap performance; for example: narrow graded riprap with a minimumweight of 650 kg, a minimum diameter of 730 mm and a riprap layer thickness of1.8 m, will meet the performance criteria.




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1.12.4 Will the riprap be amortized over the remaining useful life of theDam? If not, why not?

RESPONSE:

No. As stated in BC Hydro’s response to BCUC IR 1.12.2, the remaining useful lifeof the Dam cannot be quantified. The riprap will be amortized over the remainingaccounting life of the Dam (i.e., approximately 50 years).




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1.12.4.1 If not, what is the period over which the riprap will be amortized,and why is this amortization period considered appropriate?Please explain the applicable amortization method that BC Hydroproposes to use.

RESPONSE:

Refer to BC Hydro’s response to BCUC IR 1.12.4.

The amortization method that will be used is the straight line method; BC Hydrouses this method for all dam structures, as outlined in Attachment 1 –MAPP 3.2.4B.1.






MAPP 3.2.4B.1 Printed Copies are Uncontrolled Page 2 of 32010-Apr-01

Useful life27

Factors to be considered in estimating the useful life of a capital asset include expected future usage,28

effects of technological or commercial obsolescence, expected wear and tear from use or the passage of29 time, the maintenance program, results of studies made regarding the industry, studies of similar items30retired, and the condition of existing comparable items.31

Review of Amortization32

Significant events that may indicate a need to revise the useful life or salvage value of a capital asset33include:34

(a) a change in the extent the capital asset is used;35

(b) a change in the manner in which the capital asset is used;36

(c) removal of the capital asset from service for an extended period of time;37

(d) physical damage;38

(e) significant technological developments;39

(f) a change in the law, environment or consumer styles and tastes affecting the period of time40over which the capital asset can be used.41

(g) A decision is made to remove or replace an asset prior to completion of its original useful life42

When a significant event that impacts the useful life or the salvage value of an asset occurs, changes43to the life and/or salvage value should be considered and discussed with Corporate Finance. When44the useful life of an asset is changed, the life of the corresponding CIA, if applicable, should be45adjusted by the same amount.46

Contributions in Aid of Construction (CIA)47

CIA is amortized on the same basis as the related capital asset in most cases. CIA is amortized over the48term of the contract where the contract with the customer specifies a finite term. CIA amortization expense49is a credit and is recorded in a revenue account.50

Tracking of Accumulated Depreciation51

The accumulated depreciation balance is to be maintained at the asset level. The asset level will either52represent an individual asset ("I" class assets) or a pool of assets ("M" class assets). Accumulated53depreciation is maintained at this level because each type of asset within a facility is depreciated over a54different useful life.55

SCOPE 56

Applies to all Depreciable Capital Assets. 57


Financia l Report ing & Policy is responsible for:59

(a) The selection of an appropriate depreciation policy.60(b) The establishment of appropriate useful lives based on recommendations by business units.61

Financial Reporting & Policy approves requests for revisions to the useful life of an Asset Class62prior to the implementation of the change.63

Busin ess Groups and their f inance representat ives are responsible for:64

(a) The determination of appropriate useful lives and notification to Financial Reporting & Policy when65changes in useful lives are required.66

BCUC IR 1.12.4.1 Attachment 1


http://hw/our_bus/fin_corp/corp_finance/policy_control/Pages/mapp_glossary.aspx#useful_life

http://hw/our_bus/fin_corp/corp_finance/policy_control/pages/mapp_glossary.aspx#contributions_in_aid



http://hw/our_bus/fin_corp/corp_finance/policy_control/Pages/mapp_glossary.aspx#contributions_in_aid


http://hw/our_bus/fin_corp/corp_finance/policy_control/Pages/mapp_glossary.aspx#individual_(i)_capital_asset



http://hw/our_bus/fin_corp/corp_finance/policy_control/Pages/mapp_glossary.aspx#mass_(m)_assets



http://hw/our_bus/fin_corp/corp_finance/policy_control/Pages/mapp_glossary.aspx#capital_assets


















MAPP 3.2.4B.1 Printed Copies are Uncontrolled Page 3 of 32010-Apr-01

(b) Reporting and providing technical support for any recommended changes to be made to the67useful life of an Individual Asset to Financial Reporting & Policy.68

IMPACT /RISK 69

Because of the size of the capital asset base, use of inappropriate useful lives could have a significant70impact on depreciation expense, resulting in over/under statement of Operating Income.71



[1] MAPP 3.2.4E.1 - Depreciation Calculation Methodology



LAST REVISION 76

Author /

Date

Description of Changes

Darin HaleDec 2015

Updated organization and role titles.

Darin Hale

June 2012

Revisions to reflect SAP implementation.

Jeremy Jarvis/ July 2010

Change Profile ID to Asset Class; AND Group Controller to Finance Lead . NOTE that changes due to SAP

implementation are not yet reflected in this document.

77

BCUC IR 1.12.4.1 Attachment 1









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Reference: ESTIMATE OF RATE IMPACTExhibit B-1, Section 3.7, pp. 3-25 to 3-26; Appendix B-3-1Rate impact

1.13.1 In reference to Appendix B-3-1 in Exhibit B-1, please clarify whatis meant by the term “incremental cumulative impact on futurerates.”

RESPONSE:

The “incremental cumulative impact on future rates” means the percentageimpact of the Project on future rates. For example, if the incremental cumulativeimpact of a project on future rates is 1 per cent, then future rates in a given yearwill be 1 per cent higher than they would otherwise be without the project, all elsebeing equal.




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1.13.2 What is the incremental impact, if any, on an average residentialcustomer’s monthly bill when this project goes into service?Please provide both the percent change and the dollar amount.

RESPONSE:

Based on the P50 cost estimate, the maximum revenue requirement impact of0.20 per cent in F2021 (Appendix B-3), and an average residential customersmonthly bill of approximately $100, the maximum incremental impact on anaverage residential customer’s monthly bill in F2021 is $0.20, declining to $0.08 inF2040. These amounts are based on the revised Appendix B-3 included inBC Hydro’s response to BCUC IR 1.13.4.




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1.13.3 In addition to the amounts shown in Appendix B-3-1 of Exhibit B-1,are there other incremental operating and maintenance costsand/or impacts that are to be incurred to maintain the riprap overits estimated useful life? If not, please explain.

RESPONSE:

There are no planned incremental operating and maintenance costs that will berequired to maintain the riprap over the estimated accounting life of the Dam.Appendix B-3-1 does not include unplanned maintenance costs as the need,timing and frequency cannot be determined.




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1.13.3.1 If so, please provide the following information for any incrementalcosts:

i. Descriptionii. Amount

RESPONSE:





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1.13.4 If there are any material changes to the cost estimate oraccounting treatment since the original application was filed,please submit revisions of the financial models provided in

Appendix B-3 of Exhibit B-1.

RESPONSE:

The financial models have been revised to reflect riprap amortization over theremaining accounting life of the Dam. The models included in Exhibit B-1,Appendix B-3 were based on amortization period of 100 years. Please refer toBC Hydro’s response to BCUC IRs 1.12.1 and 1.12.4. The revised financial model(Rate Impact Analysis in Appendix B-3) is provided as Attachments 1 to 4 to thisresponse.

There have been no changes to the cost estimate since the original Applicationwas filed.




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Reference: ESTIMATE OF RATE IMPACTExhibit B-1, Section 3, Table 3-3, p. 3-21Capitalized overhead

1.14.1 In reference to the capitalized overhead amounts shown inTable 3-3 on page 3-21 of Exhibit B-1, are all capital overheadcosts directly attributable to the project? If so, please explain how.

RESPONSE:

Yes. Where costs can be demonstrated to be directly attributable to capitalprojects, but direct charging is not feasible, the costs are recorded in operatingexpenses and allocated to projects using a cost allocation loading rate.




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1.14.1.1 If not, please explain which costs are not directly attributable tothe project.

RESPONSE:




British Columbia Utilities CommissionInformation Request No. 1.14.1.1.1 Dated: December 11,2015British Columbia Hydro & Power AuthorityResponse issued January 14, 2016

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Why are these costs being capitalized and included in the project1.14.1.1.1cost estimate? Please explain.

RESPONSE:





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15.0 D. FIRST NATION CONSULTATION AND ACCOMMODATION

Reference: FIRST NATIONS CONSULTATIONExhibit B-1, p. 4-2; Appendix F, pp. 60, 65, 73Other permits and approvals


BC Hydro notes that it is not the sole Crown actor involved in this Project.[Ministry of Forests, Lands and Natural resource Operations] FLNRO consulteddirectly with First Nations prior to issuing permits for the Project… FLNROconsidered all of the information before it, including BC Hydro’s consultationprocess, and determined that consultation was adequate before issuing thepermits.

1.15.1 Did FLNRO delegate consultation duties to BC Hydro?

RESPONSE:

FLNRO did not delegate First Nations consultation duties to BC Hydro during thepermit and approval process. FLNRO conducted its own First Nationsconsultation in parallel with BC Hydro’s First Nations consultation for the Project.




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BC Hydro notes that it is not the sole Crown actor involved in this Project.[Ministry of Forests, Lands and Natural resource Operations] FLNRO consulteddirectly with First Nations prior to issuing permits for the Project… FLNROconsidered all of the information before it, including BC Hydro’s consultationprocess, and determined that consultation was adequate before issuing thepermits.

1.15.2 Please confirm that FLNRO assessed the adequacy of its ownconsultation process and did not assess the adequacy ofBC Hydro’s consultation when determining that consultation wasadequate before issuing its permits.

RESPONSE:

BC Hydro submitted applications for the Project permits and authorizations toFront Counter B.C. At FLNRO’s request, BC Hydro included with its applications

its records of consultation with First Nations. With all documents before it, FLNROdetermined that Crown consultation was adequate before the permits andauthorizations were issued to BC Hydro (Exhibit B-1, Appendix H). The permitsand authorizations have not been challenged.




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On pages 60 and 65 of Appendix F in Exhibit B-1, BC Hydro shows a proposedproject schedule in two letters to First Nations that includes “Submit BCUCapplication & Crown Land Tenure application.” In a subsequent letter from

August 14, 2015, page 73 of Appendix F in Exhibit B-1, the Crown Land Tenureapplication is removed from the project schedule.

1.15.3 Please explain why the Crown Land Tenure application wasremoved from the project schedule? Is it no longer required? If so,why is it no longer required?

RESPONSE:

The Crown Land Tenure applications were submitted December 17, 2014 and theapprovals were received by BC Hydro on July 23, 2015. As such, the Crown LandTenure Application was not outstanding on August 14, 2015. All the Crown LandTenures required for the Project to proceed have been obtained from theProvince. This is captured in the first row of the Project schedule table in theAugust 14, 2015 letter – “Obtain Provincial Authorizations for the Sand Flat Quarry

and Spur Road (Completed)”.




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1.15.3.1 If it is still required, please explain the approval process for thisapplication. Who is the approver? When is approval expected?Does the approval process consider First Nations’ consultationand the adequacy of it?

RESPONSE:

Please refer to BC Hydro’s response to BCUC IR 1.15.3. All the Crown LandTenures required for the Project to proceed have been obtained from the Province(FLNRO). With respect to whether the process considered First Nation’sconsultation, please refer to BC Hydro’s response to BCUC IR 1.15.2.




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1.15.4 Will any other Crown agencies assess the adequacy ofBC Hydro’s First Nations’ consultation for this project after orconcurrent with the Commission’s assessment?

RESPONSE:

BC Hydro anticipates two Project implementation related assessments of theadequacy of Crown consultation in respect of the Project.

As discussed in section 4.2.2 of the Application, BC Hydro will assess theadequacy of consultation with First Nations as part of its overall decision onwhether to implement the Project. Under the planned Project schedule, BC Hydro

expects to make a decision on Project implementation in May 2016. That decisionwill be informed by any additional information obtained up to that point in time onpotential impacts of the Project on First Nations’ interests.

In addition, it is likely that the adequacy of consultation will be assessed by theWater Comptroller as part of its review of BC Hydro’s application for anauthorization or order to alter, improve or replace any part of the Dam undersection 4 of the British Columbia Dam Safety Regulation (refer to section 3.8.2 ofthe Application). The Province has confirmed that the current Dam SafetyRegulation will be replaced in its entirety with the coming into force of the WaterSustainability Act , expected in early 2016. BC Hydro intends to file the section 4application prior to construction, but accordingly cannot confirm the process that

may be in force at the time of that application.

However, BC Hydro notes that such additional assessments of the adequacy ofCrown consultation will be in respect of the particular aspect of the Project beingapproved or considered. While the role of administrative bodies in assessing theadequacy of the duty to consult provides further context to the Project, it has nobearing on another administrative body’s role with respect to First Nations.




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As an administrative tribunal, the Commission is “confined to the power conferred

on [it] by the legislature, and must confine [its] analysis and order to the ambit ofthe questions before [it] on a particular application…” (Rio Tinto Alcan Inc. v.Carrier Sekani Tribal Council , 2010 SCC 43 (“Rio Tinto”), para. 62). The SupremeCourt of Canada has confirmed that any deficiencies in the regulatory process areto be resolved by the courts (Rio Tinto, para. 63).

The request before the Commission here is for a determination on acceptance ofan expenditure schedule under section 44.2(2)(b) of the Utilities Commission Act .As part of that decision, the Commission must determine whether “making theexpenditures referred to in the schedule would be in the public interest” (UtilitiesCommission Act , s. 44.2(3)(a)). In determining whether the Project as proposed isin the public interest, any Commission assessment of consultation is of the

consultation that BC Hydro undertook up to the point of its decision to submit theexpenditure determination request, together with the associated regulatory reviewof the request. The Commission is the sole administrative body assessingwhether or not the expenditures associated with the Project are in the publicinterest. The Commission’s assessment of the adequacy of consultation is up tothe point of its decision.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, Appendix E-2(d), p. 4Commitment to not start construction

In Exhibit B-1, Appendix E-2(d), page 4, Ecofor states, “Although every attemptwas made to locate and record all archaeological and cultural heritage featureslocated within the specified survey area, the possibility exists that remains mayhave been missed.”

1.16.1 Does BC Hydro agree that some sites which are archaeologicallyor culturally significant to First Nations may not be known byBC Hydro at this point?

RESPONSE:

BC Hydro completed an Archaeology Impact Assessment (AIA) in accordancewith the British Columbia Heritage Act and the methodology prescribed in theHeritage Inspection Permit. All Treaty 8 First Nations were given the opportunityto participate in the AIA and results were provided to all First Nations for review.No concerns were raised with respect to the AIA Report by any of the FirstNations.

Though BC Hydro was diligent in conducting its AIA, BC Hydro acknowledges thatthere is a possibility that archaeological and cultural heritage features may not beknown as the AIA sub-sampled moderate to high archaeological potential areas,which is standard based on the approved methodology. In accordance with theFLNRO Quarry Permit, BC Hydro or its contractor will develop a suitableArchaeological Chance Find Procedure, which would be implemented in the caseof an archaeological or culturally significant finding.






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Exhibit:B-3

with delay. As discussed in section 2.2.3 of the Application, the Project is neededto address a dam safety issue. Circumstances at the time of BC Hydro’s

determination to implement the Project may indicate that it is prudent to preservethe proposed Project schedule. BC Hydro would share such a determination withthe Commission should this occur.




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1.16.3 Does BC Hydro agree that if it starts construction and a currentlyunknown archeological or culturally significant site is disturbed ordamaged during construction prior to the Commission issuing itsdecision on the adequacy of First Nations’ consultation for thisproject, that potentially higher accommodation measures could berequired compared to a situation where the Commission hadissued its decision before unknown sites were disturbed ordamaged?

RESPONSE:

The scope of consultation required and any necessary accommodation are notaffected by the timing of the Commission’s determination. The scope of

consultation is a measure of the strength of the First Nations’ Aboriginal rights (inthis case the rights are established by Treaty 8) and the seriousness of thepotential impacts arising from the Project (Haida, paragraph 39). In this case, thepotential impacts of the Project are low (please refer to the Applicationsection 4.4.4.1). Please also refer to BC Hydro’s response to BCUC IRs 1.16.1 and1.16.2.




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1.16.3.1 Will BC Hydro commit to not start construction until theCommission’s decision on this application is issued?

RESPONSE:





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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, pp. 4-16, 4-28; Appendix F, p. 21Independent Technical Review


McLeod Lake Indian Band is leading an Independent Technical Revew (ITR) which isexpected to be completed in December 2015. The ITR is a multi-First Nation initiativeand at present McLeod Lake Indian Band and Saulteau, West Moberly and Doig RiverFirst Nations are expected to participate. BC Hydro has committed to funding thisreview.

On page 4-28 of Exhibit B-1, BC Hydro states:Saulteau First Nations will be participating in the ITR of the Project (in collaboration withMcLeod Lake Indian Band and West Moberly and Doig River First Nations) in order toidentify any further potential impacts.


Also on May 14, 2015, LGL Limited, the consultant for the Independent TechnicalReview, sent an email to BC Hydro, McLeod Lake, Saulteau and West Moberly with aproposal for the Independent Technical Review.

1.17.1 Please provide the detailed scope and terms of reference for the

Independent Technical Review. What specifically will it be reviewing orwhat questions will it answer?

RESPONSE:

The scope of the Independent Technical Review (ITR) is being provided on a confidentialbasis in the proposal from LGL Limited, dated July 24, 2015 as Attachment 1 to thisresponse. A public version of the scope of the ITR redacting the cost estimate will beprovided to Interveners.

Further discussions and correspondence resulted in the following confirmations and

clarifications to the study scope:

• Upgrades to the existing forest road are included in the Project scope;

• BC Hydro has received the required provincial permits. A provincialEnvironmental Assessment and Federal permits were not required;

• BC Hydro will be seeking acceptance from Commission of the Projectexpenditure;




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Exhibit:B-3

• Baseline information is based on current conditions;

• The Project has a short timeframe and a small footprint that will be reclaimed;

• BC Hydro did not conduct a formal socio conomic analysis; and

• BC Hydro completed an environmental assessment that evaluated theenvironmental effects of the Project (including identifying importantecosystem components study area) and identified potential mitigationmeasures to reduce effects.



LGL Limited9768 Second Street

Sidney, BC CANADA V8L 3Y8Tel: (250) 656-0127 Fax: (250) 655-4761 www.lgl.com

July 24, 2015

Lands Departments of

McLeod Lake Indian Band (MLIB);

Saulteau First Nations (SFN); and

West Moberly First Nations (WMFN)

Re: First Nations’ Independent Technical Review: BC Hydro GMS Riprap Project

LGL Limited is pleased to submit this proposal to provide technical support for the First Nations’Independent Technical Review (FNITR) on BC Hydro’s GMS Riprap project. LGL Limited (1971) is an

employee‐owned, incorporated, Canadian company and maintains an in‐house staff of over 100

professionals with expertise in a broad range of disciplines, including marine and wetland ecology,

vegetation ecology, fish, birds, mammals (terrestrial and marine), amphibians and reptiles, birds,

and freshwater; disturbance effects; environmental impact assessment and environmental planning;

and data analysis. Our senior scientists have a lengthy list of published articles and technical reports

that lend credence to their ability to (i) manage large projects according to strict budgets and

deadlines, (ii) analyze data using sophisticated statistical techniques, (iii) communicate complex

results using simple language to access a broad readership, and (iv) scrutinize protocols, both

internally and externally, to ensure adaptive management plans are based on measurable endpointsand attainable goals.

It is our understanding that BC Hydro is undertaking the GMS Riprap project to reinforce the

upstream face of the WAC Bennett Dam as the existing rock riprap has undergone significant

damage and wear caused by wind generated waves. Therefore, placement of new riprap is required

to mitigate the erosion risk of the earthfill dam. The current project is comprised of the following

components:

Sand Flat Quarry – 75 ha quarry located 40 km northwest of the WAC Bennett Dam.

Accessible by 43 km of Forest Service Roads (FSR).

Spur Road – a 2.5 km road, constructed between 5 m and 11 m in width, that connects the

quarry site to the Table FSR at approximately km-32.

This project does not trigger the requirements for an environmental assessment under the BC

Environmental Assessment Act or the Canadian Environmental Assessment Act. BC Hydro will

require a License of Occupation for the Sand Flat Quarry and Spur Road. The supporting

documentation for the permit applications include but are not limited to:

BCUC IR 1.17.1 PUBLIC Attachment 1

http://www.lgl.com/

http://www.lgl.com/







Offer of Services: FNITR GMS Rip Rap EA3638

Is the impact assessment methodology sound and applied properly to each VEC-

project pathway that justifies it?

Are the mitigation and environmental management plans consistent with present

provincial and federal legislation, as well as any applicable guidelines or BMPs as

pertains to the disciplines reviewed?

Is an appropriate suite of impact avoidance, mitigation, and compensation actions

presented? Are there any deficiencies in the actions for monitoring the

effectiveness of management plans?

Are there any project risks that have not been adequately described or interpreted,

but of which the First Nations should be aware?

An interim report will be prepared by LGL that includes a summary of the major issues and

concerns identified during the review as well as detailed comments outlined in the table.

Task 2b: At the conclusion of the review, LGL will meet with the First Nations to explain why eachissue was identified, its importance in the assessment and to provide potential solutions for

resolving any issues. The interim FNITR report will be finalized and submitted to the First

Nations and BC Hydro.

Stage 3 – Site Visit

LGL (and representatives from the First Nations, as desired) will conduct a site visit of the project

area. This is an important step that will assist us in understanding the components of the project and

the potential impacts on First Nation rights.

Stage 4 – Technician to Technician Discussions

During this stage, LGL (and representatives from the First Nations, as desired) will meet with BC

Hydro, and/or its consultants, to discuss the issues arising from the evaluation of technical

documents.

Task 4a: For this task we have assumed that one or more face to face meetings will occur with BC

Hydro. The tabular format identified above will allow for the results of the discussion on

specific issues to be tracked. The issue resolution component is expected to be a lengthy

process due to the high use of the area by First Nations members and the level of cumulative

effects potentially assessed.

Stage 5 – Main-Table Workshops

For this stage we will work with the First Nations and BC Hydro to identify potential solutions to

issues that arose in the previous stages.

Task 5a:During this task LGL will continue to work closely with the First Nations and BC Hydro to

avoid or mitigate impacts to the environment and Treaty rights. We have assumed that this

task will involve several discussions, via conference calls and face to face meeting(s). This





stage will include one or more technical workshops where members of the First Nations can

be involved in identifying potential solutions to the issues. At the conclusion of this stage,

LGL will compile a report that summarizes the main elements of the FNITR, the procedures

that were used, the communication between the various parties and the provisional

remedies for each of the identified issues.

Task 5b:At this stage in the project development it is anticipated that the proponent will begin

preparation of permit applications for activities such as timber clearing, road use, etc. We

will review and provide input into these permit applications.

Stage 6 – Community Verification

The final stage of the process includes the engagement of members and decision-makers of each

First Nation.

Task 6a: LGL will be available to meet with the Chiefs and Councils and traditional authorities toprovide a brief review of the proposed project and an overview of the FNITR process and the

provisional remedies that were agreed upon.

FNITR Schedule

We anticipate the FNITR of the permitting stage of GMS Riprap project to cover approximately nine

months. A high level proposed schedule is outlined in the table below.

Stage Task Proposed Schedule

Stage 1 – Process Initiation 1a. Liaise with FN Lands Departments July 2015

1b. Review background information July 2015

1c. Community meetings July-August 2015

Stage 2 – Evaluation of

Technical Documents

2a. Review permit application materials July-September 2015

2b. Discuss review results with FNs September 2015

Stage 3 – Site Visit July or August 2015

Stage 4 – Technician to

Technician Discussions

4a. Technical discussions with BC Hydro September – November 2015

Stage 5 – Main-Table

Workshops

5a. Technical workshops with FNs and

BC Hydro

November – December 2015

5b. Report preparation December 2015 – January 2016

Stage 6 – CommunityVerification 6a. Meet with Chiefs and Councils January / February 2016





At the conclusion of the FNITR process we anticipate that there will be additional follow up tasks

involving the review of construction environmental monitoring plans (EMPs), wildlife monitoring

plans and/or the review of associated reports.

Our work for the FNITR would be billed hourly in accordance with the following rates structure

which indicates the maximum daily rate for a given category: project manager and senior biologist,

$852; intermediate biologist $774; technician $540. Disbursements would be billed at cost. A

breakdown of the budget is provided below.

LGL has a long history of assisting First Nations in western Canada engage in those aspects of

industrial development pertaining to the conservation of fish, wildlife, and associated habitats. On

behalf of our clients, we have done numerous reviews of Notice of Work (NOW) applications and

Initial Assessment Status (IAS) reports for mineral and other exploration work. For those projects

that have proceeded past exploration and entered the federal and/or provincial environmental

assessment processes (i.e., CEAA, BC EAO), we have participated in working groups and conductedreviews of baseline data reports and formal submissions. In conducting this work, our professionals

work closely with our First Nation clients. In addition, our team has prepared and delivered formal

training materials designed to build the capacity of First Nations when it comes to engaging

regulatory processes and bringing the First Nation community’s interests to forums such as public

open-houses and government-to-government project working groups. Beyond the office/classroom-

based training aspects of our work, we also mentor trainees in the field to ensure oversight on

environmental restoration and monitoring work and to facilitate a transition from the theoretical

aspects of the work to the more applied ones.

In conducting our work, all information of a confidential nature will be handled with discretion. Wewill not distribute confidential project information or contact third parties to discuss this project

unless we have prior approval from the First Nations. I look forward to the opportunity to assist you

on this important project and am available to discuss the specific details of the work at your

convenience.

Kind regards,

Marc d'Entremont, PhD Candidate, RPBio.

Senior Wildlife Biologist

[email protected]

T: 250-656-0127

M: 250-580-4804

Encl.









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McLeod Lake Indian Band is leading an Independent Technical Revew (ITR)which is expected to be completed in December 2015. The ITR is a multi-FirstNation initiative and at present McLeod Lake Indian Band and Saulteau, WestMoberly and Doig River First Nations are expected to participate. BC Hydro hascommitted to funding this review.


Saulteau First Nations will be participating in the ITR of the Project (incollaboration with McLeod Lake Indian Band and West Moberly and Doig RiverFirst Nations) in order to identify any further potential impacts.


Also on May 14, 2015, LGL Limited, the consultant for the Independent TechnicalReview, sent an email to BC Hydro, McLeod Lake, Saulteau and West Moberlywith a proposal for the Independent Technical Review.

1.17.2 Please describe the expertise or qualifications of LGL Limited toconduct such a review? Will anyone else be contributing to it orotherwise participating in it?

RESPONSE:

LGL Limited was selected by McLeod Lake Indian Band, Saulteau First Nationsand West Moberly First Nations to conduct the Independent Technical Review(ITR) on their behalf. LGL is a qualified environmental consulting company. All theanticipated participants have been identified in Exhibit B-1 Chapter 4, page 4-16.

At the time the Application was filed, there were discussions that Doig River FirstNation may participate in the ITR. To date there is no confirmation from Doig RiverFirst Nation that it will participate.




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1.17.2.1 How will the ITR identify further potential impacts?

RESPONSE:

Please refer to the Scope and Methodology starting at page 2 of Attachment 1 toBC Hydro’s confidential response to BCUC IR 1.17.1 for a description of the workLGL is undertaking, and the deliverables for the ITR.




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1.17.2.2 How will BC Hydro incorporate the ITR findings into the projectplan?

RESPONSE:

Based on the ITR findings, BC Hydro will further refine the existing mitigationplans and/or develop new mitigation options as required, in consultation with theFirst Nations, to minimize or avoid potential impacts from the Project. Also, pleaserefer to BC Hydro’s response to BCUC IR 1.18.1.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, pp. 4-16, 4-27 and 4-28; Appendix F, p. 23Traditional use studies

On page 4-16 of Exhibit B-1, BC Hydro states, “No heritage or archaeologicalsites have been identified at either the Sand Flat Quarry or road sites.”

On page 4-27 of Exhibit B-1, BC Hydro states, “West Moberly and Saulteau FirstNations indicated a desire to undertake a TUS to more fully understand theimplication of the potential impacts for the Project.”

On page 4-28 of Exhibit B-1, BC Hydro states, “BC Hydro expects the results of

the TUS will further refine existing mitigation plans.”On page 23 of Appendix F in Exhibit B-1, BC Hydro states:

On September 28, 2015 McLeod Lake emailed BC Hydro and stated thatMcLeod Lake is aware of potential impacts related to the Project, but also notedthat the Independent Technical Review and TUS will inform any outstandingimpacts that may have been overlooked.

1.18.1 Please explain how BC Hydro will alter its assessed scope ofconsultation duty or its project plan if the TUS’ identify heritage orcultural sites at the Sand Flat Quarry or road sites.

RESPONSE:

BC Hydro believes that consultation to date has been adequate to identifypotential impacts arising from the Project. Some of the specific initiatives taken toidentify potential impacts on First Nations interests have included ArchaeologicalImpact Assessments, Ecofor’s Environmental Assessment, a medicinal plant andgame trail survey, site visits, and direct discussions with First Nations since 2012.BC Hydro continues to consult First Nations to further understand potentialimpacts including the ITR and TUS’. To date, BC Hydro’s efforts in identifyingpotential impacts have not identified any serious concerns that would cause it to

believe that it would not be honourable to proceed with the Project. BC Hydroremains open to receiving and consulting on any further information on potentialimpacts and BC Hydro will work with First Nations to use this information tofurther refine existing mitigation plans. However, should the continuedconsultation at any time, including the TUS’, identify potential significant impacts,BC Hydro would reassess its scope of consultation to determine whether furtherconsultation and a potential change in the Project plan is required.




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On page 4-28 of Exhibit B-1, BC Hydro states, “BC Hydro expects the results ofthe TUS will further refine existing mitigation plans.”



1.18.2 Does BC Hydro expect the pending TUS’ to provide moreinformation on impacts to First Nations’ treaty rights? If not, pleaseexplain why West Moberly and Saulteau both requested a TUS to

“fully understand the implication of the potential impacts.”

RESPONSE:

BC Hydro is confident that its consultation and identification of impacts areadequate for the purpose of this Application. Please refer to BC Hydro’s responseto BCUC IR 1.18.1. BC Hydro expects the results of the TUS’ to further informmitigation measures. BC Hydro cannot speak on behalf of West Moberly andSaulteau First Nations with respect to their reasons for the requested studies, butnotes that the parties agreement in respect of the FNITR and ongoing discussions

in respect of the TUS’ was informed by the current regulatory context includingthat the required FLNRO and MEM permits and authorizations for the Project havebeen issued.




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On page 4-28 of Exhibit B-1, BC Hydro states, “BC Hydro expects the results ofthe TUS will further refine existing mitigation plans.”



1.18.3 BC Hydro expects to use the TUS’ to refine mitigation plans. DoesBC Hydro consider its mitigation plans as part of its assessment ofthe level of impact of a project?

RESPONSE:

In the Haida case, the Supreme Court of Canada directs that the scope of the dutyto consult is proportionate to a preliminary assessment of the strength of theclaim and the seriousness (i.e. level) of the potentially adverse effect (HaidaNation v. British Columbia (Minister of Forests), 2004 SCC 73, para. 39).Accordingly, BC Hydro’s scope of consultation is based in part on a preliminaryassessment of the seriousness of the potential impacts arising from the Project.Information on potential adverse effects, including feedback from First Nations,

informs the scope of the duty to consult required in a particular situation.Mitigation measures also form part of any accommodation requirements.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, pp. 4-16, 4-30; Appendix F, p. 24Knowledge and understanding of Project impacts


BC Hydro will consult with First Nations on the findings of [the Independent TechnicalReview and the Traditional Use] studies. The results will be used to further refinemitigation measures prior to construction. Furthermore, the results and BC Hydro’sfurther consultation with First Nations on them will inform BC Hydro’s decision onwhether or not to implement the Project.

On page 24 of Appendix F in Exhibit B-1, BC Hydro states:On November 6, 2015, BC Hydro met with McLeod Lake, Saulteau and West Moberly todiscuss the Project. West Moberly raised a new concern related to the Road Option.They noted that the road upgrades will result in unmitigatable impacts to the land whichwill facilitate ongoing access and development to their territory. West Moberly noted thatthey may challenge Canfor’s Table Road license and that this may result in BC Hydronot being able to proceed with the Road option.

On page 4-30 of Exhibit B-1, BC Hydro states, “BC Hydro has requested a meeting withall three of the First Nations to address [West Moberly’s] concern [regarding the roadtransport option raised at the November 6, 2015 meeting].”

1.19.1 Is BC Hydro’s knowledge of the potential impacts of the project adequateat this point? If not, please explain how it can assess the duty to consultat this point and state that consultation is adequate.

RESPONSE:

BC Hydro is confident that it’s knowledge of, and consultation on, the potential impactsof the Project is adequate to support its decision to proceed with the Application.

BC Hydro has been consulting with First Nations since December 2011. In July 2015,FLNRO determined that Crown consultation had been adequate to the point of issuing

the relevant permits and authorizations. BC Hydro’s consultation with First Nationscontinued after the permits and authorizations were received. In November 2015,BC Hydro made the decision to proceed with the Application on the basis thatconsultation was adequate to that point in time and the Project was in the public interest.

BC Hydro’s consultation with First Nations is ongoing and will continue until the Projectis complete. Feedback from First Nations on potential impacts will continue to informmitigation measures throughout development and implementation of the Project. Pleaserefer to BC Hydro’s response to BCUC’s IR 1.15.4, 1.18.1, 1.18.2, and 1.18.3.




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BC Hydro will consult with First Nations on the findings of [the IndependentTechnical Review and the Traditional Use] studies. The results will be used tofurther refine mitigation measures prior to construction. Furthermore, the resultsand BC Hydro’s further consultation with First Nations on them will informBC Hydro’s decision on whether or not to implement the Project.


On November 6, 2015, BC Hydro met with McLeod Lake, Saulteau and WestMoberly to discuss the Project. West Moberly raised a new concern related to theRoad Option. They noted that the road upgrades will result in unmitigatableimpacts to the land which will facilitate ongoing access and development to theirterritory. West Moberly noted that they may challenge Canfor’s Table Roadlicense and that this may result in BC Hydro not being able to proceed with theRoad option.

On page 4-30 of Exhibit B-1, BC Hydro states, “BC Hydro has requested ameeting with all three of the First Nations to address [West Moberly’s] concern

[regarding the road transport option raised at the November 6, 2015 meeting].”

1.19.1.1 If yes, please justify BC Hydro’s position given that there arepending studies that may identify further potential impacts of theproject and that the First Nations’ have requested to “fullyunderstand the implication of the potential impacts for the Project”and “to identify any further potential impacts”.

RESPONSE:





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BC Hydro will consult with First Nations on the findings of [the Independent TechnicalReview and the Traditional Use] studies. The results will be used to further refinemitigation measures prior to construction. Furthermore, the results and BC Hydro’sfurther consultation with First Nations on them will inform BC Hydro’s decision onwhether or not to implement the Project.

On page 24 of Appendix F in Exhibit B-1, BC Hydro states:On November 6, 2015, BC Hydro met with McLeod Lake, Saulteau and West Moberly todiscuss the Project. West Moberly raised a new concern related to the Road Option.They noted that the road upgrades will result in unmitigatable impacts to the land whichwill facilitate ongoing access and development to their territory. West Moberly noted thatthey may challenge Canfor’s Table Road license and that this may result in BC Hydronot being able to proceed with the Road option.

On page 4-30 of Exhibit B-1, BC Hydro states, “BC Hydro has requested a meeting withall three of the First Nations to address [West Moberly’s] concern [regarding the roadtransport option raised at the November 6, 2015 meeting].”

1.19.1.2 If yes, please justify BC Hydro’s position given that West Moberly statedon November 6, 2015 that there are unmitigable impacts from the projectand BC Hydro has requested a meeting to address this concern.

RESPONSE:


The issue of public access on the on Table, Utah and Spur Road was raised by WestMoberly First Nations as early as 2012. Further, public access was discussed as part of

the FLNRO consultation.

The concern raised in November 2015 by West Moberly First Nations was that theupgrades to, and increased use of, the Table and Utah Roads would result in a residualimpact. It is BC Hydro’s position that the Project will not result in residual impacts. Todate, BC Hydro has not received any information that would alter this position. Withrespect to public access, Table and Utah Roads are existing operational roads andBC Hydro’s use of these roads is both temporary and within the existing permitted use.With respect to Spur Road access, please refer to BC Hydro’s response toBCUC IR 1.22.2.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, pp. 4-15 and 4-31; West Moberly First Nations v. BritishColumbia (Chief Inspector of Mines), 2011 BCCA 247, para. 117Cumulative effects


BC Hydro does not anticipate any cumulative effects given that no residualenvironmental impacts are anticipated with the implementation of appropriateenvironmental management plans, reclamation of the Sand Flats quarry site anddeactivation of the Spur Road, and adherence to federal and provincial permitting,environmental regulations and guidelines.


Cumulative Effects: Concerns that the road upgrades will facilitate ongoing access anddevelopment in their territory. The issue of increased access was first identified early inthe consultation process, and BC Hydro has committed to taking steps to mitigate thisimpact. However, the residual aspect of this potential impact was only recently raisedand BC Hydro has requested a meeting with West Moberly First Nations to address andmitigate this concern.



under consideration” will have an adverse impact on a First Nations right, as in this case,that what has gone before is irrelevant. Here, the exploration and sampling projects willhave an adverse impact on the petitioners’ treaty right, and the historical context isessential to a proper understanding of the seriousness of the potential impacts on thepetitioners’ treaty right to hunt.

1.20.1 Does BC Hydro equate cumulative effects with residual effects? If so,please justify and support this position.

RESPONSE:

In applying definitions of cumulative effects and residual effects, BC Hydro relies onprovincial and federal regulatory guidelines which direct that a cumulative effectsassessment is triggered where residual effects remain. Please refer to TechnicalGuidance for Assessing Cumulative Environmental Effects under the CanadianEnvironmental Assessment Act, 2012 (Canadian Environmental Assessment Agency,draft December 2014, ISBN 978-1-100-25181-3, Catalogue No. EN106-116/1-2014E-PDF) atpage 4, and Environmental Assessment Office User Guide: Overview of Environmental

Assessment in British Columbia, B.C. Environmental Assessment Office, July 2015 atpage 12.




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In accordance with these guidelines, BC Hydro does not equate cumulative effects withresidual effects. The ‘Technical Guidance for Assessing Cumulative Environmental

Effects under the Canadian Environmental Assessment Act , 2012’ document describesresidual effects as effects that remain after mitigation measures have been applied. Acumulative effects assessment is undertaken only after a determination is made thatthere is residual effects remain.




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1.20.2 West Moberly directs that in cases where the current contemplatedactivity results in new adverse impacts, past effects are relevant in orderto fully understand the severity of the new effects. Did BC Hydro considerpast effects when making its assessment of the new impacts of theproject?

RESPONSE:

As noted in section 3.9.2.2 of Exhibit B-1, the Project does not result in residual effects.Nevertheless, BC Hydro considered the historical context of past impacts to put thepotential new impacts of the Project in proper context and to comprehend theirmagnitude. In the present case that included the following:




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• The Project area is located within Treaty 8 territory which has recentlyexperienced rapid development and as such, First Nations have expressed

concerns as to the adequacy of lands available on which they can exercise theirTreaty rights. In particular, the First Nations are concerned about increasedaccess of the lands for public use and protecting Treaty 8 lands from furtherdevelopment; BC Hydro’s preferred Project configuration uses predominantlydisturbed areas as opposed to creating new impacts to undisturbed areas withinTreaty 8 territory. For example, the Sand Flat quarry site is a previously disturbedsite which was once part of commercial forestry operation, and the Table and Utahroads are existing and operational;

• A specific concern for the potential of cumulative effects on caribou was raised.Ecofor undertook an assessment of potential impacts to caribou and concludedthat there is a low likelihood of caribou wandering into the Project area. BC Hydro

recognizes that if the Project gives rise to an impact on the Moberly herd, it couldbe more significant given the historical depletion of that herd. However, Ecoforcharacterizes the risk of harm to caribou is very low. Notwithstanding the lowlikelihood of impact, BC Hydro requested Ecofor develop a mitigation plan(Appendix E-2(b) of Exhibit B-1) that BC Hydro will implement to ensure that in theunlikely circumstance that caribou is encountered, they protected from impactsarising from the Project; and

• First Nations raised a general concern about increased public access to Treaty 8lands and a specific concern about the Table, Utah and Spur Roads. Within thiscontext, BC Hydro assessed the potential impacts regarding access to be low asthere will be no change in the permitted use of the Table and Utah Roads and the

Spur Road will be deactivated at the end of the Project.

In considering the above, BC Hydro assessed the potential effects of the Project takinginto account the historical context as provided by Treaty 8 First Nations.






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1.20.3.1 Does BC Hydro agree that the temporary nature of a project impact doesnot necessarily lessen the level of the impact?

RESPONSE:

Assessing the level of an impact involves consideration of many elements of that impact,including for example scope, potential for harm, and duration. BC Hydro expects that, allother elements of the impact being equal, the severity of an impact would be lessened ifthat impact was temporary in nature as opposed to permanent.

For this particular Project, the temporary nature of the impacts of the Project quarry andthe roads, when assessed in consideration of all other elements of the impacts,contributes to lessen the level of impact.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, pp. 3-10, 4-12, 4-16 to 4-17; Appendix E-2(a), pp. 29,31-32Assessment of impacts – Sand Flat Quarry

On page 4-12 of Exhibit B-1, BC Hydro states, “The Sand Flat quarry site is composedof disturbed lands that were previously part of commercial forestry operations.”On pages 4-16 and 4-17 of Exhibit B-1, BC Hydro states:BC Hydro believes the seriousness of the potential impacts arising from the Project onFirst Nations’ Treaty 8 rights to be low. In coming to this conclusion, BC Hydro relies onthe following:• The Project Environmental Assessment prepared by Ecofor concluded that•

there would be no residual environmental effects arising from the Project;…• The Sand Flat quarry site is comprised of disturbed land that was previously

harvested for commercial timber;• BC Hydro plans to reclaim the quarry site after use;In Exhibit B-1, Appendix E-2(a), pages 29, 31 and 32, Ecofor states:The Project area is primarily composed of young and mature forest… The forested areasadjacent the cut blocks have significant quantities of coarse woody debris at varyingstages of decay. This coarse woody debris creates habitat for wildlife…Given the habitatin the Project area, various mammals are expected to be present. Of the mammalswhose ranges potentially overlap the Project area, there are eight provincially orfederally listed species that include: caribou, eastern red bat, fisher, grizzly bear, littlebrown myotis, northern myotis, bison, and wolverine...The Project is located in a forest

setting…There is minimal active industrial development in the area and there is no urbandevelopment.On page 3-10 of Exhibit B-1, BC Hydro states:BC Hydro’s selection of the preferred quarry was based on an evaluation of rockcharacteristics, costs to develop the quarry site (e.g., improve site access) and costs totransport materials to the Dam.

1.21.1 Please explain how there can be no residual effects from blasting andremoving material from a quarry site, even if the site is reclaimedaccording to the Mines Act. Is that quarry site not forever different than itwas before the quarrying and the reclamation?

RESPONSE:

Despite the potential for changes to the land, no residual effects are expected as allpotential effects to the Value Components (i.e., vegetation and wildlife) were determinedto be mitigable. Please refer to BC Hydro’s response to BCUC IR 1.21.1.1, whichaddresses the entire Project and therefore includes the Sand Flat quarry.




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setting…There is minimal active industrial development in the area and there is no urbandevelopment.On page 3-10 of Exhibit B-1, BC Hydro states:BC Hydro’s selection of the preferred quarry was based on an evaluation of rockcharacteristics, costs to develop the quarry site (e.g., improve site access) and costs totransport materials to the Dam.1.21.1.1 Please provide the evidence or reasoning Ecofor used to come to the

conclusion that there would be no residual environmental effects arisingfrom the Project.

RESPONSE:

The project Environmental Assessment (EA) process involved selecting ValuedComponents (VC) based on literature searches, field assessments and discussions withFLNRO, First Nations, stakeholders and BC Hydro’s experience in the Project area.Based on the VC’s identified and the Project activities, an impact and mitigationassessment was conducted. The potential effects to the VCs were evaluated anddetermined to be mitigatable therefore no residual environmental effects were identifiedfor the VC’s assessed.




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setting…There is minimal active industrial development in the area and there is no urbandevelopment.On page 3-10 of Exhibit B-1, BC Hydro states:BC Hydro’s selection of the preferred quarry was based on an evaluation of rockcharacteristics, costs to develop the quarry site (e.g., improve site access) and costs totransport materials to the Dam.1.21.2 Ecofor’s description of the project area indicates it is an area in which

First Nations may potentially exercise their treaty and other assertedrights. Please justify BC Hydro’s position that the fact that it is previouslydisturbed land contributes to BC Hydro’s assessment that the potentialimpacts of the project are low. Does the fact that First Nations mayexercise their rights on certain land not trump the fact that it was

previously disturbed when assessing the potential impacts of a project?

RESPONSE:

BC Hydro accepts that First Nations practice their Treaty rights in the area which haspreviously been disturbed. Mitigation measures will address the temporary incrementalimpacts. Given this, BC Hydro considers the potential impacts of the Project as beinglow.




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On page 4-12 of Exhibit B-1, BC Hydro states, “The Sand Flat quarry site is composed ofdisturbed lands that were previously part of commercial forestry operations.” On pages 4-16 and 4-17 of Exhibit B-1, BC Hydro states:BC Hydro believes the seriousness of the potential impacts arising from the Project onFirst Nations’ Treaty 8 rights to be low. In coming to this conclusion, BC Hydro relies onthe following:• The Project Environmental Assessment prepared by Ecofor concluded that

• there would be no residual environmental effects arising from the Project;…• The Sand Flat quarry site is comprised of disturbed land that was previously


setting…There is minimal active industrial development in the area and there is no urbandevelopment.On page 3-10 of Exhibit B-1, BC Hydro states:BC Hydro’s selection of the preferred quarry was based on an evaluation of rockcharacteristics, costs to develop the quarry site (e.g., improve site access) and costs totransport materials to the Dam.1.21.3 Do First Nations currently or have they recently (e.g. the last 25 years)

exercised their treaty or other asserted rights in the Sand Flat quarryarea? If so, please justify BC Hydro’s position that the project impacts arelow.

RESPONSE:

Information about First Nation use of the Sand Flat Quarry area was considered byFLNRO as part of its assessment of the adequacy of Crown consultation in issuing thepermits for the Project. As described in BC Hydro’s response to BCUC IR 1.15.2, FLNROconsidered the potential impacts from the Project activities on First Nation Treaty rightsin the Sand Flat Quarry area and found that Crown consultation had been adequate.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, pp. 3-10, 4-12, 4-16 to 4-17; Appendix E-2(a),pp. 29, 31-32Assessment of impacts – Sand Flat Quarry

On page 4-12 of Exhibit B-1, BC Hydro states, “The Sand Flat quarry site iscomposed of disturbed lands that were previously part of commercial forestryoperations.”


BC Hydro believes the seriousness of the potential impacts arising from theProject on First Nations’ Treaty 8 rights to be low. In coming to this conclusion,BC Hydro relies on the following:• The Project Environmental Assessment prepared by Ecofor concluded that• there would be no residual environmental effects arising from the Project;…• The Sand Flat quarry site is comprised of disturbed land that was previously

harvested for commercial timber;• BC Hydro plans to reclaim the quarry site after use;


The Project area is primarily composed of young and mature forest… The

forested areas adjacent the cut blocks have significant quantities of coarsewoody debris at varying stages of decay. This coarse woody debris createshabitat for wildlife…Given the habitat in the Project area, various mammals areexpected to be present. Of the mammals whose ranges potentially overlap theProject area, there are eight provincially or federally listed species that include:caribou, eastern red bat, fisher, grizzly bear, little brown myotis, northern myotis,bison, and wolverine...The Project is located in a forest setting…There is minimalactive industrial development in the area and there is no urban development.


BC Hydro’s selection of the preferred quarry was based on an evaluation of rockcharacteristics, costs to develop the quarry site (e.g., improve site access) andcosts to transport materials to the Dam.

1.21.4 Did BC Hydro assess the potential impact to First Nations’ rightsof the other potential quarry sites as part of the evaluation of thesites? If not, why not?




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RESPONSE:

Eight potential quarry sites were evaluated on rock characteristics, costs todevelop the quarry site and costs to transport materials to the Dam. Table 3-2 onpage 3-13 of Exhibit B-1 summarizes the ratings of the potential quarry sites. Theoutcome of this investigation resulted in the identification of two potential quarryalternatives, Sand Flat Quarry and Portage Mountain East.

BC Hydro informed First Nations by letter, in December 2011, of the two quarrysite alternatives it was considering. BC Hydro did not undertake an assessment ofpotential impacts to First Nations’ rights on the quarry sites that were screenedout as these were not viable Project alternatives.

After geotechnical investigations of both potential sites, Portage Mountain Eastsandstone was not recommended. In January 2014, the First Nations wereinformed that Portage Mountain East would require no further investigation for theProject. The elimination of Portage Mountain East was not based on anassessment of potential impacts to First Nations’ rights.




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On page 4-12 of Exhibit B-1, BC Hydro states, “The Sand Flat quarry site is composed ofdisturbed lands that were previously part of commercial forestry operations.”


BC Hydro believes the seriousness of the potential impacts arising from the Project onFirst Nations’ Treaty 8 rights to be low. In coming to this conclusion, BC Hydro relies on

the following:• The Project Environmental Assessment prepared by Ecofor concluded that• there would be no residual environmental effects arising from the Project;…• The Sand Flat quarry site is comprised of disturbed land that was previously

harvested for commercial timber;• BC Hydro plans to reclaim the quarry site after use;


The Project area is primarily composed of young and mature forest… The forested areasadjacent the cut blocks have significant quantities of coarse woody debris at varyingstages of decay. This coarse woody debris creates habitat for wildlife…Given the habitat

in the Project area, various mammals are expected to be present. Of the mammalswhose ranges potentially overlap the Project area, there are eight provincially orfederally listed species that include: caribou, eastern red bat, fisher, grizzly bear, littlebrown myotis, northern myotis, bison, and wolverine...The Project is located in a forestsetting…There is minimal active industrial development in the area and there is no urbandevelopment.


BC Hydro’s selection of the preferred quarry was based on an evaluation of rockcharacteristics, costs to develop the quarry site (e.g., improve site access) and costs totransport materials to the Dam.

1.21.4.1 What are the potential impacts to First Nations’ rights of the other quarrysites?

RESPONSE:

An assessment of potential impacts to First Nations’ rights was not undertaken for theother quarry sites. Please refer to BC Hydro’s response to BCUC IR 1.21.4.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, pp. 4-15 to 4-17Assessment of impacts – Spur Road

On page 4-15 of Exhibit B-1, BC Hydro states, “The 3 kilometre Spur Road is anexisting provincial forestry road that has not been recently used.”

On page 4-16 - 4-17 BC Hydro states:

BC Hydro believes the seriousness of the potential impacts arising from theProject on First Nations’ Treaty 8 rights to be low. In coming to this conclusion,BC Hydro relies on the following:• The roads that will be used to transport the riprap from the Sand Flat quarry

to the Dam are existing forestry roads;• Although some repairs and upgrades to the roads may be necessary, the

majority of the forestry roads are already in active use by Canfor;• The Spur Road will be used temporarily with restricted access;• BC Hydro intends on deactivating the Spur Road after use.

1.22.1 When was Spur Road last in active use for industrial purposes?

RESPONSE:

The Spur Road was last used for industrial purposes by Canfor in 1996 and wasthen deactivated.




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1.22.2 Is Spur Road currently in a condition that First Nations mayexercise their treaty or other asserted rights?

RESPONSE:

During consultation, the identified First Nations have not indicated that thecondition of the Spur Road is a factor in exercising their rights.

The primary concern raised by First Nations regarding Spur Road is the potentialfor increased public access. Deactivation measures implemented by BC Hydroinhibit the use of Spur Road, returning the condition of the road to its pre-Projectinvestigation state. To mitigate public access during the Project constructionphase, BC Hydro will control access by installing a gate and employing a securityguard. Following the completion of the Project, BC Hydro will permanentlydeactivate Spur Road, returning it to its pre-Project state. The Temporary Use

Permit Management Plan, which outlines the deactivation measures for SpurRoad, was provided to the First Nations in December 2011. FLNRO issued theTemporary Use Permit for Spur Road in August 2012.




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1.22.3 Do First Nations currently or have they recently (e.g. since the lastactive use) exercised their treaty or other rights in the Spur Roadarea? If so, please justify BC Hydro’s position that the projectimpacts are low, even if they are temporary.

RESPONSE:





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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, p. 4-11; Appendix F, pp. 86, 88Mitigation of impacts

On page 4-11 of Exhibit B-1, BC Hydro states:The Project Environmental Assessment prepared by Ecofor (Appendix E-2(a)) found thatall identified environmental impacts are mitigable, and no residual impacts areanticipated with the implementation of appropriate environmental management plansand adherence to federal and provincial permitting requirements, and environmentalregulations and guidelines.On pages 86 and 88 of Appendix F in Exhibit B-1, BC Hydro states “contractor willdevelop an Environmental Protection Plan (EPP)” for identified road, quarry and rock

placement impacts.1.23.1 Are the EPPs referred to on pages 86 and 88 of Appendix F the“environmental management plans” referenced on page 4-11? If not,please explain the difference in the content and who will be preparing andresponsible for the environmental management plans.

RESPONSE:

Yes. The Environmental Management Plan (EMP) is a BC Hydro document, prepared byEcofor in consultation with BC Hydro, which provides information and guidance to theContractor. There is one Project EMP. Its purpose is to:

• Clarify environmental roles and responsibilities;

• Identify key environmental features and values in the area that could bepotentially affected by the project;

• Identify elements of the work that could present a risk to the receivingenvironment;

• Identify Environmental Best Management Practices (EBMPs) and/or workprocedures that should be followed to minimize environmental risks;

• Identifies environmental regulatory requirements; and

• Provide emergency contact information.

For this Project, the EMP has been included in the specifications section of the Requestfor Proposal for Contractor evaluation.

Before work begins, the Contractor will develop site specific Environmental ProtectionPlans (EPPs). The EPPs will address the requirements in the EMP and applicable permitconditions with Project specific details that will be implemented by the Contractor. TheContractor’s EPPs must be approved by BC Hydro before mobilization.




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The Project Environmental Assessment prepared by Ecofor (Appendix E-2(a))found that all identified environmental impacts are mitigable, and no residualimpacts are anticipated with the implementation of appropriate environmentalmanagement plans and adherence to federal and provincial permittingrequirements, and environmental regulations and guidelines.

On pages 86 and 88 of Appendix F in Exhibit B-1, BC Hydro states “contractorwill develop an Environmental Protection Plan (EPP)” for identified road, quarryand rock placement impacts.

1.23.2 Please describe Ecofor’s involvement with the development ofthese EPPs?

RESPONSE:

Please refer to BC Hydro’s response to BCUC IR 1.23.1. Ecofor prepared the EMP

for, and in consultation with, BC Hydro. The EMP provides information andguidance for the development of the Contractor’s EPPs. Before the EPPs areaccepted by BC Hydro, Ecofor will review them on behalf of BC Hydro and providecomments and recommendations on the adequacy of the EPPs in satisfying EMPand permit requirements.




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1.23.3 Please describe BC Hydro’s involvement with the developmentand/or approval of these EPPs?

RESPONSE:

Please refer to BC Hydro’s response to BCUC IRs 1.23.1 and 1.23.2. During the

procurement process, BC Hydro will discuss the requirements of the EPPs withthe Contractor. The Contractor will prepare the Project EPPs and submit them toBC Hydro for review and acceptance.






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1.23.5 It appears that BC Hydro’s contractors will be responsible for themitigation of potential impacts from the project and that theassessment that there will be no residual impacts from the projectis dependent on appropriate environmental management plansbeing implemented. Please explain how BC Hydro will ensure thatthese plans are appropriately designed, implemented andmanaged.

RESPONSE:

Please refer to BC Hydro’s response to BCUC IR 1.23.3. BC Hydro is responsiblefor and will ensure that the EPPs are designed to adhere to the EMP. At thebeginning of implementation, BC Hydro will hold an orientation meeting with theContractor and sub-contractors to review the Project EMP and EPPs. DuringProject implementation, the EMP and EPPs will be part of daily tailboard meetings.BC Hydro and the Contractor will each have an environmental monitor to reviewand audit compliance with the EPPs. BC Hydro can stop the work in cases ofnon-compliance.




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On pages 86 and 88 of Appendix F in Exhibit B-1, BC Hydro states “contractor will

develop an Environmental Protection Plan (EPP)” for identified road, quarry and rock

placement impacts.

1.23.5.1 Who is ultimately responsible for the proper design andimplementation of these plans?

RESPONSE:

Please refer to BC Hydro’s response to BCUC IRs 1.23.3 and 1.23.5.




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1.23.5.2 How will BC Hydro ensure these plans are designed inaccordance with Ecofor’s Project Environmental Assessment?

RESPONSE:

Ecofor developed the EMP based on its Project Environmental Assessment. The

EPPs will in turn be designed in accordance with the EMP. Ecofor will review theContractor’s draft EPPs to ensure adherence to the EMP. BC Hydro considersEcofor’s comments before approving the EPPs.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, pp. 4-12 to 4-13; Appendix E-2(b), pp. 8, 10, 11Assessment of impacts - Caribou


The Caribou Mitigation Plan in place during field investigations (Golder Associates in 2012) focused on specific mitigations in the event of an encounterwith caribou. The plan also reported that the nearest caribou Ungulate WinterRange is approximately 7.5 km southeast of the project, and 2.5 km south of theaccess roads. Two caribou calving Wildlife Habitat Areas were identified: oneapproximately 10 km north and the other approximately 23 km south of the SandFlat quarry.


Accordingly, Ecofor concluded there is a low likelihood of caribou wandering intothe Project area, including on the access roads, and that the caribou are mostlikely to occupy the core caribou habitats that are well to the south of the Project.Ecofor developed a mitigation plan that BC Hydro will implement to ensure anycaribou that are encountered are protected from impacts arising from the Project.


The Moberly herd is part of the Special Concern Northern Mountain population.The population estimates for the Moberly herd have been in decline since 1997,when 191 caribou were counted in the Moberly area (MOE 2014). The herd hassince declined to a population with a total count of 22 as of March 2014…


Caribou are sensitive to disturbance and to changes in habitat. The project is notlocated within or near any identified caribou winter or summer habitats, so projectworks are not anticipated to cause any effect on caribou habitat.


Critical period: January 15 – July 15• Calving / Post parturition Late Winter – development activities are not

appropriate during this timeframe. Aerial activities should adhere toguidelines. If working within a critical window is unavoidable, proponentshould discuss alternatives, and potential for mitigation and monitoring plans.





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1.24.1 Please explain how BC Hydro will ensure its contractors on theproject abide by Ecofor’s Caribou Mitigation plans.

RESPONSE:

The Caribou Mitigation Plan was included in the Request for Proposal andincorporated into environmental specifications in the Project EMP. The EMPrequires the Contractor’s EPP to identify how the Contractor will comply with theCaribou Mitigation Plan. BC Hydro will deliver an Environmental Orientation to theContractor at the start of the Project emphasizing caribou concerns, and the EPPwill require that the Contractor provide the orientation to all Project workers.Please refer to BC Hydro’s response to BCUC IR 1.23.5 regarding BC Hydro’sauditing of the Contractor to ensure EPP compliance.




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1.24.2.1 What mitigation plans have been developed to mitigate theseimpacts?

RESPONSE:

Mitigation plans have not been prepared to specifically address blasting and noiseas no impacts associated with these activities are expected. The CaribouMitigation and Monitoring Plan finds that Project work during the ‘critical period’will not interact with caribou.




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1.24.3 Did Ecofor assess the potential impacts of this project inconsideration of cumulative impacts? In other words did Ecoforconsider the past effects on the caribou and especially theMoberly Herd which has declined to a population of 22, whenassessing the impacts of the project? If not, why not?

RESPONSE:

Yes, Ecofor has considered the population decline of the caribou in thepreparation of the Caribou Mitigation Plan.





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1.24.3.1 If not, what are the potential impacts of the project on the caribouin consideration of a cumulative impact perspective?

RESPONSE:





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1.24.4 How specifically will BC Hydro address Ecofor’s critical andcautionary timing windows in its project schedule? What“development activities” will be prohibited during these times? Willblasting be prohibited?

RESPONSE:

The critical and cautionary timing windows apply to work in caribou sensitivehabitat areas. As there are no affected caribou sensitive habitat areas in theProject area, the cautionary timing windows do not apply. Accordingly,development activities will not be prohibited.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, Appendix F, p. 40Procurement opportunities


On March 3, 2013, BC Hydro emailed Dunne-za Ventures regarding thelimestone mine. BC Hydro indicated that a number of riprap quarry sites hadbeen identified and two selected for further investigation. BC Hydro inquired as towhether the limestone mine referenced by Dunne-za Ventures was a differentlocation than any of those previously identified.On March 5, 2013 BC Hydro sent a letter providing an update on the Projectnoting that drilling investigations had indicated good quality riprap at the SandFlat site, and


1.25.1 Please explain whether the limestone at the Dunne-za Venturesmine was ever investigated for use in the Project? If not, why not?

RESPONSE:

BC Hydro considered the Dunne-Za limestone quarry for use in the Project.BC Hydro’s March 3, 2013 email to Dunne-Za Ventures requested furtherinformation on the limestone quarry referenced by Dunne-Za Ventures.Information on the quarry was provided to BC Hydro on March 14, 2013. OnMarch 20, 2013, BC Hydro met with the President of Dunne-Za Ventures andexplained that the quarry from the Dunne-Za Ventures was not suitable for theProject due to the distance from the Project (Dunne-Za is approximately four timesfarther than the Sand Flat quarry) and accessibility issues associated with thequarry.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, Appendix F, p. 40Procurement opportunities


On March 3, 2013, BC Hydro emailed Dunne-za Ventures regarding thelimestone mine. BC Hydro indicated that a number of riprap quarry sites hadbeen identified and two selected for further investigation. BC Hydro inquired as towhether the limestone mine referenced by Dunne-za Ventures was a differentlocation than any of those previously identified.On March 5, 2013 BC Hydro sent a letter providing an update on the Projectnoting that drilling investigations had indicated good quality riprap at the SandFlat site, and


1.25.2 Was the only communication to Dunne-za Ventures regardingBC Hydro’s decision to not investigate or use their limestonethrough the March 5, 2013 letter indicating that the Sand Flatquarry site indicated good quality riprap?

RESPONSE:





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26.0 E. PROJECT RISK MANAGEMENT

Reference: IMPLEMENTATION PHASE RISKSExhibit B-1, Section 5.3Quarry yield

Knight Piesold reviewed the site investigation information from the Sand Flatquarry and confirmed that the quarry yield should be between 10 per cent and15 per cent after handling losses. Based on Knight Piesold’s recommendation,BC Hydro has used a 13 per cent quarry yield in preparation of the costestimate.0F

1

In discussing its plans to manage quarry yield risk BC Hydro states, “The ECIprocess will arrive at a mutually agreeable contract structure, including thetreatment of specific contract risks such as yield. The general principal that willbe followed is that risks will be assigned to the party best able to manage theparticular risk.”1F

2

1.26.1 Quarry yield impacts several of the modeled costs. It is not clearhow the project base cost varies as a function of riprap yield. Whatare the modeled project costs if the riprap yield is 10 percent,13 percent and 15 percent?

RESPONSE:

The modeled Project costs in the following table take into account the overallyield losses, including but not limited to losses at the quarry, material transport,and stockpiling.

Nominal Yield at Dam Face(Placed)

(%)

Cost Upper Bound

($ million)

Cost Lower Bound

($ million)

10 175 112

13 171 110

15 169 108

1 Exhibit B-1, p. 5-12.2 Exhibit B-1, p. 5-6.




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Reference: IMPLEMENTATION PHASE RISKSExhibit B-1, Section 5.3Quarry yield

Knight Piesold reviewed the site investigation information from the Sand Flat quarry andconfirmed that the quarry yield should be between 10 per cent and 15 per cent afterhandling losses. Based on Knight Piesold’s recommendation, BC Hydro has used a13 per cent quarry yield in preparation of the cost estimate. 0F

1

In discussing its plans to manage quarry yield risk BC Hydro states, “The ECI process willarrive at a mutually agreeable contract structure, including the treatment of specificcontract risks such as yield. The general principal that will be followed is that risks will beassigned to the party best able to manage the particular risk.”1F

2

1.26.2 BC Hydro has identified contractor performance as a major factor in projectsuccess and plans to draft the construction contracts so that risks are bornby the party best suited to manage them. Given one of the major risks isrock yield, how does BC Hydro propose to structure the quarry contract toseparate the rock yield variance resulting from the in-situ rockcharacteristics from yield variance resulting from contractor performance?

RESPONSE:

The contract does not separate yield variance resulting from the rock quality versusContractor performance. The contract is designed to incent the Contractor to achieve

higher yield. The quarry contract will be structured to maximize Contractor performance(such as optimizing the blasting design and minimizing breakage during mucking andhandling), while the risk on quarry yield resulting from the in-situ rock characteristics isshared by BC Hydro and the Contractor. This is to be accomplished by a variable paymentstructure between unit price and achieved Quarry Yield for Class 1 riprap as follows:

• Level 0 baseline unit price for achieved Quarry Yield at 19 per cent and higher;

• Level 1 adjustment unit price for achieved Quarry Yield between 17 to 19 per cent;

• Level 2 adjustment unit price for achieved Quarry Yield between 15 to 17 per cent; and

• Level 3 adjustment unit price for achieved Quarry Yield between 12 to 15 per cent.

In the ECI process, the contract will be set so that, as a minimum, a higher Leveladjustment unit price will reflect a lower margin in profit and overhead so that it is in theinterest of the Contractor to optimize performance and maximize quarry yield. TheContractor is also required to have a blasting consultant and an engineering geologist onits team to assist with the quarry work.

1 Exhibit B-1, p. 5-12.2 Exhibit B-1, p. 5-6.




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Reference: FIRST NATIONS CONSULTATIONExhibit B-1, Appendix B-1, p. 14First Nations costs

1.27.1 BC Hydro includes a cost estimate for Aboriginal Relations andFirst Nations. Please list all costs that are included in this estimatesuch as Aboriginal Relations staff costs, capacity funding,traditional use or other study funding, etc. As this appendix isconfidential, there is no need to include dollar amounts.

RESPONSE:

BC Hydro’s cost estimate for Aboriginal Relations includes:

• Aboriginal Relations labour, travel and expenses;

• Legal costs specific to Aboriginal issues; and

• Consultation capacity funding and studies.




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1.27.2 Does this estimate include any accommodation costs? If not,where are potential accommodation costs captured?

RESPONSE:

BC Hydro understands the reference to accommodation costs to be specific toImpact Benefits Agreements (IBAs). FLNRO has found Crown consultation to beadequate to issue its permits for the Project. As the impacts of the Project areassessed as low, BC Hydro does not anticipate entering into IBAs associated withthe Project and therefore has not included potential IBA costs in its AboriginalRelations and First Nations cost estimate. BC Hydro has budgeted foraccommodation in the form of mitigation. Mitigation measures, such asimplementing the Caribou Mitigation Plan, are captured in construction costs forthe Project.




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1.27.3 Does BC Hydro believe that the cost contingencies as stated inthe Application are adequate to cover any additional costsassociated with mitigating First Nations impacts given theIndependent Technical Review and the Traditional Use Studieshave not been completed?

RESPONSE:

Yes.




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1.27.3.1 What portion of the P50 contingency relates to First Nation impactmitigation and accommodation?

RESPONSE:

BC Hydro developed the P50 contingency using a Monte Carlo model. The MonteCarlo model generates a contingency for all identified risk items as a whole anddoes not specifically apportion a contingency amount for any specific risk item,including First Nation impact mitigation and accommodation. In preparing thismodel, accommodation (which includes mitigation) was identified as low.




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1.27.4 In determining that the Application is in the public interest theCommission will assess the adequacy of the First Nationsconsultation on the project configuration outlined in the

Application. After the Commission issues its decision and if for anyreason BC Hydro were to decide to pursue a different quarry siteor riprap transportation route would BC Hydro reapply for approvalof the revised project?

RESPONSE:

BC Hydro does not anticipate having to pursue a different quarry or transportationroutes for the Project. Such a change would inevitably be significant to the Projectand may require different permits and authorizations from those already received.BC Hydro would need to consider the circumstances at the time of such a change,and would have to discuss the change with the BC Hydro Board and determine anew course of action. That consideration would include the effect on permitting,First Nation consultation and any determination made by the Commission inrespect of this Application. BC Hydro would inform the Commission of any

material changes in Project configuration, cost, or schedule impacts as soon as itis practicable to do so.

BC Hydro notes that independent of any future Application to the Commission,BC Hydro as the Crown will undertake an assessment of the adequacy of Crownconsultation prior to implementation of any new Project configuration.



REQUESTOR NAME: BCOAPO

INFORMATION REQUEST ROUND NO: 1

TO: BRITISH COLUMBIA HYDRO &POWER AUTHORITY

DATE: December 16, 2015

APPLICATION NAME: W.A.C. Bennett Riprap Upgrade

Project ______________________________________________________________________

1.0 Reference: Exhibit B-1, page 1-2 (lines 11-13)

1.1 What would be the implications of an emergency reservoir drawdown interms of electricity output (both kWh and replacement costs), safety andany other relevant issues?


2.1 Why was the original riprap layer of dam not constructed to sustain thehigh wind & storm events, ice loading and freeze-thaw action that has

been experienced?

3.0 Reference: Exhibit B-1, page 1-5 (footnote #7))Exhibit B-1, page 3-26, Figure 3-4

3.1 Does the rate impact analysis set out in Figure 3-4 include the ongoingcost of the civil maintenance program described in footnote #7?

3.1.1 If not what is the anticipated cost of the civil maintenance programand resulting implications in terms of the project’s overall impacton future revenue requirements and rate increases?


4.1 Given the unexpected deterioration of the current riprap what is the basisfor the “expectation” that the new riprap will meet performanceexpectations for 75-100 years?


5.1 After the riprap upgrade project is completed what will be the averagelevelized cost of energy from GMS?


6.1 What would be the impact on the output from GMS if the reservoir had to

be drawn down permanently in order to address the deteriorated riprapcondition?

7.0 Reference: Exhibit B-1, page 2-12

7.1 The Application states that there are no viable alternatives to undertakingthe Project. Why isn’t short-term remediation of the immediate erosion,similar remediation of any future erosion as it occurs and continuedreliance on the Upstream Riprap Emergency Plan a viable alternative?

C3-4






8.1 What is the basis for selecting the performance criteria set out in section3.2.1.6?

9.0 Reference: ExhibitB-1, page 3-21

9.1 What is the level of contingency costs that is included in each of the threeproject cost estimates?


10.1 The Application states that no escalation factor has been applied to theProject beyond the B.C. Consumer Price Index. Has B.C. Hydroreviewed the various elements of the project and satisfied itself that theBC CPI is appropriate in all cases?

10.2 When contingencies are excluded, how much of the Project’sImplementation Phase costs are labour vs. non-labour?

10.3 What has been BC Hydro’s recent (e.g., 5-years) experience with respectto labour cost inflation for the Project’s types of labour requirements?Has it exceeded or tracked general inflation?

11.0 Reference: Exhibit B-1, pages 5-5 to 5-11

11.1 Sections 5.3.1.1 through 5.3.1.4 indicate that the Project Cost rangeincludes allowances for a number of different contingencies. Does thelevel of contingency allowance vary as between the P10, P50 and P90cost estimates?

11.2 The contingency for construction delays (page 5-11) provides for loss of

up to two full construction seasons due to reservoir elevations? Does thismean that all three Project Cost estimates (P10, P50 and P90) include thecost of two years of construction delay and thereby, effectively, representthe cost associated with a later in-service date than planned?

12.0 Reference: Exhibit B-1, Appendix E-3

12.1 Please provide a copy of the full report prepared by MWH Global Inc..

12.2 The Executive Summary (page 6) contains five suggested action items.Has BC Hydro undertaken all f ive recommended actions?

12.2.1 For those is has not undertaken, please explain why not.

12.2.2 For those it has undertaken, have the results been incorporatedinto the current Application?



British Columbia Old Age Pensioners' OrganizationInformation Request No. 1.1.1 Dated: December 16, 2015British Columbia Hydro & Power AuthorityResponse issued January 14, 2016

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1.1.1 What would be the implications of an emergency reservoir drawdown interms of electricity output (both kWh and replacement costs), safety andany other relevant issues?

RESPONSE:

BC Hydro provides the following response, assuming the current condition of theupstream dam face (i.e., prior to the Project), as this is the context for the referenced textin Exhibit B-1, page 1-2, lines 11 to 13.

BC Hydro estimates that a one-time emergency reservoir drawdown would result in aloss of approximately 6000 GWh of GMS/PCN energy production due to spill and headlosses at a cost of approximately $160 million (CDN), assuming the following:

• the event occurred in late summer/early fall;

• emergency repairs were completed using materials from the existing riprapstockpile;

• the emergency repairs provided adequate interim safety to the Dam;

• the reservoir would be drawn down by spring to allow one, three-month windowfor construction of additional remediation (i.e., this Project) to address the riprapand filter layer deficiencies over the long-term (refer to BCUC IR 1.4.5.1), and

• completion of long-term remediation would be via subsequent constructionseasons and would be dependent on reservoir elevations without targeteddrawdown (i.e., completed on a non-emergency basis).

Construction of additional remediation (this Project) would be partially completed on anemergency or reactive basis that could include the following:

• BC Hydro estimates that at most there would be six months available from highreservoir level to a point where construction could begin. During this limitedtimeframe, BC Hydro would need to award contracts, obtain a quarry site, andobtain the riprap and filter materials for placement on the Dam face in the spring;and

• The selected limestone quarry may not be available in the required timeframeunder emergency or reactive conditions.

Note that the response above provides the best possible scenario. If the emergencyrepair did not provide adequate safety to the Dam, and long-term remediation could notbe sufficiently expedited, then operation of the reservoir below 2170 feet would berequired for a further period of time with additional costs.




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1.2.1 Why was the original riprap layer of dam not constructed tosustain the high wind & storm events, ice loading and freeze-thawaction that has been experienced?

RESPONSE:

Long-term performance data for riprap on large dams was very limited until thelate 1980’s, therefore long-term riprap performance was not well understood at thetime the WAC Bennett Dam was designed and constructed. When construction onthe Dam was completed in 1967, it was believed that any displacement of theriprap could likely be repaired from the Dam crest at nominal cost.

Please also refer to BC Hydro’s response to BCUC IR 1.6.2.





British Columbia Old Age Pensioners' OrganizationInformation Request No. 1.3.1.1 Dated: December 16, 2015British Columbia Hydro & Power AuthorityResponse issued January 14, 2016

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Exhibit:B-3

3.0 Reference: Exhibit B-1, page 1-5 (footnote #7))

Exhibit B-1, page 3-26, Figure 3-4

1.3.1.1 If not what is the anticipated cost of the civil maintenance programand resulting implications in terms of the project’s overall impacton future revenue requirements and rate increases?

RESPONSE:





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1.4.1 Given the unexpected deterioration of the current riprap what isthe basis for the “expectation” that the new riprap will meetperformance expectations for 75-100 years?

RESPONSE:

Deterioration of the original riprap was caused by a combination of factors,including the absence of a separate filter layer between the Zone 5 surface and theriprap, the riprap being undersized, insufficient layer thickness, and degradationof the sandstone riprap under cycles of freeze/thaw actions.

The design of the proposed new riprap has addressed these issues with theoriginal sandstone riprap, including:

• a 0.6 m thick filter layer (bedding) will be placed between the Zone 5surface and the riprap;

• the use of narrow graded riprap (minimum weight of 650 kg) that is heavierand larger than the original riprap;

• a riprap layer of 1.8 m thick that is twice the thickness of the original riprap;and

• the use of limestone that is more durable than the original sandstone.

These measures form the basis that the new riprap will meet the long-termperformance expectations.

Please refer to BC Hydro’s response to CEC IR 1.6.5 for a discussion of sandstoneand limestone durability.




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Exhibit:B-3


1.5.1 After the riprap upgrade project is completed what will be theaverage levelized cost of energy from GMS?

RESPONSE:

At Project completion, the forecast average levelized cost of energy from GMS isapproximately $22/MWh.




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Exhibit:B-3


1.6.1 What would be the impact on the output from GMS if the reservoirhad to be drawn down permanently in order to address thedeteriorated riprap condition?

RESPONSE:

BC Hydro does not consider permanent drawdown to be a viable alternative to the Project,but notes that, following a permanent drawdown, BC Hydro estimates that average annualenergy production from GMS would be reduced by about 1,900 GWh due to head losses.There would also likely be some shift in the timing of GMS production across the year and

reduction in GMS capacity. Maintaining the lower elevation would be challenging becausethis elevation would likely be below the spillway crest, resulting in a shift in the timing ofgeneration (i.e., maintaining reservoir elevations via generation only as the spillway wouldnot be available). Such an operating regime would have significant impacts on otherWilliston Reservoir stakeholders.

Maintaining a lower reservoir elevation would eventually result in damage (e.g., erosion) tothe existing sandstone riprap at this lower elevation due to exposure to waves.Remediation and upgrade would be required in the future, similar to what is proposed bythe Project.




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1.7.1 The Application states that there are no viable alternatives toundertaking the Project. Why isn’t short-term remediation of theimmediate erosion, similar remediation of any future erosion as itoccurs and continued reliance on the Upstream RiprapEmergency Plan a viable alternative?

RESPONSE:

Reliance on the Upstream Riprap Emergency Plan is not considered to be a viablealternative. Please refer to BC Hydro’s response to BCUC IRs 1.4.5 and 1.4.5.1.




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1.8.1 What is the basis for selecting the performance criteria set out insection 3.2.1.6?

RESPONSE:

The performance criteria were selected in accordance with the general guidelinesfor design of riprap by the US Bureau of Reclamation (USBR 2014) and the Sociétéd’énergie de la Baie James (SEBJ 1997) for Annual Exceedance Probability (AEP)of 1/100 and 1/1000 wind/wave events. The 1/10,000 AEP performance criteria wasselected to be consistent with the seismic design requirements by 2007 CanadianDam Association Guidelines (CDA 2007).

Reference:

• United States Bureau of Reclamation (USBR) 2014. Design Standards 13 -Embankment Dams - Chapter 7 Riprap Slope Protection;

• Société d'énergie de la Baie James (SEBJ), 1997. "Practical Guide - RiprapSizing", June;

• U.S. Army Corps of Engineers (USACE), 1990. "Construction with LargeStone", Engineer Manual 1110-2-2302, dated October 24;

• U.S. Army Corps of Engineers (USACE), 2011. "Coastal EngineeringManual, Part VI, Change 3", Engineer Manual 1110-2-1100, datedSeptember 28; and

• Canadian Dam Association (CDA), 2007. “Dam Safety Guidelines”




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Exhibit:B-3

9.0 Reference: ExhibitB-1, page 3-21

1.9.1 What is the level of contingency costs that is included ineach of the three project cost estimates?

RESPONSE:

This information response is being filed in confidence with BCUC and BCOAPO.




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1.10.1 The Application states that no escalation factor has been appliedto the Project beyond the B.C. Consumer Price Index. Has B.C.Hydro reviewed the various elements of the project and satisfieditself that the BC CPI is appropriate in all cases?

RESPONSE:

Yes, BC Hydro believes that the CPI is appropriate.




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1.10.2 When contingencies are excluded, how much of the Project’sImplementation Phase costs are labour vs. non-labour?

RESPONSE:

Excluding contingencies, labour comprises about 25 per cent of the constructioncost.




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1.10.3 What has been BC Hydro’s recent (e.g., 5-years) experience withrespect to labour cost inflation for the Project’s types of labourrequirements? Has it exceeded or tracked general inflation?

RESPONSE:

BC Hydro’s recent experience is that labour inflation has been tracking generalinflation.




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Exhibit:B-3

Kev11.0 Reference: Exhibit B-1, pages 5-5 to 5-11

1.11.1 Sections 5.3.1.1 through 5.3.1.4 indicate that the Project Costrange includes allowances for a number of different contingencies.Does the level of contingency allowance vary as between the P10,P50 and P90 cost estimates?

RESPONSE:

Please refer to BC Hydro’s response to BCOAPO IR 1.9.1.




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Exhibit:B-3

11.0 Reference: Exhibit B-1, pages 5-5 to 5-11

1.11.2 The contingency for construction delays (page 5-11) provides forloss of up to two full construction seasons due to reservoirelevations? Does this mean that all three Project Cost estimates(P10, P50 and P90) include the cost of two years of constructiondelay and thereby, effectively, represent the cost associated witha later in-service date than planned?

RESPONSE:

The upper bound (P90 estimate) of the Project Cost Range includes up totwo seasons of construction delay.




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Exhibit:B-3


1.12.1 Please provide a copy of the full report prepared by MWH GlobalInc.

RESPONSE:

This report is privileged and confidential and will be filed in confidence with theCommission and provided to the BCOAPO’s legal counsel and consultant onlypursuant to the confidentiality undertakings provided by BCOAPO (Exhibit C3-3and C3-2 respectively).

BC Hydro is of the view that the Executive Summary of the MWH Report includedas Appendix E-3 of Exhibit B-1 reflects the findings of the MWH Report (theReport). In the Report, MWH concluded that BC Hydro has developed awell-organized cost estimate relative to AACEI Class 3 estimating criteria. MWHdid not identify any estimating issues, cost detail or constructability items thatwould be considered a fatal flaw requiring revision. In their Report, MWH identifiedpotential cost estimate refinements for BC Hydro to consider in the developmentof its cost estimate, and listed five recommended actions (included in theExecutive Summary). As stated in BC Hydro’s response to BCOAPO IR 1.12.2,BC Hydro has incorporated those recommendations into its cost estimate.



CONFIDENTIALATTACHMENT

FILED WITH BCUCONLY

BCOAPO IR 1.12.1 PUBLIC Attachment 1





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Exhibit:B-3


1.12.2 The Executive Summary (page 6) contains five suggested actionitems. Has BC Hydro undertaken all five recommended actions?

RESPONSE:

Yes, all five suggested action items were taken into account when developing thecost estimate.




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Exhibit:B-3


1.12.2.1 For those is has not undertaken, please explain why not.

RESPONSE:





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Exhibit:B-3


1.12.2.2 For those it has undertaken, have the results been incorporatedinto the current Application?

RESPONSE:




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Attention:

Ms. Erica Hamilton, Commission Secretary

Dear Sirs/Mesdames:

PO Box49130

Three Bentall Centre

2900-595 Burrard Sh·eet

Vancouver,

BC

Canada V7X 1J5

Telephone

604 688-0401

Fax 604 688-2827

Website www.owenbird.com

Direct Line: 604 691-7557

Direct Fax: 604 632-4482

E-mail: cwcafcr:ii)owcnbird.com

Our File: 23841/0135

Rc

British Columbia Hydro and Power Authority ( BC Hydro ) W.A.C. Bennett

Riprap Upgrade Project Application, Project No. 3698854

We arc counsel for the Commercial Energy Consumers Association

of

British Columbia

( CEC ). Attached please find the

CEC'

s first set of Information Requests with respect to the

above-noted matter.

copy of this letter and attached Information Requests have also been fixwarded to BC Hydro

and registered interveners by e-mail.

Should you have any questions regarding the foregoing, please do not hesitate to contact the

writer.

Yours truly,

OWEN BIRD LAW CORPORATION

Christopher P.

CPW/jlb

cc: CEC

cc: BC llydro

cc:

Registered Interveners

[ 00424863:1 )

C2-2





COMMERCIAL ENERGY CONSUMERS ASSOCIATION

OF BRITISH COLUMBIA CEC)

INFORMATION REQUEST 1

British Columbia Hydro and mnr Authority BC Hydro)

W.A.C. Bennett Riprap Upgrade Project Application

Project No. 3698854

1

Reference: Exhibit B-1, Page 1-5

has as

re

1.1.

The focus

C

Hydro considerations is on the riprap, to what extent do the·

1)

Upper

Section; (2) Toe Berm; and (3) Filter Layer p01iions of the project contribute to

stability and durability of the upstream dam face, relative to the Riprap Layer.

2. Reference: Exhibit B-1, Page 1-8

7

•

to

the

2.1. Why when BC Hydro addresses economic development and the creation of jobs

does BC Hydro only focus on Nations

in

the vicinity?

2.2. Arc there any other public interest considerations beyond the First Nations that BC

Hydro should be considering in regard to economic development and job creation?

{00425119;1}



3. Reference: Exhibit B-1 Pages 1-16 and 1-17 Table 1

3.1. Please confirm that the totals shown in the table and referred to above are not correct

and please provide the corrected table for the evidentiary record.

3.2. Please confirm that o this sample o projects 67% are over P50 estimates and 33%

arc under P50 estimates.

3.3. Please confirm that the median over P50 is 7.7% over.

3 Please confirm that the difference between P50 and P90 for project median in this

is 8.6% and that for the project average in this sample is 18.4%.

3.5. Please confirm that BC Hydro final cost performance versus P50 estimate is a median

11% over and 12% under estimate.

3.6. Please confirm that the maximum range o BC Hydro final cost performance versus

P50 estimate is 14% over estimate and 19% under estimate.

3.7. Please confirm that BC Hydro past estimating accuracy appears to be considerably

less on the actual performance overestimate side than the +25% in the Class 3

estimating standard and somewhat more on the actual performance underestimate

the 1 m the Class 3 estimating standard.

3.8. Please confirm that based on this o historical project performances

evidence supports little concern that

BC

Hydro would underestimate the cost

project.

3.9. Please confirm that this project sample represents all generation projects over 50

million finished from 2008 to 2015.

3.1 0. Please confirm that BC Hydro does not have any other data on its cost estimating

performance which would provide a different perspective than that provided by this

sample.

{00425119;1}

2



4

Reference: Exhibit B-1 Page 2-5

coarsest

a

he

n

to

4.1. Please confirm that this quality o knitting together to resist movement under the

stress

o

wave or icc loading

is

a key factor in the choice

o

riprap and method

installation.

4.2. Arc there any complementary strategies

f )r

enhancing the knitting quality o the rock

armor or

is

this strictly a property o the rock and its placement?

5. Reference: Exhibit B-1 Pages 2-6 and Page 2-7

2 a

meet at the

5.1. Please describe what a separate filler material between the Zone 5 surface and the

riprap provides and why its absence has contributed to the failure.

5.2. Please describe quantitatively i f possible better than the Appendix

D-1

damage

number what the sandstone riprap durability quality is versus what

is

required.

{00425119;1}

3



6. Reference: Exhibit B-1 Page 2-10

•

The

the 5

and

•

has

to

freeze thaw

6.1. Please describe how a filter layer would protect Zone 5 Dam fill from erosion.

Please describe how the larger riprap in a matrix o finer particle sized material

contributes to erosion prevention.

6.3. Please describe how a consistent larger size riprap layer would provide a durable

protection.

6.4. Please describe how the thickness o the riprap layer works to provide protection

from erosion.

6.5. Please describe

hovv

material alternatives

to

sandstone would provide more durable

7.


seen is

event

7.1. Please provide a frequency chart o high wind events at the Dam site scaled by

intensity o the vvin event either by year or in aggregate for a number

o

years to

demonstrate the probability o significant damage event occurrence.

{00425119;1

4



8. Reference: Exhibit B-1 J agc 2-13

7

a

as as

8.1. Please discuss the 2012 expert engineering panel recommendation

o

remedy as soon

as possible and what sort o time frame the panel would have meant.

8.2. Please discuss BC Hydro s methodology for determining the timetrame in which it

expects an appropriate tradeoffbetween risks and costs.

8.3. Please discuss what considerations go into BC Hydro s assessment

o

the appropriate

tradeoff between risks and costs for rcmediating the riprap.


concrete

to the or

9.1. What is the quantitative nature

o

the wave forces that would drive the criteria for

armour design and give rise to the concrete product performance?

10. Reference: Exhibit B-1 Pages 3-4 and Page 3-5

a

a

{00425119;1}



a

10.1. In adopting these design criteria has BC Hydro ensured that there is a margin above

the basic design requirements built into the final design choice to account for possible

unknown situations in the future and or to provide a degree

of

engineering

conservatism in the design?

10.2. What is BC Hydro s estimate ofthe margin

of

safety in the design?

10.3. Please provide the calculation for the stone weight and stone diameter with an

explanation that

is

more complete that that discussed in Appendix

D 1

11. Reference: Exhibit B-1 Appendix D-1 Page 26 o 74

11.1.

f

these probabilities for exceedance

of

wind speeds have been established from

data over two years, what

is BC

Hydro s estimate the potential range error m

these results as they might

be

established over much longer timeframes?

11.2. What

is

BC Hydro s estimate

of

the potential range

of enor

in these estimates

of

wave heights?

11.3. What would be the significance

of

a

.1

meter wave height estimate change for the

design size and weight

of

the riprap and the cost

of

the project?

{00425119;1} 6



11.4. Has BC Hydro examined any wave attenuation solutions and

i

so please describe the

11.5. What would be the impact on the cost and the proposed design the wave height

exposures were reduced by 25 , 50 , 75 .

12. Reference: Exhibit B-1 Appendix D-1 Page 28

of

74

1. Please describe the damage level measure and its meaning.

Please describe where the design criteria targets are derived from and how they were

determined.

13. Reference: Exhibit B-1 Appendix D-1 Page 4 of7

13.1. Has BC

1 Iydro

determined

i

there are any suitable methods for achieving higher

yields than 1 from the quarry blasting and what alternative options any were

examined?

{00425119;1}

7



14. Reference:

Exhibit

B-1, ppendix D-1,

Page

42

of

74

14.1. What is the impact on the costs of material from the quarry for a 1 change in the

yield?

14.2. What is the impact on the costs of material from the quarry for a 1 change

in

the

handling loss rate?

1 R.cfcrcnce: Exhibit B-1, Page 3-7

•

event

s

15

.1. Is the referenced damage from one single event damage and not a cumulative damage

from events?

16. Reference: Exhibit B-1, Page 3-7

•

to

•

16.1. Does this mean that over an entire 100 year period we should expect acceptable

damage with up to a probability

of

10 and a more serious damage. which would not

lead to failures up

to

1 ?

{00425119;1}

8



16.1.1.

If not please describe the 100 year probability for the above two event

types.

17.


Table

3 1

o

Critical Erosion Zone

haracteristics for

17.1. Please describe the toughness

of

the Limestone versus the Sandstone in quantitative

units.

17.2. Please describe how each of the stone weight, stone gradation and layer thickness

perform in sensitivity to changes in specification relative to potential damage and to

potential cost.

17.3. Please confirm that these tradeoff s are among the key factors driving the design.

Arc the relationships between damage and these specifications somewhat linear,

please discuss?


18.1. What was the BC Hydro assumption with regard to the cost per cubic meter

of

rock

transported per kilometer to be transported?

{00425119;1}

9




•

elevated

there

vv s

disturbance

of

the material The

cost

9 .1. Please describe the excavator type including physical characteristics) and how this

will work for placement

of

the material from trucking to the dam site to placement on

the dam face.

Did

BC

Hydro examine the potential for a rail and trolley conveyor approach to

placement

of

the new material on the dam face?


able

3-3

Project Cost

(

Cost Components

{00425119;1}

10

B r e ~ k d o w n

Upper

Bound



20.1. Does BC Hydro believe that this project is significantly different from a general

project management costs perspective than other generation projects have been

or does BC Hydro expect that its normal cost management as

cfTective as they have been in the past?

20.2. Are there opportunities built into the cost estimating for the project aside from

contingencies to make refinement decisions during the execution of the project

which would enable some degrees of cost control ·without compromising the project

end goals

of

providing a permanent solution for protection

of

the

dam

face.

20.3. Given the weakening

of

the Canadian economy and the world economy would BC

Hydro expect to find contract bids for this project to be robustly competitive and have

the potential to produce actual cost either at or below these cost estimates.


the

s

21.1. What is the probability that global warming will be advancing the snowmelt dates

and change the low reservoir period during the term of this project.


a

ssessment

22.1. Will BC Hydro have any alternatives to

to during this negotiation process

{00425119;1}

that

t

will have some leverage in the contract negotiation to ensure cost-effective

outcomes for customers?



23.

Reference: Exhibit

B-1

Page 3-30

adverse

23 .1. Please provide an approximate quantiiication of the pos t ve socio-economic and

environmental impacts that will be achieved y the project.


are

24.1. Please explain what the contracting community will be bidding on in terms of price

and how that would provide a control on costs and the degree to which there is a risk

that the ECI process will create the price/cost negotiation which may put cost

estimates at risk.

24.2. Please explain

how

BC Hydro will be managing change order issues to avoid cost

escalations during the project.

Please explain why BC Hydro is not looking to have the ECI process done with a

bid contractors in order to have some leverage the outcome this

process.

24.4. Could BC llydro pay two or more contractors to compete inside the ECI process after

the RFP?


are

25.1. What opportunities has BC Hydro investigated to ensure that the project will be

learning from experience as it progresses and therefore has a record of improving

yields?

{00425119;1}

2



25 2 Will the mandated geotechnical experts working with the contractors be able

to

provide this learning and will they be tasked to do so?


a

26 1 In order to manage the risks related to contractor performance will BC Hydro have

within the terms and conditions an ability to make sufficient changes to supplant poor

contractor performance with better or adequate contractor performance or will BC

Hydro be constrained to accepting the end performance

o

the contractor?

27

Reference: Exhibit B-1 Pages 5-9 and 5-10

•

expect the

allocated to

are

to

contracting process t have as terms

best to t

becomes evident that they are not being adequately managed?

{00425119;1}

13




seasons There

are

28.1. Will the 10 000 truckloads

of

material be equally distributed across the 3 construction

production seasons being used making

it

3 333 per season?

28.2. Given that placement is to occur in the 3 construction dry period windows from

March to June will this result in about 27 to 30 trucks a day moving onto the dam site

or 2 to 3 per hour?

28.3. Will BC Hydro and the contractor be contemplating using lighting

the dam site

work areas to deal

\ ith

low light or darkness considerations to accommodate these

volumes material movement?

29. Reference: Exhibit B-1-4 Volume 1 Page

17

29.1. Please describe whether or not these recommendations are being addressed in the

project and

if so

how they arc being addressed.

{00425119;1} 4



30. Reference: Exhibit B-1-4 Volume 1 Page 47

30.1. Please confirm that Sinkhole 1 is

of more

significant concern than Sinkhole 2

vvith

respect to

m n ging

how

it

m y

present risks to the project.

{00425119;1}

5



Commercial Energy Consumers Association of BritishColumbiaInformation Request No. 1.1.1 Dated: December 18, 2015British Columbia Hydro & Power AuthorityResponse issued January 14, 2016

Page 1of 1


Exhibit:B-3

1.0 Reference: Exhibit B-1, Page 1-5

1.1.1 The focus BC Hydro considerations is on the riprap, to what extentdo the (1) Upper Section; (2) Toe Berm; and (3) Filter Layer portionsof the project contribute to stability and durability of the upstreamdam face, relative to the Riprap Layer.

RESPONSE

The Upper Section provides stability for the Dam crest road and provides erosionprotection for rainfall and runoff. The Upper Section is not impacted by waveerosion so riprap has been sized to utilize smaller size materials from the SandFlat Quarry.

The filter layer (bedding) provides stability and durability of the upstream Damface in the critical erosion zone, and it prevents erosion of underlying Zone 5 fill

and ultimately protects the Dam core. Without an adequate filter layer, theunderlying Zone 5 fill can be washed away through the gaps/voids between thelarge size riprap by wave action, leading to locally over-steepened sections on theslope and resulting in failure of the riprap due to slope movement.

The toe berm provides protection to the lower portions of the upstream Dam faceduring low reservoir level periods, and it contributes to the durability of this lowerslope by placing additional riprap on top of the original riprap.




Page 1of 1


Exhibit:B-3


1.2.1 Why when BC Hydro addresses "economic development and thecreation of jobs" does BC Hydro only focus on First Nations in thevicinity?

RESPONSE:

BC Hydro’s intent is to provide business and employment opportunities to alllocal stakeholders and First Nations. Please refer to BC Hydro’s response toCEC IR 1.2.2.




Page 1of 1


Exhibit:B-3


1.2.2 Are there any other public interest considerations beyond the FirstNations that BC Hydro should be considering in regard to economicdevelopment and job creation?

RESPONSE:

BC Hydro has considered other public interest benefits to local stakeholders andFirst Nations, including the following:

• The rates of the local labour and sub-contractors will be competitivelycheaper as compared to outside labour/businesses and would thereforeprovide better opportunities to locals for employment and sub-contractingwith the contractor;

• Though it may be determined necessary through detailed constructionplanning, no camp site is currently envisioned in the contract. This wouldprovide business opportunities to locals in terms of boarding/lodging,catering and transport needs of the Contractor; and

• BC Hydro views selecting a cost effective solution and delivering theProject on time and on budget as a public interest benefit in support ofbroader economic development and job creation in British Columbia.




Page 1of 1


Exhibit:B-3

3.0 Reference: Exhibit B-1, Pages 1-16 and 1-17, Table 1

1.3.1 Please confirm that the totals shown in the table and referred to above arenot correct and please provide the corrected table for the evidentiary record.

RESPONSE:

Confirmed. The GMS 1 to 5 Project appears to have been excluded from the Table 1totals. The revised Table 1 below now includes the GMS 1-5 Project in the totals, andBC Hydro will provide an errata updating the Table in the Application.

Project Name ProjectIn-service

Expected Amount

(P50)

($ million)

Au thor ized Amount

(P90 + MgmtReserve)($ million)

AmountIdentified i n

Determination /CPCN Decision

($ million)

Final ProjectCost

($ million)

GMS Units 1-5 TurbineRehabilitation

August 2015 198.6 273.7 262.0 (Note 1) 175.0 (Note 1)

Mica GIS Upgrade August 2014 180.6 200.2 180.6 (Note 2) 192.3 (Note 2)

Stave Falls SpillwayGates Upgrade

March 2013 61.5 70.6 61.5 (Note 3) 50.1

Fort Nelson Gas

Resource SmartUpgrade

February 2012 149.2 164.0 140.1 (Note 4) 165.4

Revelstoke Unit 5 December 2010 280.0 320.0 280.0 (Note 5) 250.0

Mica G1 – G4 Stators November 2009 77.6 97.0 78.0 (Note 6) 86.2 (Note 4)

Peace Canyon G1 – G4Stators

October 2009 63.7 85.7 67.0 (Note 6) 72.5 (Note 4)

AberfeldieRedevelopment May 2009 89.3 95.0

Recovery ofup to 94.0(Note 7)

95.0 (Note 4)

Coquitlam Dam SeismicImprovement

July 2008 58.0 65.6 58.0 (Note 6) 64.9

Total 1,158.5 1,371.8 Up to 1,221.2 1,151.4Notes:

1. Commission Order No. G-1-10 page 2. This project is in-service but the amount provided is a forecast as trailingcosts and the addressing of outstanding deficiencies remain.

2 Commission Order No. G-38-10, page 2. The project is now in-service but the amount provided is a forecast astrailing costs remain.

3 Commission Order No. G-81-10, page 1. The project is now in-service but the amount provided is a forecast astrailing costs remain.

4 Commission Order No. G-79-09 page 3.

5 Commission Order No. C-8-07 page 2.

6 Commission Order No. G-143-06, Appendix A, page 9 of 45.

7 Commission Order No. C-2-07, page 3.




Page 1of 1


Exhibit:B-3


1.3.2 Please confirm that of this sample of projects 67% are over P50estimates and 33% are under P50 estimates.

RESPONSE:

Confirmed.




Page 1of 1


Exhibit:B-3


1.3.3 Please confirm that the median over P50 is 7.7% over.

RESPONSE:

BC Hydro is not able to confirm that the median over P50 is 7.7 per cent over, as itis not clear from the question what amounts are being compared. Of thoseprojects where the actual costs exceeded the P50 estimate, BC Hydro hascalculated a median increase of 8.6 per cent.




Page 1of 1


Exhibit:B-3


1.3.4 Please confirm that the difference between P50 and P90 for projectmedian in this sample of project is 8.6% and that for the project averagein this sample is 18.4%.

RESPONSE:

Confirmed




Page 1of 1


Exhibit:B-3


1.3.5 Please confirm that BC Hydro final cost performance versus P50estimate is a median11% over and 12% under estimate.

RESPONSE:

Confirmed




Page 1of 1


Exhibit:B-3


1.3.6 Please confirm that the maximum range of BC Hydro final costperformance versus P50 estimate is 14% over estimate and 19% underestimate.

RESPONSE:

Based on the projects in Table 1-1 of the Application, BC Hydro confirms that therange is +14 per cent to -19 per cent.




Page 1of 1


Exhibit:B-3


1.3.7 Please confirm that BC Hydro past estimating accuracy appears to beconsiderably less on the actual performance overestimate side than the+25% in the Class 3 estimating standard and somewhat more on theactual performance underestimate than the -10% in the Class 3estimating standard.

RESPONSE:

BC Hydro’s cost estimate for the Project is based on an accuracy range of+25 per cent/-20 per cent, not the +25 per cent/-10 per cent shown on page 1-18,line 8 of Exhibit B-1. Of the nine projects in Table 1-1, the range for individualprojects varies from +14 per cent to -19 per cent. Based on the complexityassociated with this Project, BC Hydro has deemed the appropriate accuracyrange to be the +25 per cent/-20 per cent, which is consistent with the AACE

Class 3 guideline.

As per AACE Class 3 the range with 80 per cent confidence can be as high as+30 per cent and as low as -20 per cent.




Page 1of 1


Exhibit:B-3


1.3.8 Please confirm that based on this sample of historical projectperformances that the evidence supports little concern that BC Hydrowould underestimate the cost project.

RESPONSE:

Performance on this nine project sample size shows the expected amount (P50)could be in a range of +14 per cent to -19 per cent. There is always a risk thatestimates are either underestimated or overestimated. For this Project, BC Hydrobelieves that the estimate accuracy range is appropriate and is within the AACEClass 3 guideline.




Page 1of 1


Exhibit:B-3


1.3.9 Please confirm that this project sample represents all generationprojects over $50 million finished from 2008 to 2015.

RESPONSE:

BC Hydro confirms that the sample represents all generation projects over$50 million that were finished and placed into service in the period between 2007and mid-2015 as per Exhibit B-1, page 1-16, line 14.




Page 1of 1


Exhibit:B-3


1.3.10 Please confirm that BC Hydro does not have any other data on itscost estimating performance which would provide a differentperspective than that provided by this sample.

RESPONSE:

BC Hydro has further data on its cost estimating performance. For example,page 13 of BC Hydro’s F2015/16 to F2017/18 Service Plan (available on BC Hydro’swebsite) shows that capital projects have achieved an overall reduction in actualcost performance of 4.75 per cent compared to project budget. The metric in theService Plan is based on a five-year rolling data set (F2010 to F2014) of actualcosts compared to original approved full scope implementation budgets (notincluding project reserve amounts), for generation and transmission capitalprojects that were put into service during the period.




Page 1of 1


Exhibit:B-3


1.4.1 Please confirm that this quality of knitting together to resist movementunder the stress of wave or ice loading is a key factor in the choice

of riprap and method installation.

RESPONSE:

Confirmed.




Page 1of 1


Exhibit:B-3


1.4.2 Are there any complementary strategies for enhancing the knittingquality of the rock armor or is this strictly a property of the rock and its

placement?

RESPONSE:

The interlocking (or knitting) quality is mainly a property of the rock (size, shape,and durability) and its placement method. Construction of a test panel at thebeginning of riprap placement will provide a reference standard of knitting qualityfor the remaining work. Construction quality inspection (QA/QC) is essential toensure knitting quality.




Page 1of 1


Exhibit:B-3

5.0 Reference: Exhibit B-1, Page 2-6 and Page 2-7

1.5.1 Please describe what a separate filler material between the Zone 5surface and the riprap provides and why its absence has contributed tothe failure.

RESPONSE:

A separate filter layer (bedding) underneath the riprap prevents erosion ofunderlying Zone 5 fill and ultimately protects the dam core. Currently, the gaps orvoids within the original riprap are large enough that the underlying Zone 5materials have been washed out by wave actions in storm events, contributing tothe 2.4 m (8 ft) deep localized erosion on the upstream slope and resulting failureof the original riprap.

The requirement for a filter layer for the new riprap is specified to ensure that the

failure process outlined above is not repeated.




Page 1of 1


Exhibit:B-3


1.5.2 Please describe quantitatively (if possible better than the Appendix D-1

damage number) what the sandstone riprap durability quality is versuswhat is required.

RESPONSE:

The durability quality parameters of the existing sandstone riprap are comparedwith the required durability for the new riprap in the table in BC Hydro’s responseto CEC IR 1.6.5. The table illustrates that the specific gravity (SSD), waterabsorption, abrasion resistance (LA Abrasion), and magnesium sulphate (MgSO4)soundness of the sandstone, does not meet durability requirements for the new

riprap at the Dam. The measured low durability quality of the original sandstoneindicates that it is vulnerable to weathering degradation / breakdown subject tocycles of freeze and thaw.




Page 1of 1


Exhibit:B-3


1.6.1 Please describe how a filter layer would protect Zone 5 Dam fill fromerosion.

RESPONSE:

The filter layer (bedding) prevents erosion of the underlying Zone 5 fill through thenew riprap by ensuring filter compatibility between these layers. The filter layerensures that no Zone 5 materials are washed out through the gaps betweenindividual rock blocks in the riprap layer.




Page 1of 1


Exhibit:B-3


1.6.2 Please describe how the larger riprap in a matrix of finer particle sizedmaterial contributes to erosion prevention.

RESPONSE:

BC Hydro has provided a response on the basis that the question meant to askhow the larger riprap in a matrix of finer particle sized material contributes toerosion, not erosion prevention. Larger riprap in a matrix of finer sized particlescontributed to the failure of the original riprap on the Dam due to poorinterconnections among these particles. Wide gradation of the original riprapresulted in undersized riprap in localized zones, leading to damage (beaching anderosion) in these areas under wave actions in storm events.




Page 1of 1


Exhibit:B-3


1.6.3 Please describe how a consistent larger size riprap layer would providea durable protection.

RESPONSE:

The specified large size riprap, which has a narrow band of particle gradation,ensures that the smallest piece of the riprap is sized to resist the design waveforces on the steep (2H:1V) slope at the Dam. Combined with the use of durablerock such as Sand Flat limestone, this design will provide a durable protection tothe upstream Dam face.




Page 1of 1


Exhibit:B-3


1.6.4 Please describe how the thickness of the riprap layer works to provideprotection from erosion.

RESPONSE:

The riprap thickness acts to dissipate the wave energy and protect the underlyingfilter layer (bedding) and the Zone 5 fill. A thicker riprap layer would provide betterprotection to the Dam face.




Page 1of 2


Exhibit:B-3


1.6.5 Please describe how material alternatives to sandstone would providemore durable protection

RESPONSE:

Rock for riprap should be hard, dense, durable, and able to resist long exposureto weathering. Rock types such as granite, quartzite, basalt and limestone aremore durable than sandstone by virtue of being more crystalline, more indurated(i.e., cemented) and usually with significantly less porosity. These characteristicsmake them more resistant to abrasion, moisture penetration, freeze/thaw andother weathering processes. The U.S. Army Corps of Engineers (USACE 1990)ranks common rock types, from most durable to least durable, as

(1) Granite;

(2) Quartzite;

(3) Basalt;

(4) Limestone and Dolomite;

(5) Rhyolite and Dacite;

(6) Andesite;

(7) Sandstone; and

(8) Breccia and Conglomerate.

The rock materials available near the Dam are limestone and sandstone.Limestone durability is ranked above the sandstone according to USACE (1990).In particular, the measured durability of the Sand Flat limestone is alsoconsiderably higher than the durability of the original sandstone riprap asillustrated in the table below.






Page 1of 2


Exhibit:B-3


1.7.1 Please provide a frequency chart of high wind events at the Dam sitescaled by intensity of the wind event either by yea r or in aggregatefor a number of years to demonstrate the probability of significantdamage event occurrence.

RESPONSE:

BC Hydro installed a wind anemometer at the crest of Dam in March 1999 tomeasure directional wind speeds at hourly intervals. Table 7.1 below illustratesthe measured annual maximum hourly wind speeds since 1999 in terms winddirection by quadrants. High wind events blowing from North-West (NW) andNorth-East (NE) result in wave actions on the Dam. Table 7.2 below illustrates theaggregate number of occurrences of annual maximum hourly NW and NE windspeeds as observed at the Dam crest during 1999 to 2015.

The record shows that the Dam did not experience very high wind events in thepast 17 years. There were two wind events (64 km/hr in NW and 65 km/hr in NE)that had a maximum hourly wind speed exceeding the ten-year wind speeds(60 km/hr in NW and 62 km/hr in NE). There were 16 events with wind speeds inthe range of 50 to 60 km/hr that are lower than the ten-year wind speeds.

Table 7.1 Annual Maximum Hourly Wind Speed Record(1999 to 2015) at the Crest of the Dam

Annual Maximum Hourly Wind Speed (km/hr)

Year NE SE SW NW

1999 56.4 52.1 34.8 33.9

2000 51.4 53.6 43.4 34.9

2001 65.1 50.6 50.1 39.5

2002 48.1 42.7 54.8 54.42003 53.2 45.6 69.8 55.3

2004 48.2 45.0 70.4 50.1

2005 55.3 57.9 68.8 59.5

2006 43.3 48.6 65.2 46.7

2007 44.5 44.0 56.3 52.4

2008 45.4 47.1 69.6 50.7

2009 57.3 40.5 66.8 50.0




Page 2of 2


Exhibit:B-3

Annual Maximum Hourly Wind Speed (km/hr)

Year NE SE SW NW

2010 42.8 34.2 65.5 48.0

2011 45.1 46.7 59.8 51.8

2012 44.4 42.5 68.4 44.9

2013 48.7 41.7 60.6 55.3

2014 59.5 51.8 68.8 64.2

2015 41.5 47.3 57.0 52.5

Max. Wind Speed(1999 to 2015) (km/hr)

65.1 57.9 70.4 64.2

Table 7.2 Aggregate Number of Occurrences ofHigh NW and NE Wind Events at the Dam Crest

Annual Maximum HourlyWind Speed (km/hr)

Number of Occurrencesin Past 17 Years (NW)

Number of Occurrencesin Past 17 Years (NE)

30 to 40 3 0

40 to 50 3 10

50 to 60 10 6

60 to 66 1 1

>66 0 0




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Exhibit:B-3


1.8.1 Please discuss the 201 2 expert engineering panel recommendation ofremedy as soon as possible and what sort of timeframe the panel wouldhave meant.

RESPONSE:

The Expert Engineering Panel (EEP) conducted a site visit to the Dam in 2011 andobserved the condition of the riprap. At the time, BC Hydro expected that simplerepairs to the riprap would be possible using a local rock quarry and anticipatedproject completion around 2015. BC Hydro expressed this timing to the EEP,which supported the need for the riprap upgrades and documented the expected2015 date in its report.

During early project planning and definition BC Hydro determined that simplerepairs would not suffice and that a more comprehensive solution, includingusing higher quality rock from a more distant quarry, was required to provide a

long-term solution.

The EEP was recently re-convened in November 2015, and the new design,construction plans, and construction schedule from 2017 to 2019 were presented.While its report is still in draft, the EEP continues to support the need for theriprap upgrade and did not provide any comments regarding the constructionschedule.




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Exhibit:B-3


1.8.2 Please discuss BC Hydro's methodology for determining the timeframein which it expects an appropriate tradeoff between risks and costs.

RESPONSE:

There was no consideration of a specific timeframe or an appropriate tradeoffbetween risk and cost in determining the timing of the Project. Rather, BC Hydroused judgment in determining when to initiate the Project based on visualobservations of the rate of deterioration and in view of other dam safety prioritiesacross the system.




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Exhibit:B-3


1.8.3 Please discuss what considerations go into BC Hydro's assessment ofthe appropriate tradeoff between risks and costs for remediating theriprap.

RESPONSE:

Please refer to BC Hydro’s response to CEC IR 1.8.2.

A tradeoff between risk and cost was required when assessing the approach tothe design work. BC Hydro’s key decision was whether or not to requirerebuilding of the riprap layer as if the work was being done during construction ofa new dam. It was determined that such a requirement would necessitatesignificantly greater time and effort than is currently planned and only result in arelatively small decrease in the likelihood of future damage to the riprap layer.These tradeoffs between risks and costs included the selection of the design levelof protection of the new riprap and the acceptable level of damage, the use of

smaller riprap on the upper section above the maximum reservoir level, and there-use of the existing riprap on the berm below El. 2170 ft.

There is no specific numerical calculation that can determine an economictradeoff between the probability of future damage and the robustness of theplanned works as there are too many undefined variables.






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Exhibit:B-3


1.10.1 In adopting these design criteria has BC Hydro ensured that there is amargin above the basic design requirements built into the final designchoice to account for possible unknown situations in the future and or toprovide a degree of engineering conservatism in the design?

RESPONSE:

BC Hydro has adopted performance-based design criteria for the new riprap that

includes a margin of safety to provide a practical degree of engineering

conservatism to account for the uncertainties inherent in the design. Refer to

BC Hydro’s response to CEC IR 1.12.2 for more details on the performance-baseddesign criteria.




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Exhibit:B-3


1.10.2 What is BC Hydro's estimate of the margin of safety in the design?

RESPONSE:

The performance-based design approach has been adopted for the design of newriprap. The target performance requirements are that, over a 100-year period, thereis a 10 per cent probability of acceptable damage and a 1 per cent probability ofmore serious damages, but not leading to upstream slope failure (equivalent tothe performance criteria set out in Exhibit B-1, section 3.2.1.6).

Reasonable design conservatism as normally adopted in engineering designpractice has been followed in selecting design parameters such as wind speed,

wave height and riprap gradation.




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Exhibit:B-3


1.10.3 Please provide the calculation for the stone weight and stone diameterwith an explanation that is more complete that that discussed in

Appendix D-1

RESPONSE:

The minimum riprap weight (Wmin) using the empirical method (SEBJ 1997) can be

calculated using the following Hudson’s Equation:

γr H3

Wmin =

KD (Gs-1)3 (cot α)

γr = Unit Weight of Riprap

H = Design Wave Height

KD = Stability Coefficient (K= 1.75 for No Damage, 3.5 for Acceptable

Damage)

Gs = Specific Gravity of Riprap

cot α = Slope of Structure Face (Horizontal/Vertical)Wmin = Required Minimum Weight of Riprap

As outlined in the Preliminary Design Report in Exhibit B-1, Appendix D-1, a W min

of 850 kg was calculated using the empirical method for the target design criteria

and the site specific design parameters. Once the riprap weight is determined, the

minimum riprap size (Dmin) of 800 mm is calculated by the following equation:




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Exhibit:B-3

Wmin 1/3

Dmin =

Cf Gs

Cf = Coefficient of Form (where 1 would indicate a perfect cube and

0.25 would indicate a perfect tetrahedron, 0.6 is typically assumed)

Gs = Specific Gravity of Riprap

Dmin = Required Minimum Size of Riprap

In addition to the above empirical method of calculating riprap weight and size,numeric modelling of performance for the design riprap was conducted.

Based on results of numeric modelling of the design riprap proposed for theDam, it was determined that riprap with a minimum weight (Wmin) of 650 kg and aminimum size (Dmin) of 730 mm will meet the performance-based design criteria asdescribed in Exhibit B-1, section 3.2.1.6.




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Exhibit:B-3

11.0 Reference: Exhibit B-1, Appendix D-1, Page 26 of 74

1.11.1 If these probabilities for exceedance of wind speeds have beenestablished from data over two years, what is BC Hydro's estimate ofthe potential range of error in these results as they might be established

over much longer timeframes?

RESPONSE:

BC Hydro has been collecting directional wind data at the crest of the Dam for17 years since March 1999. However, the available wind data is inadequate for anat-site frequency analysis for obtaining reliable wind speed estimates for longreturn period events. Therefore, BC Hydro carried out a regional analysis toestimate wind speeds for various Annual Exceedance Probabilities (AEP).Regional analysis augments the data from the site of interest by using data from

other sites that are judged to have frequency distributions similar to that of thesite of interest. Regional analysis can minimize the uncertainty of frequencyestimates for stations with limited data. Regional estimates are found to be moreaccurate (have less absolute error) and are more stable (have less variance) thanthose based solely on at-site records (Goel et al. 2004). The uncertainty estimatesfor the dam crest wind speeds obtained from regional wind analysis are shown inColumn A in Table 1 below.

BC Hydro deployed a buoy in the Williston Reservoir in 2012 to collect over-waterwind and wave data. Tetra Tech EBA developed a correlation between theconcurrent measurements of winds at the dam crest and the buoy using astatistical approach. A numerical wave model was also developed and calibrated

on the basis of over-water measurements of wind and waves. Tetra Tech EBA thendeveloped a transfer function to predict site-specific over-water winds at standard10 m height over the complete reservoir fetch that generates waves that aredirected at the upstream face of the Dam. They applied this transfer function towind estimates obtained from regional analysis to calculate over-water windspeeds. Peak wave parameters (significant wave height and wave period) weresubsequently predicted for the extreme wind events using the calibratednumerical wave model.






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Exhibit:B-3


1.11.2 What is BC Hydro's estimate of the potential range of error in these

estimates of wave heights?

RESPONSE:





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Exhibit:B-3


1.11.3 What would be the significance of a .1 meter wave height estimate

change for the design size and weight of the riprap and the cost of theproject?

RESPONSE:

The size of riprap that is able to resist a particular wave event is linearlyproportional to the wave height (Hs), but the weight required has a cubicexponential relation to Hs. For the new riprap design, a change of wave height by0.1 m (i.e., approximately 5 per cent of the design wave height) would result in achange of riprap size by 5 per cent and a change of riprap weight by 15 per cent,

which would result in a change to the total Project cost by approximately5 per cent.




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Exhibit:B-3


1.11.4 Has BC Hydro examined any wave attenuation solutions and if so

please describe the review?

RESPONSE:

The wave attenuation solution was presented and examined in the one-day Projectreview workshop held in October 28, 2014. The solution of installing a waveattenuator to protect the upstream face of the Dam was not considered to be aviable option to address the Dam safety deficiencies due to the failure of theexisting riprap.

The wave attenuation solution was eliminated due to concerns on lack ofprecedence and effectiveness of the attenuator; installation of a wave attenuatorwould not completely eliminate the need for future riprap repairs as proposed forthe Project.






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Exhibit:B-3


1.12.1 Please describe the damage level measure and its meaning.

RESPONSE:

The figure below illustrates the damage level (S) which is a measure of erodedriprap area relative to the size of the riprap stone. The damage level (S) of riprap isa quantitative expression of riprap damages caused by wave erosion based onstudies by W. van der Meer (1995). For example, for riprap on a steep slope(2H:1V) a damage level of 8 indicates failure of the riprap that exposes theunderlying filter materials. For riprap on a flatter slope (3H:1V), riprap failurecorresponds to a damage level of 12.




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Exhibit:B-3


1.12.2 Please describe where the design criteria targets are derived from andhow they were determined.

RESPONSE:

The performance criteria were selected in accordance with general guidelines fordesign of riprap by US Bureau Reclamation (USBR 2014) and the Sociétéd’énergie de la Baie James (SEBJ 1997) for AEP of 1/100 and 1/1000 wind/waveevents. The 1/10,000 AEP performance criteria was selected to be consistent withthe seismic design requirements by 2007 Canadian Dam Association Guidelines(CDA 2007). Please refer to BC Hydro’s response to BCOAPO IR 1.8.1 for a list ofreferences.

As set out in Exhibit B-1, section 3.2.1.6, the design criteria adopted for the new

riprap are:

1) no damage (i.e., <5 per cent damage) to the riprap for Annual ExceedanceProbability (AEP) of 1/100 wind/wave events;

2) acceptable damage (i.e., does not require emergency repair) for AEP of1/1000 events; and

3) no failure (i.e., not exposing underlying filter layer) for AEP of1/10,000 events.

The above performance criteria are tied to the damage level (S) based on studies

by W. van der Meer (1995). For the 2H:1V upstream slope of the Dam, theassociated threshold damage levels (S) for the new riprap are targeted to be S=2,S=5 and S=8 under the AEP of 1/100, 1/1000 and 1/10,000 wind/wave events,respectively.




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Exhibit:B-3


1.13.1 Has BC Hydro determined if there are any suitable methods forachieving higher yields than 15% from the quarry blasting andwhat alternative options any were examined?

RESPONSE:

Yes, BC Hydro examined alternative methods for quarry production to achieve ariprap yield higher than 15 per cent. For example, the Contractor is required tohave in its team a blasting consultant and an engineering geologist, who arequalified for the Project, to conduct the quarry work on an ongoing basis. Thebenefits of this include:

• the quarry blasting will target the most productive area tailored to the sitegeology; and

• the blasting design would be updated with changing rock condition andexperience gained throughout the quarry work.

BC Hydro has also examined alternate procurement/contracting approaches toachieve a riprap yield higher than 15 per cent, for example:

• the Request For Proposals provides for incentives to the Contractor forachieving higher yield at the quarry; and

• during the ECI process, methodologies to increase quarry yield will bediscussed with the selected Contractor and the risks associated with the

quarry yield assigned to achieve higher yield.




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Exhibit:B-3


1.14.1 What is the impact on the costs of material from the quarry for a 1%change in the yield?

RESPONSE:





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Exhibit:B-3


1.14.2 What is the impact on the costs of material from the quarry for a 1%change in the handling loss rate?

RESPONSE:

It will be similar to the cost impact for a 1 per cent change in the yield. Please referto BC Hydro’s response to BCUC IR 1.26.1.




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Exhibit:B-3

15.0 15 Reference: Exhibit B-1, Page 3-7

1.15.1 Is the referenced damage from one single event damage and not acumulative damage from many events?

RESPONSE:

Yes, the referenced damage is from one single event for the referenced returnperiod.




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Exhibit:B-3


1.16.1 Does this mean that over an entire 100 year period we should expectacceptable damage with up to a probability of 10% and a more seriousdamage, which would not lead to failures up to 1%?

RESPONSE:

Yes, an Annual Exceedance Probability (AEP) of 1/1000 event is approximatelyequivalent to a 10 per cent probability event in 100 years, and a 1/10,000 event isapproximately equivalent to a 1 per cent probability event in 100 years.



Commercial Energy Consumers Association of BritishColumbiaInformation Request No. 1.16.1.1 Dated: December 18, 2015British Columbia Hydro & Power AuthorityResponse issued January 14, 2016

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Exhibit:B-3


1.16.1 Does this mean that over an entire 100 year period we should expectacceptable damage with up to a probability of 10% and a more seriousdamage, which would not lead to failures up to 1%?

1.16.1.1 If not please describe the 100 year probability for the

above two event types.

RESPONSE:





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Exhibit:B-3

17.0 17. Reference: Exhibit B-1, Page 3-8

1.17.1 Please describe the toughness of the Limestone versus theSandstone in quantitative units.

RESPONSE:





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Exhibit:B-3


1.17.2 Please describe how each of the stone weight, stone gradation and layerthickness perform in sensitivity to changes in specification relative to potentialdamage and to potential cost.

RESPONSE:

The figure below shows the relationship between the expected damage levels and stoneweight (Wmin) for narrow graded riprap. Under a particular wind/wave event (such as anAnnual Exceedance Probability (AEP) of 1/100 event), damage levels increase in anonlinear function as the stone weights decrease (i.e., the relative increase in damageswould be more than the relative decrease in stone weight). The contribution of ripraplayer thickness to damage is similar to the contribution of the riprap stone weight; adecrease in layer thickness will increase the damages.

The stone gradation (variation in stone sizes) also contributes to the damage levels ofriprap; for the steep slope and severe climate conditions at the Dam, the proposednarrow graded riprap is more effective and reliable to resist wave attacks than a well

graded riprap specification. Please refer to Exhibit B-1, section 3.2.1.3 for a discussion ofthe improved performance with narrow graded riprap.

The Project cost has an approximately cubic root relationship with the stone weight(Wmin) and an approximately linear relationship with riprap layer thickness. Narrowgraded riprap is higher cost than well graded riprap as the quarry yield is reduced fornarrow graded riprap due the increase in the uniformity of stone sizes. Please refer toBC Hydro’s response to BCUC IR 1.26.1 for a discussion of how the Project cost varieswith changes in quarry yield.




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Exhibit:B-3


1.17.3 Please confirm that these tradeoffs are among the key factors drivingthe design.

RESPONSE:

Confirmed.




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Exhibit:B-3


1.17.4 Are the relationships between damage and these specificationssomewhat linear, please discuss?

RESPONSE:





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Exhibit:B-3


1.18.1 What was the BC Hydro assumption with regard to the cost percubic meter of rock transported per kilometer to be transported?

RESPONSE:

BC Hydro provided a bottom-up approach to develop the estimate by costelement. The cost estimate was not based on a cost per cubic meter per kilometerof rock transported.




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Exhibit:B-3


1.19.1 Please describe the excavator type (including physical characteristics)and how this will work for placement of the material from trucking to

the dam site to placement on the dam face.

RESPONSE:

BC Hydro has assumed a Caterpillar 390 (90-ton) excavator with an extendedreach and a bucket thumb. It is assumed that trucks will offload material adjacentto the excavator, with the excavator subsequently placing material on the slope.




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Exhibit:B-3


1.19.2 Did BC Hydro examine the potential for a rail and trolley conveyorapproach to placement of the new material on the dam face?

RESPONSE:

No. BC Hydro considers that it would be impractical for moving the large rockcontemplated for the Project via a rail and trolley conveyor.




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Exhibit:B-3


1.20.1 Does BC Hydro believe that this project is significantly different, froma general project management of costs perspective, than its othergeneration projects have been or does BC Hydro expect that itsnormal cost management practices will be as effective as they havebeen in the past?

RESPONSE:

BC Hydro expects that its normal cost management practices will be as effectiveor better as they have been in the past.




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Exhibit:B-3


1.20.2 Are there opportunities built into the cost estimating for the project,aside from contingencies, to make refinement decisions during theexecution of the project, which would enable some degrees of costcontrol ·without compromising the project end goals of providing apermanent solution for protection of the dam face.

RESPONSE:

No. The budget is comprehensive with regards to the desired project scope andrisks. However, BC Hydro is pursuing innovation through the ECI process and theexecution of the project to control cost within the budget and mitigate projectrisks. Please refer to BC Hydro’s response to CEC IR 1.27.1 that discusses riskallocation through the ECI process.




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Exhibit:B-3


1.20.3 Given the weakening of the Canadian economy and the worldeconomy would BC Hydro expect to find contract bids for thisproject to be robustly competitive and have the potential to produceactual cost either at or below these cost estimates.

RESPONSE:

No, BC Hydro does not expect contract bids to result in an updated cost estimatethat is below the lower bound of the Project Cost Range (as described inExhibit B-1, section 3.5.1). The Project Cost Range considers competitive bids(i.e., four to six bids) experienced for recent work in the area.




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Exhibit:B-3


1.21.1 What is the probability that global warming will be advancing thesnowmelt dates and change the low reservoir period during the termof this project.

RESPONSE:

Williston Reservoir is BC Hydro’s major system reservoir used to time shiftproduction from high inflow low demand periods to low inflow high demandperiods. Therefore the timing and duration of drawdowns is dependent on systemconditions (e.g., timing and magnitude of loads, market prices, and generationfrom other resources) as well the melting of the basin snowpack.

The analysis that BC Hydro used to estimate the duration of the low reservoirperiod includes 42 historic weather sequences for system inflows, prices, loads,

and generation from other resources, and includes historic years up to 2014.Therefore any climate change trends will be included as part of this historicrecord.

Moreover, within the duration of this project the magnitude of the year-to-yearnatural climate variability within the 42 sequences is much larger than anyexpected current climate change trend signal, and we have seen no significantclimate change trends to date in the seasonality of Williston inflows.

As a result, BC Hydro has not separated out the impacts of climate change in theforecasts of low reservoir periods for this Project.




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Exhibit:B-3


1.22.1 Will BC Hydro have any alternatives to go to during thisnegotiation process such that it will have some leverage in thecontract negotiation, to ensure cost-effective outcomes forcustomers?

RESPONSE:

The intent of the Early Contractor Involvement (ECI) process is to discuss allaspects of the Contract based on the base prices, profits, mark-ups/margins andassumptions/risk submitted by the selected proponent/contractor in their bids inresponse to the RFP. These include, but are not limited to, the constructionmethodology, schedule, First Nation sub-contracting, risk sharing mechanism etc.and to collaboratively arrive at an agreed contract price.

In the event it becomes evident during the ECI process that the selectedcontractor/proponent will not negotiate in good faith, BC Hydro has reserved theright to terminate the process or pre-construction agreement. BC Hydro wouldalso do an internal assessment of the prices for cost-effectiveness outcomes. Allthis will ensure a cost-effective outcome.




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Exhibit:B-3


1.23.1 Please provide an approximate quantification of the positivesocio-economic and environmental impacts that will be achieved bythe project.

RESPONSE:

Positive socio-economic and environmental impacts that will be achieved by theProject include avoiding reliance on the Emergency Plan, which may also includeemergency reservoir drawdown. Please refer to BC Hydro’s response toBCUC IR 1.4.4 for a range of possible costs associated with the Emergency Plan.Additional positive socio-economic impacts are related to the procurementassociated with the Contract value, providing employment to the local workforceand First Nations. Additional benefits will be realized by the suppliers selected bythe Contractor, potential businesses in Hudson’s Hope, Fort St. John, and/or otherlocations selected by the Contractor.




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Exhibit:B-3


1.24.1 Please explain what the contracting community will be bidding onin terms of price and how that would provide a control on costs andthe degree to which there is a risk that the ECI process will createthe price/cost negotiation which may put cost estimates at risk.

RESPONSE:

The responding proponents will be submitting:

• a proposal that will include a reasonably detailed schedule of base prices(both lump sum and unit priced) that cover the required scope of workexclusive of profit and overhead/mark-ups;

• assumptions/risks in arriving at the base price for each item; and• a separate schedule for profit, overhead and sub-contractor mark-up.

This will form a baseline cost price to enter into the ECI process enabling

BC Hydro to gain a better understanding of the cost structure of the respondent tothe RFP.

This approach will provide a dual benefit of cost control and reduce the riskduring the ECI process of cost escalation that would put the cost estimates atrisk.




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Exhibit:B-3


1.24.2 Please explain how BC Hydro will be managing change orderissues to avoid cost escalations during the project.

RESPONSE:

BC Hydro will use the Contract Terms and Conditions as published in the RFP tomanage change order issues as they arise during Project implementation.




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Exhibit:B-3


1.24.3 Please explain why BC Hydro is not looking to have the ECI processdone with a short list of bid contractors in order to have some leveragein the outcome of this process.

RESPONSE:

The intent of the ECI process is to achieve, in a collaborative manner, a faircontract price that accurately and fairly addresses the contract scope, schedule,and risks, and assigns risks to the party best able to manage them. This approachrequires both parties to have detailed discussions with regards to scope,schedule and construction methodologies. Furthermore, the riprap upgradedesign has already been finalized by BC Hydro, and the proponents would besubmitting their proposals based on the design details provided in the RFP.

Having such in-depth discussions in a process that involves multiple bidderswould make the process more complicated and would require a longer time, which

carries a risk of delay in award of contract and potentially the loss on oneconstruction season resulting in additional project cost.

BC Hydro is confident that the ECI process is adequately designed to achieve faircosts. Please refer to BC Hydro’s response to CEC IR 1.24.1.




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Exhibit:B-3


1.24.4 Could BC Hydro pay two or more contractors to compete inside theECI process after the RFP?

RESPONSE:

Please refer to BC Hydro response to CEC IR 1.24.3.

The RFP does not contemplate having a competition within the ECI process.Furthermore, the intent of the ECI process is to follow a collaborative approachwith an assured delivery of the contract by the contractor, and a competitioninside the ECI process would defeat the objectives of the ECI. Also, paying twocontractors to participate in a competitive process after the RFP would add to thecost of the Project, and could impact Project schedule.




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Exhibit:B-3


1.25.1 What opportunities has BC Hydro investigated to ensure that theproject will be learning from experience as it progresses andtherefore has a record of improving yields?

RESPONSE:

The main opportunity to learn from experience at the quarry is by having qualifiedand experienced personnel on the Project. This includes selecting a Contractorwho has substantial experience in this type of work and requiring that theContractor employs a qualified blasting consultant and engineering geologist. Theblasting consultant and engineering geologist will be mandated to conduct aminimum number of site visits during construction and report on changing siteconditions and operating methods to optimize yield, and take a more active rolewhen the quarry yield is lower than expected by BC Hydro.

BC Hydro will have its own blasting consultant and engineering geologist who will

review the geological and blasting field reports provided by the Contractors team,ensuring past experience is being incorporated.

Another opportunity for learning from experience is during the ECI process. TheQuarry Development Plan will be developed during this stage, which will allowBC Hydro to work with the Contractor to ensure the experience previously gainedduring the design stages of the Project is passed on to the Contractor andreflected in their plan for quarry development.




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Exhibit:B-3


1.25.2 Will the mandated geotechnical experts working with the contractors beable to provide this learning and will they be tasked to do so?

RESPONSE:





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Exhibit:B-3


1.26.1 In order to manage the risks related to contractor performance willBC Hydro have within the terms and conditions an ability to makesufficient changes to supplant poor contractor performance with better oradequate contractor performance or will BC Hydro be constrained toaccepting the end performance of the contractor?

RESPONSE:

The terms and conditions of the Contract have been provided to the proponents inthe RFP. The Contract terms and conditions have remedies for BC Hydro in theevent of poor performance on the part of the Contractor including set-off ofpayments to remedy defaults, removal of scope, adjusting the contract price, andterminating the Contract.




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Exhibit:B-3

27.0 27. Reference: Exhibit B-1, Pages 5-9 and 5-10

1.27.1 What does BC Hydro expect the ECI contracting process to have asterms and conditions for risks allocated to the party best able to managethem but then it becomes evident that they are not being adequately

managed?

RESPONSE:

The intent of the ECI process is to discuss risks with the selected Contractor foreach item in the schedule of prices and assign the risks to the party best able tomanage those risks. Under the terms and conditions of the Contract, theContractor carries the cost of the assigned risk. Should the Contractor not acceptthat risk, BC Hydro retains the risk, and the Contractor forgoes the cost paymentfor that risk. In this way, the terms and conditions incent the Contractor to accept

and effectively manage the agreed upon risks resulting in Project cost control.






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Exhibit:B-3


1.28.2 Given that placement is to occur in the 3 construction dry periodwindows, from March to June, will this result in about 27 to 30 trucks aday moving onto the dam site or 2 to 3 per hour?

RESPONSE:

Between the stockpile and the Dam, BC Hydro has estimated that it requiresapproximately four to five trucks per hour.




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Exhibit:B-3


1.28.3 Will BC Hydro and the contractor be contemplating using lighting thedam site work areas to deal with low light or darkness considerationsto accommodate these volumes of material movement?

RESPONSE:

Yes.






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Exhibit:B-3

30.0 Reference: Exhibit B-1-4, Volume 1, Page 47

1.30.1 Please confirm that Sinkhole 1 is of more significant concern thanSinkhole 2, with respect to managing how it may present risks to theproject.

RESPONSE:

Confirmed. The surface manifestation of Sinkhole 1 is on the upstream side of theDam crest and not on the upstream slope, as for Sinkhole 2. During theremediation of the Sinkhole 2 area in 1998, new sandstone riprap replaced the oldrock and new dam monitoring instrumentation was installed. A decision was madefor the riprap construction to leave the restored Sinkhole 2 area as is rather thanre-disturb this area as the riprap replaced in 1998 is still in good condition andthis area is above the high reservoir level.

To prevent further potential disturbance at Sinkhole 1, a decision was made thatthe riprap construction equipment would not be allowed to travel directly over thisarea, and that either a temporary bridge or an alternative bypass road would berequired by the contractor.

BC Hydro still believes it prudent to be concerned about both sinkhole areas and,as part of the construction-generated Dam Safety Risk Management Plans, bothareas will be monitored during the construction. If any concerns are noted,construction will be halted if required.





GMS Riprap Upgrade Project EA3638

2

1.0 Reference: Vehicle Traffic Safety Hazards

Exhibit B-1, Section 5.3.4.1, p. 5-16; Appendix E-2(a), p. 27


The Sand Flat rock quarry is situated approximately 38 kilometres from the Dam site.

Transport of materials from the quarry to the Dam will be via existing roads and result in

up to 10,000 truckloads to site over three construction seasons. There is a risk of safety

incidents between the transport vehicles and the public.

On page 27 of Appendix E-2(a) in Exhibit B-1, BC Hydro states:

There is minimal active industrial development in the area and there is no urbandevelopment. Machinery from industrial development does not contribute significant

emissions to the air within the project study area. Air quality is typical of a natural non-

industrial area.

Airborn sands and dusts coming from the reservoir shoreline has been identified as an

environmental and health concern of the surrounding communities. Dust is particularly

evident when reservoir levels are low. In 2010 a 24-hr average PM10 concentrations

(particulate matter under 10 μm) exceeded the 50 μg/m3

mandated by the Canada Wide

Standard (Fryear, Nickling and Schillinger 2011). The elevation of particulate matter can

result in the increase of respiratory and cardiovascular issues, including aggravation of

asthma and respiratory symptoms. In plants, dust may effect photosynthesis,

transpiration, alteration of temperature at the leaf surface and allow penetration of

phytotoxic gaseous pollutants (Farmer 1993).




3

1.1 First Nations are concern over the amount of potential fugitive dust generated from the

quarry activities and the riprap hauling activities along the forestry roads that can gradually

accumulate over time. Specific concerns are in regards to potential human health impacts

from exposure to dust and impacts to medicinal and cultural plants.

1.1.1 We request that BC Hydro confirm whether an Occupational Monitoring Plan is

required for dust management as part of its Mines Act Notice of Work permit?

1.1.2 We request that BC Hydro prepare a dust dispersion model to demonstrate the

distance the dust will travel and expected impacts to vegetation/ food chain from

the dust loading.

1.1.3 We request that BC Hydro demonstrate how it will comply with the BC AmbientAir Quality Objectives for fugitive dust?

2.0 Reference: Riprap Quantity

Exhibit B-1, Section 3.2.1.2, p. 3-4

Materials Transport



The design will require approximately 73,800 cubic meters of limestone riprap for

placement on the Dam.


Approximately 10,000 truckloads of rock material would be transported to the Dam over

a three-year period.

2.1 The majority of riprap will be sourced from the Sand Flat Quarry and will involve blasting,

sorting and transport to the dam face. There is a certain level of noise associated with these

activities and members are concerned that impacts from noise could result in a reduction in




4

the enjoyment of traditional use activities and safety issues from exposure to noise and/or

from not being able to hear other environmental components while being out on the land

(e.g., bears).

2.1.1 We request that BC Hydro provide the expected noise levels and zone of influence

from the blasting and heavy equipment operation at the quarry and also include the

frequency of blasts on a daily and weekly basis during the seasonal operation of the

quarry.

2.1.2 We request that BC Hydro provide the noise levels and zone of influence that are

expected to be encountered along the haul roads from the rock trucks and also

include the frequency of these occurrences based on daily and weekly hauling

schedules.

2.1.3 We request that BC Hydro provide an assessment of these noise levels from the

above two items in relation to noise exposure criteria.

3.0 Reference: Cumulative Effects

Exhibit B-1, Section 4.2.4.1, pp. 4-15, 4-16

Materials Transport

Appendix E-2(a), p. 38


Cumulative effects: BC Hydro is aware that cumulative effects are an ongoing concern

for Treaty 8 First Nations. BC Hydro does not anticipate any cumulative effects given

that no residual environmental impacts are anticipated with the implementation of

appropriate environmental management plans, reclamation of the Sand Flats quarry site

and deactivation of the Spur Road, and adherence to federal and provincial permitting,

environmental regulations and guidelines. Further, implementation of the Project will not

change the operation, output or capacity of the GMS Facility, and is not expected to

change the long-term operation of Williston reservoir.




5

West Moberly First Nations recently informed BC Hydro that there may be potential

residual impacts from the upgrades to the Table and Utah Roads belonging to Canfor. In

particular, West Moberly First Nations believes that such upgrades will facilitate ongoing

access and development of the territory. BC Hydro has requested a meeting with West

Moberly and other First Nations to obtain further particulars about this potential impact.

On page 38 of Appendix E-2(a), in reference to species at risk, BC Hydro states:

Temporary displacement of these species may occur during the project however there is an

abundance of similar habitat surrounding the project footprint so the temporary occupation

of the habitat in the work zone is not anticipated to cause a significant impact to these

species.

3.1 The approach BC Hydro is taking overlooks the consideration of regional cumulative

effects that are occurring from the presence of multiple projects on the landscape (i.e.,

nibbling effect). This type of approach for assessing cumulative effects could screen out

circumstances where cumulative effects are of concern despite the project's contribution

not affecting the viability or sustainability of a resource or value. Over the past four

decades resource development in the Peace region has resulted in a significant increase in

the amount of area developed resulting in a decrease in interior habitat and an increase in

edge habitat. Industrial development has had an additive and synergistic effect on the

ecological integrity of the ecosystems within the Peace region as evidenced by changes in

landscape structure, habitat destruction, change in forest biodiversity and species richness

and composition. Further, activities from other projects in the area, such as the Peace

Region Electrical Supply, Prince Rupert Gas Transmission Project, Gething Coal Bulk

Sample Project and Canfor logging have the potential to affect affecting Aboriginal

interests and the ability to exercise Treaty rights.

3.1.1 Can BC Hydro confirm that it assessed residual and cumulative impacts to Treaty

and Aboriginal rights in its environmental assessment?

3.1.2 If yes, please explain the methods used for this assessment.









McLeod Lake Indian Band and Saulteau First NationInformation Request No. 1.1.1.2 Dated: December 18, 2015British Columbia Hydro & Power AuthorityResponse issued January 14, 2016

Page 2of 2


Exhibit:B-3

RESPONSE:

A dust dispersion model was not required as part of the FLNRO or Ministry ofEnergy and Mines regulatory processes. BC Hydro does not intend to prepare adust dispersion model for this Project as dust generation and potential effects aredeemed mitigatable.

While a dust dispersion model was not required, Ministry of Energy and Minesincluded a condition related to dust control at the quarry as part of its Notice ofWork Permit. Please refer to BC Hydro’s response to MLIB/SFN IR 1.1.1.1 for thespecific requirements of Condition 21.

BC Hydro will ensure dust generated from road transport is controlled through theimplementation of the Dust Management EPP created by the Contractor to protectdriver safety and reduce potential effects on vegetation and water quality.

BC Hydro does not anticipate a significant impact to vegetation and food chainfrom Project generated dust. Further, as there is no permanent human occupationin the Project area, health effects from long term exposure are not anticipated.




Page 1of 1


Exhibit:B-3

1.0 Reference: Vehicle Traffic Safety HazardsExhibit B-1, Section 5.3.4.1, p. 5-16; Appendix E-2(a), p. 27


The Sand Flat rock quarry is situated approximately 38 kilometres from the Damsite. Transport of materials from the quarry to the Dam will be via existing roadsand result in up to 10,000 truckloads to site over three construction seasons.There is a risk of safety incidents between the transport vehicles and the public.

On page 27 of Appendix E-2(a) in Exhibit B-1, BC Hydro states:There is minimal active industrial development in the area and there is no urbandevelopment. Machinery from industrial development does not contributesignificant emissions to the air within the project study area. Air quality is typical

of a natural non-industrial area.

Airborn sands and dusts coming from the reservoir shoreline has been identifiedas an environmental and health concern of the surrounding communities. Dust isparticularly

evident when reservoir levels are low. In 2010 a 24-hr average PM10

concentrations (particulate matter under 10 μm) exceeded the 50 μg/m3

mandated by the Canada Wide Standard (Fryear, Nickling and Schillinger 2011).The elevation of particulate matter can

result in the increase of respiratory and cardiovascular issues, including

aggravation of asthma and respiratory symptoms. In plants, dust may effectphotosynthesis, transpiration, alteration of temperature at the leaf surface andallow penetration of phytotoxic gaseous pollutants (Farmer 1993).

1.1.1 First Nations are concern over the amount of potential fugitivedust generated from the quarry activities and the riprap haulingactivities along the forestry roads that can gradually accumulateover time. Specific concerns are in regards to potential humanhealth impacts from exposure to dust and impacts to medicinaland cultural plants.

1.1.1.3 We request that BC Hydro demonstrate how it will comply withthe BC Ambient Air Quality Objectives for fugitive dust?

RESPONSE:

BC Hydro understands that the B.C. Ambient Air Quality Objectives are non-binding limits that can inform regulatory decision makers. FLNRO and the Ministryof Energy and Mines did not include the B.C. Ambient Air Quality Objectives asconditions of the regulatory permits issued for the Project. BC Hydro will controldust as discussed in its response to MLIB/SFN IRs 1.1.1.1 and 1.1.1.2.




Page 1of 2


Exhibit:B-3

2.0 Reference: Riprap QuantityExhibit B-1, Section 3.2.1.2, p. 3-4

Materials TransportExhibit B-1, Section 3.3.1, p. 3-15


The design will require approximately 73,800 cubic meters of limestone riprap forplacement on the Dam.


Approximately 10,000 truckloads of rock material would be transported to theDam over a three-year period.

1.2.1 The majority of riprap will be sourced from the Sand Flat Quarryand will involve blasting, sorting and transport to the dam face.There is a certain level of noise associated with these activitiesand members are concerned that impacts from noise could resultin a reduction in the enjoyment of traditional use activities andsafety issues from exposure to noise and/or from not being ableto hear other environmental components while being out on theland (e.g., bears).

1.2.1.1 We request that BC Hydro provide the expected noise levelsand zone of influence from the blasting and heavy equipmentoperation at the quarry and also include the frequency of blastson a daily and weekly basis during the seasonal operation ofthe quarry.

RESPONSE:

Using the data provided in Workers Compensation Board Engineering SectionReport ARCS Reference No: 0135-20 “Construction Noise” (2000), BC Hydroestimates noise levels of its various equipment and machinery likely to be used inthe quarry to be as follows:

Equipment Noise (Average Decibels to Operator) Noise (Range in Decibels)

Dozers, Dumpers 96 89-103

Front End Loaders 88 85-91

Excavators 87 86-90

Air track drill 113 Not provided.




Page 2of 2


Exhibit:B-3

Precise noise levels from blasting will depend on the Contractor’s blasting plan,which must be undertaken in accordance with the issued permits. In particular,

BC Hydro notes the following condition in the Notice of Work Permit Condition 29 – Blasting:

a) All blasting activities are conducted as per Part 8 of the Code;

b) Blasting is conducted by a blaster who is certified under the Mines Act ;

c) Blasting magazines are permitted, managed according to the Code, andfollow all relevant Provincial and Federal Acts and Regulations;

d) The Permittee shall, seven (7) days prior to commencing drilling of blastholes, notify the Regional Health & Safety inspector of Mines in writing (via

email or letter). The notification shall include start date and the anticipatedend date of the drilling operation; and

e) The Permittee shall, seven (7) days prior to commencing blast hole loadingand/or blasting, notify the Regional Health & Safety Inspector of Mines inwriting (via email or letter). The notification shall include start date and theanticipated end date of the loading and/or blasting operations.

BC Hydro expects that the noise levels associated with blasting will be typical ofmining operations. In this particular case, the impacts are estimated to be low andtemporary as only one blast per day is expected, possibly two per day if theContractor expedites the blasting program. To address the issue of noise, theMinistry of Energy and Mines permit included Condition 20 in the issued Notice ofWork Permit which provides:

a) The Manager shall ensure compliance with 2.6.1 of the Code and ensureany machinery or equipment which, when operating, exposes the operatoror persons in the vicinity to noise levels in excess of those prescribed inTable 2-2, Part 2, for unprotected ears, shall if practical, be fitted with aproperly maintained muffler or other noise reducing device;

b) Stationary engines and portable compressor installations shall be enclosedin noise attenuating structures; and

c) Site equipment shall be fitted with high efficiency muffling devices.

In addition, the Contractor will be required to develop an EPP that addressesnoise associated with the operation of the quarry.

To address any safety issues arising from noise hazards, access to the quarry willbe limited to persons authorized by the mine manager, a gate and/or security willbe set up at the entrance to the Spur Road, approximately 3 km from the quarry.The Ministry of Energy and Mines’ Notice of Work Permit Condition 17 addressesAccess Control to the quarry.




Page 1of 1


Exhibit:B-3

2.0 Reference: Riprap QuantityExhibit B-1, Section 3.2.1.2, p. 3-4

Materials TransportExhibit B-1, Section 3.3.1, p. 3-15


The design will require approximately 73,800 cubic meters of limestone riprap forplacement on the Dam.


Approximately 10,000 truckloads of rock material would be transported to theDam over a three-year period.

1.2.1 The majority of riprap will be sourced from the Sand Flat Quarryand will involve blasting, sorting and transport to the dam face.There is a certain level of noise associated with these activitiesand members are concerned that impacts from noise could resultin a reduction in the enjoyment of traditional use activities andsafety issues from exposure to noise and/or from not being ableto hear other environmental components while being out on theland (e.g., bears).

1.2.1.2 We request that BC Hydro provide the noise levels and zone ofinfluence that are expected to be encountered along the haulroads from the rock trucks and also include the frequency ofthese occurrences based on daily and weekly haulingschedules.

RESPONSE:

The WorksafeBC report examined for BC Hydro’s response to MLIB/SFN IR 1.2.1.1does not expressly refer to rock trucks, but BC Hydro anticipates that the rocktrucks will operate at a comparable decibel level to a Front End Loader orExcavator, in the range of 86 to 90 decibels.

At this time BC Hydro does not know the Contractor’s daily and weekly hauling

schedules, however BC Hydro anticipates that there will be approximately50 truckloads per day with groups of trucks moving as a convoy. It is reasonableto assume that truck noise will be throughout the daylight hours. The precisenature and carry of the sound will depend on several variables (i.e., topography,vegetation type and density), however the magnitude of the sound will diminish asthe distance increases from the road. In addition, the Contractor will be requiredto develop and implement an EPP to address concerns raised over truckingactivities.






Page 1of 2


Exhibit:B-3


Exhibit B-1, Section 4.2.4.1, pp. 4-15, 4-16Materials TransportAppendix E-2(a), p. 38


Cumulative effects: BC Hydro is aware that cumulative effects are an ongoingconcern for Treaty 8 First Nations. BC Hydro does not anticipate any cumulativeeffects given that no residual environmental impacts are anticipated with theimplementation of appropriate environmental management plans, reclamation ofthe Sand Flats quarry site and deactivation of the Spur Road, and adherence tofederal and provincial permitting, environmental regulations and guidelines.

Further, implementation of the Project will not change the operation, output orcapacity of the GMS Facility, and is not expected to change the long-termoperation of Williston reservoir.

West Moberly First Nations recently informed BC Hydro that there may bepotential residual impacts from the upgrades to the Table and Utah Roadsbelonging to Canfor. In particular, West Moberly First Nations believes that suchupgrades will facilitate ongoing access and development of the territory.BC Hydro has requested a meeting with West Moberly and other First Nations toobtain further particulars about this potential impact.


Temporary displacement of these species may occur during the project howeverthere is an abundance of similar habitat surrounding the project footprint so thetemporary occupation of the habitat in the work zone is not anticipated to causea significant impact to these species.

1.3.1 The approach BC Hydro is taking overlooks the consideration ofregional cumulative effects that are occurring from the presence ofmultiple projects on the landscape (i.e., nibbling effect). This typeof approach for assessing cumulative effects could screen outcircumstances where cumulative effects are of concern despitethe project's contribution not affecting the viability or sustainabilityof a resource or value. Over the past four decades resource

development in the Peace region has resulted in a significantincrease in the amount of area developed resulting in a decreasein interior habitat and an increase in edge habitat. Industrialdevelopment has had an additive and synergistic effect on theecological integrity of the ecosystems within the Peace region asevidenced by changes in landscape structure, habitat destruction,change in forest biodiversity and species richness andcomposition. Further, activities from other projects in the area,




Page 2of 2


Exhibit:B-3

such as the Peace Region Electrical Supply, Prince Rupert Gas

Transmission Project, Gething Coal Bulk Sample Project andCanfor logging have the potential to affect affecting Aboriginalinterests and the ability to exercise Treaty rights.

1.3.1.1 Can BC Hydro confirm that it assessed residual and cumulativeimpacts to Treaty and Aboriginal rights in its environmentalassessment?

RESPONSE:

Please refer to BC Hydro’s response to BCUC IRs 1.20.1 and 1.20.2.




Page 1of 2


Exhibit:B-3


Exhibit B-1, Section 4.2.4.1, pp. 4-15, 4-16Materials TransportAppendix E-2(a), p. 38


Cumulative effects: BC Hydro is aware that cumulative effects are an ongoingconcern for Treaty 8 First Nations. BC Hydro does not anticipate any cumulativeeffects given that no residual environmental impacts are anticipated with theimplementation of appropriate environmental management plans, reclamation ofthe Sand Flats quarry site and deactivation of the Spur Road, and adherence tofederal and provincial permitting, environmental regulations and guidelines.

Further, implementation of the Project will not change the operation, output orcapacity of the GMS Facility, and is not expected to change the long-termoperation of Williston reservoir.

West Moberly First Nations recently informed BC Hydro that there may bepotential residual impacts from the upgrades to the Table and Utah Roadsbelonging to Canfor. In particular, West Moberly First Nations believes that suchupgrades will facilitate ongoing access and development of the territory.BC Hydro has requested a meeting with West Moberly and other First Nations toobtain further particulars about this potential impact.


Temporary displacement of these species may occur during the project howeverthere is an abundance of similar habitat surrounding the project footprint so thetemporary occupation of the habitat in the work zone is not anticipated to causea significant impact to these species.

1.3.1 The approach BC Hydro is taking overlooks the consideration ofregional cumulative effects that are occurring from the presence ofmultiple projects on the landscape (i.e., nibbling effect). This typeof approach for assessing cumulative effects could screen outcircumstances where cumulative effects are of concern despitethe project's contribution not affecting the viability or sustainabilityof a resource or value. Over the past four decades resource

development in the Peace region has resulted in a significantincrease in the amount of area developed resulting in a decreasein interior habitat and an increase in edge habitat. Industrialdevelopment has had an additive and synergistic effect on theecological integrity of the ecosystems within the Peace region asevidenced by changes in landscape structure, habitat destruction,change in forest biodiversity and species richness andcomposition. Further, activities from other projects in the area,