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PUBLIC ACCEPTANCE
tioning the flooding of productive agricultural lands and wildlife
habitat, the displacement of aboriginal groups, and the submergence
of sometimes entire communities due to dam projects [2]. Within a
background provided by the growth of the environmental movement,
a number of events in the late 1980s and early 1990s brought the
problems associated with the operating regime of BC Hydro facilities
to the attention of decision-makers in the utility, and the provincial
and federal government. These problems increasingly highlighted the
need to address a growing unsatisfactory situation.
In the late 1980s, the decline of fish stocks in BC rivers became a major
concern, and the effects of construction and operation of hydro power
dams and diversions on fish populations and habitat were increasingly
evident [3]. Alongside the cumulative effects that had taken place over
a number of years, several sudden events in the early 1990s brought
mounting attention to shortcomings within BC Hydro operations.
In 1991-92, for example, BC Hydro spilled water into the Bridge
River due to large inflows, causing the destruction of fish habitat
downstream of the Terzaghi dam [4]. The spills resulted in prose-
cution by the Federal Department of Fisheries and Oceans, which
accused the utility of infringing the Fisheries Act. Along with these
high-profile court cases, several further events during that period,
which were widely covered by the media, highlighted BC Hydro’s
shortcomings. These included the destruction of a locally-built fish
spawning channel on the Campbell river, fish stranding due to lower-
ing the Downton reservoir level for maintenance work [5], and other
cases of fish and fish habitat damage due to spills, rapid flow fluctua-
tion, peaking operations of certain plants, etc [6&7].
At the same time, BC Hydro also had to work within an unclear
regulatory environment [8]. Given that most of its water licences dated
back to the early parts of the twentieth century, they included no provi-
sion for minimum water releases and were very general, using unclear
language that could be subject to differing interpretations and provid-
ing little guidance regarding how facilities should be operated.
This meant that conflicts had emerged regarding for instance the
amount of water that storage licences actually allowed to be stored,
or diversion licences allowed to be diverted. Furthermore, following
the release of a study which indicated that BC Hydro was failing to
comply with its water licences on a number of its facilities [9&10], it
became clear that BC Hydro licences needed to be revised.
BC Hydro was also encountering more problems with the
Department of Fisheries and Oceans (DFO), which, since the crea-
tion of stronger legislation for the protection of fish habitat in the late
1970s, had become significantly more vocal and active in putting pres-
sure on the utility [4]. As DFO prosecuted in some cases, and released
flow orders and constraints in others, BC Hydro felt that it could no
longer freely operate and meet its mandate of electricity production.
Although in some cases negotiations with DFO led to minimum
flow releases on some streams, such agreements generally only
affected smaller facilities which would incur no loss in power genera-
tion. The utility’s official position was that as long as it had a licence,
which gave it legitimacy to use water to produce hydro power, it was
in compliance with its responsibilities and did not need to accommo-
date demands from other water users. Nonetheless, DFO had already
threatened to charge BC Hydro for destruction of fish habitat on a
number of its facilities, including the Cheakamus, Hugh Keenleyside
and John Hart [4], furthering an approach which, in addition to being
costly and time-consuming, was ineffective at solving the underlying
problems with BC Hydro operations.
In this precarious situation, the utility was looking to get specific pro-
visions, authorisations and constraints on its licences, operating rules
and regime in order to ensure compliance with provincial and federal
legislation, while still being able to meet the terms of its mandate [11].
UNDER PR ESSURE
BC Hydro was also being put under mounting public pressure from
some First Nation groups and a range of NGOs. These were attract-
ing growing media attention, threatening the reputation of both the
utility and the provincial government responsible for the crown cor-
poration. The groups demanded changed dam operations, the release
of instream flows, and increased participation in decision-making
processes surrounding water management in the province [12]. For
the first time, such public interest groups were starting to have an
impact. In 1989 Angus Reid public polls found that concern for the
environment had reached an historic high, with the environment
reported as being a ‘top-of-mind’ issue for Canadians [13].
As a further sign of the changing times, in 1991 the New Democratic
Party (NDP) government was elected in BC for the first time after
close to 20 years. The environment was one of the main platforms
on which the NDP, which was responsive to the shifting times, based
its campaign and won over the previously-ruling pro-industry Social
Credit Government [2]. Alongside substantive commitments that
included doubling the amount of protected land area in BC, the NDP
also made the use of consensus-based decision-making techniques,
multi-stakeholder forum and consultation to deal with contentious
environmental issues, increasingly common. Through such processes,
a degree of authority, going beyond mere consultation, was starting
to be devolved to stakeholders.
BC Hydro also started undergoing an internal shift. In the late
1980s the utility recognised that it was not being a good corporate
citizen. Customer perceptions, values and priorities were shifting, and
they consequently expected the company to change and go beyond
the minimum necessary to keep out of court [11].
While the company had started to undertake compensation and miti-
gation programmes on some of its operations, prior to the 1990s BC
Hydro’s approach to sustainability and to the environmental damage
caused by the utility’s operations was strongly tied to legal compliance
and was mostly reactive [14]. As time went on, however, the inclu-
sion of environmental principles became more widely discussed, start-
ing with the 1989 Board of Directors resolution: ‘In carrying out its
business, BC Hydro will minimise adverse effects on the natural and
social environment and actively pursue opportunities to manage our
resources for the benefit of present and future generations’ [15].
This was followed by The Way Ahead, BC Hydro’s 1993 cor-
porate strategic plan which provided a new vision and eight new
strategic initiatives, including ‘to develop and maintain a leadership
role in environmental stewardship’ [16].
While a culture shift was taking place within the utility, BC Hydro
also recognised that from a purely business/financial point of view,
the current approach was not working. It knew its licences were not
bullet-proof and that the way ahead was paved with orders, legal
challenges and DFO trying to closely manage the corporation. An
internal assessment of the worst-case scenario, should the situation
proceed as it had been in the early 1990s, indicated that C$180M pa
(1995 dollars) worth of generation was in jeopardy.
Furthermore, while the utility recognised that under a traditional
business case it would not voluntarily undertake inevitably costly
changes in operations, given that the value of fish losses would never
add up to the power produced [17], the decisions it now faced were
much more complex.
‘In a traditional business case, costs are weighed against benefits.
In environmental decisions, however, the benefits of taking action
are not simply the additional fish produced or the spills avoided, but
the reduction or elimination of risks to our freedom to operate the
system in a rational and balanced way. In other words, we can esti-
mate the cost of doing something to satisfy regulatory demands or
public expectations, but how do we estimate the potential cost of not
doing something, especially when a consequence of inaction could
be to bring about the regulations that remove the freedom to decide
altogether?’ [11]
BC Hydro had therefore realised that by being proactive and lead-
ing a process that would address the problems tied to its operations, it
would avoid a reactive, regulatory response from government, which
would on the other hand remove the utility’s discretion.
WINDOW O F OPPORTUNI TY
Although the route ahead appeared to be increasingly clear, BC
Hydro had two choices: it could negotiate or litigate; deciding that
the former was a more productive and cost-effective approach [4].