From conflict to collaboration7 May 2010
What prompted BC Hydro to initiate its water use planning programme, and to consider water values beyond electricity generation? Lucia Scodanibbio takes a look back at how the Canadian utility was able to gain increased public acceptance of its hydro operations
In the last few decades decision-making processes dedicated to allocating water among different users have accorded increasing importance to the environmental and social values of water. In many river systems around the world, however, conflicts between dam operators, local communities, environmentalists and government are still common and in many cases unresolved.
In British Columbia (BC) Canada, the water use planning (WUP) programme is a multi-stakeholder process aimed at revising the operating plans of BC Hydro’s hydroelectric facilities, in order to consider water values beyond power generation (see http://www.waterpowermagazine.com/story.asp?storyCode=2008489).
Prior to the mid-1990s, when this progressive programme emerged, BC Hydro operated in a heavily conflicted environment, whereby most requests for the release of environmental flows were disregarded. So what were the circumstances and factors that converged to enable the creation of the WUP programme?
BC Hydro is the third largest electric utility in Canada today, providing 90% of British Columbia’s energy needs, mainly through hydro power dams which were built throughout the last century. While in the earlier parts of the twentieth century dams were perceived as engines of economic growth and symbols of man’s prowess over nature, with time they came to be seen as megaprojects responsible for several unaccounted social and environmental costs.
BC citizens, following the aggressive development of the Peace and Columbia river facilities in the 1960s and 1970s , started questioning 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 . 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 . 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 . The spills resulted in prosecution 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 lowering the Downton reservoir level for maintenance work , and other cases of fish and fish habitat damage due to spills, rapid flow fluctuation, peaking operations of certain plants, etc [6&7].
At the same time, BC Hydro also had to work within an unclear regulatory environment . Given that most of its water licences dated back to the early parts of the twentieth century, they included no provision for minimum water releases and were very general, using unclear language that could be subject to differing interpretations and providing 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 creation of stronger legislation for the protection of fish habitat in the late 1970s, had become significantly more vocal and active in putting pressure on the utility . 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 generation. 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 accommodate 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 , 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 provisions, 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 .
BC Hydro was also being put under mounting public pressure from some First Nation groups and a range of NGOs. These were attracting growing media attention, threatening the reputation of both the utility and the provincial government responsible for the crown corporation. The groups demanded changed dam operations, the release of instream flows, and increased participation in decision-making processes surrounding water management in the province . 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 .
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 . 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 .
While the company had started to undertake compensation and mitigation 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 . As time went on, however, the inclusion of environmental principles became more widely discussed, starting 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’ .
This was followed by The Way Ahead, BC Hydro’s 1993 corporate strategic plan which provided a new vision and eight new strategic initiatives, including ‘to develop and maintain a leadership role in environmental stewardship’ .
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 , 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 estimate 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?’ 
BC Hydro had therefore realised that by being proactive and leading 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 of opportunity
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 .
Much internal convincing had to occur before senior management accepted the idea that despite having a water licence, some flows could be returned for the benefit of other users. This convincing, in large part aided by the business case and the need to have regulatory clarity in order to operate more freely, was carried out by a handful of enlightened and progressive individuals who joined BC Hydro as of the late 1980s. These individuals, who had realised that it was crucial that BC Hydro take the high road in its approach to the environment and decision-making, became the WUP champions within the company.
One of the crucial factors in obtaining the buy-in of senior management was the creation of the system operations fund, an agreement between the utility and the provincial government, whereby the latter would cover any power generation losses that may result from the decisions taken during the WUP processes . Thus, while it was accepted that the operating regime of facilities may change in order to release water for fisheries or recreational purposes, it was agreed that the losses in revenue arising from that foregone power would be offset by the provincial government, through a rebate on the rental fees the utility paid for the use of water for electricity generation . The cap was put at C$50M per year.
A policy window for change opened when BC Hydro applied for an expansion of its generating capacity at its Stave Falls power plant in 1994. Giving in to pressure from public interest groups that had been demanding that flows in the contiguous Alouette river (which feeds the Stave Falls scheme) be augmented, the provincial government included that a water use plan be conducted as a condition for going ahead with the Stave Falls upgrade.
As a result, a multi-stakeholder process, which came to be known as the Alouette water use plan (AWUP), was launched in late 1995 to review the operating plans of the Alouette scheme. It was composed of 19 stakeholders from federal, provincial, local and First Nations governments, NGOs and BC Hydro, joined together in what became known as the Alouette stakeholder committee. The objectives of AWUP were to:
• Explore the different values related to water in the Alouette.
• Develop a common understanding and information base to be used for developing an operating plan for the facility.
• Conduct an open consultation process with integrity and seeking consensus .
A number of meetings that took place over a period of several months was facilitated by two consultants, and resulted in the signing of an agreement in 1996 that BC Hydro would release 2.6m3/sec/yr, equivalent to approximately 10% of the river’s average annual flow .
While the AWUP was initially considered a pilot, its success in terms of being an inclusive and science-based process clearly showed potential for solving longstanding problems and providing a method to reach agreement between several stakeholders . The fact the process was based on structured decision making, which combined objective, scientific data with the values people placed on different water uses [22&23], was crucial for its acceptance.
Similarly, the inclusion of the principle of adaptive management, which entailed that decisions could be revised after a certain time in the light of monitoring studies and the collection of new information, also made stakeholders more at ease when it came to taking contentious decisions. In addition, the process was hailed for building trust between the different parties and for gradually replacing the antagonistic relations which had previously characterised the interactions between BC Hydro and other stakeholders .
As a consequence, the provincial government issued a letter of direction in 1996 mandating BC Hydro to undertake water use plans for all of its facilities within a period of five years. The WUP programme, which officially started in 1999, following the drafting of the WUP guidelines  resulted in the development of 23 WUPs which revised the operating plans of 30 BC Hydro dam facilities, over a six-year period, at a cost of C$26M .
Push and pull
Looking at the processes tied to the emergence of WUP, it really seems that action must happen from the bottom-up as much as from the top-down.
External pressures from outside must also be complemented by internal shifts in thinking. The timing of these different push and pull factors, however, seems to play a crucial influence.
Initially, external pressure and bottom-up action by the grassroots is essential in attracting and focusing the attention of the broader public and decision-makers on the shortcomings with the system in place. While such public pressure can, over time, contribute to triggering internal changes in thinking regarding the status quo (eg within government or an organisation), often denial and deeply entrenched political and economic interests can be powerful in disregarding such voices. Therefore other contextual changes (such as more progressive societal or industrial trends pointing towards new directions) can assist in furthering changes in thinking. These can be finally triggered by an external event like a change in government, or a substantial focusing event (eg an ecological crisis) which creates the final straw, or tipping point.
Within this broader framework, it is crucial to have the presence of some enlightened, passionate, visionary leaders that champion the issue. While it is not essential that they are in a position of authority, they need to be able to exert their influence in some manner.
Secondly, resources are critical, both financial and in terms of capacity including access to scientific information, technical skills, the latest thinking, human and managerial resources, etc. While these may be taken for granted in the developed world, they are generally lacking in the areas where solutions are often the most urgently needed.
Thirdly, for organisational change to occur, a business case is essential, which provides the financial incentive to act in an environmentally responsible manner. Increasing evidence shows that it is possible to be an environmental leader and have a competitive advantage: in the case of the Bridge WUP, the changes in operating regime that were agreed to allowed BC Hydro to generate an additional C$1.8M in electricity, in addition to meeting a number of cultural, environmental and social benefits .
There is also an element of chance that plays a role in bringing change about, and that is what often contributes to either the opening of a policy window, or the grasping of the opportunity provided by it. The policy window which led to the Alouette WUP allowed BC Hydro, under the direction of government, to try a new approach. This aimed to explore different ways of managing multiple resource conflicts and address long-standing concerns regarding fish impacts on the Alouette river. The WUP process consequently increased public acceptance of BC Hydro and its operations, thus translating into enhanced business certainty for the company.
Lucia Scodanibbio explored the factors that led to the emergence of the water use planning programme as part of her Masters thesis in the School of Community and Regional Planning at the University of British Columbia, under the supervision of Profs Tony Dorcey and William Rees. A number of interviews with BC Hydro, government and non-government stakeholders informed her results, which have been summarised in this article. She is currently looking for her next opportunity to work on water resources management and governance issues. Email: [email protected]