Massachusetts Civil Debt Collector Credit Card Form Interrogatories by zau21261

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									                 ONTARIO
                 ENERGY
                  BOARD

FILE NO.:   EB-2007-0050      REDACTED - PUBLIC


VOLUME:     14

DATE:       June 11, 2008

BEFORE:     Pamela Nowina     Presiding Member and Vice Chair

            Cynthia Chaplin   Member

            Ken Quesnelle     Member
                                                      EB-2007-0050


                        ONTARIO ENERGY BOARD



               IN THE MATTER OF the Ontario Energy Board
               act, 1998, S.O. 1998, c.15 (Sched. B);

               AND IN THE MATTER OF an Application by
               Hydro One Networks Inc. pursuant to
               section 92 of the act, for an order or
               orders granting leave to construct a
               transmission reinforcement project between
               the Bruce Power Facility and Milton
               Switching Station, all in the Province of
               Ontario.


                 Hearing held at 2300 Yonge Street,
                    25th Floor, Toronto, Ontario,
                    on Wednesday, June 11, 2008,
                       commencing at 9:16 a.m.


               ------------------------------------------
                               VOLUME 14
               ------------------------------------------


B E F O R E:


    PAMELA NOWINA         PRESIDING MEMBER and VICE CHAIR

    CYNTHIA CHAPLIN       MEMBER

    KEN QUESNELLE         MEMBER
                   A P P E A R A N C E S



MICHAEL MILLAR             Board Counsel

NABIH MIKHAIL              Board Staff
NEIL McKAY

GORDON NETTLETON           Hydro One Networks Inc.
MATTHEW KEEN

QUINN ROSS                 Ross Firm Group
PAUL ROSS

ARTHUR PAPE                Saugeen Ojibway Nation
ALEX MONEM

PETER D. FALLIS            Fallis Group of Landowners

RICHARD STEPHENSON         Power Workers’ Union
JUDY KWIK

BASIL ALEXANDER            Pollution Probe


JOHN RATTRAY               Independent Electricity System
                           Operator (IESO)

CHRIS PAPPAS               Intervenor

ARTHUR BARLOW              Intervenor




ALSO PRESENT:


GLENN ZACHER               Ontario Power Authority
     I N D E X      O F     P R O C E E D I N G S


Description                                         Page No.



--- Upon commencing at 9:16 a.m.                           1


Preliminary matters                                        1

SAUGEEN OJIBWAY NATION - PANEL 1                           5
W. Russell; Sworn

Examination-in-chief by Mr. Pape                           5

--- Recess taken at 10:57 a.m.                            53
--- Upon resuming at 11:20 a.m.                           53

Cross-examination   by    Mr.   Ross                      62
Cross-examination   by    Mr.   Fallis                    69
Cross-examination   by    Mr.   Pappas                    73
Cross-examination   by    Mr.   Barlow                    81

--- Luncheon recess taken at 12:27 p.m.                   91
--- Upon resuming at 1:34 p.m.                            91

Cross-examination by Mr. Barlow                           92
Cross-examination by Mr. Nettleton                       100

--- Upon resuming at 3:27 p.m.                           134
--- Recess taken at 4:45 p.m.                            178

--- On resuming at 4:55 p.m.                             178
--- In-camera session commenced at 4:55 p.m.             178




[Page 178, line 7 to Page 206, line 24 are redacted]
     I N D E X   O F   P R O C E E D I N G S


Description                                    Page No.



--- Resuming public session at 5:41 p.m.            206
--- Dinner recess taken at 5:41 p.m.                206
--- Upon resuming at 6:47 p.m.                      206



SAUGEEN OJIBWAY NATION - PANEL 1, RESUMED           207
W. Russell, sworn

Cross-examination by Mr. Stephenson                 207
Cross-examination by Mr. Nettleton (continued)      218
Question from the Board                             260

--- Recess taken at 8:21 p.m.                       262
--- Upon resuming at 8:41 p.m.                      262



FALLIS FIRM GROUP OF INTERVENORS - PANEL 1          272
Edward Brill, sworn

Examination-in-chief by Mr. Fallis                  272

--- Recess taken at 9:55 p.m.                       305
--- Upon resuming at 10:07 p.m.                     305

Cross-examination by Mr. Fallis                     305
Cross-examination by Mr. Barlow                     313
Cross-examination by Mr. Nettleton                  317




---Whereupon the hearing concluded at 11:05 p.m.    340
                    E X H I B I T S

Description                                    ______Page No.


     NO EXHIBITS WERE FILED DURING THIS PROCEEDING
EXHIBIT NO. K14.1: NET PRESENT VALUE GRAPHS
PROVIDED BY MR. RUSSELL WITH BRUCE B
REFURBISHMENT                                            23


EXHIBIT NO. K14.2: BRIEF OF MATERIALS ENTITLED,
"SAUGEEN OJIBWAY NATION'S ADDITIONAL MATERIAL
FOR EXAMINATION-IN-CHIEF OF MR. WHITFIELD
RUSSELL, JUNE 10TH."                                     56


EXHIBIT NO. K14.3: UNDERTAKING TO MR. BARLOW,
DATED JUNE 11TH, 2008.                                   92


EXHIBIT NO. K14.4: SUPPLEMENTAL MATERIALS OF
THE FALLIS GROUP, INCLUDING A NEW PAGE 13.              290
                U N D E R T A K I N G S

Description                                         Page No.


UNDERTAKING NO. J14.1: TO RE-RUN THE HYDRO ONE
SCENARIO WITH 1) A MODIFIED CAPITAL COST OUTLAY
IN 2015 OF $635 MILLION; 2) A MODIFIED LIE
COLUMN, FROM 2019 TO 2030 WITH ZERO LIE AMOUNTS;
3) A MODIFIED LOSSES COLUMN FROM 2019 TO 2030 AND
PLACE THE NUMBER ZERO IN THOSE CELLS, AND THE
SAME FOR THE COLUMN ENTITLED "PEAKER" FROM 2019
TO 2030.                                                268


UNDERTAKING NO. J14.2:   MR. RUSSELL'S SCENARIO         268
                                                                      1

 1        Wednesday, June 11, 2008
 2        --- Upon commencing at 9:16 a.m.
 3        PRELIMINARY MATTERS:
 4        MS. NOWINA:    Please be seated.
 5        Good morning, everyone.    Today is day 14 of the
 6   Ontario Energy Board's hearing EB-2007-0050.       The hearing
 7   is in regard to Hydro One's application for leave to
 8   construct a transmission line between the Bruce Power
 9   facility and the Milton Switching Station, and to make
10   modifications to certain transmission stations.
11        Today we will continue the examination of the
12   witnesses -- of the intervenors' witnesses.
13        I will repeat the guidance that I provided last week
14   to parties regarding cross-examination.
15        Examination-in-chief should focus on the adoption of
16   prefiled evidence and examination of any evidence that has
17   come forward since the oral hearing began, and I expect
18   that it will be relatively brief.
19        The intention of cross-examination is for parties to
20   test the expert's evidence.    It is not intended to
21   duplicate examination-in-chief or to solicit the
22   restatement of prefiled evidence.
23        Examination by parties other than Hydro One should be
24   very brief, if at all, and I will restrict the amount of
25   time allowed for that.
26        Today we will have the examination of the witnesses
27   for the Saugeen Ojibway Nation and the Fallis group.
28        As you are aware, I think, it may be a long day, so I

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 1   expect that everyone will be as efficient as possible with
 2   their examination.      We will sit today until examination of
 3   both witnesses is complete.
 4        So a couple of suggestions.        It is warm in here.      We
 5   will try to get it cooler.       If you need to remove your
 6   jackets, feel free to do so.       As the day progresses and we
 7   look at the schedule, we will talk about appropriate
 8   breaks.   If we need to go into the evening, we will discuss
 9   how we can handle that, as well.
10        Before proceeding with the examination of witnesses, I
11   have two preliminary matters I would like to deal with.
12        First, I would like to inform you of the schedule for
13   argument.     There had been discussion of an oral day of
14   argument following the submission of written argument.            The
15   Board has decided not to do this.        Argument will be in
16   writing only.
17        The schedule for argument is as follows:          Argument-in-
18   chief will be -- we will expect to receive that by June
19   18th; intervenor argument, July 2nd; and reply argument,
20   July 16th.
21        Second, regarding argument, the Board is requesting
22   specific input in the argument on issue 6, which is in
23   regard to Aboriginal consultation and accommodation.            We
24   ask parties to address the following questions in their
25   argument:     What Crown consultation and accommodation is
26   required for the purposes of approving a section 92 leave-
27   to-construct application; and what, if any, consultation
28   and accommodation issues are within the Board's

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 1   jurisdiction in this case; and has the required
 2   consultation and possibly accommodation been done.
 3        Those are my opening remarks.       Are there any other
 4   preliminary matters?
 5        MR. NETTLETON:     Good morning, Madam Chair.      I have one
 6   preliminary matter.
 7        It concerns an undertaking that was provided to Mr.
 8   Barlow two weeks ago when Mr. Barlow was asking questions
 9   of the Hydro One panel regarding the scheduling of
10   refurbishment of Bruce units.
11        The undertaking response that was provided, in
12   hindsight, appears to focus only on information that we
13   provided to Mr. Pape relating to the upgrades that were
14   being undertaken for Bruce units 1 and 2 and did not fully
15   -- the undertaking that we referred to did not fully
16   address the refurbishment schedule for all of the other
17   units at the Bruce complex.
18        What we are planning and what we are doing right now,
19   Madam Chair, is preparing a revised response to Mr.
20   Barlow's question, and we will be filing that or intend to
21   file that this morning.      That shows the Bruce refurbishment
22   schedule that the OPA has used and is consistent with the
23   2018 date that has been used by Bruce -- or, sorry, has
24   been used by OPA in and referred to in information
25   responses and for the purposes of the locked-in energy
26   forecast.
27        Again, that information, I don't believe -- I couldn't
28   find anywhere on the record where questions were asked of

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 1   the Hydro One panels about the source of the 2018 date.
 2        The interrogatory responses that were provided only
 3   referred to publicly available information.         That was --
 4   that came out of Energy Probe 6.       And what we would like to
 5   do is file, for purposes of responding to Mr. Barlow's
 6   question, the information and the source of that
 7   information so that he and all other parties have that
 8   before them.
 9        My friend Mr. Skalski is just reminding me that the
10   question that Mr. Barlow asked was just that, a question,
11   and I think we referred -- you asked whether or not we
12   could answer the question, and I don't think there was
13   officially an undertaking given, but we responded to it by
14   referring to a previous undertaking that had been made.
15        MS. NOWINA:     All right.
16        MR. NETTLETON:     And that what we would like to do is
17   provide a more fulsome and proper response to the questions
18   that we understand had been asked, and that is the full
19   schedule that relates to the Bruce refurbishment tasks.
20        MS. NOWINA:     So no one has any objections to receiving
21   this clarifying information?
22        MR. QUINN ROSS:     Madam Chair, we have no objection to
23   receiving the information.      However, we would like to
24   review it prior to consenting to it being entered into
25   evidence.
26        MS. NOWINA:     All right.   So we expect to have it this
27   morning, and perhaps at morning break that review could
28   take place.

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 1        MR. NETTLETON:     Yes.
 2        MS. NOWINA:     Fine.   Let's do that.
 3        Mr. Pape, are you ready to begin?
 4        MR. PAPE:    Thank you, Madam Chair, we are.       Madam
 5   Chair, Mr. Whitfield Russell is in the chair and ready to
 6   be sworn.
 7        MS. NOWINA:     All right.    We will do that.
 8        SAUGEEN OJIBWAY NATION - PANEL 1
 9        Whitfield Russell, Sworn
10        EXAMINATION-IN-CHIEF BY MR. PAPE:
11        MR. PAPE:    Madam Chair, Mr. Whitfield Russell is
12   presented as an expert witness on behalf of Saugeen Ojibway
13   Nation.   You have met him before.      He has been present
14   through a substantial part of the hearing and took part in
15   a working group process, technical working group process,
16   on some matters during the course of the hearing.
17        We tender Mr. Russell as an expert and ask the Board
18   to qualify him to give expert evidence on bulk power
19   systems, including the generation and transmission aspects
20   of those systems.
21        I will briefly take Mr. Russell through several parts
22   of his resume, which you will find at tab B1 of the large
23   volume of evidence of the intervenor, the Saugeen Ojibway
24   Nation.
25        Mr. Russell, good morning.
26        MR. RUSSELL:     Good morning.
27        MR. PAPE:    Let's talk first about your formal
28   educational qualifications.       In your resume, in the first

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 1   paragraph, it lists three degrees.        Would you just
 2   reiterate for the Board what those three degrees are that
 3   you hold?
 4        MR. RUSSELL:      A bachelor's in science and electrical
 5   engineering, a BSc; a master's in electrical engineering;
 6   and a juris doctor of law degree.
 7        MR. PAPE:     What was the subject matter of your
 8   master's thesis?      In your master's of science?
 9        MR. RUSSELL:      It was a digital simulation of switching
10   surges on extra high voltages transmission lines.
11        MR. PAPE:     You have listed your work history on the
12   first page of this resume, and let's just go through the
13   relevant portions very quickly.
14        Starting at the bottom of the page, which is your
15   earliest position at Potomac Electric Power Company.            Would
16   you just tell the Board about each of, very, very briefly,
17   about these four positions between 1969 and 1976, when you
18   founded Whitfield Russell Associates as a consulting firm.
19        MR. RUSSELL:      Yes.   At PEPCO, I was an associate
20   engineer in the system planning department.          That involved
21   load flow studies, stability studies, generation planning
22   generally.     And also, PEPCO is a member of the
23   Pennsylvania-New Jersey-Maryland interconnection, known as
24   the PJM pool.     It at the time was about 40,000 megawatts.
25   Since then it has spread beyond those three states as far
26   west as Chicago.
27        It is very large integrated power pool in which
28   separate utilities operate and plan together as a single

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 1   utility, to optimize.
 2        So I served on a number of committees of PEPCO,
 3   relating to both PJM and PJM's relationships with adjoining
 4   regions.
 5        MR. PAPE:    All right.    That was between 1969 and '71?
 6        MR. RUSSELL:     Yes.
 7        MR. PAPE:    And then you went to the Federal Power
 8   Commission?
 9        MR. RUSSELL:     It is now called FERC, but it was then
10   the Federal Power Commission.
11        MR. PAPE:    What did you do there?
12        MR. RUSSELL:     I was a staff engineer and testified in
13   one or two hearings, I think one in the Atomic Energy
14   Commission on the need for power in the Michigan area.         But
15   did a variety of tasks related to the litigation concerning
16   gas curtailments of power plants, which at that point in
17   time were quite prevalent.
18        MR. PAPE:    All right.    And after that, you -- and this
19   mentions that when you were at Federal Power Commission,
20   you appeared before the Atomic Energy Commission.
21        MR. RUSSELL:     Yes.
22        MR. PAPE:    What was that with respect to?
23        MR. RUSSELL:     As I said, it was the need for power in
24   Michigan, related to Consumers Powers application for an
25   operating licence on the Midland nuclear facility, Midland
26   Michigan.
27        MR. PAPE:    And then, from '72 to '76, you were in the
28   engineering division and became chief engineer for

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 1   Securities and Exchange Commission's division of corporate
 2   regulation.
 3        And what were you doing there?
 4        MR. RUSSELL:    This is the part of the SEC which
 5   regulates registered holding companies.       Those are
 6   companies, public utility companies, both gas and electric,
 7   which are owned by a holding company, spread over separate
 8   states, and operate in many cases as a single power pool or
 9   single utility.
10        But separate corporate identities.       So this involved
11   mergers, acquisitions.      Many of these proceedings involved
12   bulk power supply engineering and planning.
13        MR. PAPE:    And what were your roles as an engineer in
14   relation to those kinds of functions of the agency?
15        MR. RUSSELL:    Well, often savings were claimed for the
16   merger.   That was always a subject, to investigate the
17   support for claimed savings in bulk power supply and
18   transmission.
19        Examination of alternatives to the merger, and they
20   were always under the Holding Company Act, concerns about
21   anti-competitive aspects of the mergers.
22        So those -- I provided engineering support with
23   respect to those commission concerns.
24        MR. PAPE:    So would it be correct to say that in that
25   position, you were dealing both with engineering issues and
26   with financial and economic issues?
27        MR. RUSSELL:    Yes.   Yes, I was.
28        MR. PAPE:    All right.   Then you established Whitfield

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 1   Russell Associates in 1976?
 2        MR. RUSSELL:      That's correct.
 3        MR. PAPE:     I take it from this, from what it says in
 4   the second paragraph on this page, that you have been
 5   qualified as an expert in some 27 states, as well as in
 6   Alberta and Manitoba and the District of Columbia, and you
 7   have given expert evidence in one form or another in some
 8   150 or so proceedings.
 9        MR. RUSSELL:      That's approximate numbers, yes.
10        MR. PAPE:     I am going to ask you to just take the
11   Board to a few of the particularly relevant proceedings, in
12   which issues having some relationship to the issues in this
13   hearing, were the subject of your evidence.
14        We have discussed this before, so I will mention some
15   of those that we have discussed and you can just give the
16   Board a very brief indication of what those hearings were
17   about or the role you played, and the relationship between
18   the issues in those hearings and the issues in this
19   hearing.
20        MR. RUSSELL:      Okay.
21        MR. PAPE:     So numbers 8 and 9 in the list of
22   proceedings are listed as FERC hearings re Pacific Power
23   and Light Company.      What were those about, and what was
24   your role?     Again, explain to the Board, if you would, the
25   relationship between the issues in that proceeding and the
26   issues here, in a very general sense.
27        MR. RUSSELL:      Right.   Okay.   This involved attempts by
28   municipal power systems which I represented, my clients,

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 1   about 13 of them in northern California and sometimes in
 2   some proceedings, five in southern California as well,
 3   seeking to obtain access to the Pacific northwest-southwest
 4   intertie.     That was originally two 500 kV lines operated in
 5   parallel with a DC, plus or minus 500 kV DC line.          It
 6   extends from about 1,000 miles from the Colorado River –-
 7   Columbia River, pardon me, from the Columbia River to the
 8   Los Angeles basin.
 9        It evolved over time from about 800 megawatt per line
10   on the 500 kV capacity, through the addition of series
11   capacitors, generation rejection, load rejection, to a
12   system that is capable of about 1700 or 1800 megawatts per
13   circuit.
14        Throughout the period, there was a large amount of
15   series compensation which was added to the lines, which
16   induced subsynchronous resonance, which is a concern that
17   we have discussed here, and this was the earliest, some of
18   the earliest attempts to deal with the subsynchronous
19   resonance.
20        As we noted earlier in the hearing, the Mojave plant
21   in Nevada snapped its shaft as a result of the
22   subsynchronous resonance appearing, and a number of methods
23   were adopted to control that.
24        In addition, there is a very large SPS system has been
25   in place since the '70s on this line.         It has a
26   particularly susceptible -- it is particularly susceptible,
27   rather, to the loss of the two 500 kV lines coming down the
28   west coast, and when that happens, all of the, as much as

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 1   3,200 megawatts of capacity that was on the lines, makes
 2   its way through lower voltage lines to the east, in Idaho
 3   and Utah and back through the Four Corners area in the
 4   desert southwest.
 5        Because this was such a devastating impact, the
 6   uncontrolled outage, upon the loss of these two 500 kV
 7   lines, an SPS, or they then called it a RES, a remedial
 8   action scheme at that time -– it's now called a SPS -- was
 9   put in place.
10        It involved rejection of a number of generators upon
11   the double contingency.       It involved a dynamic break; that
12   is, excess generation tended to be trapped in the Pacific
13   northwest, and it was being sent to the southwest.              So in
14   order to maintain synchronism and allow the systems not to
15   have -- excessively slowing down in desert southwest and
16   speeding up excessively in the Pacific northwest, we
17   dropped generation in the northwest, we added load in the
18   form of a dynamic break which was switched on to slow
19   things down, and then in the southwest, large amounts of
20   load were dropped, in addition to sending a signal to the
21   Four Corners area to separate the northwest from the
22   southwest.
23        This was armed practically all the time from its
24   inception, and except for one period when it was disarmed
25   when a third AC line was added.        And after four cascading
26   failures, it was, the SPS was put back in place.
27        So we have the other important takeaway point here on
28   the Pacific Northwest is that this is armed virtually

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 1   continuously from the early '70s to today.
 2        MR. PAPE:     Was your expert evidence in relation to all
 3   of the various technical issues you have just mentioned?
 4        MR. RUSSELL:    Not entirely.   The evolution of this
 5   capacity -- and my clients were trying to get access to it
 6   and so we -- these facts and these relationships,
 7   engineering relationships, played a large part in what we
 8   were able to accomplish in gaining access, the clients
 9   gaining access to low-cost power in the northwest.
10        MR. PAPE:   I understand you gave a very substantial
11   amount of evidence in that hearing?
12        MR. RUSSELL:    Well, I was cross-examined for 68 days.
13   The hearing ran on for 300 days, or so.      I am hoping not to
14   repeat that here.
15        MS. NOWINA:    As are we, Mr. Russell.
16        MR. RUSSELL:    Thank you very much.
17        MR. PAPE:   We rest our case.
18        Next, you have mentioned to me a hearing in which you
19   gave evidence, a proceeding involving Exxon Mobil.
20        MR. RUSSELL:    Yes.
21        MR. PAPE:   Which I don't think is listed in this.
22        MR. RUSSELL:    I couldn't find it, but it was a jury
23   trial in Los Angeles state court.
24        What happened was, in the '96 period, that was one of
25   those -- two of the blackouts that occurred when the SPS
26   had been removed.    They felt when they added a third line,
27   it would be no problem, that it was going to be
28   sufficiently reliable.      We didn't need the SPS anymore.

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 1        They were wrong.      The three lines went out, and other
 2   precipitating events made -- caused these cascading
 3   failures.
 4        So this -- but before that happened, in the '96
 5   blackout a low-voltage wave came through southern
 6   California, because they weren't separated from the
 7   northwest.     Voltage went well below 80 percent at times and
 8   for sustained periods, and burned up some very large motors
 9   at the Exxon Mobile refinery at Torrance, California.           So
10   the subject of that lawsuit was, What happened, what could
11   Southern California Edison, the defendant, do about it, and
12   what did they do about it?
13        The SPS and the SSR controls and the dynamics of the
14   system figured prominently in that proceeding.
15        MR. PAPE:     Who was your client in that proceeding?
16        MR. RUSSELL:      Exxon Mobil.
17        MR. PAPE:     Number 165 in this list of proceedings is a
18   Massachusetts file involving Braintree Electric.          Could you
19   tell the Board about that?
20        MR. RUSSELL:      Yes.   This is a case in which
21   transmission to the -- what we call the southeast
22   Massachusetts area is insufficient after an N minus 2
23   event, which is a loss of two critical 345 kV lines.
24        What has been happening is that the primary source of
25   supply to protect against that very unusual and very rare
26   event is to operate what we call the canal units.          They're
27   fuelled by oil.      Oil prices, as you know, have skyrocketed,
28   and the cost of protecting for an N minus 2 event, for

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 1   which the criteria allow the rejection of load, has been on
 2   the order of $200 million per year.        It's gone -- $100
 3   million year and is now about $200 million a year.
 4           So this subject, our clients were paying their
 5   allocated share of this, because they're in southeast
 6   Massachusetts and they retained us to help them resolve
 7   this.
 8           We filed testimony recommending the use of a pre-first
 9   contingency switching scheme, which our adversary, the IESO
10   New England, admits is feasible and complies with criteria.
11           Moreover, we have recommended use of an SPS.       We think
12   it is more cost-effective and would be a more reliable
13   approach to the problem.       That case is still pending.
14           MR. PAPE:   I understand that there are several of
15   these proceedings that dealt with questions of whether new
16   transmission lines would be authorized and that in -- and
17   that you have given evidence on both sides of that question
18   in different hearings.
19           If you would tell the Board about number 27 where, I
20   understand that you were questioning the efficacy of
21   constructing a proposed new transmission line.
22           MR. RUSSELL:   Yes.   This was the so-called Mandan
23   line.    It's an abbreviation for Manitoba Dakota Nebraska.
24   What happened was Manitoba only had one interconnection
25   with the US, with Northern States Power.         There was a time
26   when the value of that hydro surplus was very, very high,
27   and there was also a time in history in which utilities in
28   the US were not obligated to transmit to third parties.

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 1        So basically what NSP did was buy the power cheap and
 2   realize all our savings, and also resell it at higher
 3   prices in the market.
 4        Manitoba, in an effort to get a higher price, and the
 5   utilities in Nebraska, in an attempt to get a lower price,
 6   struck a deal to build a line from Manitoba to Nebraska.
 7   They came through South Dakota.       South Dakota was -- staff
 8   hired me for that proceeding, and that proceeding was held
 9   and the line was denied.      The application for the line to
10   go through South Dakota was denied.
11        MR. PAPE:    Then numbers 120 through 122, you were on
12   the opposite side of that question whether a new line
13   should be built, as I understand it.        This involved
14   Arrowhead-Weston?
15        MR. RUSSELL:     Yes.   My clients were small investor-
16   owned utilities in a coalition with public power systems.
17   This is a line which would add to the transfer capability
18   from Minnesota to high-cost areas in Chicago.
19        I testified in support of this line, and I believe it
20   is in service, but I know it was being constructed.
21        MR. PAPE:    Then you have told me that there are a
22   number of these proceedings which have dealt with various
23   aspects of wind power generation issues.
24        I will mention to the Board -- numbers 128, 129, 136,
25   143, 144, 145 and 150, are all, as I understand it, from
26   you, Mr. Russell.     Those are proceedings in which wind
27   power issues were among the subjects of your expert
28   evidence.

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 1          Perhaps you could tell the Board about a couple of
 2   those that have a particular kind of relevance to issues
 3   that have arisen in this hearing.
 4          MR. RUSSELL:   Yes.   I was retained to help the wind
 5   generator with its interconnection and negotiating payments
 6   for upgrades to the transmission network, and also to
 7   propose that the facilities be treated as network upgrades
 8   which had a favourable treatment under FERC procedures.
 9          Basically, FERC procedure is this --
10          MR. PAPE:   Which proceeding are we talking about?
11          MR. RUSSELL:   We're talking about the Cannon White
12   Water and the Cabazon, 128 and 129.
13          MR. PAPE:   Thank you.
14          MR. RUSSELL:   These predated the California
15   legislation, which I will discuss a little bit in 135 and
16   136.
17          MR. PAPE:   Okay.
18          MR. RUSSELL:   Basically, the FERC rule in all 48
19   states with interconnections is this:        They subdivide the
20   interconnection service from the transmission service.
21   Every generator has rights under these procedures to
22   interconnect, but he has no right to transmission service
23   and no right to firm transmission service unless he agrees
24   to pay for upgrades to the grid.
25          If he pays for upgrades to the grid, he then can be
26   counted toward the firm source of generation supply to the
27   customer.
28          So many, many generators pay for the interconnection;

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 1   do not pay for upgrades to the grid, even though when you
 2   pay for upgrades to the grid, and then render transmission
 3   -- then take transmission service, either directly as the
 4   generator or the customer takes transmission service from
 5   the generator.
 6        Your transmission payments are forgiven until the
 7   payment for the upgrades has been paid off, and then you
 8   begin paying for transmission service.      So, in that way,
 9   you recover.
10        But the take-away point here on the Cabazon and White
11   Water cases, 128 and 129, is that these parties paid for
12   upgrades, but only got transmission service when all
13   facilities are in service; in other words, N minus zero
14   conditions, not N minus 1.    They had to pay for upgrades
15   nonetheless.
16        That's to contrast from what Hydro One is recommending
17   here, that transmission service be rendered in the N minus
18   1 condition, and the N minus 1 is a very severe one
19   involving the loss of two circuits on a single set of
20   towers.   So that is one take-away point there.
21        Also, the point is that this was representative of the
22   prevailing policy in the United States under the FERC
23   interconnection procedures.    You have a right to connect,
24   but if you want transmission service, you either -- if it's
25   not available on the grid and you want firm service, you
26   have to pay for upgrades to make it possible.       And then you
27   recoup it over time, as you take transmission service.
28        MR. PAPE:   All right.   Now, there is another one of

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 1   these proceedings involving wind issues, where questions of
 2   the development of wind generation facilities and the
 3   development of transmission lines and how those two things
 4   interact has very much been at the centre of the case.
 5        Could you tell us about that?
 6        MR. RUSSELL:     Yes.   California passed a statute,
 7   which, in the briefest terms, determined whether a
 8   transmission line was necessary to facilitate the
 9   development of wind energy.
10        What they did was, they said:       You as the transmission
11   owner, when you are going to build a facility which -- the
12   transmission line or substation or whatever -- if you're
13   going to build a facility which is not a network facility
14   which gets the special treatment, and the costs of which
15   are spread to all customers, but if you are going to build
16   a radial, say, up to the Tehachapi wind air shed, a very
17   large and with 4,500 megawatts of potential, if you are
18   going to build that up there, you first must go to FERC and
19   ask FERC:    Please treat it like a network facility and
20   spread the costs across the entire state of California.
21        If you fail, the statute says, then you can come back
22   to the state of California and we will let you run that
23   through the rates to your retail customers, to the extent
24   FERC won't let you recover it from the entirety of the
25   customers in the state.      But you have to meet these
26   facility tests, and it's only charged to the transmission
27   customer, the retail transmission customers of the utility
28   which develops this generation radial.

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 1           So, this is a way in which California, in the
 2   Tehachapi area, departs from the prevailing national scheme
 3   and, but even then, they have to tiptoe and coordinate
 4   their exercise of this jurisdiction with FERC.
 5           In this particular case, there were three segments of
 6   line.    Two segments were networked, and they went to FERC,
 7   the transmission owner went to FERC and said:          We would
 8   like network treatment of all three segments, the two
 9   networks and the generation radial that goes up to
10   Tehachapi.
11           And we would also like you to prefind that we get
12   prudence, and if it is abandoned, we can recover the costs
13   that we have laid out before abandonment.
14           So what FERC said is no.     FERC said:   On the two
15   segments that are networked, we will consider them as
16   network, if, as and when you get them complete and you can
17   show that they're used and useful in providing prudent
18   utility service.
19           On the radial line, FERC said:     No, that is a gen tie,
20   a radial line that has to be paid for by the generators,
21   and you can go back to the sate of California, try to
22   recover some of those costs from the retail ratepayers of
23   Southern Cal Edison only, but that is between you and the
24   state of California.
25           So, that's a very interesting development.
26           So the first two segments have gone in.       The third
27   segment is nearing completion.        There were, I think, with
28   the first three segments, something like 800 megawatts of

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 1   Tehachapi generation, wind generation, would have been
 2   deliverable.        But as the line neared completion, the
 3   California Independent System Operator and FERC redid the
 4   protocols for the transmission -- I mean the wind generator
 5   queue.
 6           In the course of that, as the line was nearing
 7   completion, many of the wind generators in the early part
 8   of the queue dropped out, and have not elected to complete
 9   their interconnection agreements and take transmission
10   service and contribute to the payment of that line.
11           As a result, Southern California Edison has got a very
12   big line, with many of the early entries in the queue have
13   disappeared as applicants for interconnection.          And so
14   they're down to trying to justify the line, again, as a
15   network upgrade.
16           MR. PAPE:    This is file 150, is it?
17           MR. RUSSELL:    This is 135 and 136.
18           MR. PAPE:    135 and 136.   Just to close this off --
19           MR. RUSSELL:    I'm sorry, I misspoke.    135 and 136 was
20   the California proceeding, at the California PUC, and, yes,
21   150 is the proceeding at FERC, the parallel proceeding at
22   FERC.
23           MR. PAPE:    You were describing.
24           MR. RUSSELL:     Yes.
25           MR. PAPE:    All right.   And just to close this off, for
26   what kinds of reasons have wind generator applicants that
27   were in the queue, for what kind of reasons have they been
28   dropping out of the queue?

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 1           MR. RUSSELL:   Well, my wind client is one of the
 2   surviving ones who wants to interconnect, but he doesn't
 3   want to be the only one to interconnect and he doesn't want
 4   to have to pay for the full costs until the other
 5   interconnecting wind generators, again, get their act
 6   together and get back in the queue and help share the
 7   costs.
 8           So you get this typical Catch-22 situation, which
 9   always develops with a dedicated line to generation.
10           So that's where the situation sits.      They're trying to
11   resolve whether they can go back to making it a network and
12   hope that FERC will allow them to do that, or some other
13   resolution.
14           But it shows the problem of prebuilding in
15   expectation.     Just because you've got a full queue of
16   generators indicating interest, you need something more.
17           You need commitments to pay cash.      You need
18   interconnection agreements.       You need contributions to the
19   upgrades, and so forth, to provide the sort of assurance
20   which will hopefully mitigate or lessen the probability of
21   these kind of developments.
22           MR. PAPE:   Is it a surprise that some applicants who
23   were there originally have now dropped out?
24           MR. RUSSELL:   No.   In my experience, that is often the
25   case.    In the prior cases in Southern California with
26   Cabazon and White Water, my clients had to pay for
27   upgrades, but they came on line before the upgrades were
28   ready.

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 1        Generators, two or three generators on the same line
 2   ahead of them in the queue, with interconnection
 3   agreements, with interconnections and completed purchase
 4   arrangements had not come on.
 5        So my client was able to get on before his upgrades
 6   were completed and use the pre-existing capacity which had
 7   been dedicated to the earlier members in the queue.
 8        This is very -- very often what happens is some of the
 9   developers later in the queue move more quickly than those
10   earlier in the queue, and so this -- always have this
11   problem of who is going to pay for the upgrades and when.
12        MR. PAPE:   Thank you, Mr. Russell.
13        Madam Chair, those are my questions for Mr. Russell
14   for purposes of qualifying him.
15        MS. NOWINA:   All right.   Does anyone have any
16   objection to us qualifying Mr. Russell as an expert in bulk
17   power systems, including transmission and generation of
18   those systems?
19        The Board so qualifies Mr. Russell.
20        MR. PAPE:   Thank you.
21        Mr. Russell, there are three component documents that
22   comprise your evidence, and we will just indicate those and
23   have you adopt them.
24        The first of your expert evidence is the large volume
25   that was prefiled, called: "The evidence of the intervenor,
26   the Saugeen Ojibway Nations."
27        Then during the course of this hearing, in response to
28   developments in the evidence, you prepared or had prepared

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 1   several more charts and graphs and those are contained in a
 2   small unbound volume that is stapled and called:
 3   "Supplementary evidence of the intervenor, the Saugeen
 4   Ojibway Nations."      Finally, there is a two-page document
 5   that was prepared late yesterday, and is now being
 6   provided, is available to the Board, and that contains two
 7   new graphs showing net present value calculations, with
 8   some different timing information at its base.
 9        Do you have all of those three documents?
10        MR. RUSSELL:      I don't have the last one with me.       I
11   apologize.
12        MR. PAPE:     I will have someone bring you one.
13        MR. RUSSELL:      I have the others.
14        MR. PAPE:     Madam Chair, does the Board have the third
15   document yet?
16        MS. NOWINA:      We don't have the last one yet.      We will
17   mark the last one as an exhibit, Mr. Pape.
18        MR. MILLAR:      K14.1.   That is -- graphs provided by Mr.
19   Russell.   I guess they're net present value charts for the
20   -- for Bruce B refurbishment -- with Bruce B refurbishment.
21        EXHIBIT NO. K14.1:        NET PRESENT VALUE GRAPHS PROVIDED
22        BY MR. RUSSELL WITH BRUCE B REFURBISHMENT
23        MR. PAPE:     I could say now, for the record, Madam
24   Chair - it might just simplify things - These graphs were
25   prepared based on information in a response -- this new
26   exhibit, K14.1, is based on information that was provided
27   by Hydro One in response to an interrogatory from Pollution
28   Probe.

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 1           Perhaps Mr. Nettleton could help me with the number of
 2   that.
 3           MS. NOWINA:    K19 -- sorry, Interrogatory No. 19 from
 4   Pollution Probe; is that the one we're talking about?
 5           MR. MILLAR:    Yes.   I can pull it up.   I believe, Madam
 6   Chair, it is Exhibit C, tab 2, schedule 19, so Pollution
 7   Probe 19, unless I am mistaken.
 8           MR. PAPE:   Well, subject to correction, Madam Chair,
 9   that's what it is.
10           MS. NOWINA:    We should probably make it clear, because
11   the response to that undertaking, some of it was filed
12   confidentially.
13           MR. PAPE:   Exactly.
14           MS. NOWINA:    Is there any confidential information in
15   your exhibit, Mr. Pape?
16           MR. PAPE:   The pages that you have do not contain
17   confidential information.
18           MS. NOWINA:    All right, that's fine.    We are cautious
19   in terms of questioning, and Mr. Russell in response, that
20   we're not treading into the confidential information.
21           MR. RUSSELL:    I will stay clear.
22           MR. PAPE:   We have discussed that among counsel, Madam
23   Chair, and it may or may not be necessary to deal with
24   confidential information with respect to this, but it has
25   been agreed, among counsel, that these two pages can be on
26   the record and a very simple explanation of what they
27   represent can be on the record.
28           MS. NOWINA:    That's fine.   Thank you, Mr. Pape.

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 1        MR. PAPE:    So those three documents together, Mr.
 2   Russell, they comprise your -- the first part of your
 3   evidence.    Do you adopt those?
 4        MR. RUSSELL:     Yes, I do, and I do want to say that
 5   with respect to the modelling discussed in my first April
 6   18 evidence, we've been taken over by events and that's
 7   what has caused us to learn more about the model and to
 8   file the second two sets of evidence.
 9        MR. PAPE:    Right.     We are going to come to those when
10   we -- when I have you briefly discuss those with the Board.
11        Finally, Mr. Russell, you, on behalf of Saugeen
12   Ojibway Nation, answered some interrogatories --
13        MR. RUSSELL:     Yes.
14        MR. PAPE:    -- that were asked of you.      Do you adopt
15   those interrogatory responses as your evidence?
16        MR. RUSSELL:     I do.
17        MR. PAPE:    All right.    Mr. Russell, what I propose to
18   do is to have you discuss some aspects of your filed
19   evidence that you have now adopted, and particularly to
20   discuss it in the context of the issues and the evidence
21   that have been the subject of this hearing for the first 13
22   days of the hearing.
23        I am mindful of the time, Madam Chair, and we will do
24   this in a way to try and find a good balance between being
25   taking too much time, but ensuring that we have enough time
26   that Mr. Russell's expert opinion is clear on the issues
27   that have gradually developed as the major unresolved
28   issues in this hearing.

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 1           Let's start, Mr. Russell, with the fundamental issue
 2   with respect to the need for the new Bruce-Milton
 3   transmission line that Hydro One has applied for
 4   authorization to construct.
 5           As you know, and as we all know, Hydro One's
 6   application is based on its view that it needs to create
 7   transmission capacity capable of transmitting 8,100
 8   megawatts from the Bruce region and needs to do so at this
 9   time.
10           You have been cognizant of that, and it is mentioned
11   in -- it's mentioned in your evidence at paragraphs 4(b)
12   and 6 and 8 and 48.      That is your recognition of Hydro's
13   position on this issue.
14           In your evidence throughout, you disagree with Hydro's
15   position on need, and that is discussed particularly in
16   paragraphs 9, 10, 11 and 17 of your evidence-in-chief.
17           Now, I don't propose to take you to all of those.
18   They're there for the Board to review, but I want to focus
19   on the key issues that you have focussed on and the key
20   points at which you disagree with Hydro's position on need.
21           Let's talk particularly about the aspect of Hydro's
22   projected need that is based on the 1,000 megawatts of new
23   wind that they forecast to be developed in the Bruce
24   region.
25           You have said, particularly in paragraph 15, that you
26   have not included that 1,000 megawatts of future wind in
27   your charts in the development of transmission system
28   upgrades that you consider to be an alternative, and you

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 1   have explained the reasons why you have not considered it
 2   proper to include those 1,000 megawatts of new wind.
 3           Would you just briefly summarize for the Board your
 4   reasons for taking that position?
 5           MR. RUSSELL:   Okay.   As I understand the situation,
 6   this wind will be addressed in the IPSP, the amounts and
 7   locations.     It will be facilitated by decisions made in the
 8   IPSP.
 9           The general approach, as I understand it - and I am
10   not very far into the IPSP - is that there's going to be a
11   competitive acquisition, an RFP, from renewable resources.
12           So to the extent wind generators are spread throughout
13   the province and want to bid, there's got to be some way to
14   adjust their bid to reflect the differing costs of
15   transmission upgrades associated with them.
16           So that process has to play its way out, and it seems
17   to be kind of a disconnect, as an incidental matter,
18   between the assumptions in this proceeding and the
19   assumptions in the IPSP.
20           In this case, we're being told the upgrade is needed
21   for this 1,000 megawatts of wind, of which the 700 is not
22   standard offer and would be supposedly subject to this
23   competitive acquisition.
24           We have been told here that the transmission upgrades
25   are needed for it, but over in the -- and you would assume
26   logically that costs would be allocated to the wind in the
27   Bruce area to reflect that this transmission is being
28   added, so its penalty to the ratepayer would be properly

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 1   reflected.
 2        However, when we go to the IPSP, this proceeding is
 3   assumed to be decided and to have been decided in Hydro
 4   One's favour, and all of the costs of the upgrades under
 5   discussion here, which are supposedly necessary to the wind
 6   in the Bruce, are not charged to those Bruce area
 7   generators.     There has just been a very different approach
 8   to accountability for upgrades between the IPSP and this
 9   proceeding.
10        So if that is straightened out, or some other outcome,
11   there are very low costs assigned as a transmission penalty
12   to the Bruce area and Owen -– the Bruce peninsula and the
13   Goderich concentrations.       So those penalties, if they're
14   fussed over and a different allocation turns out to be
15   adopted by the Board in the IPSP, that may affect the
16   attractiveness of the wind in the Bruce area to purchasers
17   and affect their competitive posture.
18        So that process, it seems to me, it has to play out,
19   and we don't really have a resolution of that in the IPSP
20   as well.
21        Now, we've got all of these other problems as well.          I
22   mean, we have to build and certificate and acquire rights-
23   of-way for upgrades and enabler lines.         Those are not in
24   place.
25        There has been no commitment yet, has been made to
26   develop or contract for this generation or the related
27   transmission facility requirements.
28        I think the entirety of the upgrade of the new line

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 1   is, the capacity provided by, supposedly provided by the
 2   new line can be provided by alternatives, and capture much
 3   of the benefit at a much lower cost and result in a much
 4   lower transmission penalty to these projects.
 5        So that process, it seems to me, has to play out.
 6        MR. PAPE:    All right.
 7        MR. RUSSELL:     One other thing.    There are a lot of
 8   missing parties in here.      The assumptions made by OPA with
 9   respect to these wind generators assume they will come in
10   place on a regular, predictable basis, and be completed in
11   the ramp-up to 1,000 megawatts by 2015, as I recall.
12        That, we've got to hear from the vendors of the
13   turbines.    We haven't heard from the lenders who are going
14   to lend to the developers.      We haven't heard from the
15   developers themselves.
16        I don't believe the interconnection arrangements with
17   these wind generators are in place.       I don't understand
18   that the contracts are in place to buy the power.         And all
19   of the studies and preliminary work necessary to this
20   simply is not in place.
21        So this creates a great deal of uncertainty about even
22   if there is a lot of potential in Bruce and Goderich, to
23   get this 700 megawatts, until the process plays out, it
24   seems to me, you can't assume that it will occur in the
25   amounts assumed by OPA, or on the schedule assumed by OPA.
26        MR. PAPE:    Now, in paragraph 9 of your major report,
27   you take issue with Hydro including the refurbishment of
28   Bruce B, in its case for the need for the proposed new

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 1   line.
 2           MR. RUSSELL:   Yes.
 3           MR. PAPE:   Why is that?
 4           MR. RUSSELL:   Well, I understand that there is a
 5   directive, that up to 14,000 megawatts of nuclear
 6   generation will be addressed in the supply mix directive,
 7   as a part of the IPSP.        Not more particular, but I
 8   understand up to 14,000 is part of the directive.
 9           It seems to me that if something substantially less
10   than the 14,000 megawatts is -- comes out of the IPSP
11   proceeding, that that will affect the competition for
12   building and refurbishing existing nukes and building new
13   nukes.    It can affect how much of it is going to appear at
14   Bruce and continue to exist at Bruce.
15           So until that process plays out -- and I also
16   understand that parties beyond the province of Ontario have
17   some say in this -- it seems to me until that process plays
18   out, we can't say with assurance that the assumed amounts
19   of nuclear generation will be at Bruce for the long-term.
20   If it's not, of course, we may be building transmission for
21   facilities which ultimately do not continue to operate or
22   are not built.
23           MR. PAPE:   So you have taken, in your report you have
24   said that those two aspects of the assumptions that Hydro
25   has accepted as the basis for need -- that is the future
26   wind, 1,000 megawatts and the refurbishment of Bruce B --
27   are not a proper foundation for establishing need for the
28   new line.

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 1        You have provided some technical explanations in
 2   paragraphs 11 and 12 and some graphs at pages 11 and 12,
 3   and then, again, a discussion on page 15 where you explain
 4   the risks and the costs associated with constructing the
 5   line in the face of the uncertainties that you have been
 6   discussing --
 7        MR. RUSSELL:     Yes.
 8        MR. PAPE:   -- about wind and Bruce B refurbishment.
 9   And you have heard a lot of evidence about this in other
10   days of the hearing.
11        So if you would just summarize your views now, and
12   whether your views are still the same after all of the
13   evidence you have heard in the hearing and so on, about the
14   technical aspects of this uncertainty problem.
15        MR. RUSSELL:     Well, the technical aspects are first.
16   We're looking at a $635-million investment upfront, before
17   we have these uncertainties resolved.      So assume, for
18   example, that the wind doesn't eventuate in the full 1,000
19   megawatts expected.    We're going to have transmission
20   capacity set aside for wind in excessive amounts, in my
21   opinion, because of the attributes and intermittent nature
22   of wind generation.
23        And that will undermine the economic attractiveness to
24   the ratepayers of building this line.
25        Similarly, if you look -- if the Bruce is retired
26   instead of being refurbished, or if it's refurbished before
27   2018, in other words, Bruce B refurbishments start before
28   2018, as opposed to the assumptions made with respect to

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 1   the economic evaluation done, the financial evaluation done
 2   by OPA, that, too, will adversely affect the economic
 3   attractiveness of the line.
 4           So it seems to me, you have to -- you've got this very
 5   large front-end cost.      It depends for its long-term
 6   attractiveness upon these assumptions with respect to
 7   refurbishment and continued operation, and they also depend
 8   upon assumptions with respect to the amount and timing of
 9   wind generation additions, which are both uncertain at this
10   time.
11           So that is one problem.
12           Now, the other major problem is that I understand that
13   the Board has to balance and take into account other
14   policies separate and apart from just power-supply
15   economics.     They have to take into consideration the
16   interests of the consumer, and it's clearly -- as we will
17   discuss -- I am recommending an alternative which has a
18   front-end cost of one-sixth that of Hydro One's recommended
19   line.
20           Moreover, it is going to use existing transmission
21   right-of-ways, and it doesn't add to the need for
22   transmission right-of-ways.       A series capacitor needs a
23   little bit of land.      It has less -- it has less, it has
24   fewer institutional exposure to delays and acquisitions of
25   land.    So it seems to me this is kind of an insurance
26   policy, this series capacitor offers kind of an insurance
27   policy as a stepping-stone, and meets these other concerns,
28   to balance the need for the line with the interests of

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 1   consumers and also to optimize the use of existing
 2   infrastructure.
 3        MR. PAPE:    Are there other technical issues about
 4   having -– if, as you say, some of the assumed future
 5   generation doesn't occur or doesn't occur on the timelines
 6   that are being assumed in the application, are there other
 7   consequences of having unused capacity in the transmission
 8   system?
 9        MR. RUSSELL:    Well, it will be a stranded investment
10   until it is amortized and paid off, and the ratepayers will
11   continue to pay for it, irrespective of whether it is used.
12        MR. PAPE:    So in your expert opinion, is there an
13   alternative and more prudent planning approach that could
14   be taken at this time?
15        MR. RUSSELL:    Yes.   I think the more scalable approach
16   is to approach this problem through a lower-cost set of
17   upgrades, so as to leave time for these uncertainties with
18   respect to wind, and with respect to nuclear refurbishments
19   and with respect to really the performance of the nuclear
20   units, which factor so heavily into its attractiveness, the
21   attractiveness and justification for the line; so in the
22   diversity between wind -- that is, locational diversity
23   amongst the wind -- and the diversity between the wind and
24   nuclear, in their use of any transmission capacity which is
25   added.
26        So I have this approach which says, with the near-term
27   measures, we're going to have 5,400 megawatts.       With series
28   capacitors, we can add another 900 megawatts or so of

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 1   transfer capacity without even using generation rejection.
 2        We can add another amount of generation, getting us up
 3   to 7,076, by adding -- by using generation rejection on one
 4   Bruce unit.    If we use the limit on rejection of generation
 5   of one Bruce unit plus 400 megawatts of wind, as supplied
 6   in Saugeen interrogatory response 10, then we get up to in
 7   the 7,400 range.
 8        So we're going to get to the point where it is very
 9   scalable.    We can go in steps, as opposed to the 8,100
10   megawatt line, which, once you make that commitment and
11   build it, you have 8,100 megawatts and there's no way to
12   back away from that investment or that financial
13   commitment, if the wind and nuclear assumptions postulated
14   by the OPA do not come to fruition.
15        MR. PAPE:     Now, you have mentioned scalable, and let's
16   go to that right now.
17        If Hydro was to proceed with the approach that you
18   have said is a prudent alternative, how would scalability
19   work, both up and down, if the system was modified in the
20   ways you have suggested would be appropriate?
21        MR. RUSSELL:     Well, as I say, by adding the series
22   capacitors, we get to 6,326, which is roughly the amount of
23   -- in the 62 to 6,400 range is roughly the amount of the
24   nuclear generation proposed at Bruce.
25        We can get additional amounts for committed wind by
26   adding generation rejection of one Bruce unit, or rejection
27   of the wind generation.      If we wanted to maximize the
28   amount of generation rejection that permits us to stay

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 1   within the 1,500 megawatt import limit, which is subscribed
 2   to by the Ontario utilities, then we can get up to 7,400.
 3           If, for example, any one of those processes or any one
 4   of those developments don't come into fruition, then you
 5   can back away.      You can stop using generation rejection.
 6   You go back down to the 6,300 level just to service the
 7   nuclear generation, as opposed to the 8,100 megawatt
 8   addition, which has no real scalability on the downside.
 9           Once you got the 8,100, even without generation
10   rejection, there is really no way to back away if the
11   expected or projected amounts of wind and nuclear do not
12   come into play.
13           MR. PAPE:   In the approach that you've suggested, you
14   are including the near-term measures that --
15           MR. RUSSELL:   Yes.   The near-term measures get you to
16   5,400.    If you use the maximum amount of generation
17   rejection, I get to 7,400.       That is about 91 percent of the
18   8,100 for about one-sixth the cost, capital cost.
19           MR. PAPE:   Now, let's talk about net present value
20   graphs.    Hydro produced some net present value graphs
21   during the course of the hearing.        They were Exhibit K3.2.
22   Then you later caused the development of some additional
23   ones.
24           Do you have K3.2?
25           MR. RUSSELL:   Yes, I have it.
26           MR. PAPE:   I wonder if that could be put on the
27   screen.    Perhaps the best thing to do, Mr. Russell, is if
28   you would also have available to you your supplementary

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 1   evidence, and let's concentrate for the moment on the four
 2   graphs that you did in the first supplementary evidence
 3   package, all right --
 4         MR. RUSSELL:   Okay.
 5         MR. PAPE:   -- in response to K3.2.
 6         Now, if you could start -- I'm sorry.      I was hoping to
 7   leave K3.2 on the screen.     I apologize for the confusion.
 8         Perhaps you could just briefly tell us what these
 9   graphs are doing and particularly to explain the notion of
10   the crossover point, as it is shown by these graphs.
11         MR. RUSSELL:   Yes, okay.    Well, the blue line, as we
12   all know, is the net present value over time of the Hydro
13   One's proposed line.
14         It runs up in the range of 600 very quickly, because
15   we've laid out the dollars and we're committed to pay for
16   it for the useful life of the facility and associated debt.
17   So that is the blue line.
18         The red line is a line with series capacitors at
19   7,076, I believe -- oh, 7,176, I'm sorry, because -- it is
20   slightly higher than the 7,076 I talked about earlier,
21   because it assumes a more average level of negative BLIP or
22   NBLIP.   I promise not to revisit the development of that.
23         But the fact of the matter is it flows over the annual
24   period, which add to the flows from Bruce on the critical
25   constrained facility, the N582L line.       On average, they're
26   not as severe as they are in the 7,076, and that allows us
27   to have a little more when we add generation rejection to
28   it.

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 1        So this bottom red line includes the 7,076 amount of
 2   transfer capability -- 7,176, excuse me, plus generation
 3   rejection of, I think, one Bruce unit.
 4        So what you see over time is that the red line starts
 5   out much lower, reflecting its one-sixth capital cost
 6   requirement, but it causes, as time goes on, locked-in
 7   energy to develop and accumulate.     That locked-in energy,
 8   under the modelling assumptions made by the OPA model, lead
 9   to a crossover point at which -- in 2018 or so, at which
10   this line begins to pay off.
11        After that, the red line, owing to the accumulation,
12   the assumed accumulation of locked-in energy, goes up
13   higher.
14        Now, when I first got an understanding of this, it was
15   apparent from the data responses that this red line, just
16   by adding the series capacitors and the one generator
17   rejection, as compared to the near-term measures plus
18   generation rejection, there's only a 300 megawatt
19   difference in the modelling.
20        I haven't shown on here the near-term measures with
21   generation rejection, but it is higher, in general, than
22   the red curve and closes more quickly.
23        But what I did note is that this 300 megawatt
24   difference from the near-term measures plus generation
25   rejection assumed in the modelling, 6,810 megawatts, could
26   be transmitted, as compared to the 7,176, about 300 and
27   change -- 300 megawatts and change -- cut the locked-in
28   energy over the period from 30-million-some megawatt hours

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 1   to 15 million megawatt hours.     So there is obviously going
 2   to be a lot of diminishing return.
 3        So I said to myself, Well, if we get a little bit more
 4   of transfer capability with the series capacitors and a
 5   little bit more generation rejection, we get another 300
 6   megawatts, we may make, you know, big inroads into that
 7   locked-in energy.
 8        And that is, in fact, what happened when we did our
 9   modelling and altered the assumptions with respect to the
10   series capacitors plus generation rejection.
11        MR. PAPE:   So let's go through several things.         First
12   of all, in your evidence-in-chief, at the end of it, you
13   had several paragraphs where you were quite critical of the
14   model that Hydro had used, because of the uncertainties in
15   the model and so on.
16        MR. RUSSELL:   Yes.
17        MR. PAPE:   Right?    And then events continued and
18   during the course of the hearing, Hydro agreed to provide
19   what was needed so that you and your technical people
20   could, in fact, understand the model well enough to run it.
21   Right?
22        MR. RUSSELL:   Yes.
23        MR. PAPE:   With some different assumptions?
24        MR. RUSSELL:   Yes, that's correct.
25        MR. PAPE:   So I take it the original questions or the
26   original comments in your evidence about the difficulty of
27   working with the model and understanding the model, those
28   aren't relevant any more.

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 1        MR. RUSSELL:      Well, they may be relevant but they have
 2   certainly been superseded.       We know more about it and we
 3   know more about its attributes, yes.
 4        MR. PAPE:     All right.    We will come back to some
 5   issues that still exist about the model.
 6        MR. RUSSELL:      All right.
 7        MR. PAPE:     Now, once the model became available, you,
 8   in fact, caused the development of some new additional net
 9   present value graphs.
10        MR. RUSSELL:      Yes, I did.
11        MR. PAPE:     And those are the ones in your first filed
12   supplementary evidence?
13        MR. RUSSELL:      That's correct.
14        MR. PAPE:     So would you explain to the Board, please,
15   what assumptions you made and scenarios were graphed in
16   these additional four graphs?
17        MR. RUSSELL:      Okay.   I basically made two changes.
18        I upped the transfer limit to reflect a maximum
19   generation rejection that would not also require load
20   rejection.     In other words, just that amount of generation
21   rejection which would hit the 1,500-megawatt limit on
22   imports, after the most critical N minus 2 contingency.         It
23   is actually called an N minus 1 here.
24        So when I did that, I get on page 1 of the
25   supplementary -- it's about the fifth page in.          I'm sorry.
26   Of the attachments, page 1 of the attachments.          You can see
27   that instead of having a crossover point in the 2017 to
28   2018 range, we can get a crossover point that goes out to

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 1   2023 or 2024.
 2        In other words, the series capacitor and generation
 3   rejection does a -- the crossover point is pushed further
 4   out in time, and so we get more time before this Bruce line
 5   would pay for itself vis-à-vis a series capacitor with a
 6   maximum amount of generation rejection.
 7        That means we get a lot more time.
 8        The other major change I made is reflected on page 2
 9   of the attachment, based upon the testimony from Mr. Falvo.
10   He wasn't really sure how much the cost of additional
11   voltage support would be, but he said it was on the order
12   of $70 million to achieve this additional amount of
13   generation rejection, so I did an additional case, assuming
14   a lump sum payment in 2009 or maybe 2011 for voltage
15   support.   And that, again, that brought the crossover point
16   closer in time, because the series capacitor has an
17   additional economic penalty associated with it.
18        Now, I think the true answer is probably somewhere
19   between those two crossover points, because if the
20   Nanticoke generators are converted, the synchronous
21   condensers, they will provide most, if not all, needed
22   dynamic voltage support.
23        So the order of magnitude for those kinds of
24   conversions is not anywhere near the $70 million range, as
25   I understand it.    It is more in the $2- to $5 million
26   range per unit.
27        So somewhere between these curves, given the
28   assumptions in the model, would produce this range of

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 1   crossover points.
 2        Just by lifting this transfer limit by 300 megawatts,
 3   we really push out in time the crossover point and increase
 4   the amount of time we have to consider what to do about
 5   these uncertainties.
 6        MR. PAPE:   Would you take us to the next two graphs in
 7   this exhibit -– sorry, in this evidence?         The ones on pages
 8   3 and 4.
 9        MR. RUSSELL:    Okay.   This shows the effect of retiring
10   Bruce B.   When you retire Bruce B and you don't have any
11   voltage support costs at all, but we do have the upgraded
12   -- we use an upgraded 7,476 limit, we really don't reach a
13   crossover point until close to 2030.
14        If we put the voltage support in, then the crossover
15   point moves closer in time to the 2018 range, we see.
16        MR. PAPE:   Madam Chair, perhaps I could explain
17   something for the record --
18        MR. RUSSELL:    2019 range.    Pardon me.
19        MR. PAPE:   Thank you.
20        Perhaps I could explain something for the record.
21        The graphs on pages 1, 2, 3, 4 within the box, they're
22   properly labelled.    The first two are labelled "Bruce
23   refurbishment" and the third and fourth are labelled "Bruce
24   B retired".   The headings at the top of the page were
25   inadvertently all labelled "Bruce refurbishment run".
26        Some of the copies that some of the parties may have
27   handwritten on pages 3 and 4 for the major heading "Bruce
28   retirement run", but obviously some copies don't.

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 1        So I just wanted to explain that the heading is
 2   actually wrong on -- that is the heading outside the box is
 3   wrong on pages 3 and 4.
 4        MS. NOWINA:     We should rely on the heading in the box?
 5        MR. PAPE:   Yes, please.
 6        And then one more of these net present value charts
 7   was produced yesterday.
 8        MR. RUSSELL:    Yes.
 9        MR. PAPE:   At the end of the day, and Mr. Russell,
10   this is -- this reflects some alternative timing scenarios
11   for Bruce B refurbishment.      We're not going to be specific
12   about those, but the data that was the basis for these two
13   graphs is, I believe, in some confidential material that
14   was provided in response to Pollution Probe 19.       I believe
15   that is accurate, although the heading says it's pursuant
16   to the responses to Pollution Probe 47.
17        In any event, what matters is that this has different
18   underlying data about scheduling and you get different
19   crossover points again.
20        Would you just tell the Board what these crossover
21   points end up being here?
22        MR. RUSSELL:    If you go down the numbers, you can see
23   where the 7,176 limit meets the Hydro One proposal in 2023
24   with no voltage costs.      And the 7,476 transfer limit has a
25   crossover in 2026.
26        So that -- and those come closer in time, that is
27   closer to the present, if we include voltage support costs
28   of $70 million, as I discussed earlier, voltage support

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 1   costs.
 2        MR. PAPE:     Right.    Now, all of these graphs do the
 3   same thing.     They show both the space before the crossover
 4   point and they show different crossover points and so on.
 5        From a planning perspective, what is the significance
 6   of the crossover point?       What does it mean?
 7        MR. RUSSELL:      Well, what these are telling us is that
 8   depending upon the assumptions, we can buy more time, in
 9   which to make a decision about whether or not the new line
10   is needed.
11        When the accumulation of -- if wind comes in promptly
12   or in greater amounts, if Bruce B is refurbished and/or
13   replaced with larger units and the -- then this will cause
14   this locked-in energy to increase, and we'll get a point at
15   which the crossover will occur, if you carry this process
16   out into the future.
17        So what each of these scenarios tells us is that by
18   taking some measures, we can push out the crossover point
19   further in time, and -- but if we get an expedition of wind
20   development or an increase in -- no retirement of Bruce,
21   then we're going to get a closer in time crossover point.
22        But, in any event, we've got time to consider -- under
23   all of these scenarios, time to consider whether to build
24   the other line and await the resolution of these
25   uncertainties.
26        MR. PAPE:     Just so we're perfectly clear, are you
27   suggesting that decision-makers with respect to
28   transmission capacity from the Bruce -- are you suggesting

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 1   that they should wait until the crossover point to make
 2   their decision on whether to proceed?
 3           MR. RUSSELL:   No.   You should wait until the
 4   resolution of some of these uncertainties tells us that
 5   three to five years in the future we'll have a crossover,
 6   and then refer an application for this new line.          But if it
 7   turns out that the Bruce is -- Bruce B is retired, or if
 8   wind doesn't come along as quickly, or if there is more
 9   diversity amongst the wind than is assumed in the
10   modelling, then that would affect -- that would, in effect,
11   relieve the locked-in energy, reduce the amount of locked-
12   in energy and perhaps show the line is not needed at all.
13           MR. PAPE:   Why do you use the number three to five
14   years?
15           MR. RUSSELL:   Well, we have heard that the -- from the
16   time the Board decides in October of -- projected in
17   October of 2008.       The expectation for the in-service date
18   of the Hydro One's proposed line is early 2012, end of
19   2011.    So it is about a little over a three-year period.
20           I would -- I think some time would have to be allowed
21   for a new application and a hearing in advance of that.         So
22   that three to five years is probably the range of lead time
23   you would need before this crossover point to start this
24   process.
25           MR. PAPE:   So if we took just one of these -- let's
26   take the graph that is on page 2 of your supplemental
27   evidence, which is in some ways the closest to Hydro One's
28   predictions and assumptions, because that scenario -- if I

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 1   understand it, this scenario says Bruce B will be
 2   refurbished on something like the timeline that Hydro has
 3   been relying on and voltage costs will be -- at the high
 4   end of the estimate of voltage costs, will be factored into
 5   the costs of not building the line; right?
 6        MR. RUSSELL:     Yes.
 7        MR. PAPE:    The alternative.
 8        So you get a crossover point -- with the higher
 9   generation rejection scenario, you get a crossover point
10   somewhere around, what, 2020, 2021?
11        MR. RUSSELL:     Yes, yes.   You come down those right-
12   most columns, the two right-most columns, and you will see
13   the 7,476 limit overtakes the Bruce-Milton line at 2020.
14        MR. PAPE:    Even if you use the lower megawatt limit,
15   7,176, you get a crossover point of about 2018.
16        MR. RUSSELL:     Yes.
17        MR. PAPE:    All right.    So just so we're very clear on
18   what you are suggesting, if you go back, let's say, five
19   years, I take it what you are saying is that -- and we'll
20   use again the graph that -- we'll use the red line.            What
21   you are saying is planning decisions should be made between
22   now and 2013, and by 2013, maybe these curves would remain
23   the same.
24        If they did, then 2013 would indicate it's time to set
25   in motion an application?
26        MR. RUSSELL:     If we saw a crossover five years ahead,
27   yes, and the resolution of some of these uncertainties.
28        MR. PAPE:    Right.     Just so we're clear, if in fact the

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 1   planning process goes ahead and a number of these issues
 2   are resolved, one way or the other, and new factors come
 3   into play and so on, will these graphs remain the same?
 4   Will the crossover points themselves remain static?
 5        MR. RUSSELL:     No.    They will be pushed out in time.
 6        I mean, the new sets of assumptions will be the new
 7   sets of crossover points and so -- but we'll be more
 8   certain about what the input data should be.
 9        MR. PAPE:     So we may move from assumptions to, in
10   fact, decisions?
11        MR. RUSSELL:     Yes.
12        MR. PAPE:     All right.
13        So the recommendation you have made for -- I want to
14   ask you two things about the alternative that you have
15   suggested in your opinion as a viable alternative.
16        First of all, it's a solution to a problem that is
17   meant to provide for what period of time?
18        MR. RUSSELL:     Until we can see into the future, that
19   more transmission is needed above the 7,176 limit, or until
20   we see that no generation rejection is no longer needed.
21        MR. PAPE:     So it's not interim until a new line is
22   built, necessarily?
23        MR. RUSSELL:     Not necessarily.    It may turn out that
24   the evolution of the wind and nuclear developments will
25   cause us to be well within the range where it can be
26   accommodated with a 7,176 -- 76 or less.
27        MR. PAPE:     Or it could turn out to be interim until a
28   new line is needed and built?

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 1        MR. RUSSELL:      That's right.
 2        MR. PAPE:     All right.    Now, if the latter occurs, if
 3   it turns out down the road that generation development in
 4   the Bruce goes something like what OPA has projected, or
 5   even more, what happens to the costs that have been
 6   invested in series caps and voltage support, and so on?
 7        MR. RUSSELL:      Well, first of all, before the new line
 8   is built, the series caps will increase the amount of
 9   transfer capability that can be accommodated and provide
10   some sort of assurance -- insurance against delays in the
11   line, or that kind of eventuality, vis-à-vis just the near-
12   term measures and larger amounts of generation rejection.
13        So it's a kind of insurance policy against delays or
14   changes in assumptions that would lead to a prolongation of
15   just the near-term measures and large amounts of generation
16   rejection.
17        Once the line is built, it seems to me the series
18   capacitors will still allow us, during the outage of the
19   proposed line, to transfer more power than would have been
20   the case absent the series capacitor.
21        In other words, when we take the new line out for
22   maintenance, we have to reduce the amount of transfer
23   capability on the remaining facilities.         If series
24   capacitors continue to be there, the derated facility will
25   have a higher capacity than would be the case absent these
26   series capacitors.      So it has continuing benefits.
27        Moreover, if more generation, both wind and/or
28   nuclear, is added to the Bruce area, and you have to

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 1   upgrade that facility, there is basically three major legs,
 2   three double-circuit towers that could be that if transient
 3   stability is the limit, could be equipped with series
 4   capacitors, and we already have one of the three major legs
 5   equipped, if the series capacitors were already in place,
 6   and the cost of adding series capacitors to the other
 7   facilities would be whatever they are.        But you would have
 8   one fewer leg of -- one of the three legs would already be
 9   equipped with series capacitors, you get a little bit more
10   flexibility, a little more scalability.
11        So those kinds of advantages mean that you don't have
12   a totally stranded cost of series capacitor investment
13   costs, if the new line is built.
14        MR. PAPE:    If series capacitors were installed now in
15   the way that you have suggested, would it create any
16   additional planning choices or options for the future?
17        MR. RUSSELL:     Well, that's what I'm saying.      If
18   perchance you wanted to add series capacitors to the
19   proposed new line and the parallel circuits, one of the
20   three major legs would already have series capacitors.         So
21   you get more scalability and a cheaper upgrade than would
22   be the case without the series caps.
23        MR. PAPE:    What about if, when it comes to actually
24   deciding to add or to construct additional transmission
25   lines, having series capacitors in place, does that create
26   any additional options about what kind of additional lines
27   to build?
28        MR. RUSSELL:     Well, it means that you can upgrade with

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 1   series capacitors at a lower cost, and add capacity to the
 2   pre-existing system at a lower incremental cost than would
 3   be the case absent the series caps.
 4           Again, this assumes stability is the, transient
 5   stability is the constraining -- binding constraint on
 6   upgrades.
 7           MR. PAPE:   One of the issues that has been discussed
 8   quite a bit in the evidence is generation rejection and its
 9   acceptability under various reliability criteria.
10           Clearly, your evidence says that generation rejection
11   is relied on in some alternative ways as a feature of the
12   alternative.
13           So you have suggested two different levels, for
14   example, of generation rejection.        Would you explain about
15   that?
16           MR. RUSSELL:   Well, the first is the 7,176 limit with
17   the NBLIP of 500, and that involves rejection of just one
18   Bruce unit.     The other would be an amount of rejection
19   equal to one Bruce unit plus 400 megawatts of wind, which
20   may be achievable all with wind at some point in time.
21           But that -- the whole idea with generation rejection
22   is that whatever line-level capacity we have absent
23   generation rejection, is the amount to which we have to get
24   down, after the most serious contingency.
25           So we always operate so that we can reject generation
26   so that after the contingency occurs, we immediately drop
27   generation and get within the capacity of the remaining
28   facilities, the transfer capacity of the remaining

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 1   facilities.    So we're taking advantage of the fact that,
 2   with all facilities in service, we can transmit more, but
 3   we're quickly able to get below -- and it's a very cost
 4   effective and has turned out to be a very reliable process
 5   over history, of the Bruce complex.
 6        MR. PAPE:    How would these two options compare with
 7   what has been the case historically in this area?
 8        MR. RUSSELL:     Well, as we know, the 5,000-megawatt
 9   existing capacity before the near-term measures were in
10   place was the limit, until the near-term measures were put
11   in place.
12        We also know that somewhere in the neighbourhood of
13   62 -- 6,400, 6,200 megawatts of Bruce generation was
14   operating from time to time, less about 300 megawatts for a
15   facility, a nuclear facility at the Bruce complex.
16        So that means, 6,200, say, less the 300 megawatts
17   load, we were putting 5,900 megawatts of generation for
18   years down that right-of-way, at times, on a facility that
19   was rated for 5,000 megawatts.       And that has proved to be a
20   very cost-effective and very reliable approach, even though
21   it involved, from time to time, being able to go from the
22   5,000 megawatts, you would have to reject the difference
23   between the 6200 that was operating and the 5,000-megawatt
24   transfer capability.
25        MR. PAPE:    We have heard a distinction between arming
26   and triggering in relation to generation rejection.
27        MR. RUSSELL:     Yes.
28        MR. PAPE:    Could you explain that?

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 1        MR. RUSSELL:   Well, the arming is getting yourself
 2   ready to reject generation.    It doesn't cost anything,
 3   unless and until -- and it doesn't have consequences --
 4   unless and until the contingency for which you are arming
 5   occurs.
 6        As I said, with respect to the Pacific northwest-
 7   southwest intertie, that has been armed virtually all the
 8   time since the 1970s.   That SPS has been armed virtually
 9   all the time, except for that period during which people
10   thought the third AC line on the intertie would relieve it.
11   It is back in place.    So that constant arming is an
12   attribute of SPS which is really not a major concern.
13        In fact, it is such a failure of an SPS to operate, as
14   we know from reading the NPCC document A-2, is deemed to be
15   an extreme contingency.    Not something that has to be
16   planned for, something you assess and you examine and try
17   to accommodate, but not a contingency for which one must
18   design.
19        MR. PAPE:   Why is that not a contingency for which one
20   must design?
21        MR. RUSSELL:   Well, relays and telecommunications, by
22   their nature, are quite reliable.     Then, in addition, in
23   these SPSs we're concerned with here at Bruce and also with
24   the one being put on the Hanmer-Essa line, there is
25   redundancy put into the paths.     Redundancy has been the
26   practice in the Pacific Northwest.     That Pacific northwest-
27   southwest intertie has had redundancy.      There are actually
28   three separate sets of telecommunications and relays and

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 1   detecting device, and they are an independent -- totally
 2   independent from one another, and there are two out of
 3   three voting before the -- before the armed SPS is
 4   triggered.
 5        And this kind of redundancy adds to the reliability,
 6   so it is just a failure of one of the communication links
 7   doesn't necessarily trigger a misoperation of the SPS.
 8        MS. NOWINA:      Mr. Pape, are you getting close to the
 9   completion of your examination-in-chief?         I have allowed
10   pretty extensive examination-in-chief on the net present
11   value graphs, because that was an evolving topic as we went
12   along.
13        MR. PAPE:     Right.
14        MS. NOWINA:      Some of the things you have been talking
15   about most recently are in the evidence and are not to do
16   with the evolving information.
17        MR. PAPE:     Right.    I have really two big subjects, two
18   subjects left.     They all have to do with standards issues
19   and reliability issues.       So I think I am 15 minutes more.
20   I need 15 minutes or so more.        Perhaps we should take the
21   break, and I could talk to Mr. Russell and we can make sure
22   we do it as expeditiously as possible.
23        MS. NOWINA:      All right.   If there are no objections to
24   you talking to Mr. Russell.
25        MR. PAPE:     He's in the middle of evidence-in-chief.
26        MS. NOWINA:      All right.
27        Before we do that, I would like to get a sense of who
28   else, who is in support of the Saugeen Ojibway Nations'

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 1   proposal, who would like to cross-examine.       I see Mr. Ross,
 2   Mr. Pape, Mr. Barlow, Mr. Fallis.      All right.
 3        Well, let me give you some guidance, then.        I don't
 4   expect you to cross-examine on anything that Mr. Pape has
 5   already covered.    I suspect that will leave very little
 6   ground.
 7        So I expect you to be very brief.       No one person will
 8   take more than 15 minutes, unless you can give me a
 9   compelling case of why you require more than 15 minutes.
10   Even so, that will be another hour of examination in
11   support of the witness.     So that's a lengthy time.
12        All right.    We will take our break now for 20 minutes
13   and return at quarter after eleven.
14        --- Recess taken at 10:57 a.m.
15        --- Upon resuming at 11:20 a.m.
16        MS. NOWINA:    Please be seated.
17        Mr. Pape, you can continue.
18        MR. PAPE:     Thank you.
19        Mr. Russell, there was extensive evidence, which you
20   are familiar with, about a package of materials in Exhibit
21   K12.1, and others, all of which involved an application by
22   the IESO for approval of an SPS and it was an application
23   to the NPCC.
24        As you heard in that evidence, that application is
25   pending.   It's going through several subcommittees.          A
26   letter has been written, and we have it in evidence, from
27   the chairman of one of the subcommittees, with his comments
28   on what his subcommittee may do, and there are other

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 1   subcommittees going to meet.
 2        We have heard that this application that IESO has made
 3   will not be resolved soon.    It will probably not be
 4   resolved until after the current application before the
 5   Board has been dealt with, or, let's put it this way, it
 6   may not be resolved until after that point.
 7        So I'm going to ask you some questions that are, in a
 8   sense, hypothetical, but they go to very important issues
 9   in the hearing.
10        If, if it turned out in the end that the Board decided
11   not to approve Hydro's application, and if Hydro then
12   decided to develop the series capacitors, et cetera,
13   measures that you -- of a type that you have recommended,
14   and if at that point the current application by IESO for
15   approval of the SPS that they filed in their application --
16   if that had not yet been decided, would it be possible or
17   reasonable for Hydro to modify its application with respect
18   to the SPS that would be needed, or for which they would
19   seek approval, if they decided to go with the series cap
20   alternative?
21        MR. RUSSELL:   Yes.   And I think -- yes, and I think
22   that is anticipated in the milestones for the abbreviated
23   installation of series capacitors.     A revisit or a re-
24   application to NPCC was envisioned.
25        MR. PAPE:    Can you say anything about what kind of SPS
26   might be designed under the series cap alternative?
27        MR. RUSSELL:   Well, I wouldn't presume to get into the
28   details of the design, but the basic notion is this:         If

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 1   the near-term measures have the 5,400 megawatt capability
 2   we have been told -- and the response to Pollution Probe 47
 3   said that that capability could be as much as 6,800
 4   megawatts.     So something on the order of 1,400 megawatts
 5   would have to be dropped or rejected if the series -- if
 6   there were no series capacitors and you want to get from
 7   6,800 megawatts of deliveries down into your safe harbour
 8   of the 5,400, okay, so you're talking about something on
 9   the order of 1,400.
10           If, however, series capacitors are added, you go up
11   300, but you only have to get down to 6,323.          So you can
12   transmit 300 more, but you can drop -- you have to drop 900
13   megawatts less.
14           So the net effect regarding series capacitor for the
15   most critical capacity is to lessen the number of units
16   that you have to reject, and lessen and perhaps eliminate
17   loads that might have to be rejected with the NTM
18   alternative, and this would have -- this would have a
19   mitigating effect upon the concerns expressed in the NPCC
20   task force letter.
21           MR. PAPE:   Now, one other issue about reliability
22   standards has been raised.       There has been talk of the
23   transmission assessment criteria that are published by the
24   IESO.    I am going to take you to some documents that we've
25   made available to parties yesterday.
26           Madam Chairman, I wonder if these could be made an
27   exhibit.    They're called "Saugeen Ojibway Nation's
28   additional material for examination-in-chief of Mr.

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 1   Whitfield Russell, June 10th."
 2        MS. NOWINA:     Yes, we can do that, Mr. Pape.
 3        MR. MILLAR:     Exhibit K14.2.
 4        EXHIBIT NO. K14.2:       BRIEF OF MATERIALS ENTITLED,
 5        "SAUGEEN OJIBWAY NATION'S ADDITIONAL MATERIAL FOR
 6        EXAMINATION-IN-CHIEF OF MR. WHITFIELD RUSSELL, JUNE
 7        10TH."
 8        MS. NOWINA:     Thank you.
 9        MR. PAPE:    Mr. Russell, you have those documents?
10        MR. RUSSELL:     I do.
11        MR. PAPE:     A few questions.    I would ask you to start
12   at tab 9.    Let me simply say for the record, Madam Chair,
13   that these documents all came from IESO's website.
14        MS. NOWINA:     Let me just clarify for a moment.         I am
15   looking at the document under tab 9 and it looks like a
16   version that shows changes.       Those changes are not yours?
17   Those are changes that were in the original document that
18   you took from the website?
19        MR. PAPE:    This is a "show changes" version which is
20   actually published on the website.
21        MS. NOWINA:     Okay.
22        MR. PAPE:    And the changes have now been made, as I
23   understand it.
24        MS. NOWINA:     All right.
25        MR. PAPE:    So this shows the changes that have been
26   made to this document in the last round of changes.
27        MS. NOWINA:     By the IESO?
28        MR. PAPE:    By IESO, as of June -- if you look on page

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 1   2, the effective date of these changes is June 6th, 2007.
 2          MS. NOWINA:    Thank you.
 3          MR. PAPE:   I want to take you to one section, Mr.
 4   Russell, section 3.4.1 on page 14.
 5          It is the second paragraph that I want you to address
 6   your mind to.      You can see that the first sentence is -- it
 7   has been changed.      I don't know how, because there's no
 8   strike-outs, but you can see the large bulk of the
 9   paragraph is in yellow and underlined, which means it is
10   new.
11          It replaces the rest of what's still in that
12   paragraph, but crossed out, all right?
13          MR. RUSSELL:   Yes.
14          MR. PAPE:   I want you to address your mind first to
15   what used to be there; that is, the portion at the end that
16   is struck out.
17          MR. RUSSELL:   Yes.
18          MR. PAPE:   Can you tell us whether that portion of
19   this paragraph -- and compare it to the comparable terms in
20   the comparable NPCC standards.
21          MR. RUSSELL:   This language that is showing stricken
22   here comports and is, in large part, verbatim with the NPCC
23   provisions relating to the same material.
24          MR. PAPE:   All right.   The part that is new in this
25   paragraph, have you looked at it and compared it, in a
26   general sense with the standards or the pre-existing
27   terminology and terms, and how does it compare?
28          MR. RUSSELL:   It is more strict.     It forbids -- well,

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 1   the language that makes it more strict is the sentence:
 2               "The reliance upon a NPCC Type I SPS for NPCC A-2
 3               design criteria contingencies with all
 4               transmission elements in-service must be reserved
 5               only for transition periods while new
 6               transmission reinforcements are being brought
 7               into service."
 8        MR. PAPE:    And what's --
 9        MR. RUSSELL:     That's the language which considerably
10   -- makes the provision considerably more stringent.
11        MR. PAPE:    What was -- compare that or tell us what
12   the previous version meant.
13        MR. RUSSELL:     Well, the previous version gave some
14   general framework and was permissive of SPS, and without
15   regard to whether new transmission reinforcements were
16   anticipated, or were being brought into service.
17        MR. PAPE:    All right.    I am going to come back and ask
18   you some more about this, but before I do, I simply want to
19   get you to go through and identify with me some of the -- a
20   couple of the documents at earlier tabs, so we get the flow
21   properly.
22        I want you to turn to paragraph 4.
23        MR. RUSSELL:     Tab 4?
24        MR. PAPE:    Tab 4, sorry, thank you.
25        Tab 4 is dated December 4th, 2006 and it is a response
26   from Hydro One to IESO's request, original request for
27   comments on a proposed -- on its proposed changes, really,
28   to this document.     All right.    Which is, I think, usually

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 1   called ORTAC.
 2        MR. RUSSELL:    Yes.
 3        MR. PAPE:    In this response, Hydro questions the
 4   propriety of IESO being a standard section.        I am going to
 5   leave this.   These are either policy or legal matters that
 6   are not technical, and I will not ask you to do more than
 7   to take note of them, but you will see that at the top of
 8   page 2, Hydro One questions IESO's jurisdiction to
 9   establish transmission planning standards, and in the very
10   last paragraph, Hydro One makes a submission that
11   transmission planning standards should come under the
12   purview of this Board's Transmission System Code, and
13   therefore, that the OPA's recommended changes to its
14   document should all be brought within issues to be
15   considered in the IPSP.
16        All right?
17        MR. RUSSELL:    Yes, I see that.
18        MR. PAPE:    Now, in the next tab, we have a series of
19   documents, of correspondence, and they are sent to the IESO
20   by Hydro One in February of 2007 and the -- on what is
21   called page 1 of that document, but the next page, it is
22   dated February 13th and there is comments from Hydro One.
23   It says:
24              "As agreed during the January 26th, 2007 (phone)
25              meeting between Hydro One and IESO staff, the
26              following comments are provided by Hydro One
27              solely with respect to the technical matters
28              contained in IESO's draft document."

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 1        Then the next paragraph says:
 2             "The following comments should be considered
 3             together with Hydro One's comments dated December
 4             4th, 2006, concerning serious issues regarding
 5             IESO's purview and standards development process
 6             that also need to be resolved."
 7        Then at the bottom of the page, it lists page 12,
 8   section 3.4.1, "special protection systems" and it says,
 9   "We recommend this."
10        And have you looked at this?
11        MR. RUSSELL:   Yes.
12        MR. PAPE:   In is, in fact, "this" the suggested change
13   that IESO put into place?
14        MR. RUSSELL:   It appears to be verbatim, yes.
15        MR. PAPE:   Yes, okay.   So IESO, in fact, took Hydro's
16   suggestion and this is all happening.      Okay.
17        Now let's go back to, if you wouldn't mind, to tab 9
18   and page 14 and the new language that IESO has adopted at
19   the request of Hydro One.
20        The question is:   As you understand this, leaving
21   aside any questions of IESO's proper role, purview,
22   jurisdiction, or whatever -- leave all of that aside, I
23   don't want to discuss that with you at all and I don't seek
24   your opinion on those issues at all -- what I am asking you
25   is, would the suggested alternative proposal that your
26   expert opinion recommends and the resulting type of SPS
27   that may be needed, would those run afoul of this changed
28   paragraph?

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 1        MR. RUSSELL:     I think not.
 2        MR. PAPE:    Would you explain?
 3        MR. RUSSELL:     My approach is that we are going to
 4   examine, looking forward, for these crossover points at
 5   which a new line would be placed in service, or a point in
 6   which generation from the Bruce vicinity would diminish to
 7   the point that locked-in energy and generation rejection
 8   would be reduced.
 9        So the series capacitor alternative that I am
10   recommending as an interim measure fits within this,
11   because it looks to a time at which a transmission
12   reinforcement would be brought into service.         Moreover, the
13   series capacitors themselves are a transmission
14   reinforcement which would be brought into service, but that
15   is a little too hyper-technical.
16        The real policy point is this:       Looking forward in
17   time, our approach is to see when we need a new line, and
18   make an application in time to get it in there.         Or, in the
19   alternative, as an applied assumption in this rule, that if
20   we don't need to reject generation because generation at
21   the Bruce vicinity has declined so much, or never risen to
22   the level anticipated, that we would diminish the
23   generation rejection.
24        So I think my series capacitor proposal, coupled with
25   this crossover approach, crossover point approach, fits
26   within the literal terms of even the more stringent
27   standard.
28        MR. PAPE:    You have heard some talk in the hearing

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 1   about the changes being developed in the Hanmer-Essa line.
 2           MR. RUSSELL:   Yes.
 3           MR. PAPE:   What can you tell us about that line and
 4   the plans for it and the SPS for it, and how would that
 5   relate to this new paragraph?
 6           MR. RUSSELL:   The Hanmer-Essa project involves the
 7   addition of series capacitors, coupled with somewhere
 8   between 5- and 600 megawatts of generation rejection.
 9           It's going to have redundancy.     It's deemed to be a
10   NPCC Type I SPS.       It was evaluated in a May 2007
11   interconnection assessment, and it was found to be
12   acceptable because reinforcements from the Sudbury to Essa
13   or Barrie area were in the works.        Although specific
14   planning and in-service dates didn't seem to be indicated,
15   that seemed to be enough to pass muster under this
16   provision as reported by the IESO interconnection
17   assessment.     That's dated -- that is Exhibit E, tab 3,
18   schedule 1, attachment 1, and the discussion is at page 31.
19           MR. PAPE:   Thank you very much.      Those are my
20   questions, Mr. Russell.       Thank you.
21           Thank you, Madam Chair.
22           MS. NOWINA:    Thank you, Mr. Pape.
23           Of the remainder, who would like to go first.           Mr.
24   Ross.
25           MR. QUINN ROSS:    I am content with proceeding first.
26   Thank you.
27           MS. NOWINA:    Thank you, Mr. Ross.    Go ahead.
28           CROSS-EXAMINATION BY MR. ROSS:

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 1        MR. QUINN ROSS:    Good morning, Mr. Russell.
 2        MR. RUSSELL:    Good morning.
 3        MR. QUINN ROSS:    My first question, and perhaps the
 4   most pressing for everyone in this room, is:       Is the
 5   absence of air-conditioning in the hearing room an example
 6   of load rejection?
 7        [Laughter]
 8        MR. QUINN ROSS:    Now, on to the serious questions.    In
 9   the instance of substantially decreased generation in the
10   Bruce area, if the -- sorry, what happens in the instance
11   of substantially decreased generation in the Bruce area if
12   the series cap generation rejection option is employed?
13        MR. RUSSELL:    Well, depending upon the degree of
14   reduction from expectations or actual reduction, you would
15   have to arm fewer megawatts of generation for rejection, or
16   all the way down to zero.    Perhaps you could get within the
17   6,326 of magnitude of transfer capability without
18   generation rejection.
19        But the point of the matter is that there would be
20   fewer megawatts armed for rejection.
21        MR. QUINN ROSS:    Just as an extension to that, if, for
22   example, the 6,326 was not being generated in the Bruce
23   area, what is the effect on this option?
24        MR. RUSSELL:    Well, it has the same -- well, you could
25   disarm the -- you could bypass the series capacitors if you
26   wanted to achieve a small reduction in real losses, I
27   suppose, and that would drop you down to 5,400.
28        MR. QUINN ROSS:    What happens in the instance of

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 1   substantially decreased generation in the Bruce area if the
 2   500 kV line is in place?
 3        MR. RUSSELL:      Well, it's still 8,100 megawatts.
 4        MR. QUINN ROSS:      Regardless of how much it has
 5   decreased?
 6        MR. RUSSELL:      That's correct.    It will reduce.       It has
 7   a lower impedence than would the alternatives, which would
 8   reduce real and reactive losses, but its capacity would
 9   remain at 8,100.      It would be not scalable down.
10        MR. QUINN ROSS:      So it would then be unused capacity?
11        MR. RUSSELL:      Yes.
12        MR. QUINN ROSS:      Just moving to the topic of wind, and
13   specifically dealing with the process of establishing wind
14   either through the standard offer or individuals, are you
15   familiar with the concept of the option lease prior to the
16   installation of the turbine?
17        MR. RUSSELL:      I'm not familiar with that.
18        MR. QUINN ROSS:      I will just describe what it is.        I
19   may be using a term that you are not familiar with.             It is
20   the lease that they enter into with a landowner for the
21   purpose of establishing testing facilities to test the
22   quantity and consistency of wind.
23        MR. RUSSELL:      Okay, yes.
24        MR. QUINN ROSS:      You are familiar with those?
25        MR. RUSSELL:      I am familiar with that process, yes.
26        MR. QUINN ROSS:      Would you agree these leases can run
27   for -- just the testing leases can run for five years?
28        MR. RUSSELL:      I don't know the specifics of it, but

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 1   the longer the period of collection of data, of course, the
 2   more valuable.
 3        MR. QUINN ROSS:    I am going to move to the topic of
 4   conductoring, very generally.
 5        Does the use of one type of conductor on a line, by
 6   necessity, demand that all connected lines are turned to
 7   that type of conductor?
 8        MR. RUSSELL:    No.    You can have different-sized
 9   conductors in segments of the line.
10        MR. QUINN ROSS:    Can you have different types of
11   conductors on an interconnected grid?
12        MR. RUSSELL:    Yes.
13        MR. QUINN ROSS:    So for the use of a high-tension,
14   low-sag conductor, for example, in a contingency situation
15   you would deal with that the same as you would deal with
16   another type of conductor.     It would be based, then, on the
17   amount of voltage transmission that has been lost?
18        MR. RUSSELL:    I am not following your question.       What
19   happens, as I understand it, is that the ampacity of these
20   conductors is higher.
21        If the limit on transfer capacity is a thermal limit,
22   raising it by use of one of these conductors will enable
23   you to achieve a higher transfer capability, if you're
24   upgrading the binding constraint.
25        MR. QUINN ROSS:    I will just -- I will give you a
26   general example.    If you've got an HTLS line that is
27   carrying -- that's carrying - I am just using round
28   numbers, random round numbers - 1,000 megawatts and that

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 1   line goes down, you would deal with that contingency by
 2   trying to redistribute the 1,000 megawatts as you would if
 3   two lines of the ASCR equalling 1,000 megawatts went down;
 4   is that correct?
 5           MR. NETTLETON:    Madam Chair, I must object to my
 6   friend's questions.
 7           Mr. Russell has not sponsored evidence in this
 8   proceeding relating to ACCR technology.         Maybe if my friend
 9   could help me point to where in his evidence he does speak
10   to this line of questioning that he is pursuing with Mr.
11   Russell, it would be helpful.        But if he intends to proceed
12   with questions related to this topic, and the topic hasn't
13   been evidence that has been put in-chief by Mr. Russell, I
14   think it is quite improper for him to proceed with this
15   line.
16           MR. QUINN ROSS:    Unless I misunderstand the benefits
17   of expert evidence, in that you can place hypotheticals to
18   the expert and if it's within their field of knowledge,
19   they can respond to those hypotheticals, then I am happy to
20   withdraw the question.
21           I think my friend might be confused, in that I am not
22   leading evidence-in-chief, which would be precluded by the
23   purviews of his report.
24           I am putting to him evidence that has come out in this
25   hearing through the applicant's own evidence, and I am
26   testing it with his expertise in a hypothetical; nor have
27   I, in any way, referred to ACRR.        I am talking about a type
28   of conductor, of which there are many different forms.

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 1           MS. NOWINA:    Mr. Millar, do you have an opinion?
 2           MR. MILLAR:    I am not sure exactly where it's going,
 3   Madam Chair.     I think Mr. Ross may be granted some leeway
 4   to ask questions about things that are not necessarily put
 5   forward by Mr. Russell in his original evidence.
 6           Again, I am not sure exactly where it is going.         We
 7   haven't heard the answers to the questions or all of the
 8   questions, but I think he might be granted some leeway,
 9   would be my suggestion.       But of course it is in your hands.
10           MS. NOWINA:    All right.   I will take Mr. Millar's
11   advice, Mr. Ross, but I am limiting you to your 15 minutes.
12           MR. QUINN ROSS:    This is the last question in this
13   area and I can -- if you remember it, I will allow you to
14   answer.    If you don't, I can try to rephrase.
15           MR. RUSSELL:   If you could reframe it, that would
16   help.
17           MR. QUINN ROSS:    Basically what I am getting at is to
18   see if you would agree it's not in fact the type of
19   conductor that determines the response to a contingency,
20   but the amount of loss on that conductor as a result of the
21   contingency that you are responding to; is that correct?
22           MR. RUSSELL:   That's correct.    In other words, the
23   flow that was on the facility experiencing the outage has
24   to move on other parallel paths absent some adjustment to
25   generation load.
26           MR. QUINN ROSS:    Thank you.   My final area of
27   questions deals with what was referred to as the wait-and-
28   see approach, the series compensation generation rejection

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 1   allowing for the opportunity to wait and see what the
 2   realities are going to be, given all of the inconsistencies
 3   and ongoing regulatory affairs that are sort of blurring
 4   our vision of the future.
 5        We have heard in the proponent's evidence that the new
 6   line proposed would not be sufficient to transmit the
 7   generation of a new Bruce build.
 8        So this wait-and-see period, as I understand it, would
 9   allow for a new application for transmission facilities
10   that would preclude congestion as much as technically and
11   economically feasible.    Would you agree with that?
12        MR. RUSSELL:    Well, if I understand your question.
13   You're hypothesizing a situation in which the applicants
14   would assert more than 8,100 megawatts is needed.       Is
15   that --
16        MR. QUINN ROSS:     That's correct.
17        MR. RUSSELL:    Yes, okay.   And the question is:       In
18   that case, what...
19        MR. QUINN ROSS:     Well, for example, we're waiting to
20   determine where this new build is going to go.       If Bruce
21   gets it, the evidence has been that the 500 kilovolt line
22   proposed won't be enough to transmit that new energy.
23        MR. RUSSELL:    That's correct.   There would be an
24   upgrade under the nameplate rating approach, yes.
25        MR. QUINN ROSS:     So this wait-and-see approach that
26   you are proposing would allow for that information to
27   become available and for Hydro One to amend their
28   application to take this increased generation into

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 1   consideration?
 2        MR. RUSSELL:   Yes.   I would put that under the
 3   umbrella of nuclear uncertainties that I discussed in my
 4   direct testimony.
 5        MR. QUINN ROSS:    So that being said, if the Bruce
 6   build, the new build, does go ahead, the current
 7   application is actually, to use a Hydro One expression,
 8   "planning for congestion"?
 9        MR. RUSSELL:   There certainly would be more flow in
10   the line than there would with a refurbishment of Bruce B.
11   As I understand it, the units would be 1,000 megawatt class
12   as opposed to the 850 class.      So for each unit that was
13   replaced -- each Bruce B unit that were replaced by Bruce
14   C, we would have another 150 megawatts.
15        So, yes, if there were congestion, that could
16   precipitate congestion, yes.
17        MR. QUINN ROSS:    Thank you.    Those are my questions.
18        MS. NOWINA:    Mr. Fallis.
19        CROSS-EXAMINATION BY MR. FALLIS:
20        MR. FALLIS:    Mr. Russell, I basically have one
21   question or area of questioning.
22        Just in the hypothetical, if the new transmission line
23   were to be built, have you formed any opinion as to whether
24   it would be, from an engineering transmission purpose, as
25   to whether it should be built in a location in the
26   Longwood-Nanticoke area as opposed to Bruce-to-Milton, are
27   there any -- would there be any reasons why you would
28   prefer one to the other, or is that a possibility to

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 1   consider it in another location and serve the efficiencies
 2   of transmitting hydro?
 3        MR. RUSSELL:      All other things being equal, putting it
 4   along the Longwood-Nanticoke corridor would avoid
 5   concentrating so much transfer capability in a single
 6   right-of-way, so that would mitigate the concern with
 7   extreme contingencies.
 8        MR. FALLIS:      Those extreme contingencies would --
 9        MR. RUSSELL:      Loss of a right-of-way is an extreme
10   contingency, that's the one I am talking about.
11        MR. FALLIS:      Loss of a right-of-way.     Putting it in
12   the Bruce-to-Milton corridor, have you been able to
13   calculate -- if it were constructed and put into place
14   utilizing all of the two 500 kV lines and the 230, what
15   percentage of the power at Bruce would be transmitted in
16   that corridor that it would generate --
17        MR. RUSSELL:      Well, there's some 230 kV -- each of
18   those 500 double circuits is worth in the order of thirty
19   -- 3,000, 3,500, so two of them in that corridor would be
20   7,000, plus you would put the capacity of the amount being
21   carried by the 230s as well.
22        But here's the point.       Capacities are not a measure of
23   what flows.     It is the amount that flows that would be
24   lost, and you would have to take whatever was flowing on
25   that circuit and push it down the Bruce to Longwood-
26   Nanticoke corridor if you lost the right-of-way from Bruce
27   to Milton.
28        MR. FALLIS:      And the one event that has happened where

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 1   the SPS was triggered was a tornado-related event in 1985.
 2   Is that your understanding, as well?
 3        MR. RUSSELL:   That's my recollection, although I must
 4   say the outage data indicate that there were two instances
 5   of momentary double circuit outages.      Whether that
 6   triggered an SPS, I do not know.
 7        MR. FALLIS:    Anyway, but if that type of an event went
 8   through a corridor and this would contain three lines, that
 9   would be a very severe event, from the point of view of the
10   ability of Bruce to sustain itself and keep generating.        If
11   there were --
12        MR. RUSSELL:   Oh, yes.     No question about that.
13        MR. FALLIS:    All right.
14        MR. RUSSELL:   If they were heavily loaded and you lost
15   the two 500s and parallel 230s, yes, that would be a severe
16   shock.
17        MR. FALLIS:    With respect to the Nanticoke side, you
18   indicated from a reliability point of view and security
19   point of view, it would be better if it were rooted in that
20   corridor for major catastrophic events for that purpose; is
21   that correct?
22        MR. RUSSELL:   Well, all we discussed so far was the
23   effect of the loss of the right-of-way from Bruce to
24   Milton.
25        MR. FALLIS:    Yes.
26        MR. RUSSELL:   In that instance, there would be fewer
27   assets packed or concentrated in that corridor, and we
28   would have less exposure to a loss of a right-of-way.        It's

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 1   sort of axiomatic.
 2        Now, with those other attributes, I think they would
 3   require studying.
 4        MR. FALLIS:     Those are my questions.
 5        MS. NOWINA:     Thank you, Mr. Fallis.
 6        Mr. Pappas.
 7        MR. PAPPAS:     There, I'm on.    Thank you.
 8        All right.     With limited time, I will try to rush
 9   through this.
10        MR. RUSSELL:     Can I move over and try to make eye
11   contact, if that is okay?
12        MR. PAPPAS:     Thank you.     Firstly, Madam Chair, I
13   forgot last time in my sudden anxiety of the short time, I
14   would like to put my evidence book in officially as
15   evidence to this proceeding.       I forgot to do it last week.
16        MS. NOWINA:     I think you sent it in to us.
17        Mr. Millar, I believe it was sent in to us, and so it
18   is in evidence in the proceeding.
19        MR. MILLAR:     Yes, we can mark it for convenience if
20   you like, but it has been prefiled, I believe.
21        MS. NOWINA:     It has been.
22        MR. PAPPAS:     Oh, I'm sorry.    I was under the
23   impression that maybe I had to formally say something, so I
24   didn't want to mess that up.
25        MS. NOWINA:     We have it, Mr. Pappas.    You can refer to
26   it if you like.
27        MR. PAPPAS:     I'm sorry?
28        MS. NOWINA:     We have it.

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 1        MR. PAPPAS:     Thank you very much.
 2        CROSS-EXAMINATION BY MR. PAPPAS:
 3        MR. PAPPAS:     I would like to go to your evidence on
 4   tab 9, page 14.
 5        MS. NOWINA:     Which one, Mr. Pappas?     The first
 6   evidence?
 7        MR. PAPPAS:     It's the one just handed out.
 8        MS. NOWINA:     Or K14.2 that he handed out today?
 9        MR. PAPPAS:     Yes.
10        MS. NOWINA:     K14.2, all right.
11        MR. RUSSELL:     My tab 9?    No, it's this one.
12        MR. PAPPAS:     Your tab 9, page 14.
13        MR. PAPE:    This one.
14        MR. RUSSELL:     From the evidence book?     All right, I
15   have it.
16        MR. PAPPAS:     All right.    Right in the first
17   paragraph --
18        MR. RUSSELL:     Page?
19        MR. PAPPAS:     Of page 14.
20        MR. RUSSELL:     Tab 9 starts at --
21        MR. PAPPAS:     That's the IESO document that you were
22   going over that is all crossed out, or corrected.
23        MR. RUSSELL:     Oh, oh, our –-
24        MR. PAPPAS:     Sorry.
25        MR. RUSSELL:     Okay, that's my problem.      I
26   misapprehended.     Okay.     Are you talking about page --
27   special protection system, section 3.4.1?        I have it.
28        MR. PAPPAS:     And:

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 1               "-- is defined as a protection system designed to
 2               detect abnormal system conditions and take
 3               corrective action(s) other than the isolation of
 4               faulted elements.     Such action(s) may include
 5               changes in load, generation or system
 6               configuration to maintain system stability,
 7               acceptable voltages or power flows."
 8          MR. RUSSELL:   Yes.
 9          MR. PAPPAS:    Okay?   So --
10          MR. RUSSELL:   It's to distinguish it from typical line
11   protection.
12          MR. PAPPAS:    Okay, so, if -– well, as we have already
13   noted, there is different levels of SPS, not only
14   throughout this province, but throughout North America.
15   But they all seem to be of a much lesser complexity.
16          MR. RUSSELL:   Yes.    This SPS historically used in
17   Ontario involves more monitoring and more potential
18   remedial actions than do most.
19          MR. PAPPAS:    Could you tell me what these --
20          MR. RUSSELL:   With a possible exception of the Pacific
21   northwest-southwest intertie.
22          MR. PAPPAS:    Can you tell me what these abnormal
23   system conditions might be, and what they would arise from,
24   that it is so particular here and requires such a complex
25   SPS?
26          MR. RUSSELL:   Well, it's the amount of the generation
27   being moved under N minus zero conditions, all facilities
28   in-service, versus the amount which can be transmitted

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 1   after the first contingency involving both Bruce-Milton and
 2   Bruce-Claireville lines on the same tower, and further
 3   compounded by the need to stay within the 1,500 megawatt
 4   limit on surges from neighbouring systems.
 5        MR. PAPPAS:    Now, if there was other ways of
 6   redressing such a situation, could it alleviate the need
 7   for such a complex SPS?
 8        MR. RUSSELL:    Yes.   The series capacitors, as we
 9   discussed, is one of those ways.
10        Series capacitors would lessen the megawatts of load
11   that need to be rejected, and lessen the amount of
12   generation that would need to be rejected.
13        MR. PAPPAS:    Now, when you did your evaluations, did
14   you basically just stick to what Hydro was considering and
15   evaluate it as you saw, rather than offer any new or
16   different possibilities?
17        MR. RUSSELL:    Yes.   I confined my testimony to the two
18   generation rejection schemes that have been found
19   acceptable in the Hydro One documents.
20        MR. PAPPAS:    Now, in these design criteria
21   contingencies that they describe as the reason for the SPS,
22   basically you did say it had to do with the amount of
23   generation and ability to transmit it; is that correct?
24        MR. RUSSELL:    Well, the term NPCC A-2 design criteria
25   contingencies means the list of single contingencies that
26   must be accommodated under the NPCC section 2, I think.
27        MR. PAPPAS:    I guess I will try and go quickly here so
28   I can best utilize my time.

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 1           MR. RUSSELL:    I'm sorry, the section is wrong, but it
 2   is the list of contingencies.        It includes a single line to
 3   ground fault on two phases, two separate phases of a
 4   double-circuit transmission tower.
 5           MR. PAPPAS:    Could you tell me, amongst the things
 6   that -- the elements that could be faulted or possibly lead
 7   to default of larger elements, would that include various
 8   devices on the line, whether it is circuit breakers or
 9   switches or whatever?       Would failure of such devices
10   possibly cause the failure of a larger element, like a
11   line?
12           MR. RUSSELL:    You're saying a failure of a breaker?
13           MR. PAPPAS:    Any of the smaller elements.     Those would
14   be elements; right?
15           MR. RUSSELL:    Okay.    You're talking an insulator
16   failure, for example, that would cause a short circuit.
17   That would look like a single line to ground fault, yes.
18           MR. PAPPAS:    Okay.    Now, is one of the constraints for
19   a system the thermal limit of the lines?
20           MR. RUSSELL:    Yes.
21           MR. PAPPAS:    Is it possible that if lines are run at
22   their thermal limits regularly and over-frequently to their
23   maximum limits that the heat could compromise some of these
24   individual elements?
25           MR. RUSSELL:    Only if the transfer limits were
26   improperly set.
27           In other words, when you set long-term emergency
28   rating, it is one you can live with at least till the next

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 1   downward cycle in load, okay.        That's the general rule of
 2   thumb.
 3           There are also short-term emergency limits.       You can
 4   only survive for 15 minutes, and -- or only for 50 hours a
 5   year.
 6           So those times and magnitudes of ampacity are set with
 7   respect to avoiding the annealing that you are
 8   hypothesizing.
 9           MR. PAPPAS:    I am not sure if you're familiar with the
10   attributes of the various conductors, or not.          Are you
11   familiar with the temperature limits on the ACSR?
12           MR. RUSSELL:   Yes, I understand that there are
13   specific degree Centigrade rises in temperatures that are
14   associated with each of the line ratings.
15           I don't have the numbers in memory to recall.
16           MR. PAPPAS:    Would it sound familiar at all that the
17   rating is 93 degrees Celsius and that it is suggested that
18   they keep them at 75, that above 93 they begin to anneal?
19   Does that...
20           MR. RUSSELL:   I just don't recall.     I had seen some
21   other numbers.
22           MR. PAPPAS:    If you had a transmission system with a
23   lot of such lines, and you have a problem with the ability
24   to transmit, would the reconductoring to any other line
25   that would have at least a 200 degree Celsius regular
26   operating unit -- would that help to eliminate the danger
27   to the conductor and increase your ability to transmit,
28   particularly when peaks and that are required?

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 1        MR. RUSSELL:      I think maybe the general point you are
 2   trying to make is that if you have a binding constraint
 3   limited by temperature rise on one conductor, and if you
 4   can replace it with another conductor that will carry more
 5   power, then, yes, that can relieve the binding constraint
 6   and allow a higher transfer, but only for a thermal limit.
 7        MR. PAPPAS:      Yes, yes.
 8        MR. RUSSELL:      If it is a stability limit or voltage
 9   collapse limit, then that won't help.
10        MR. PAPPAS:      That's where I was going to go next,
11   because -- well, I will just ask you to verify what I think
12   I know.
13        When you do go to greater capacity conductors, so that
14   you are moving more power, you do have -- you've got a
15   problem where it is consuming more reactive power; is that
16   correct?
17        MR. RUSSELL:      You get more I squared X losses, yes.
18        MR. PAPPAS:      So in which case you would consider
19   applying FACTS technology?
20        MR. RUSSELL:      I can't -- I'm sorry, I can't help you
21   there.
22        MS. NOWINA:      Mr. Pappas, you have two minutes.
23        MR. PAPPAS:      Okay.
24        I would like to go to tab 3 on mine.       I would like to
25   go to page 3, FACTS benefits, at the top of the page,
26   firstly.   It says:
27              "A number of electrical utilities around the
28              world have strategically been utilizing FACTS

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 1                technology for decades.     Of course the reason for
 2                doing so may vary between the different
 3                operators.    Traditional reasons are to improve
 4                the stability and increase the transmission
 5                capacity.    In the wake of deregulation, other
 6                aspects have been brought forward."
 7           I would like now to go down to flexibility and up
 8   time.    It says:
 9                "Constructing new overhead transmission lines
10                take several years.     The FACTS installation
11                requires no or limited access to new land.         It is
12                normally in service 12 to 18 months after a
13                contract is awarded to a supplier.       Not only can
14                FACTS provide increased capacity and improved
15                stability to the system, it also has the
16                flexibility for future upgrades.      There are also
17                examples of completely relocated FACTS
18                installations mainly due to changes in power
19                demands."
20           Finally, financial aspects:
21                "One of the main purposes of utilizing FACTS is
22                to increase transmission capacity and the
23                investment cost is a fraction of building new
24                transmission lines.     It is not unusual that the
25                pay-back time of the investment is less than a
26                year.   Also, in a deregulated market the improved
27                stability in the power system substantially
28                reduces the risk for forced outages, thus

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 1                reducing risk to lost revenue and penalty from
 2                power contracts."
 3        Does that -- have you found that in your experience
 4   with the industry, that those are valid statements?
 5        MR. RUSSELL:      I haven't boned up on this lately and I
 6   apologize.     I just can't help you.
 7        MR. PAPPAS:      No problem.
 8        MS. NOWINA:      Mr. Pappas, your time is up and it sounds
 9   like you are asking the witness areas -- in areas that he
10   doesn't have the current knowledge.
11        MR. PAPPAS:      Okay.   Could I have one last question?
12        MS. NOWINA:      Well, you are out of time, so I guess
13   what I would like to -- is what area is it in, and we will
14   first establish whether or not the witness wants to answer
15   questions --
16        MR. PAPPAS:      It is just going to --
17        MS. NOWINA:      You have talked about --
18        MR. PAPPAS:      It is a further matter of FACTS and
19   hopefully, he can answer it.        It'll be very short --
20        MS. NOWINA:      The witness has already made a comment
21   about FACTS, that it is really not an area that he is
22   currently an expert in.       Is that correct, Mr. Russell?
23        MR. RUSSELL:      Yes, ma'am.    I have looked at these
24   matters in years past, but I didn't bone up for it for this
25   hearing.
26        MR. PAPPAS:      Okay, well --
27        MS. NOWINA:      So I believe you are finished then, Mr.
28   Pappas.

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 1           MR. PAPPAS:    I guess I am finished.     Thank you very
 2   much.
 3           MS. NOWINA:    Mr. Barlow?   There you are.
 4           CROSS-EXAMINATION BY MR. BARLOW:
 5           MR. BARLOW:    If I look at your various graphs, most of
 6   them show crossovers above 2018 out to 2023.
 7           MR. RUSSELL:    Yes.
 8           MR. BARLOW:    The refurb, the decision on the
 9   refurbishing of Bruce B would start in about that time
10   period, and using your -- the series capacitor would allow
11   us to, allow the people of Ontario to make a proper
12   decision because use of the series capacitors will allow
13   them to get within five or 10 years of that juncture, to
14   make a decision on Bruce B.
15           MR. RUSSELL:    Well, you're right.    The onset of the
16   refurbishment cycle is accompanied by a reduction in
17   locked-in energy.
18           And so that is all -- when we do the calculations with
19   OPA's model, that's always helpful.        And advancing it, of
20   course, would help reduce locked-in energy more, and
21   setting it back further in time, in the future puts off the
22   time at which this benefit is -- or this relaxation of
23   locked-in energy occurs.
24           MR. BARLOW:    You have looked at the OPA 20-year plan
25   that they have issued already?        Have you had a chance to --
26           MR. RUSSELL:    Do you have a document?
27           MR. BARLOW:    No.   Have you looked --
28           MS. NOWINA:    Do you mean the Integrated Power System

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 1   Plan?
 2           MR. RUSSELL:   I looked at some of the IPSP, yes, but
 3   I --
 4           MR. BARLOW:    The reason why I am asking that is
 5   there's only minor comment about the putting in this line,
 6   and I think that using the technology would allow them to
 7   fully integrate this decision, if it's going to happen,
 8   into their 20-year plan, which it isn't.
 9           So your technology would allow them to have more study
10   time and more building in to whether that is an appropriate
11   thing in a 20-year proposal.
12           MS. NOWINA:    Is that a question?
13           MR. BARLOW:    Yes.   Well, it said it would give OPA a
14   chance to take this out of the context of this hearing--
15           MS. NOWINA:    You're saying "would it give".     You have
16   to ask a question, Mr. Barlow.
17           MR. BARLOW:    -- and put it into their future plans and
18   your series compensation would do that; do you agree?
19           MR. RUSSELL:    Series compensation at the 7,476 level
20   pushes back the time of this crossover.
21           So I think that's the question you are asking.
22           MR. BARLOW:    Yes.
23           MR. RUSSELL:   That's what I testified to, yes.
24           MR. BARLOW:    Have you looked at the flows?     We had
25   earlier in this hearing a discussion about flows from east
26   to west and west to east, and how they have changed over
27   the last 20 years.
28           Have you had a look at that impact on the areas in

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 1   which the Bruce power is coming into, and whether Hydro
 2   needs to do some adjustments in those areas outside of the
 3   Bruce that they should be doing now, even before they do
 4   this project?
 5          MR. RUSSELL:   I'm sorry, I'm not sure I follow your
 6   question.    I do understand that there has been an increase
 7   in the predominance of west to east flow.
 8          MR. BARLOW:    That's right.
 9          MR. RUSSELL:   As a result of imports from Michigan and
10   construction of generation in the Sarnia and Windsor areas,
11   yes.
12          MR. BARLOW:    Yes.
13          MR. RUSSELL:   That seems -- that trend seems to be
14   correct.
15          MR. BARLOW:    So what I am saying is that there
16   probably is some remedial action that should be done there,
17   that would alleviate maybe some of the issues that are
18   coming out of Bruce.     Such as the Longwood, only single 500
19   kV line that's there.
20          MR. RUSSELL:   Well, there is a relationship with the
21   NBLIP, if that is what you are driving at.        When you reduce
22   the flows from the west, then that relieves the loading on
23   the Nanticoke-Longwood line, and yes, that has a salutary
24   effect on how much you can get out of Bruce.
25          If that's what you're saying?
26          MR. BARLOW:    Yes.
27          MR. RUSSELL:   We see that in the Pollution Probe 47,
28   that is whereas with NBLIP of 1,500 they give us a rate

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 1   rating of 7,076, but with NBLIP of 500, we get -- we went
 2   from 7,076 to 7,176.
 3        So yes, that in a nutshell is what happens.        There is
 4   a correlation between those west-to-east flows and the
 5   amount you can get out of Bruce.
 6        MR. BARLOW:    Right now we're saying that we need 3,100
 7   megawatts out of Bruce to be handled by this line; is that
 8   not correct?
 9        MR. RUSSELL:    No.   It's 3,000 on Bruce A, and they're
10   projecting --
11        MR. BARLOW:    No, no, I meant for this line.
12        MR. RUSSELL:    Pardon?
13        MR. BARLOW:    The line capacity we need for this is
14   about 3,100, of which 1,000 is wind power --
15        MR. RUSSELL:    You're saying the upgrade from the
16   5,000 --
17        MR. BARLOW:    Yes.
18        MR. RUSSELL:    -- to the 8,100; yes, that 3,100, of
19   which 400 comes from the near-term measures.        So it is not
20   quite the whole 3,100.
21        MR. BARLOW:    If we take the 625 million that they're
22   proposing to -- cost to build the line, plus the interim
23   costs that they're planning, which is 2- or 300 million,
24   we're looking at approaching a billion dollars.
25        So 32 percent of this line is for wind power.            Is that
26   right?   So if we take a 1,000 out of the 3,100, 1,000 is
27   about 32 percent of the costs of this line.
28        MR. RUSSELL:    Yes, it's a little less than a third,

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 1   yes.
 2           MR. BARLOW:    Now, I am going to turn you around and
 3   say:    Let's --
 4           MR. RUSSELL:    Based on nameplate.
 5           MR. BARLOW:    Yes, based on nameplate.
 6           Given that you might be a consultant for Bruce Power
 7   some day, okay?       God forbid.    Okay, if you were looking at
 8   it and saying:     If I had to pay for the line and I'm
 9   responsible for 30, 64 percent of this -- 68 percent of
10   this line, what options would I make?         Because I purchased
11   the rights to run this station for a number of years, I
12   knew what the capacity out was, I now have some more that I
13   need to deliver.       Would I choose a 500 kV double circuit
14   line?    Would I choose a 500 kV single circuit line?            Or
15   would I look at some other options that are cheaper,
16   because -- would that be an option?         Would a double circuit
17   500 kV line be your choice if you were working for Bruce?
18           MR. RUSSELL:    I'm sorry.    That's a really complicated
19   question --
20           MR. BARLOW:    Well, what I'm trying -- maybe I can
21   rephrase it.
22           If you as a private company -– well, we talked about
23   the interconnects and how the people who produce the powers
24   have to pay for the interconnects.
25           MR. RUSSELL:    Right.
26           MR. BARLOW:    This is an interconnect.    It talks like a
27   duck, walks like a duck and it speaks like a duck.              It must
28   be a duck.     So what I'm saying is that if Bruce had to pay

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 1   for their section of this line, and the wind power had to
 2   pay for their segment of this line, would Bruce Power not
 3   look at some of the more inexpensive costs of doing it,
 4   rather than spending almost a billion dollars?
 5        MR. RUSSELL:     Well, that -- in theory -- has several
 6   problems.
 7        First, there is no inherent right to transmission
 8   access.   We actually posed a question to Hydro One, an
 9   interrogatory asking about what kind of continuing rights
10   the Bruce generation had to the transmission system, and
11   whether they supervened those of a new entrant and so
12   forth.
13        Absent -- as I recall the data response, that is not
14   the way they go at it.
15        But there are, as I discussed in the direct testimony,
16   there are direct assignments of network upgrades under some
17   circumstances under the FERC approach.        If you need an
18   upgrade and you want your generating facility to be treated
19   as a firm resource to your customer, then, yes, that is
20   directly assigned, but over time, because it's providing a
21   benefit to the generator and to all other customers on the
22   grid, as a network upgrade, they get that money back over
23   time --
24        MR. BARLOW:     That's right.
25        MR. RUSSELL:     -- through the FERC regime.      So it is a
26   time value cash-flow issue.      It is not so much an ultimate
27   burden on the person who pays for the upgrade.
28        MR. BARLOW:     On the SPS, putting in this line, through

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 1   testimony we have heard from Hydro One, they said that they
 2   would become less complex.     Yet the IESO document says that
 3   it will be more complex.
 4        What is your take on it?
 5        MR. RUSSELL:   Can you say that again?
 6        MR. BARLOW:    Hydro One in their statements at this
 7   hearing said that if they put the line in, this additional
 8   line in, that it will be less complex an SPS.
 9        The IESO document says that if they even put it in, it
10   will be a more complex SPS.
11        MR. RUSSELL:   As I stated earlier.
12        MR. BARLOW:    Tab 95, section 5.
13        MS. NOWINA:    Of what?
14        MR. PAPPAS:    Page 22.
15        MS. NOWINA:    Of what document?
16        MR. PAPPAS:    Of mine.
17        MR. RUSSELL:   Tab 9?
18        MR. BARLOW:    Tab 9, section 5.
19        MR. PAPPAS:    It's page -- it says page 22.     It is
20   page, um... -- oh, it is page 22.
21        MR. RUSSELL:   Okay.    The statement is where, please?
22        MR. BARLOW:    "Subject to the receipt of the required
23             approvals for the construction of new 500 double-
24             circuit line between the Bruce complex and Milton
25             switching station, the Bruce SPS will need to be
26             further enhanced to recognize contingency
27             involving the circuits of the new line, as well
28             as any new breaker failure conditions at the

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 1             terminus station of the new line that could be
 2             expected to have an adverse effect on the post-
 3             contingency operation of the system.
 4             "Because the Bruce SPS is now over 20 years old
 5             and much of the technology employed in the scheme
 6             is obsolete, Hydro One has conducted a review of
 7             the expected requirements.      Once the new line is
 8             in service, additional generation capacity has
 9             been installed to take advantage of the increased
10             transfer capability out of the Bruce area."
11        MR. RUSSELL:   This Bruce enhancement, as I understand
12   it, means more elements will be monitored and more elements
13   will be subject to remedial action.
14        So when they use the word "enhanced", it does not mean
15   that it's going to increase transfer capability.       It just
16   means that additional elements of the system would be
17   subject to monitoring and subject to opening or closing,
18   and that sort of thing.
19        MS. NOWINA:    You have two minutes, Mr. Barlow.
20        MR. BARLOW:    Yes.
21        MR. RUSSELL:    Now -- that's how I took that statement.
22        MR. BARLOW:    The other thing is I would like -- since
23   we have not received the refurbishing schedule and in and
24   out of service, I would like to have a review of that, if I
25   have any more questions of this witness, because we have
26   not received that document.
27        I asked for it two weeks ago, and it's just on the
28   scheduling of those reactors how it would affect the

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 1   scheduling, and I think that is a major impact on when and
 2   if we run out of capacity, or don't, and we have not
 3   received that yet.
 4           MS. NOWINA:   Mr. Millar?
 5           MR. MILLAR:   I am not sure.     Is that the -- would that
 6   be the subject of the IR response you are filing later
 7   today, Mr. Nettleton?
 8           MR. NETTLETON:    Yes.    In fact, I have before me the
 9   undertaking or the response to the question that Mr. Barlow
10   asked us to respond to.         I could file it now, if you'd
11   like.
12           MS. NOWINA:   All right.     Why don't you file it now?
13           MR. MILLAR:   If I am not mistaken, it doesn't have an
14   undertaking number, Mr. Nettleton.         So perhaps I will just
15   give it an exhibit number.
16           MS. NOWINA:   Give it an exhibit number.
17           MR. MILLAR:   We are now at K14.3.
18           MR. QUINN ROSS:    Prior to it being made an exhibit, we
19   would like the opportunity to review the document.              We may
20   contest it being entered as an exhibit.
21           MS. NOWINA:   That's right.     We did discuss that.       Hold
22   on a minute, Mr. Nettleton.
23           MR. MILLAR:   It may be that -- it is lunch time
24   anyway, Madam Chair.
25           MS. NOWINA:   Yes, that's what we will do.      If we can
26   distribute it?     It's not confidential; is that correct, Mr.
27   Nettleton?
28           MR. NETTLETON:    No.

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 1           MS. NOWINA:   We will distribute it.     We won't enter it
 2   as an exhibit, and then after lunch we will determine
 3   whether or not parties have objections to it being entered
 4   as an exhibit.
 5           Mr. Barlow, you will only have five minutes, at most,
 6   to question on it, if you would like to.
 7           Before we break for lunch, I would like to get a sense
 8   of the schedule for the remainder of the day, just a sense.
 9           I know that nothing is certain.
10           MR. BARLOW:   Ask him if he brought his toothbrush.
11           MS. NOWINA:   Exactly.   We have to make some
12   arrangements, in terms of -- or do some thinking in terms
13   of how long the elevator banks work here, for example.
14           So, Mr. Nettleton, if you could give me a sense of how
15   long you think you will be in cross-examination of this
16   witness?
17           MR. NETTLETON:   I have brought my toothbrush.          I
18   anticipate to be several hours with this witness.          I think
19   it would be wise to plan for the rest of the afternoon I
20   will be with Mr. Russell asking questions.
21           MS. NOWINA:   All right.   Well, I guess that gives me a
22   sense.    Then we will have Mr. Brill's examination this
23   evening.
24           All right.    We will break -- now, given that we know
25   we are going into this evening, let me ask you a question,
26   then.    Would you prefer to have longer or shorter breaks
27   during the day today in order to compress that schedule as
28   much as possible, or, because it is going to be a very long

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 1   day, would you prefer to have a little bit -- to have the
 2   normal length of breaks?
 3        MR. NETTLETON:    I am indifferent, Madam Chair.         I
 4   think the length of the breaks that we have had to date
 5   have been suitable and we can just move forward, subject I
 6   think to the court reporter's needs.
 7        MS. NOWINA:    She has been very accommodating so far.
 8        MR. NETTLETON:    Yes.
 9        MS. NOWINA:    Why don't we break for an hour now, and
10   then we will return at 1:30?
11        --- Luncheon recess taken at 12:27 p.m.
12        --- Upon resuming at 1:34 p.m.
13        MS. NOWINA:    Please be seated.
14        Before we begin, I have a couple of administrative
15   items.   The chiller apparently has been broken and is under
16   repair, and they told me it would be repaired by one
17   o'clock, so it may indeed be repaired now and it is
18   beginning to get cooler.      Let's hope that is true.
19        Regarding this evening, the elevator in this building
20   stops making trips up without a pass card at seven o'clock
21   in the evening.    So to prevent having to give everyone a
22   pass card, we will break for supper at 5:30.        Getting
23   everybody back in at 6:30 or a few minutes after 6:30, so
24   we're all in the building or we're all in the room.           If you
25   leave then, you can't come back, so once you are here after
26   6:30 you're committed.
27        So that is the plan for this evening.       Then the Board,
28   we will provide coffee and drinks and snacks through the

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 1   evening, beginning at about 7:30 and, if you behave, I may
 2   let you have them in the hearing room, but we will see.
 3        So that's to give you a sense of what is going on for
 4   tonight.
 5        Returning to the serious matters of the hearing, we
 6   have had a look at the undertaking in question.          Does
 7   anyone have any submissions objecting to filing this
 8   undertaking?     No?
 9        MR. MILLAR:       Madam Chair, I note Mr. Ross is not here.
10   I don't think he had any objections, though he did speak
11   with me over the break.       I think some parties may have
12   questions on the document, but as I understand, there are
13   no objections.
14        MS. NOWINA:       All right.   That's fine.
15        Fine.     Then, Mr. Barlow, you can ask your questions on
16   this document.     Let's give it an exhibit number.
17        MR. MILLAR:       Yes.   K14.3, Madam Chair.
18        MS. NOWINA:       Thank you.
19        MR. MILLAR:       This is the undertaking to Mr. Barlow,
20   dated June 11th, 2008.
21        EXHIBIT NO. K14.3:        UNDERTAKING TO MR. BARLOW, DATED
22        JUNE 11TH, 2008.
23        MS. NOWINA:       Go ahead, Mr. Barlow.
24        CROSS-EXAMINATION BY MR. BARLOW:
25        MR. BARLOW:       Just a couple of questions and comments.
26        What does CNSC stand for, Canadian something or other?
27   It's on this page here, that is not numbered.          "Engagement
28   with CNSC on licensing issues."

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 1        MS. NOWINA:      Where is it, Mr. Barlow?     You're asking
 2   Mr. Russell, right?      On page?    Can you give a page?
 3        MR. BARLOW:      There are no page numbers on these.
 4        MS. NOWINA:      There are no page numbers.      Would the
 5   title of the --
 6        MR. BARLOW:      "Progressing with new build."
 7        MS. NOWINA:      You realize, that this is Hydro One's
 8   evidence.     Mr. Russell may not know the answers to your
 9   questions.
10        MR. BARLOW:      I didn't.   I am asking you, because I
11   don't know, and he probably doesn't know either, so --
12        MS. NOWINA:      Canadian Nuclear Safety --
13        MR. BARLOW:      I am asking the Board to explain.
14        MS. NOWINA:      Canadian Nuclear Safety Commission.
15        MR. BARLOW:      Okay, that's fine.     My comments on this
16   is that I don't see how the Board or any intervenor can use
17   the data provided in this document to do any analysis work
18   as to when the units are coming on and off.          This is just a
19   graph and there are some large questions inside that, but
20   it's not adequate.      I certainly could not submit any
21   documents.     This is just a nice graph, with not enough data
22   there to -- anybody to analyze what the progress or
23   rescheduling or what is, and to determine whether there
24   this is an aggressive schedule or non-aggressive schedule,
25   or what.
26        I have questions on the graph, because it looks like
27   there's not even, when you look at the graph, Bruce C is
28   continuing to go on without any taking out for

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 1   refurbishment.   It just continues on until another 20 years
 2   without any impact on that graph.
 3        So this is not adequate for me to do any analysis and
 4   I don't think that you can provide it for the Board.         It's
 5   a presentation that Mr. Hawthorne made to somebody, but
 6   it's certainly not acceptable as to any documentation or
 7   any understanding of what the process is, and the
 8   explanation of when the units are coming in and out.
 9        So I can't use this to determine anything.
10        MS. NOWINA:   Perhaps we can ask a couple of further
11   questions -- I know Mr. Quesnelle had a question on it --
12   and ask Mr. Nettleton if he has a response or we can get it
13   in a further undertaking which might assist all of us.
14        MR. QUESNELLE:   Mr. Nettleton, I just wondered,
15   looking at the graph itself and the bar graph on page 11, I
16   am just trying to interpret what is happening in 2018.
17        I'm just looking at the wording on the graph and the
18   colour-coded second line that corresponds with the darker
19   blue: "Bruce B capacity once refurbished."
20        So are we to interpret that, that that are when units
21   are returning from a refurbishment schedule?
22        MR. NETTLETON:   Mr. Quesnelle, I think it would be
23   helpful just to put this document into context,
24   particularly given the comments of my friend, Mr. Barlow.
25        If we turn to Exhibit C, tab 6, schedule 6, which is
26   Energy Probe interrogatory response 6, and it's the -- part
27   of the response to that question in the second paragraph to
28   A, part A, describes eight and the information that the OPA

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 1   has used for purposes of its assumption that refurbishment
 2   for the first Bruce B unit would take place at the end of
 3   2017, and it would follow sequentially on a staggered
 4   basis, commencing one year following that date, i.e. 2018
 5   and continuing to 2023.
 6        During the appearance of the Hydro One panel, no party
 7   asked questions about this response or any other response
 8   related to the estimate that OPA has used with respect to
 9   the 2018 time period.
10        What we thought, given the continuing questioning that
11   we had received from, in particular, Mr. Barlow, about what
12   is the basis or when are the Bruce units being refurbished,
13   we thought it would be helpful to provide the background
14   information, the supporting information, if you will, that
15   the OPA has used for purposes of supporting the assumption
16   that is contained in this interrogatory response and
17   others.
18        So that is just to put it into context.       This is the
19   document that the OPA has used.     It is a document that was
20   provided at a presentation made by the CEO of Bruce Power
21   at the Toronto Board of Trade on November 23rd, 2007, which
22   obviously occurs after the information that related to the
23   Pollution Probe C-2-19 confidentiality response, which of
24   course was information -- the question in that response was
25   information that was used in the discussion paper number 7,
26   the IPSP discussion paper number 7, which was dated
27   November 2006.
28        So this information predates that.

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 1        Okay.     So that's the context to it.
 2        In terms of what's happening on this graph, my
 3   understanding of it, for what it's worth, is simply that in
 4   2018, what we are seeing are units like what is described
 5   in the Energy Probe 6 response, that units are coming off
 6   and they're becoming refurbished and they are coming back
 7   on and they will be -- and it's assumed that the Bruce B
 8   units would be refurbished by 2023.
 9        That's the area of the dark blue, giving the capacity
10   megawatts of 6,000 megawatts in 2023.
11        MS. NOWINA:      But, Mr. Nettleton, it shows 6,000
12   megawatts at 2021 -- or, rather, all the way through it
13   shows 6,000 megawatts.
14        MR. NETTLETON:      I think the key is the language used
15   of, in the lighter blue, "operating capacity including
16   units 1 to 4 when refurbished".        So it is when those units
17   are refurbished, and also in the next line up, "the Bruce B
18   capacity once refurbished".       Now, that is my understanding.
19        I am loathe to provide any more information, because I
20   am not the best person to speak to it.         I would be happy
21   and pleased to have Mr. Chow return and have him explain
22   this better than I could, if that is of any assistance to
23   the Board.
24        MS. NOWINA:      Well, can Mr. Chow return today?
25        MR. NETTLETON:      He is right here.
26        MS. NOWINA:      He is right here.    I see that.    I think
27   we need to clarify this for the Board's consideration, and
28   so the question is whether or not we need to make reference

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 1   to the confidential undertaking.        If we do, we will have to
 2   go in camera to have this discussion.
 3        MR. NETTLETON:      I am not sure if you have questions
 4   regarding the confidential undertaking.         If you do, then I
 5   agree that we would have to be proceeding...
 6        MS. NOWINA:      Give us a moment to confer.
 7        [Board Panel confers]
 8        MS. NOWINA:      All right.   We will do that, Mr.
 9   Nettleton.     Mr. Barlow, first I want to address you.
10   First, the Board thanks you for bringing this to our
11   attention and forcing us to have a close look at the
12   information.
13        We think, for us to get a clearer picture, that we do
14   need to go in camera, which makes it confidential.              Our
15   practice direction for confidentiality is that it is only
16   available to counsel and experts, and that means you,
17   personally, will not be able to be involved in that
18   discussion.
19        Some of the counsel here have signed undertakings.
20   Others who wish to remain may sign an undertaking and
21   remain.   I am sure that they will thoroughly investigate
22   the questions that no doubt are in your mind.
23        So that's how we will proceed.        We will probably do it
24   after our afternoon break to give people an opportunity to
25   sign the undertaking, if they have not yet signed the
26   undertaking, in order to see the confidential information
27   and to be here for the in camera session.
28        Mr. Millar, does that meet all of our procedural

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 1   requirements?
 2           MR. MILLAR:   I might add one thing.     Mr. Pape is going
 3   to raise something.      He may ask what Mr. Russell is to make
 4   of this.    Maybe I will let him address his point first.
 5           MR. PAPE:   Well, with respect, Madam Chair, I am
 6   troubled by all this.      Hydro had the burden from the
 7   beginning to establish need for this application.          Hydro
 8   has put a number of graphs and projections in front of the
 9   Board.     Hydro put this document in front of the Board.
10           I think the quality of Hydro's knowledge about Bruce B
11   or Bruce, generally, it speaks for itself.         It has been
12   evident from the beginning of the hearing.         They've had
13   ample opportunity to show us the extent or nature of their
14   planning mechanisms, their projections.
15           If we now turn this back again and start giving Hydro
16   another go at its projections of need in respect of
17   nuclear, we're going to open this all up again, and I don't
18   know why, frankly.      I mean, it seems to me, with great
19   respect, that we all know now the range of projections and
20   schedules and the quality of the material that Hydro has
21   put before us.      We have seen it.    Let it speak for itself,
22   with respect.
23           MS. NOWINA:   I understand your point, Mr. Pape.        I am
24   not anticipating that we will have a lengthy cross-
25   examination.     We have a couple of documents.       Mr. Chow is
26   here.    I am not anticipating that we will allow Hydro One
27   to do -- increase their evidence and put in more evidence
28   on this matter after the questions that we ask.

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 1        So it is just simply clarification of the documents
 2   that we do have on file, and it would be helpful for the
 3   Board.   Mr. Ross, you have a comment.
 4        MR. QUINN ROSS:     Just that Mr. Chow wasn't the person
 5   who prepared the document.     There is no evidence to suggest
 6   that it was prepared under his overview or oversight.          It
 7   was prepared, according to the document itself, by Mr.
 8   Hawthorne of Bruce Power.
 9        The OPA has, throughout, declined to give evidence
10   with regards to generation, because it is outside of their
11   jurisdiction and they don't get involved in it.        I just
12   don't see why, now, simply because he's sitting beside Mr.
13   Nettleton and has some technical understanding of these
14   things, he is in any kind of position to give evidence on
15   this, other than pure opinion evidence, which we could get
16   from any one of the experts, including Mr. Russell.
17        MS. NOWINA:     Let me make it clear, Mr. Ross.     We need
18   to clarify what Mr. Chow has said on the record.        We need
19   to clarify our understanding of that.
20        He has seen the information for Bruce Power.        One
21   assumes that he has taken that into account when he makes
22   his comments, so we need to understand why he has made --
23   put forward the evidence that he has put forward and that
24   they're consistent.
25        If they're not consistent, the Bruce Power evidence
26   stands for itself.    We have it.    We have both Mr.
27   Hawthorne's and the other document, and it will simply
28   stand as it is.

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 1           MR. QUINN ROSS:    Thank you, Madam Chair.
 2           MR. NETTLETON:    Again, for the record, Madam Chair,
 3   this information was represented in the interrogatory
 4   response as saying:
 5                "For planning purposes, the OPA is using
 6                publicly-available information prepared by Bruce
 7                Power."
 8           MS. NOWINA:    Yes.
 9           MR. NETTLETON:    And so my only comment is that all
10   that Mr. Chow can do is explain how --
11           MS. NOWINA:    Explain his interpretation of the Bruce
12   data.
13           MR. NETTLETON:    Exactly.
14           MS. NOWINA:    That's what we will be asking him to do.
15           MR. NETTLETON:    Thank you.
16           MS. NOWINA:    All right.    So we will do that after
17   break.    We have then completed Mr. Barlow's cross-
18   examination, which takes us to you, Mr. Nettleton.
19           CROSS-EXAMINATION BY MR. NETTLETON:
20           MR. NETTLETON:    Thank you, Madam Chair.     Good
21   afternoon, Mr. Russell.
22           MR. RUSSELL:   Good afternoon, sir.
23           MR. NETTLETON:    Mr. Russell, I would like to begin
24   with perhaps the obvious, and that is there seems to be two
25   central differences between the generation forecasts which
26   my client has included in its application in this
27   proceeding, and your evidence.
28           Maybe you can help me or confirm with me that one of

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 1   the major differences relates to the 1,000 megawatts of
 2   planned wind?
 3        MR. RUSSELL:      Yes.
 4        MR. NETTLETON:      And the second major difference is in
 5   relation to the inclusion in the generation forecast the
 6   assumptions regarding refurbishment and continuation of
 7   nuclear output from the Bruce complex.
 8        MR. RUSSELL:      Yes.   And with respect to the wind, we
 9   have a disagreement about the need for transmission
10   capacity, N minus 1 transmission capacity, in the full
11   nameplate capability of the wind.
12        MR. NETTLETON:      Fair enough.    Fair enough.    We will
13   get there.     Just narrowing the 1,000 megawatts of planned
14   wind, that is the portion -- if we turn to page 11 of your
15   direct evidence, evidence of the intervenor Saugeen Ojibway
16   Nation, figure 1, page 11.
17        MR. RUSSELL:      Yes.
18        MR. NETTLETON:      That's effectively a replication of
19   the graph found in the application.        Fair?
20        MR. RUSSELL:      Yes.
21        MR. NETTLETON:      Just for the record, we're talking
22   about the planned wind being that triangular-like green
23   segment at the far right segment at the far right of the
24   graph.   Fair?
25        MR. RUSSELL:      Correct.
26        MR. NETTLETON:      Can you confirm with me that the 1,000
27   megawatts is effectively made up of 300 megawatts of
28   standard offer planned wind?

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 1        MR. RUSSELL:     I had understood that that was the basis
 2   for Hydro One's assumption, yes.
 3        MR. NETTLETON:    And that differs from the 700
 4   megawatts of planned large wind?
 5        MR. RUSSELL:   Yes.
 6        MR. NETTLETON:    So are you suggesting that the 300
 7   megawatts of standard offer wind should be rejected from
 8   the forecast on the same grounds as the 700 megawatts of
 9   wind being rejected?
10        MR. RUSSELL:   In part, but not in whole.      In other
11   words, the barriers to standard offers, as I understand it,
12   have a standard price, standard terms and conditions.
13   There is not much to negotiate.
14        So there is probably a standard terms and conditions
15   for an interconnection.    It is on distribution facilities,
16   so the barriers to getting an interconnection are far
17   smaller than they are for large new wind.
18        So I see that the imponderables, the uncertainties
19   with the 300 are fewer than for the 700.
20        MR. NETTLETON:    With respect to the pink zone, so to
21   speak, that is to say the committed wind generation, do you
22   understand any of that committed wind generation to include
23   standard offer wind?
24        MR. RUSSELL:   I did not.
25        MR. NETTLETON:    Do you understand the term or concept
26   "orange zone"?
27        MR. RUSSELL:   In very general terms, yes.
28        MR. NETTLETON:    Why don't you explain to me what your

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 1   understanding is.
 2        MR. RUSSELL:     My understanding of the orange zone is
 3   the zone within which wind generation is subject to a
 4   moratorium because it would add to loading on the Bruce
 5   transmission system.
 6        MR. NETTLETON:     Do you understand that to apply to
 7   standard offer wind?
 8        MR. RUSSELL:     Yes.   To the extent it's in the orange
 9   zone, yes, and would make its way on to the way -- well, it
10   is on a distribution feeder, so it makes its way by
11   displacement.
12        MR. NETTLETON:     At page 2 -- well, sorry.      The planned
13   wind, the 700 megawatts of planned wind, can we agree that
14   that is based upon an estimate of 1,400 megawatts of
15   potential wind?
16        MR. RUSSELL:     Yes, and it's planned large wind.
17        MR. NETTLETON:     That's correct.
18        MR. RUSSELL:     Yes, new large wind, mm-hmm.      And I had
19   so understood that there was 1,400 megawatts of potential,
20   and that Mr. Chow explained he took half of that.
21        MR. NETTLETON:     Your view is that that probability
22   discount factor still does not make for a reasonable
23   forecast?
24        MR. RUSSELL:     Well, it doesn't make for certainty
25   justifying a front-end loaded transmission line of $635
26   million.
27        MR. NETTLETON:     But for --
28        MR. RUSSELL:     We need a little more certainty about

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 1   the time and amounts of generation to be connected.
 2           MR. NETTLETON:   But as it relates to forecasting, sir,
 3   as it relates to the forecasting exercise, do you think
 4   that a probability factor being ascribed to planned wind of
 5   50 percent is reasonable?
 6           MR. RUSSELL:   I haven't made a study of that.
 7           MR. NETTLETON:   Well, your evidence says that the
 8   whole entirety of the planned wind should be rejected for
 9   generation forecast purposes.
10           MR. RUSSELL:   Until it is more certain, yes.
11           MR. NETTLETON:   So why is a 50 percent reduction
12   factor not reasonable?
13           MR. RUSSELL:   Well, because I went through the example
14   of Tehachapi, and had we taken 50 percent there, we would
15   have been way high.      You've got to get some indicators of
16   certainty.     You've got a real live person on the other side
17   of the table.     He has a wind machine under contract.         The
18   turbine is going to be produced and delivered at a certain
19   time.    He has an interconnection agreement.        He has a
20   purchase agreement.      He has, you know, rights to the site.
21   He has an EPC contractor.       He has -- his substation is
22   built, and so on and so forth.
23           Just taking indications of interest from people who
24   put themselves in a queue is not a very solid basis,
25   because there is so much gamesmanship which has gone on
26   with this acquiring places in a queue and then sitting on
27   it, because it is a very valuable right to have a place
28   early in a queue.

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 1        MR. NETTLETON:     We will get to the queue, sir, I
 2   promise.    But as it relates to the exercise at hand of
 3   generation forecasting and the exercise of forecasting for
 4   generation resources, and the transmission requirements for
 5   forecast generation requirements, and resources, is it your
 6   position, sir, that all of the approvals that you just
 7   enumerated would have to happen and have to be satisfied
 8   before they could be considered as being part of a forecast
 9   resource?
10        MR. RUSSELL:     I would want a number of those
11   milestones to be completed, yes.
12        MR. NETTLETON:     Do you believe it is reasonable, sir,
13   that generation and transmission forecasts, in this
14   province, and for purposes of the transmission and
15   generation resources to serve load in this province, take
16   into account all ministerial directives issued to the OPA
17   concerning procurement of renewable energy sources?
18        MR. RUSSELL:     I had so understood, that planning takes
19   into account directives, yes.
20        MR. NETTLETON:     So that's reasonable?
21        MR. RUSSELL:     Well, a directive is a directive.         I had
22   understood that that was a high order of mandate.         Not
23   necessarily mandate, but a high order of guidance.
24        MR. NETTLETON:     So if a generation forecast, like the
25   one found in the application and referred to in your
26   evidence of figure 1, didn't take into account ministerial
27   directives relating to the procurement and requirements for
28   generation, renewable energy sources, that wouldn't be

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 1   reasonable?
 2        MR. RUSSELL:      Well, I don't know that.      I mean I don't
 3   know what the law is binding OPA.        So I have just, using my
 4   experience and judgment, I would not commit to a $600
 5   million investment to increase the transmission capability
 6   by 1,000 megawatts for wind, without certain attributes of
 7   certainty.     A real, live person.     A person with a
 8   chequebook and a creditworthy opposite party.          A person
 9   with a track record of doing projects, and acquiring and
10   delivering projects on time.
11        Those kind of attributes I would want before I went
12   out and built a $600 million investment when I could get
13   almost there for $97 million.
14        MR. NETTLETON:      But, sir, you do take issue or take
15   exception to the generation forecast that the OPA has
16   presented and that Hydro One relies upon in its
17   application; correct?
18        MR. RUSSELL:      Well, I have assumed that we can get 91
19   percent of the way there and deliver most of the energy
20   with $538 million less capital expenditure.
21        So it's not quite either/or.        You see, your questions
22   are framed in terms of nameplate.        Whereas --
23        MR. NETTLETON:      My question, sir, is not about
24   nameplate yet.     My question is simply about the
25   reasonableness of generation forecasts.
26        My question to you, sir, is whether or not the
27   generation forecast that you have included as figure 1, is
28   reasonable, or not, if it takes into account ministerial

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 1   directives.
 2        MR. RUSSELL:      I am saying that this chart on page 11,
 3   which was the point of departure, is based on nameplate
 4   capacity, and it doesn't really get to the nuances of my
 5   reasoning for using transfer capability less than 8,100
 6   megawatts.
 7        MR. NETTLETON:      Sir, you understand that the committed
 8   wind and the standard offer wind is a result of what are
 9   known as the RES I and II processes, do you?
10        MR. RUSSELL:      I had assumed so.
11        MR. NETTLETON:      And the RES I commitments require the
12   OPA to enter into contracts pursuant to a ministerial
13   directive?
14        MR. RUSSELL:      I had seen a directive indicating that
15   those contracts should be entered into, if that's what
16   you're asking.
17        MR. NETTLETON:      Do you have my cross book?
18        MR. RUSSELL:      Yes.   Yes, I do.
19        MR. NETTLETON:      If I could take you to tab 1, is that
20   the ministerial directive that you are thinking of?
21        MR. RUSSELL:      This is RES 1.
22        MR. NETTLETON:      Right.
23        MR. RUSSELL:      And it designates the contracts with
24   which the OPA is directed to assume responsibility for
25   exercising all powers.
26        And at the second page, the OPA is authorized to
27   execute and deliver such agreements.
28        MR. NETTLETON:      So OPA was directed to enter into the

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 1   ten contracts listed?
 2           MR. RUSSELL:   I so took it, yes.
 3           MR. NETTLETON:   You understand that that direction and
 4   the result of that direction is encapsulated in the
 5   generation forecast?
 6           MR. RUSSELL:   For the executed contracts, yes.
 7           MR. NETTLETON:   Then with respect to tab 2, this was
 8   the direction that's aptly referred to as the RES II RFP.
 9   Have you seen this document before, sir?
10           MR. RUSSELL:   Yes.   You delivered it to me before, my
11   last scheduled appearance.
12           MR. NETTLETON:   Similar to RES I, that direction
13   required OPA to execute nine contracts; right?
14           MR. RUSSELL:   Yes.
15           MR. NETTLETON:   You wouldn't take issue with the fact
16   that the generation requirements arising from this
17   direction would be included in the generation forecast,
18   would you?
19           MR. RUSSELL:   Well, executing a contract doesn't mean
20   that you can say that the amount of power will be delivered
21   at a specific scheduled time.        There are probably
22   milestones.     I haven't seen the contracts; haven't read
23   them.    But, typically, in my experience, these things have
24   timelines and they have milestones, and they're points in
25   time at which dollars have to be put up for an
26   interconnection agreement, facilities, and then the rights
27   of the parties lapse after inactivity for a period of time.
28           So I think having a contract with a reputable opposite

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 1   party, who has a record of performing on time and has built
 2   other projects, I think those kinds of attributes are some
 3   assurance, but not 100 percent assurance.
 4           MR. NETTLETON:   Do you think, for generation
 5   forecasting purposes, the generation arising -- the
 6   generation capacity arising from this RFP, this RES, this
 7   ministerial direction, should be included in a generation
 8   forecast?
 9           MR. RUSSELL:   Yes, it should be reflected in a
10   generation forecast, in whole or in part.
11           MR. NETTLETON:   Then if I take you to tab 3?
12           MR. RUSSELL:   Okay.
13           MR. NETTLETON:   This is a letter dated March 21st,
14   2006 to Mr. Carr, from the minister of Energy.          Do you see
15   that?
16           MR. RUSSELL:   Yes.
17           MR. NETTLETON:   Have you had the chance to review
18   this?
19           MR. RUSSELL:   I think I have read through this before,
20   yes.    Let me just glance at it.
21           MR. NETTLETON:   This letter concerns the standard
22   offer program; correct?
23           MR. RUSSELL:   I am reading it, if you will give me a
24   moment.
25           Yes, the next penultimate paragraph says:
26                "I hereby direct the OPA to assume, effective as
27                of the date of this letter of direction,
28                responsibility for exercising powers and

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 1                performing the duties of the Crown under the
 2                Standard Offer Program with the objective of
 3                having the program in place by the fall of 2006."
 4           MR. NETTLETON:    Then it goes on to say:
 5                "It is expected that, as a consequence of this
 6                direction, the OPA will enter into such contracts
 7                with small renewable generators as are necessary
 8                to implement the program."
 9           Right?
10           MR. RUSSELL:    Yes, yes.
11           MR. NETTLETON:    So a generation forecast that takes
12   into account this standard offer program directive is also
13   reasonable, is it?
14           MR. RUSSELL:    Well, it's an indicator that activity is
15   occurring.       It's not an assurance that any particular
16   projects will show up and be deliverable at any particular
17   time.    It is an indication that the program is under way.
18           MR. NETTLETON:    Aren't all of these ministerial
19   directives embedded in your generation forecast?
20           MR. RUSSELL:    In my generation forecast, I was
21   critiquing the uncertainty associated with OPA's generation
22   forecast.     I was saying that things can go wrong.       I didn't
23   make a separate forecast.
24           MR. NETTLETON:    If we go to figure 2, sir, at page 12.
25           MR. RUSSELL:    All right, yes.
26           MR. NETTLETON:    Do I not understand that diagram to
27   effectively represent your generation forecast?
28           MR. RUSSELL:    Yes, that is a forecast of the nameplate

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 1   capacity which can be transmitted by the 7,076 series
 2   capacitor alternative.      That is the one with one -- nuclear
 3   generation rejection.
 4        MR. NETTLETON:     Well --
 5        MR. RUSSELL:    So it is really -- as you can tell from
 6   these financial evaluations, the fact that the capacity is
 7   capped at 7,076 doesn't mean that more nameplate capacity,
 8   particularly with wind, can't be transmitted.
 9        MR. NETTLETON:     You haven't taken issue, have you,
10   with either the Bruce Power total or the committed wind
11   generation levels?    You have replicated those in this
12   figure, haven't you, if you compare figure 1 to figure 2?
13        MR. RUSSELL:    Yes.   We have the first 700, yes.
14        MR. NETTLETON:     So it's reasonable to include the
15   first -- sorry, it is reasonable to include the committed
16   wind generation?    You have done that, haven't you?
17        MR. RUSSELL:    I reflected a line for the nameplate
18   capacity as compared to the transfer capacity, yes.
19        MR. NETTLETON:     So it is reasonable to include the
20   committed wind generation?
21        MR. RUSSELL:    It is reasonable to include the
22   committed wind generation as a wind resource, yes.
23        MR. NETTLETON:     And it is reasonable to include the
24   Bruce Power total?
25        MR. RUSSELL:    Yes, for purposes of nameplate capacity
26   comparison.
27        MR. NETTLETON:     The only difference, then, between
28   figure 1 and figure 2, in effect, out to 2014 is the future

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 1   wind generation?
 2           MR. RUSSELL:   Yes.   These are illustrative diagrams to
 3   show orders of magnitude.       They don't really get to the
 4   issue of how much diversity there is between the wind and
 5   the nuke and within the wind.        These are comparing transfer
 6   capacities of transmission to nameplate capacities of
 7   generation.
 8           The more rigorous comparison of what you can make is
 9   something along the lines of the financial evaluation
10   model.
11           MR. NETTLETON:   We'll get there.
12           Let me turn to the next tab, which is tab 4 of my aid
13   to cross, and that is the August 27th directive, August 27,
14   2007.    That was the directive made by the minister Duncan
15   in a letter addressed to Dr. Jan Carr.
16           Do you have that?
17           MR. RUSSELL:   I have, yes.
18           MR. NETTLETON:   Now, Mr. Russell, you were asked an
19   interrogatory by Hydro One in respect of this directive.
20   It was Hydro One Networks, Inc. to Saugeen Ojibway Nation
21   interrogatory 1(b).      Do you have that?
22           MR. RUSSELL:   We're back in tab 22, is that where you
23   are?
24           MR. NETTLETON:   That's correct.     It's actually -- I
25   believe it is tab 21.
26           MR. RUSSELL:   21, okay I have it.     What number was it?
27           MR. NETTLETON:   It's number 1(b).
28           MR. RUSSELL:   Yes.

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 1        MR. NETTLETON:   The question was that was asked was:
 2             "Please explain how you took into account this
 3             directive for the procurement of 2,000 megawatts
 4             of large wind renewable energy supply, in
 5             addition, i.e. incremental, to the generation
 6             within the standard offer program RES I and RES
 7             II programs."
 8        Do you see that?
 9        MR. RUSSELL:   Yes.
10        MR. NETTLETON:   And the answer you provided says that,
11   that you had understood that the 2,000 megawatts of large
12   wind renewable energy supply was a target level.
13        MR. RUSSELL:   Yes.
14        MR. NETTLETON:     -- of the IPSP, and that procurements
15   would need to be approved before becoming the subject
16   matter of a binding commitment on OPA and Hydro One.
17        Do you see that?
18        MR. RUSSELL:   Yes.
19        MR. NETTLETON:   Help me understand what approval you
20   are speaking of.
21        MR. RUSSELL:   I was speaking of a contract to purchase
22   wind power from a project.
23        MR. NETTLETON:   Whose approval are you thinking of in
24   that response?
25        MR. RUSSELL:   I had assumed that there was a process
26   by which approval was given to wind purchase contracts.
27        MR. NETTLETON:   Approval from whom?
28        MR. RUSSELL:   I wasn't sure.    I am not that familiar

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 1   with that process.
 2        MR. NETTLETON:    If we go back to the ministerial
 3   directive, tab 4.
 4        MR. RUSSELL:    Yes.
 5        MR. NETTLETON:    Is there any suggestion in that
 6   directive that qualifies or provides some sort of condition
 7   that an approval is necessary?
 8        MR. RUSSELL:    There is a mention of contracts in the
 9   penultimate paragraph on page 2.     I had assumed that
10   approvals of such contracts would ultimately be -- have to
11   be obtained.
12        MR. NETTLETON:    From who?   This Board?
13        MR. RUSSELL:    I am not sure what the approval process
14   is, but generally, in all organizations, there is an
15   approval process when the organization enters into a
16   contract, and people have either authority or delegated
17   authority to do such things.
18        MR. NETTLETON:    If there was no such approval
19   requirement, Mr. Russell, would that alter your view as to
20   whether a portion of this directed 2,000 megawatts would be
21   or should be included in a generation forecast?
22        MR. RUSSELL:    Well, no.   The thing I was getting to
23   was the same point I made earlier, that for someone to
24   expend sums of money on a transmission line to move
25   nameplate capacity of wind generation would require, in my
26   experience, and should, to be prudent, require some
27   incidents of certainty that the opposite party was going to
28   provide the project, was going to provide it in the

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 1   contracted amounts, and had the wherewithal to do it, in
 2   terms of equipment, an EPC contractor, land, site, and all
 3   of those incidents which lead to production from a
 4   successful wind project.
 5        This people listing themselves in a queue, indications
 6   of interest, wind forecast, potential wind capability
 7   forecasts, those aren't quite the same things as the
 8   certainty I would want to have before I went out and built
 9   a big new transmission line.
10        MR. NETTLETON:    If I can take you to page 1 of that
11   directive --
12        MR. RUSSELL:   Page 1 of the August 28th?
13        MR. NETTLETON:    Yes.
14        MR. RUSSELL:     Oh, okay, I have it.
15        MR. NETTLETON:    The last paragraph of that directive
16   reads:
17             "I understand that the OPA has identified that
18             there is potential for up to 2,000 megawatts of
19             additional new renewable generation to come into
20             service by 2015 from projects that are greater
21             than ten megawatts in size.      In light of the
22             required lead time for consultation with First
23             Nations and Métis peoples, environmental and
24             municipal approvals and construction, the
25             procurement of these resources needs to occur by
26             2011."
27        MR. RUSSELL:   I see that.
28        MR. NETTLETON:    If procurement has to take place by

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 1   2011, -- let me ask you this first.
 2           Are you aware of whether or not the RES I and RES II
 3   programs were oversubscribed?
 4           MR. RUSSELL:   I do not know, no.
 5           MR. NETTLETON:   But you do know there is an orange
 6   zone?
 7           MR. RUSSELL:   Yes.
 8           MR. NETTLETON:   And that orange zone relates to
 9   precluding the OPA from entering into contracts with
10   willing parties?
11           MR. RUSSELL:   Yes.
12           MR. NETTLETON:   Back to this ministerial directive,
13   did you inform yourself as to the status of this directive,
14   in terms of the procurement steps that are being taken?
15           MR. RUSSELL:   I made no separate investigation of the
16   status of this.      This language speaks almost in an
17   imprecatory way of establishing a series of targets.            It
18   sets a series of guideline deadlines.         The final, well, the
19   third from the last paragraph says that:
20                "Mr. Duncan requests that the OPA work toward
21                commencing consultation on the design of the
22                first procurement for approximately 500 megawatts
23                by the end of 2007."
24           I mean this is not exactly a mandate to execute a
25   specific amount of megawatts, to be delivered at a date
26   certain, of wind energy.
27           This language is kind of a guideline, an objective, a
28   target.    It doesn't -- and it is a directive, but set forth

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 1   in the first paragraph of page 2, he directs the OPA to
 2   assume, effective as of the date of the letter of
 3   direction, responsibility for exercising powers in the
 4   acquisition of up to 2,000 megawatts.       But those kinds of
 5   language and generalized guidelines, I could see them being
 6   complied with without resulting in 700 megawatts being
 7   deliverable through the Bruce transmission system.
 8        There may be not much in terms of the 2,000 megawatts
 9   at any certain time.
10        So, you know, it's a set of guidelines.        It's targets.
11   And it sets up a sort of a work plan of sorts, but it
12   doesn't give me, as a document, the kind of guarantees I
13   want before I recommend my clients reach in their pocket
14   and lay out $600 million for a new transmission line.
15        MR. NETTLETON:    What would you expect the OPA to do to
16   comport with this directive?
17        MR. RUSSELL:    Well, I have said that in several prior
18   answers.   We do conduct some due diligence on the opposite
19   parties, execute contracts, get deposits from them for
20   study work, get deposits from them on engineering for their
21   interconnection, obtain from them documents indicating they
22   have rights to the land on which the projects will be
23   built.   Let me have their forecasts of how many megawatts I
24   am going to get from this project, lay out for me the
25   distribution on the customers' side, on the generator's
26   side of the interconnection.     How he is going to lay it
27   out, how he is going to deliver it, at what voltages.         Tell
28   me what kinds of equipment you are going to have and so on

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 1   and so forth.
 2           Then, assuming arguendo that those megawatts are lined
 3   up, then I want to know whether I can deliver those
 4   megawatts.     Once I have satisfied all of that, I want to
 5   know whether I can deliver that amount of megawatts on a
 6   lesser transmission system at a lower capital cost.
 7           I think that was what this exercise with the financial
 8   evaluation was such as eye opener, because it indicated
 9   much more can be delivered, short of the new line, and
10   nearly achieve the objectives.
11           MR. NETTLETON:   When you made a determination that the
12   1,000 megawatts of planned wind should not be included in
13   your generation forecast, were you aware of this directive?
14           MR. RUSSELL:   I think I was, yes.     I don't have a
15   memory of when I first saw this, but it's a document I had
16   seen.    Sometime beginning in December of 2007 is when I
17   started work on this engagement.
18           MR. NETTLETON:   When you made the determination that
19   the 1,000 megawatts of planned wind ought not to be
20   included in your generation forecast, did you take steps to
21   inform yourself of the Independent Electric System
22   Operator's queue?
23           MR. RUSSELL:   No.
24           MR. NETTLETON:   Why not?
25           MR. RUSSELL:   Because, as I said before, these queues
26   -- from long experience, these queues are indications of
27   interest, but until we get real people putting down real
28   money and making real commitments for machinery and

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 1   interconnections and studies, I just don't assign a great
 2   deal of certainty to any kind of indication of interest.
 3        MR. NETTLETON:      So you don't know, do you, sir,
 4   whether or not there are financial obligations and
 5   commitments that are required in this jurisdiction in order
 6   to be placed in the Independent Electric System Operator's
 7   queue?
 8        MR. RUSSELL:      I don't know the specific provisions,
 9   but I expect, if they're like most queues, for large
10   companies it is a nominal amount of money that is put down
11   to put yourself in a queue, and you secure a place in a
12   priority vis-à-vis others in the queue, and that is all it
13   represents.
14        Now, if you can tell me, by hypothetical or
15   suggestion, I will be pleased to answer the question, but I
16   don't know what the specific requirements are to be listed
17   in the queue in this jurisdiction.
18        MR. NETTLETON:      If I take you to tab 13 of the aid to
19   cross.
20        MR. RUSSELL:       This is your document?
21        MR. NETTLETON:      Yes.
22        MR. RUSSELL:      Okay, I have it.
23        MR. NETTLETON:      I have included both the re-
24   examination that I did of Mr. Chow and Mr. Falvo describing
25   the queue.
26        MR. RUSSELL:      Sorry?
27        MR. NETTLETON:      Mr. Falvo's queue, the IESO's queue.
28   Then attached behind that is status of applications that

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 1   the IESO has received - i.e., IESO has received - both
 2   before and after April 30th, 2005.
 3        MR. RUSSELL:   Yes, I was aware of this testimony.      I
 4   think I was in the room when this testimony was given.
 5        MR. NETTLETON:    Do you understand that that listing is
 6   for all of the queue projects?     It's not just Bruce-to-
 7   Milton area?   Do you know?
 8        MR. RUSSELL:   I had understood the 1,400 was twice the
 9   700 associated with the Bruce area.
10        MR. NETTLETON:    Sorry.    Are you on the last page?
11        MR. RUSSELL:     I am on page 44.
12        MR. NETTLETON:    Okay.    I just wanted to just go
13   through the status of the application, sir.
14        MR. RUSSELL:   Oh, okay.
15        MR. NETTLETON:    There is a chart that is noted to be
16   from the IESO website.
17        MR. RUSSELL:   Yes.
18        MR. NETTLETON:     There's four pages of that material.
19        MR. RUSSELL:   All right.
20        MR. NETTLETON:    That's for all projects --
21        MR. RUSSELL:   Yes.
22        MR. NETTLETON:     -- in the IESO queue?
23        MR. RUSSELL:   Yes.
24        MR. NETTLETON:    Then there is a summary page that
25   breaks those out in respect of those projects that are
26   Bruce-to-Milton specific, so to speak.
27        MR. RUSSELL:   I so understood this, yes.
28        MR. NETTLETON:    And, sir, it is your evidence that

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 1   notwithstanding that there -- that this queue exists and
 2   that this queue exceeds the 700 megawatts that have been
 3   included in the planned forecast component, that the 700
 4   megawatts of planned wind is still not a reasonable --
 5           MR. RUSSELL:   It doesn't have the degree of certainty,
 6   as I have said before, that enables me to recommend to
 7   anyone the expenditure of $635 million for transmission,
 8   especially when substantial portions of this generation
 9   could be transmitted by a system short of the new line, as
10   is pretty clear from the evidence I gave earlier, and also
11   Pollution Probe 47, which shows you these frequency
12   distributions, and also that discussion I gave of Mr.
13   Lanzalotta's summary where, with -- by moving from the
14   near-term measures plus generation rejection at 6,810, just
15   increasing the transfer capability by a little more than
16   300 megawatts, you wiped out half of the locked-in energy.
17           So those kinds of things figured into my discounting
18   of the need for the new line.
19           So assuming arguendo that these megawatts of wind
20   generation showed up, it is my expectation that very large
21   amounts of it, with limited amounts of locked-in energy,
22   could be transmitted by my alternatives.
23           MR. NETTLETON:   You made reference in your evidence,
24   sir, to concerns respecting enabler lines.         Do you recall
25   that?
26           MR. RUSSELL:   Yes, yes.
27           MR. NETTLETON:   And the fact that enabler lines would
28   probably be needed for Bruce generation; right?

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 1        MR. RUSSELL:   Wind generation, yes, hmm-hmm.
 2        MR. NETTLETON:     Do you know whether or not any of
 3   these projects that show -- again, in these last two pages
 4   of tab 13, do you know whether any of those points of
 5   interconnection exist today or whether they are new?
 6        MR. RUSSELL:   I would think that some would and some
 7   would not, yes.
 8        MR. NETTLETON:     Would it surprise you if they all
 9   exist?
10        MR. RUSSELL:   The points of interconnection that are
11   designated all exist?
12        MR. NETTLETON:     Yes, yes.
13        MR. RUSSELL:   With the sufficient capability to move
14   the wind machine?
15        MR. NETTLETON:     Yes.
16        MR. RUSSELL:   I did not understand such a thing, no.
17        MR. NETTLETON:     If you did understand such a thing,
18   would that be a fact that would be relevant to the question
19   of whether 700 megawatts of planned wind should be included
20   in a generation forecast?
21        MR. RUSSELL:   Well, if I knew they all designated an
22   existing interconnection?      Not without reviewing the
23   interconnection studies and seeing the load flows for the
24   particular combinations that you are assuming to exist.
25        MR. NETTLETON:     Mr. Russell, do you know whether or
26   not the OPA has taken any steps to commence the RFP process
27   for RES III?
28        MR. RUSSELL:     I had seen, I thought, in the documents

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 1   you delivered in this, reference to a solicitation of
 2   expression of interest, if that's what you are driving at.
 3          MR. NETTLETON:   And so that expression of interest
 4   would be a step towards fulfilling the directives required
 5   of it?
 6          MR. RUSSELL:   Yes.   And, again, going back to this
 7   paragraph that I read before in the August 27 letter, I
 8   take that to be a fulfilment of that very general
 9   directive, or request, really - it wasn't a directive -
10   that the OPA work toward commencing consultation on the
11   design of the first procurement.
12          So this is just -- it's kind of a typical thing, when
13   people look for expressions of interest, want to know who
14   is out there and who is interested in building.         This is a
15   fairly preliminary kind of commitment.        It's not anything I
16   would base a forecast on.
17          MR. NETTLETON:   If we turn to tab 6, which I think is
18   the request for expressions of interest relating to RES
19   III?
20          MR. RUSSELL:   Yes.
21          MR. NETTLETON:   You understand, from the introduction,
22   that the last sentence reads:
23               "The current objective is to issue the first
24               request for proposals for approximately 500
25               megawatts of renewable energy supply in early
26               2008."
27          MR. RUSSELL:   Yes, I see that.
28          MR. NETTLETON:   And that still does not influence your

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 1   reasoning that, without actual signed contracts and without
 2   all necessary approvals for wind generation associated with
 3   the RES III, the 700 still is an unreasonable element to
 4   include in a generation forecast?
 5           MR. RUSSELL:   This is not a very large incremental
 6   guarantee of certainty, no.       This is an expected kind of
 7   procedural step toward the kinds of certainty that I would
 8   want.
 9           MR. NETTLETON:   Mr. Russell, is that conclusion based
10   upon, in part at least, the evidence that you gave this
11   morning respecting the requirement for cost responsibility
12   to be borne by generators through an interconnection?
13           MR. RUSSELL:   What's the antecedent for that in your
14   question, sir?
15           MR. NETTLETON:   My antecedent is the fact that you
16   still don't believe that the 700 megawatts is a reasonable
17   element of a generation forecast.
18           MR. RUSSELL:   Okay.   So what you're referring to is my
19   prior answer?     And my prior answer is -- could you reframe
20   the question, please?
21           MR. NETTLETON:   You believe the 700 megawatts is not a
22   reasonable element to include in a generation forecast.
23   Fair?
24           MR. RUSSELL:   No.   It doesn't have the indicators of
25   certainty that I would want before I went out and spent
26   $600 million.     We're going over the same ground,       Mr.
27   Nettleton.
28           MR. NETTLETON:   Those indicators, are they related to

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 1   some form of expectation that generators would make
 2   financial commitments necessary for the interconnection
 3   costs?
 4        MR. RUSSELL:   Those would be a beginning step.
 5   Typically, in the US, there's a three-stage process.         You
 6   put down 10,000 bucks, you get a preliminary feasibility
 7   study, within 90 days.
 8        After 90 days, then, if you want to go forward based
 9   upon what the preliminary feasibility study shows, you put
10   down 50,000 for an impact study.     The impact study is a
11   more refined one.
12        Then after that study is completed, then you have to
13   decide whether to go forward based upon what the impact
14   study shows, to a $150,000 deposit on engineering work on
15   your interconnection.
16        And the final step is the contract, and in the US, at
17   least, if you have a contract, you don't -- you have the
18   right to -- excuse me.    So what you have is a final
19   interconnection agreement, is the step.
20        Now, as I told you -- excuse me, not as I told you,
21   but as I discussed in the direct testimony this morning, we
22   have many, many times, in my experience, in dealing with
23   wind generators and other generators -- co-generators
24   independent power producers -- we have executed contracts,
25   all the deposits have been done, all of the procedural
26   steps are completed, and we still don't have a project in
27   many cases.   People get into trouble with financing.        They
28   just can't get deliveries of equipment.      There is many

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 1   things that go wrong and can go wrong to delay or eliminate
 2   projects that have some indicators of certainty.
 3        So before I would -- also, I have been doing this
 4   contracting for bulk power and selling bulk power, various
 5   aspects of this business, you know, for about 30 years.
 6   These kinds of, the lack of indications of certainty that I
 7   found when I came to this proceeding don't justify the
 8   level of commitment of financial resources that the Hydro
 9   One is proposing to make.
10        MR. NETTLETON:     I understood your testimony this
11   morning to be that generators fell off the queue when there
12   were requirements associated with the allocation of costs
13   for interconnection.    Is that not the case?
14        MR. RUSSELL:     Well, the people are in the queue, ready
15   to go forward, in order, and yes, as I understand it when
16   it came time to sign up for an interconnection and sign up
17   for allocation of the generator tie line, people dropped
18   out of the queue, yes.
19        MR. NETTLETON:     What due diligence did you do, sir, to
20   test whether your "indicators of certainty" have relevance
21   to this jurisdiction?
22        MR. RUSSELL:     Well, like I say, I have been buying and
23   selling bulk power and negotiating contracts of this type
24   for about 30 years.
25        I know when I come with a generator to a utility and I
26   want an interconnection and I want an upgrade, there are
27   lots and lots of hoops my clients have to jump through.
28   Similarly, on the other side of the table, typically when I

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 1   am running a transmission system and I got a new generator
 2   wants me to add a lot of facilities to my system, I want
 3   some kind of guarantees that I am going to get my money
 4   back, and that that's going to be used and useful by that
 5   interconnecting generator.
 6           That's the kind of -- that's the kind of process I am
 7   used to and I am just not seeing those indicators of it
 8   here.
 9           I see lots of indication of interest.      I see lots of
10   megawatts in the queue.       But my experience tells me those
11   are not the kind of things I would use as a basis for going
12   forward and committing $635 million.
13           MR. NETTLETON:    And that's based on your experience?
14           MR. RUSSELL:   Yes.
15           MR. NETTLETON:    With FERC-based regulated entities?
16           MR. RUSSELL:     FERC and Texas, which is not FERC
17   jurisdictional, yes.
18           MR. NETTLETON:    That in part relates to the fact there
19   is a standardized open access transmission tariff?
20           MR. RUSSELL:   No.    The large generator interconnection
21   procedures were only formalized in 2003.
22           I have been doing this kind of work since the 1970s.
23           So these kinds of indicators of certainty that I am
24   talking about are indicators that I have identified and
25   come to rely upon over a career spanning back 30 years.
26           MR. NETTLETON:    Where, in your evidence, have you
27   described those indicators of certainty and the assessment
28   of those indicators of certainty as being relevant to this

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 1   jurisdiction, to Ontario?
 2        MR. RUSSELL:     Well, I didn't have a specific section,
 3   but I had an understanding of how the process would evolve,
 4   and I had seen no evidence of people signed up with
 5   contracts, with a planned enabler system in place and all
 6   of those other indicators we have talked about so many
 7   times before.
 8        If you have that sort of a record and those kinds of
 9   contracts, I would be pleased to review them and reconsider
10   my opinion.
11        MR. NETTLETON:     Why don't we take you to Exhibit B,
12   tab 4, schedule 3?
13        MR. RUSSELL:     Exhibit B?
14        MR. NETTLETON:     Tab 4, schedule 3, on page 1 of 4.
15   This is the updated application dated November 30th, 2007.
16   That's page 1 of 4.
17        MR. RUSSELL:     B, Tab 4, schedule 3?
18        MR. NETTLETON:     I want to take you to line 22 under
19   the heading "economic feasibility".     It's on the screen, if
20   that helps.   It should be on your monitor, too.
21        In particular, it is the statement that reads:
22             "The proposed line facilities will be included in
23             the network pool for ratemaking purposes with no
24             customer capital contribution required,
25             consistent with the provisions of Section 6.3.5
26             of the Transmission System Code."
27        MR. RUSSELL:     Okay.
28        MR. NETTLETON:     Do you see that?

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 1        MR. RUSSELL:      Yes.
 2        MR. NETTLETON:      Help me understand why your indicator
 3   of certainty related to customer capital contributions is
 4   relevant in Ontario when there is no requirement for that
 5   in this jurisdiction?
 6        MR. RUSSELL:      Well, if we don't have an obligation to
 7   provide a capital contribution, I would want even more
 8   indications of certainty and wherewithal than I would
 9   without this demonstration of financial wherewithal.
10        In other words, this notion that we're going to build
11   a line on the hopes that the wind generation will show up,
12   without more in the way of guarantees of certainty, is
13   troubling.
14        MR. NETTLETON:      So are you suggesting, sir, that the
15   customer capital contribution that you discussed this
16   morning now falls by the wayside?        And something else
17   replaces it?
18        MR. RUSSELL:      I am not saying that, no.      I'm saying
19   that my need for assurance and certainty is all the more
20   heightened if the customer is not on the hook for the cost.
21        MR. NETTLETON:      Notwithstanding there is a ministerial
22   directive requiring the OPA to make financial obligations
23   for renewable energy supply of up to 2,000 megawatts?
24        MR. RUSSELL:      Where are you referring to in this?
25        MR. NETTLETON:      I am back to the August 27th, 2007
26   directive.
27        MR. RUSSELL:      Let me go look at that.     Show me where
28   the obligation --

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 1          MR. NETTLETON:    They have to enter into contracts,
 2   sir.
 3          MR. RUSSELL:    Tab, what was it?
 4          MR. PAPE:   Madam Chair, I would really ask that Mr.
 5   Nettleton refer the witness to specific portions of
 6   documents.     If he says -- rather than some very vague and
 7   generalized interpretation which doesn't necessarily
 8   reflect the words of the document he is talking about.
 9          MS. NOWINA:    Without commenting on Mr. Pape's
10   assessment of it, Mr. Nettleton, it would be helpful if you
11   take us exactly to your reference.
12          MR. NETTLETON:    I am on page 2 of the August 28th
13   directive.
14          MR. RUSSELL:    Okay.
15          MR. NETTLETON:    Where it states:
16                "I hereby direct the OPA to assume, effective as
17                of the date of this letter of direction,
18                responsibility for exercising the powers and
19                performing the duties of the Crown in regard to
20                the acquisition of up to 2,000 megawatts of new
21                renewable electricity supply for projects that
22                are greater than 10 megawatts in size."
23          MR. RUSSELL:    I see that.
24          MR. NETTLETON:    So my question, sir, is:
25   Notwithstanding that obligation to enter into contracts for
26   the acquisition of up to 2,000 megawatts of new renewable
27   energy electricity supply, that is not a sufficient
28   indicator of certainty as it relates to the 700 megawatts

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 1   of planned energy?
 2        MR. RUSSELL:    No, not at all.   This is a generalized
 3   directive for the province for 2,000 megawatts.       This does
 4   not tell us that 700 megawatts of that will be contracted
 5   for or need to be contracted for to be placed on the Bruce
 6   lines for transmission.
 7        I am just not seeing the conclusory nature of your
 8   suggestion in your question reflected in the language of
 9   this paragraph.
10        MR. NETTLETON:    Do you understand that the evidence of
11   the OPA, the testimony of the OPA, that has been given in
12   this proceeding is that 700 megawatts of their planned wind
13   forecast is under this directive?
14        MR. RUSSELL:    That's their projection, yes, but it's
15   not a necessary outcome.    It's -- as I indicated earlier,
16   this is going to be addressed in the IPSP.
17        The nature of the transmission penalties that will be
18   associated with particular wind air sheds, as I understand
19   that process, will be worked out there, and the overall
20   costs to the consumer, related to acquisition of power from
21   one wind shed as opposed to another wind shed, is to be a
22   part of that -- worked out as a part of that process.
23        Then once you have that worked out, then it seems to
24   me you can solicit proposals, get proposals, and then
25   isolate the ones which, adjusted for transmission costs,
26   give the best bargain for the Ontario ratepayer, but that
27   is a long way from anything that this language is --
28   getting from this language to 700 megawatts under that

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 1   process of procurement in a competitive market, I just
 2   don't see how you get from this language and all of the
 3   imponderables of that process to 700 megawatts of assurance
 4   that would justify an additional 1,000 megawatts of
 5   transmission.
 6        MR. NETTLETON:   Do you know whether, sir, the IPSP
 7   proceeding is required to exempt out or exclude out
 8   ministerial directives?
 9        MR. RUSSELL:   I had not assumed that they had, but
10   this ministerial directive does not bind that -- the
11   discretion and latitude of the Board by very much, the
12   language that I am seeing here.
13        There's a great deal of latitude and flexibility left
14   to the Board in the IPSP process to work within the broad
15   outlines of this directive.
16        MR. NETTLETON:   In any event, you didn't take any
17   steps to inform yourself whether or not the IPSP process is
18   one that can include or exclude the provisions of
19   ministerial directives?
20        MR. RUSSELL:   I had assumed that the ministerial
21   directives were binding.
22        MR. NETTLETON:   Were binding?
23        MR. RUSSELL:   Yes.
24        MR. NETTLETON:   So that they wouldn't be matters given
25   consideration in the IPSP process?
26        MR. RUSSELL:   The specific guidelines I had not
27   assumed were subject to change by the Board, but within the
28   guidelines it seems to me there is a great deal of latitude

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 1   left to the Board by this letter.
 2          MR. NETTLETON:    Mr. Russell, if I could take you back
 3   to tab 13.
 4          MS. NOWINA:    Of which document, Mr. Nettleton?
 5          MR. NETTLETON:    Sorry, of my aid to cross.
 6          I am looking at the last two pages of that document,
 7   sir.   Again, just to be clear, you did not look at the IESO
 8   queue?
 9          MR. RUSSELL:     No.
10          MR. NETTLETON:    At all?
11          MR. RUSSELL:    No.
12          MR. NETTLETON:    And so do you have any understanding
13   of the nomenclature in this IESO queue document regarding
14   whether the status of system impact assessment is on hold,
15   or not?
16          MR. RUSSELL:    I did not.
17          MR. NETTLETON:    Under the second chart where, it says,
18   "Bruce area wind project's system impact assessment is on
19   hold", I think we confirmed this, but that total amounts to
20   813?
21          MR. RUSSELL:    Where are you?    What page?
22          MR. NETTLETON:    This is the second-last page behind
23   tab 13.
24          MR. RUSSELL:    "Bruce area wind projects currently
25   approved for connection by the IESO", and then the next
26   one?
27          MR. NETTLETON:    Yes.
28          MR. RUSSELL:    System impact assessment is on hold,

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 1   okay, yes.
 2           MR. NETTLETON:    That total equals --
 3           MR. RUSSELL:   I'm sorry, I have a cramp in my leg
 4   here.
 5           MR. NETTLETON:    Do you need a break?
 6           MS. NOWINA:    Do you want a break, Mr. Russell?
 7           MR. RUSSELL:   Yes, thank you.
 8           MS. NOWINA:    Let's take a 20-minute break.     Well,
 9   quarter after 3:00.
10           --- Recess taken at 2:50 p.m.
11           --- Upon resuming at 3:27 p.m.
12           MS. NOWINA:    Please be seated.
13   I understand there was some brief discussion about having
14   Mr. Chow go now, but decided to hold it just before the
15   dinner break, which makes sense.        I think that is the
16   appropriate thing to do.
17           We do need Mr. Russell, though.
18           [Laughter]
19           [Mr. Russell takes the stand]
20           MR. RUSSELL:   Thank you for the break.
21           MS. NOWINA:    No problem.   Go ahead, Mr. Nettleton.
22           MR. NETTLETON:    Thank you, Madam Chair.     Good
23   afternoon, Mr. Russell.
24           MR. RUSSELL:   How do you do.
25           MR. NETTLETON:    We were talking about the queue
26   document and the tables in the IESO queue document that was
27   included in the materials behind tab 13 of my aid to cross
28   before the break.

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 1        MR. RUSSELL:   Okay.
 2        MR. NETTLETON:    Mr. Russell, do you have that?
 3        MR. RUSSELL:   I see it.
 4        MR. NETTLETON:    We were talking about the second table
 5   entitled, "Bruce area wind projects system impact
 6   assessment was placed on hold."
 7        MR. RUSSELL:   Yes.
 8        MR. NETTLETON:    The chart on the screen is not the
 9   right chart.   It needs to be paged up to number 2.
10        Mr. Russell, has it been your experience in other
11   jurisdictions that the conduct of system impact assessments
12   may be delayed or placed on hold at the request of
13   generators?
14        MR. RUSSELL:     In my experience at FERC, once you get
15   on the train, you have to keep going.      Sometimes, it seems
16   to me -- I am not the sure that is a universal rule, but
17   that is the intent of the rule.
18        The rule really arose because we had vertically
19   integrated utilities who didn't want to deal with
20   independent generators, so this was the way to hold their
21   feet to the fire.
22        MR. NETTLETON:    Mr. Russell, you understand that
23   projects, wind development projects in the Bruce area may
24   very much be interested in the outcome of this proceeding?
25        MR. RUSSELL:   Yes, I can see why they might, but I
26   think the modelling that we have done should give them some
27   insurance -- assurance, because we do have the full 1,000
28   megawatts of wind in our models and we show that the line

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 1   is not justified even then.
 2        So their issue, it seems to me, would be the extent to
 3   which they could be expected to be constrained-off, so yes.
 4        MR. NETTLETON:     So the outcome of this proceeding, if
 5   your evidence is accepted, that is to say the application
 6   is denied, and subsequent steps ultimately are taken for a
 7   series capacitor solution to be implemented, that would
 8   have a risk of congestion or constraining-off.         Fair?
 9        MR. RUSSELL:     Well, not by my definition of
10   congestion.    Congestion, in my definition is in merit
11   generation being constrained-off.
12        As I understand these prices of the wind generators,
13   in many hours, the prices paid to the wind generators are
14   out of merit, so constraining them or is a benefit to the
15   consumer.
16        So I don't think it is congestion in the classical
17   sense.
18        MR. NETTLETON:     And the risk of being constrained-off,
19   in any event, from a wind generator's perspective -- you
20   have acted for wind generators before, haven't you?
21        MR. RUSSELL:     Oh, sure, yes.
22        MR. NETTLETON:     From a wind generator's perspective,
23   from a commercial perspective, that risk, from a revenue
24   requirement and an overall revenue earnings potential to
25   recover the investment, that would be a factor relevant to
26   a wind generator?
27        MR. RUSSELL:     If they were facing large constraints-
28   off, yes; but as we indicated when I cited Mr. Lanzalotta's

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 1   testimony, you wipe out half the locked-in energy just by
 2   increasing the transfer capability by 300 megawatts.
 3        So when I go from my 7,076 or 7,176 to add another 300
 4   megawatts, we're getting down to pretty low amounts.           So I
 5   should think that would be of importance to them, but I
 6   don't think that would be dispositive on whether to go
 7   forward with the project.
 8        We may find out, for example, that the nuclear units
 9   don't perform at the capacity factors that are modelled.
10   We may find out that there is more diversity, more
11   locational diversity among the wind generators than is
12   modelled.    We may find out that the losses and outage rates
13   of the enabling lines are higher than expected.
14        There are all kinds of things which might turn out in
15   this interim period while we're using the series
16   capacitors, which may militate in favour of the wind
17   generators and allow us to get by without the new line.
18        MR. NETTLETON:     Mr. Russell, you can confirm that that
19   list comprises of projects that are greater than 10
20   megawatts in size?
21        MR. RUSSELL:     Oh, yes.   We can stipulate that.
22        MR. NETTLETON:     So that would be, in the vernacular,
23   large wind projects.
24        MR. RUSSELL:     Yes.   Even by -- yes.
25        MR. NETTLETON:     Is it reasonable, in your view, to
26   think that those would be the types of projects that would
27   be likely to participate in a RFP process for large wind?
28        MR. RUSSELL:     I don't understand the question.

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 1           MR. NETTLETON:   Would you expect the developers of
 2   those projects to be ones interested in participating in an
 3   RFP, a request for proposal process for large renewable
 4   energy?    Large wind?
 5           MR. RUSSELL:   Well, I mean they've indicated interest.
 6   That's all we've got here.       They've they made their deposit
 7   and they're in the queue.
 8           MR. NETTLETON:   But as it relates to the RFP
 9   process --
10           MR. RUSSELL:   Yes?
11           MR. NETTLETON:   -- for renewable energy supply, the
12   RES III process.
13           MR. RUSSELL:   Yes?
14           MR. NETTLETON:   -- you wouldn't have any reason to
15   think that it is these types of projects that would likely
16   be participating in that RFP process?         Would you?
17           MR. RUSSELL:   I don't have a reason to say they would
18   or they wouldn't, or if they would, at what price, or
19   whether, if they were assigned a high penalty for
20   transmission, whether that might drive them out of the
21   market, because they would have to lower their price too
22   much.    There are just too many imponderables to answer your
23   question.     It also tends to be a lot of work to work up a
24   proposal.
25           So the fact that someone is in the queue doesn't mean
26   that they're going to hang in there and make a bid and go
27   to contract.
28           MR. NETTLETON:   But in any event, we know from our

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 1   review of the RES III document, that there is a process
 2   contemplated that must take place and the procurement must
 3   occur by 2011.    I can take you to that again, if you like.
 4         MR. RUSSELL:    Yes, let me see that again.
 5         MR. NETTLETON:    It's tab 4.
 6         MR. RUSSELL:    I thought --
 7         MR. NETTLETON:    This is again on page 2, the statement
 8   of:
 9               "I hereby direct the OPA to assume effective as
10               of the date of this letter of direction,
11               responsibility for exercising the powers and
12               performing the duties of the Crown in regards to
13               the acquisition of up to 2,000 megawatts of new
14               reliable electricity supply from projects greater
15               than 10 megawatts."
16         And on the prior page, there's reference at the last
17   paragraph that:
18               "The procurement of these resources needs to
19               occur by 2011."
20         MR. RUSSELL:    I see that, but it's all renewables and
21   it is province-wide.
22         It doesn't -- I don't know how you get from -- I heard
23   Mr. Chow explain how he got from this directive to 700
24   megawatts, but that is one scenario, but it's not the only
25   scenario.    And it seems to me you have to let the process
26   play out before we know how much will really show up.
27         MR. NETTLETON:    Mr. Russell, you were asked an
28   interrogatory, and I am just --

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 1         MR. RUSSELL:   Tab 21?
 2         MR. NETTLETON:    Yes.
 3         MR. RUSSELL:   Okay.
 4         MR. NETTLETON:    Regarding whether you had conducted
 5   any studies.   This is number 1(d), as in dog.
 6         MR. RUSSELL:     1(d), okay.
 7         MR. NETTLETON:    Whether you had looked at where the
 8   2,000 megawatts would be sourced from.
 9         MR. RUSSELL:   Right.    I had not run a study to track
10   the reasonableness of Mr. Chow's assumptions or the
11   reasonableness of the 700 megawatts.       It's a number.     I
12   understand his logic.     It doesn't have the guarantees of
13   certainty that I would want, and -- as we've discussed at
14   considerable length, but it is a number.
15         Let me repeat that when we did our economic analyses
16   for the financial evaluation model, we put the whole 700
17   in.   In fact, we put the whole 1,000 in.
18         MR. NETTLETON:    And that was after you carried out and
19   prepared your supplementary evidence; right?
20         MR. RUSSELL:   That was as part of the supplementary
21   evidence, yes.
22         MR. NETTLETON:    Not before?
23         MR. RUSSELL:   Right.    We didn't have a model before.
24         MR. NETTLETON:    With respect to the Bruce area and the
25   potential wind resources in the Bruce area, I am just
26   looking at question E or part E.
27         MR. RUSSELL:   Part E, okay.
28         MR. NETTLETON:    Where the question was asked:

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 1                "What other geographic locations in Ontario does
 2                Mr. Russell believe would be able to make up the
 3                700 megawatts of shortfall that would otherwise
 4                be necessary?"
 5        You take some issue with the characterization of a
 6   shortfall?
 7        MR. RUSSELL:      Yes.
 8        MR. NETTLETON:      But is it fair to say that you did not
 9   look at the wind generation potential from the Bruce area
10   for purposes of preparing your evidence?
11        MR. RUSSELL:      Well, I reviewed those documents.        I'm
12   trying to think of the name of the people who prepared the
13   data in the studies, and you know, I went through the
14   papers.   I didn't make a study, if that's what you're
15   asking.
16        MR. NETTLETON:      Do you know of any other wind --
17   geographic area that has wind potential that is more
18   proximate to Ontario's greatest load than the Bruce area?
19        MR. RUSSELL:      I didn't determine that one way or the
20   other, no.     You mean to the GTA?
21        MR. NETTLETON:      Yes.
22        MR. RUSSELL:      From looking at the maps, I thought the
23   GTA was -- Bruce was closest to the GTA.         It is certainly,
24   in electrical terms; with the high capacity
25   interconnections, it is electrically close.
26        MR. NETTLETON:      So if --
27        MR. RUSSELL:      If they get to Bruce, yes.
28        MR. NETTLETON:      If the 2,000 megawatts could not

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 1   include the 700 that OPA is forecasting to be sourced from
 2   the Bruce area, if that 700 has to be resourced from a
 3   different geographic area, do you know whether that
 4   geographic -- any other geographic area has the necessary
 5   transmission capability to have that level of generation
 6   supply access the grid?
 7        MR. RUSSELL:     Well, again, you're mixing renewables
 8   and you're assuming, in your question, that wind is the
 9   only kind of renewable subject to the directive.
10        So I assume some large part of the 2,000 megawatts
11   would be wind, and you're saying, if I couldn't get 700 of
12   wind at Bruce, how would I make up that difference and get
13   my 2,000 megawatt target from somewhere else.
14        I did not do that study, if that's the question.
15        MR. NETTLETON:     That's fine.     Mr. Russell, your
16   evidence speaks to and takes issue with the concept of
17   planning, transmission system planning, to nameplate
18   capacity?
19        MR. RUSSELL:     Yes.
20        MR. NETTLETON:     And, in fact, sir, I think what you
21   say, if I could take you there, page 5 and 6 of your --
22        MR. RUSSELL:     April 18th?
23        MR. NETTLETON:        Yes.   I would like to direct your
24   attention to paragraph J.
25        MR. RUSSELL:     J?
26        MR. NETTLETON:     J on page 5 and over the page to page
27   6.
28        MR. RUSSELL:     Yes.    Okay.

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 1        MR. NETTLETON:    You state, after describing the
 2   concern using full nameplate output, you conclude using the
 3   phrase that that practice is not consistent with sound
 4   system planning principles.     Do you see that?
 5        MR. RUSSELL:    Yes.
 6        MR. NETTLETON:    What planning principles are you
 7   referring to in that conclusion?
 8        MR. RUSSELL:    I am analogizing this to surplus hydro
 9   for -- non-firm hydro.      It is also intermittent.
10        There were -- when the Pacific northwest-southwest
11   Intertie was constructed, there were as much as 13,000
12   average megawatts a month of hydro surplus, more than the
13   lines could carry.    But in many months, it is zero and so
14   forth.
15        I was analogizing this to economy energy, non-firm
16   energy, intermittent energy in the form of surplus hydro.
17        So in the electric power business, when we've got
18   something that does not have to be delivered to meet peak
19   demand, the nature of the reliability of the path over
20   which it is delivered is not important.      It's -- you get
21   what you can.   You economize when you can, and you take it
22   in, but it's not something you count upon to serve your
23   peak demands of your customers.
24        So if it's not there sometimes, because of an N minus
25   1 condition, it's not a terrible threat to reliability.
26        MR. NETTLETON:    But with respect to sound planning
27   principles, I shouldn't be interpreting that to mean
28   principles that have been established by reliability

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 1   organizations, should I?       That's not what you --
 2        MR. RUSSELL:      No.    I'm speaking more of power supply
 3   economics.     This is what prudent planners do.
 4        If we have an intermittent supply and, you know, it
 5   may be there at 100 percent, but it's no great -- it's no
 6   great threat to reliability or to the economics of the
 7   system if it's not there for a few hours, then we don't
 8   spend a lot of extra money to guarantee that it's
 9   deliverable in an N minus 1 contingency, especially one as
10   severe as what we have modelled here.
11        MR. NETTLETON:      Is it your experience, sir, that in
12   jurisdictions where you have provided and been qualified as
13   an expert - namely, the United States - the concept of non-
14   firm transmission service is a service that is offered
15   under a tariff?
16        MR. RUSSELL:      Yes.
17        MR. NETTLETON:      Is it your understanding that non-firm
18   transmission service is offered by Hydro One?
19        MR. RUSSELL:      I don't know.    It's not crucial to what
20   I was doing here.
21        MR. NETTLETON:      You didn't enquire into or examine
22   whether or not the tariff of Hydro One offers firm and non-
23   firm services?
24        MR. RUSSELL:      I did not.    I was focussed upon the
25   principle that when we have something that's intermittent
26   and that we're not counting on for the peak, to serve the
27   peak, that we don't have to build a lot of extra redundancy
28   into the bulk power network as opposed to the radial lines

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 1   to deliver it.
 2        See, if you look at that frequency distribution in
 3   Pollution Probe number 47, that response to the
 4   interrogatory, you will see that, you know, when you cut
 5   off the top few megawatts of the 1,700 megawatt chart,
 6   you're really not losing much energy.        I mean, you're
 7   getting to a point of diminishing returns, so that is the
 8   notion I was trying to convey.
 9        Even if you did have the full 1,700 megawatts of wind
10   available, it's very likely that, on average, one of the
11   Bruce nuclear units will be out of service.         They have an
12   85 percent capacity factor, and a partial derating.
13        Of course, each of these diversities of supply is
14   offset by the possibility of partial deratings of
15   transmission, but nonetheless, it is -- you're getting to a
16   law of diminishing returns when you try to get every last
17   megawatt of wind energy out of a project.
18        MR. NETTLETON:     If transmission facilities were sized
19   only to meet average wind capacity factors, do you think
20   this would have a positive, neutral or negative effect on
21   policy objectives to allow for the development of wind
22   projects?
23        MR. RUSSELL:     Well, it would certainly lead to
24   constraining-off, and, you know, if we had a 100-megawatt
25   project and you only put in 50 megawatt gen tie, of course
26   that wouldn't be a very -- that's calculated to have a lot
27   of constraints.
28        But when we're talking about not building in N minus 1

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 1   capability into a network whose transfer capability is only
 2   impaired at very low outage rates, by very low outage
 3   rates, as we are with this Bruce grid, that's a very
 4   different issue here.
 5        I think you may be confusing me with someone else.        I
 6   don't think I ever recommended building transmission for
 7   wind energy equal to its average output.
 8        MR. NETTLETON:     Right.   You have acted on behalf of
 9   the California Wind Energy Association, right?
10        MR. RUSSELL:   Yes, yes.
11        MR. NETTLETON:     Let me clarify whether or not it's
12   your position, the position of your evidence is that wind
13   energy, wind projects should be designed, or the
14   transmission facilities for the purposes of serving the
15   wind projects should be designed to meet nameplate capacity
16   of the wind resource.
17        MR. RUSSELL:   On an N minus zero condition, I should
18   think it should, yes.    If you have some diversity, I would
19   say less than 100 percent would do.     In other words, the
20   chance that all the wind will peak at the same time is very
21   small when you have large amounts of wind generation spread
22   over a large geographic area.
23        MR. NETTLETON:     So when we go back to your evidence of
24   page 5 and 6, that I just referred you to.
25        MR. RUSSELL:   Paragraph J?
26        MR. NETTLETON:     Yes.   When you talk about the average
27   wind energy production representing only 29 percent of the
28   installed capability of wind generation --

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 1        MR. RUSSELL:     Yes.
 2        MR. NETTLETON:     -- and you then go on to talk about,
 3   your next statement is:
 4             "In other words, Hydro One asserts that the
 5             transmission system should be built to deliver
 6             the full nameplate output of the Bruce NGS units
 7             coincident with the overstated wind generation
 8             capacity."
 9        You say: "overstated wind generation capacity."
10   Right?
11        MR. RUSSELL:     Yes.
12        MR. NETTLETON:     And that you go on to say:
13             "For Hydro One to build and operate firm
14             transmission capacity for delivery of the full
15             installed capability of intermittent energy
16             sources (that is significantly above the
17             projected on-peak output on which Ontario relies)
18             that's not consistent with sound planning
19             principles."
20        MR. RUSSELL:     Right.   In other words, we shouldn't be
21   building enough transmission capacity to survive this loss
22   of two circuits on the double circuit tower at the time of
23   peak for full nameplate capacity, when we know, when we
24   expect only about 20 percent of that would be counted for
25   meeting firm peaks.
26        In other words, if you put in 1,000 megawatts of wind,
27   you know that to serve the firm load, you need to make up
28   800 megawatts of that with firm resources elsewhere,

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 1   because the wind itself is only good for -- is only deemed
 2   good for meeting the 200 megawatts.
 3        MR. NETTLETON:     From a planning perspective, sir, I am
 4   not to interpret that to say that the transmission design
 5   is one that shouldn't be based upon nameplate?
 6        MR. RUSSELL:     Well, it depends where you are, see?
 7        If I need a step-up transformer for a wind generator,
 8   a single turbine, obviously I want to get all the
 9   capability out.
10        If I've got a collector system for wind generators,
11   okay, localized, they're likely to have relatively little
12   diversity, so I might want to have some account for
13   diversity, but not much.      I would probably want it.        Now I
14   get over to my step-up transformer, and I am going to step
15   up to the grid.     I want most, if not all, of my step-up
16   transformer capability, and maybe use a little of the
17   overload transformer capability to get the firm peak out,
18   because we wouldn't expect it to last for very long and
19   step-up transformers, by their nature, can be overloaded
20   for short periods of time.
21        Then you get into the grid itself.        Once you get into
22   the grid itself, I don't think we should be talking about
23   building N minus 1 capability for the full nameplate
24   capacity.    That's where we part company.
25        And the practice among many of my wind clients is not
26   to do that.    They will do an interconnection, they will not
27   pay for the upgrade costs associated with getting a
28   capacity credit, and they will survive and some prosper on

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 1   as-available transmission capability.
 2        Very oftentimes, their customers will have network
 3   service and designate them as a network resource for 20
 4   percent of the installed capability.      That is the way, in
 5   my experience, the game is played.
 6        MR. NETTLETON:     And that game is played in the United
 7   States pursuant to that legislative scheme?
 8        MR. RUSSELL:   Well, yes but it is based upon the
 9   principles that wind generation, by its nature, tends not
10   to be available on peak for the full nameplate capacity.
11   So why build a system which is capable of delivering it?
12   We don't count on it.    We've got other generation to cover
13   for the 80 percent that is not there, but it just -- it's
14   common sense that we wouldn't build a network capable of
15   doing that.
16        You see that, really, in the Bruce system, the Bruce
17   system and its interaction with NBLIP.      And in a nutshell,
18   you've got this Nanticoke-to-Longwood line and it gets
19   contributions from both the Michigan, Sarnia, London area,
20   the Windsor, and it also gets contributions from Bruce.
21   And they come into a funnel at Longwood, and the
22   constraining path is over toward Nanticoke.
23        So we don't upgrade that path to take 100 percent of
24   the Bruce and 100 percent of Michigan and 100 percent of
25   every generator in all hours of all of the years.       In fact,
26   that's why we have these different adjustments for the
27   Bruce transfer capability, to reflect the fact that we
28   can't move all the megawatts all the time.

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 1          MR. NETTLETON:   When you say "we can't" and "we
 2   don't" --
 3          MR. RUSSELL:   Yes.   I'm --
 4          MR. NETTLETON:   -- do you understand whether or not
 5   historically, in Ontario, the transmission designing
 6   function has been one that has been designed to meet
 7   maximum MCR?
 8          MR. RUSSELL:   I would be surprised if that's the case
 9   and I think the example of the Nanticoke-to-Longwood line
10   is an example of an exception to that rule.
11          MR. NETTLETON:   Did you look at diversity of wind for
12   purposes of your testimony in this proceeding?
13          MR. RUSSELL:   I didn't analyze or quantify it.         I
14   could see that Mr. Fagan was going to.        I know there is
15   diversities.    It's taken into account.
16          MR. NETTLETON:   You believe there is diversity?
17          MR. RUSSELL:   There is diversity among wind machines,
18   yes.
19          MR. NETTLETON:   Do you believe there is diversity in
20   the Bruce area, specifically in the Bruce area?
21          MR. RUSSELL:   Like I say, I have not studied it and I
22   did not study that issue.
23          MR. NETTLETON:   Do you understand that the areas, the
24   wind potential areas are organized in separate and distinct
25   geographic areas in the province?
26          MR. RUSSELL:   Yes, I reviewed the wind data, yes.
27   But, again -- maybe you didn't hear my prior answer -- I
28   did not make a study of the diversity of wind, air sheds or

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 1   diversity of wind generators within the Bruce vicinity.
 2        MR. NETTLETON:    I want to talk a little bit about the
 3   second area of our departure, so to speak.       We've talked a
 4   lot about planned wind.     The second area that I think we
 5   discussed was nuclear.
 6        MR. RUSSELL:    Yes.
 7        MR. NETTLETON:    My understanding, Mr. Russell, is that
 8   your evidence is that it's not reasonable to make
 9   assumptions relating to the refurbishment of Bruce B units,
10   that a wait-and-see approach should be adopted?
11        MR. RUSSELL:     That is more accurate, yes, yes, until
12   it becomes more certain.
13        MR. NETTLETON:    When you made that -- when you took
14   that position, did you have familiarity with the IPSP
15   process?
16        MR. RUSSELL:    I don't recall looking at that.          I just
17   don't recall the timing.     Like I say, we began to start on
18   IPSP in recent months, and how much of that I looked at I
19   can't recall.
20        MR. NETTLETON:    Can I take you to tab 5 of my aid to
21   cross, sir?
22        MR. RUSSELL:    Tab 5 of your...
23        MR. NETTLETON:    Aid to cross.
24        MR. RUSSELL:     Right, thank you.
25        MR. NETTLETON:    This is the Integrated Power System
26   Plan directive issued from minister Duncan to Dr. Jan Carr
27   dated June 13th, 2006.
28        MR. RUSSELL:    I see it.

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 1        MR. NETTLETON:   Have you had a chance to review that?
 2        MR. RUSSELL:   Yes, I have.
 3        MR. NETTLETON:   Sir, on page 2 of that document, item
 4   3 reads, and just to put this into context from the first
 5   part of page 1:
 6             "The government directs the OPA to create an
 7             integrated power system plan to meet the
 8             following goals:    Plan for nuclear capacity to
 9             meet base load electricity requirements, but
10             limit the installed in-service capacity of
11             nuclear power over the life the plan to 14,000
12             megawatts."
13        Do you see that?
14        MR. RUSSELL:   Yes.
15        MR. NETTLETON:   You understand the evidence of OPA and
16   my clients is that that objective is met by either assuming
17   Bruce B is refurbished or rebuilt?
18        MR. RUSSELL:   What objective is that, the up to
19   14,000?
20        MR. NETTLETON:   Yes.
21        MR. RUSSELL:   Whatever is at Bruce will contribute to
22   up to 14,000, but up to 14,000 is not exactly a hard-and-
23   fast minimum requirement.
24        MR. NETTLETON:   Let's be clear.     Not 14,000 out of
25   Bruce; right?   This is the IPSP plan.     This is system wide.
26        MR. RUSSELL:   This is the system-wide plan for up to
27   14,000 megawatts of nuke, yes.
28        MR. NETTLETON:   How much nuclear generation is

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 1   produced in Ontario today?
 2        MR. RUSSELL:    Oh, I thought the number was in the
 3   order of 12,000 -- 10, 12, I have forgotten the number, but
 4   it is substantial.
 5        MR. NETTLETON:    Not all of that is from the Bruce;
 6   right?
 7        MR. RUSSELL:    No.
 8        MR. NETTLETON:    But what the OPA and what Hydro One
 9   have assumed, for purposes of this application, is that the
10   level of generation out of the Bruce generated from nuclear
11   facilities remains the same.    It's either refurbished or
12   its --
13        MR. RUSSELL:    I think they framed it in terms of 6- to
14   7,000 megawatts would continue indefinitely, but they also
15   had assumed that the province-wide nuclear installed
16   capability would be 14,000, so -- in the IPSP.
17        So you have really got to -- you've got a little lack
18   of logic here, because if the plan turns out to be less
19   than 14,000, particularly by a substantial amount, I think
20   it's illogical to assume that all of it would come out of
21   other sites.
22        MR. NETTLETON:    Sir, you're suggesting that the plan
23   is that something less than 14,000 --
24        MR. RUSSELL:    Is a possibility, yes.
25        MR. NETTLETON:    Even though the minister has directed
26   the plan to be one that -- nuclear capacity to meet base
27   load electricity requirements, but limit installed in-
28   service capacity over the life of the plan to 14,000?

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 1        MR. RUSSELL:     Yes.    It's a ceiling.   The 14,000 is a
 2   ceiling, as I read these words.       I have also seen it
 3   characterized as "up to 14,000".
 4        You seem to be converting it to a floor in your
 5   question.    Are we communicating or --
 6        MR. NETTLETON:     We are communicating.
 7        MR. RUSSELL:     Oh, okay.    Then I am not understanding
 8   your point.
 9        MR. NETTLETON:     The point is that the IPSP -- given
10   this directive, the IPSP must plan for a 14,000 megawatt
11   installed capacity level; right?
12        MR. RUSSELL:     No.    I don't see how those words get
13   translated into your statement.       If this is an "up to"
14   limit, why is it, in your words -- in your question a
15   floor?
16        MR. NETTLETON:     I don't think I'm saying it is a
17   floor, sir.    It says, "but limit the installed in-service
18   capacity of nuclear power over the life of the plan to
19   14,000 megawatts."
20        MR. RUSSELL:     Yes, I see that, and I took that to be
21   up to.
22        MR. NETTLETON:     Correct.    And so if the OPA and Hydro
23   One have relied upon, for purposes of its generation
24   forecast, an assumption that Bruce complex generation
25   remains constant at a 6,000 to 7,000 megawatt level, do you
26   see that being consistent with the existing level of
27   nuclear generation in the province?
28        MR. RUSSELL:     I just -- I don't know how I get from

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 1   the premise to that conclusion.
 2          MR. NETTLETON:    Well, let's look at it a different
 3   way.
 4          MR. RUSSELL:    Maybe you could take it in smaller steps
 5   for me.
 6          MR. NETTLETON:    If we were to assume that the level of
 7   nuclear generation out of the Bruce were to fall off from
 8   its current levels, in order to meet this plan objective,
 9   wouldn't that nuclear generation have to be generated
10   somewhere else?
11          MR. RUSSELL:    If 14,000 is a floor, yes, but I took it
12   to be a ceiling.
13          MR. NETTLETON:    Well, let's assume that it is a
14   ceiling.
15          MR. RUSSELL:    Then there is no harm, no foul.         If it's
16   cost-effective to reduce Bruce below the 6- to 7,000 range,
17   let it fall off, we're below 14,000.        We meet the criterion
18   of this directive.
19          MR. NETTLETON:    So if it was assumed, instead, to be a
20   plan to a specific level, no more, no less, a plan to
21   14,000 megawatts, and you were to assume that Bruce complex
22   generation were to fall off, then inherently it would have
23   to be made up somewhere else; right?
24          MR. PAPE:   Madam Chair, I object to the question.
25   Questions of this nature, which are double and triple
26   hypotheticals, create chaos in the transcript and are of no
27   assistance to the Board, in my respectful opinion.
28          MS. NOWINA:    I am having a hard time following your

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 1   questioning as well, Mr. Nettleton.        I think the
 2   conversation has gone back and forth about the
 3   interpretation of the words and being a ceiling and floor,
 4   and you have your response from Mr. Russell.
 5           I am not sure where you are going with it.
 6           MR. NETTLETON:    Well, Madam Chair, my last set of
 7   questions related to not a ceiling or a floor, but a level,
 8   a specific number, plan to 14,000 megawatts.
 9           And the characterization that my friend has given that
10   this is some sort of triple assumption is just not the
11   case.
12           MR. PAPE:   It was a triple hypothetical, Madam Chair,
13   because he first asked him to assume one interpretation of
14   this, and then he said, What if the level falls off and
15   what would that mean?
16           And that's -- with all respect, it's not a useful
17   approach.
18           MS. NOWINA:   So, Mr. Nettleton, if the remainder of
19   your questions on this topic are working with the
20   assumption that 14,000 is a target, I guess regardless of
21   what it says here, but that someone has decided 14,000 is a
22   target, I have no problem with you asking the questions on
23   that basis.
24           You might want to --
25           MR. NETTLETON:    I will try and refine my questions
26   to --
27           MS. NOWINA:   -- talk a little bit more about the
28   14,000, all right.       Thank you.

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 1        MR. NETTLETON:      I think the simple point, Mr. Russell,
 2   is this.     Let us assume that the target under this
 3   directive is nuclear generation capacity must be 14,000
 4   megawatts.
 5        MR. RUSSELL:      All right.
 6        MR. NETTLETON:      If existing nuclear capacity out of
 7   the Bruce is to fall from its historic levels, isn't it the
 8   case that that has to be made up in some other geographic
 9   location in order to meet the target of 14,000 megawatts?
10        MR. RUSSELL:      Well, you had it in one part of your
11   question as a target, and it seems to me, in another part
12   of your question you characterize it as something else.
13        Did you mean just if we assume that 14,000 is the
14   target, should I assume that?        And then assume that nuclear
15   generation, installed capacity falls off at Bruce, then
16   Bruce will make a lesser contribution to the 14,000.
17        Obviously if we want to hit the target of 14,000 it
18   has to be made up somewhere, I agree.         It's a tautology.
19        MR. NETTLETON:      Thank you.
20        Did you take that particular directive into account
21   when you made assumptions regarding your evidence relating
22   to figure 2?
23        MR. RUSSELL:      Now, in --
24        MR. NETTLETON:      The evidence on page --
25        MR. RUSSELL:      In interpreting this directive, should I
26   assume that is a target, a floor or a ceiling?
27        MR. NETTLETON:      Well, I --
28        MR. RUSSELL:      I took it as a ceiling, and so a fall-

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 1   off at Bruce would not have any -- it wouldn't violate any
 2   requirements of the directive.
 3        MR. NETTLETON:     So that's, sorry, figure 2, page 12 of
 4   your evidence.
 5        MR. RUSSELL:    Figure 2, page 12.    Yes, okay.
 6        MR. NETTLETON:     It's on the screen.   So your evidence
 7   is that that doesn't -- that generation forecast does not
 8   abrogate that directive because, in your view, it's a
 9   ceiling, not a floor?
10        MR. RUSSELL:    I so took it, yes.    "Up to" are the
11   words used elsewhere, and I just don't recall the document.
12        MR. NETTLETON:     But "up to" is not found here?
13        MR. RUSSELL:    That's correct.
14        MR. NETTLETON:     I would like to venture into the wacky
15   world of California.    You are, Mr. Russell, familiar with
16   California?
17        MR. RUSSELL:    I have been in the past, yes.
18        MR. NETTLETON:     You are the Whitfield Russell and
19   electric engineer with 30 years of experience, much of it
20   labouring in the California labour transmission vineyards?
21        MR. RUSSELL:    Yes, yes.
22        MR. NETTLETON:     For the record, that is at tab 7, page
23   2 of my materials.
24        MR. RUSSELL:     Tab 7, page 2?
25        MR. NETTLETON:     Yes.
26        MR. RUSSELL:    Oh.   That is my lawyer's
27   characterization of my --
28        MR. NETTLETON:     That is your lawyer's

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 1   characterization?
 2        MR. RUSSELL:      Yes.    That is not my words.
 3        MR. NETTLETON:      Do you agree with that
 4   characterization?
 5        MR. RUSSELL:      What?
 6        MR. NETTLETON:      Do you agree with that
 7   characterization?
 8        MR. RUSSELL:      I wish I could have spent more time in
 9   the California vineyards.
10        MR. NETTLETON:      As opposed to the transmission
11   vineyards?
12        MR. RUSSELL:      As opposed to the Palm Desert and that
13   vicinity.
14        MR. NETTLETON:      You should know there are vineyards in
15   this jurisdiction too.
16        MR. RUSSELL:      Yes, and very fine ones.
17        MR. NETTLETON:      Mr. Russell, you indicated earlier in
18   your evidence and testimony today, that item 150 of your CV
19   relates to testimony that you provided on behalf of the
20   California Wind Energy Association related to the Tehachapi
21   transmission project.
22        MR. RUSSELL:      Yes.    Let me just check and make sure it
23   is 150.   I think that is right.       Yes, that is the docket.
24   Yes, that's it.
25        MR. NETTLETON:      That transmission project related to
26   the development of wind energy in the Tehachapi region of
27   California?
28        MR. RUSSELL:      Yes.

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 1        MR. NETTLETON:      Your client, the California Wind
 2   Energy Association was supportive of that project?
 3        MR. RUSSELL:      Yes.
 4        MR. NETTLETON:      Just so that we can follow along here,
 5   if I could take you to tab 8 of your -- of my aid to cross
 6   document, which is --
 7        MR. RUSSELL:      Tab 8.
 8        MR. NETTLETON:      Tab 8.
 9        MR. RUSSELL:      Yes.
10        MR. NETTLETON:      Which is an excerpt document from the
11   Public Utility Commission of the state of California, an
12   opinion granting a certificate of public convenience and
13   necessity.
14        MR. RUSSELL:      I see it.
15        MR. NETTLETON:      And at page 1 of the -- sorry, page 2
16   of the decision, it indicates that the decision relates to
17   a granting of a certificate of public convenience and
18   necessity to Southern California Edison to construct a
19   transmission in the wind-rich Tehachapi region of
20   California?
21        MR. RUSSELL:      Yes.   You know, I've got a diagram of
22   that, if it might help with the discussion, but to
23   understand segment 1, 2 and 3, you really have to have the
24   diagram, I think.
25        MR. NETTLETON:      It was a three-segment project; is
26   that your understanding?
27        MR. RUSSELL:      Yes.   Oh, yes.
28        MR. NETTLETON:      And the authority granted in this

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 1   decision related to that segment known as the Antelope-
 2   Pardee transmission line?
 3        MR. RUSSELL:   Correct.
 4        MR. NETTLETON:   That was segment 1?
 5        MR. RUSSELL:   Yes.
 6        MR. NETTLETON:   And that segment was related to ensure
 7   access to wind power in the Tehachapi area and to prevent
 8   overloading of existing facilities, right?      That's what the
 9   summary says.
10        MR. RUSSELL:   Where are you reading?
11        MR. NETTLETON:   I am reading from the summary on
12   page 2.
13        MR. RUSSELL:   Of the opinion?
14        MR. NETTLETON:   Yes.
15        MR. RUSSELL:   Okay.    Yes, and to prevent overloading
16   in existing facilities, yes.
17        MR. NETTLETON:   Do you understand segment 1 to have
18   been a 25.6-mile 500 kV transmission line?
19        MR. RUSSELL:   No.    It was, I think, designed for 500,
20   but operated at 230 or 220, is Edison's voltage.
21        MR. NETTLETON:   So if I can take you to page 4, sir.
22        MR. RUSSELL:   Page 4.
23        MR. NETTLETON:   The first main paragraph, it reads:
24             "The Antelope-Pardee transmission project
25             includes transmission of a 25.6-mile 500 kV
26             transmission line to connect SCE's existing
27             Antelope substation, located in Lancaster, with
28             SCE's existing Pardee substation, located in

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 1                Santa Clarita."
 2           MR. RUSSELL:    And the next sentence says it is
 3   initially operated at 220.
 4           MR. NETTLETON:    What reason are you aware of the fact
 5   that it was initially energized at 220 kV instead of 500
 6   kV?
 7           MR. RUSSELL:    I think it is to be scalable, and you
 8   know, if you have a 220 kV network and then you superimpose
 9   a 500 kV over it, you need some new switch gear and
10   transformers.
11           So this will defer the need for those kinds of
12   upgrades.
13           MR. NETTLETON:    Did it also allow for the fact that
14   there was the potential for future wind energy in this
15   region?
16           MR. RUSSELL:    Oh, you mean the ability to convert from
17   220 to 500?
18           MR. NETTLETON:    Yes.
19           MR. RUSSELL:    Yes, yes, that's right.    That was the
20   plan.
21           MR. NETTLETON:    So is it the case that it was
22   originally or initially energized at a lower kV level to
23   reflect the fact that there was not a demand for the entire
24   500 kV transfer capability?
25           MR. RUSSELL:    In phase 1, I think, there was 800
26   megawatts or so.       Segment 1, it says here on page 6, only
27   accommodated about 201 megawatts, yes.
28           MR. NETTLETON:    Is it the case, Mr. Russell, that in

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 1   California, determinations relating to facility approvals
 2   concern the present and future public necessity?       Is that
 3   the threshold, do you know?
 4        MR. RUSSELL:   That sounds familiar.
 5        MR. NETTLETON:    Do you know, sir, whether or not this
 6   line was justified on the basis of a generation forecast?
 7        MR. RUSSELL:   I think it was, but there was also -- it
 8   had a lot more going on here.
 9        MR. NETTLETON:     Well, why don't we take a look at page
10   11 to see exactly what was going on.
11        MR. RUSSELL:   Okay, page 11?
12        MR. NETTLETON:    Yes.
13        MR. RUSSELL:     Okay.
14        MR. NETTLETON:    I direct you to paragraph that starts:
15             "SCE identified potential projects that have
16             applied to the IESO for interconnection have
17             participated in a collaborative study process or
18             identified themselves to the CEC."
19        Just for the record, SCE is?
20        MR. RUSSELL:   Southern Cal Edison.
21        MR. NETTLETON:    CEC is?
22        MR. RUSSELL:   The California Energy Commission.
23        MR. NETTLETON:    It goes on to say:
24             "The Antelope-Pardee transmission project would
25             be energized initially at 220 kV to interconnect
26             and integrate generation from a proposed 201
27             megawatt wind project located 8.5 miles northwest
28             of the Antelope substation."

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 1         MR. RUSSELL:   I see that, yes.
 2         MR. NETTLETON:   Then it goes on to say:
 3              "Although the transmission line would be operated
 4              initially at 220 kV, the ISO-approved
 5              interconnection using 500 kV design and
 6              construction standards would be one of the first
 7              among many upgrades that will eventually
 8              accommodate up to 4,400 megawatts of potential
 9              wind generation located north of Antelope."
10         Do you see that?
11         MR. RUSSELL:   Well, I would quibble with the word
12   "will".   I think it is a stepping stone to a system which
13   could accommodate up to that amount.
14         MR. NETTLETON:   Did you testify in this proceeding on
15   behalf of the California Wind Energy Association to suggest
16   that the elements of certainty that you have testified here
17   in this proceeding should be required prior to the approval
18   of the segment 1 facilities?
19         MR. RUSSELL:   I don't remember that I testified in
20   this proceeding.     I testified in a Tehachapi proceeding on
21   the overall plan, but maybe you can show me something that
22   shows I was in the segment 1 proceeding.
23         I am not disagreeing.    I just don't recall.
24         MR. NETTLETON:   Okay.   I don't think anything turns on
25   it.   I am just interested in knowing whether or not you
26   provided expert evidence in that proceeding relating to
27   elements of certainty required.
28         MR. RUSSELL:   No.   My recollection was that one of the

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 1   CalWEA members is Charter Oak, a wind developer near Cal
 2   Cement, which is at the extreme end of segment 3 and also
 3   served some loads up there, and they were tied to a very
 4   rickety old 66 kV system and they really wanted some
 5   transmission to firm up the loads, and also so they didn't
 6   get all of the wind generators knocked off every time they
 7   had a single-phase fault on the 66 kV system.       So there was
 8   a lot more going on here.
 9        In addition, one of the long-range plans suggested by
10   the California ISO was that the Big Creek lines, which
11   extend north and west of Antelope and Pardee, be
12   interconnected with PG&E, so that PG&E would have -- which
13   is a northern California utility, would have access to
14   these wind facilities, as well.
15        So it wasn't just -- it wasn't just Edison and it
16   wasn't just for wind generation.     It had a load component
17   that was a very important part, and the reliability of
18   service to that load had been a longstanding bone of
19   contention.
20        MR. NETTLETON:   So if I take you further on to page 11
21   in the next paragraph, the sentence that starts:
22             "The ISO found that the Antelope-Pardee 220 kV
23             line was necessary to interconnect the 201
24             megawatt wind project.     It also determined that
25             constructing the facility to 500 kV standards and
26             energizing at 200 kV was necessary, considering
27             the potential magnitude of additional renewable
28             resources that may develop in the Tehachapi

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 1                area."
 2           Your view is that segment 1 was not just simply for
 3   wind?
 4           MR. RUSSELL:    Yes, that's right, not solely for wind,
 5   and it was designed to operate initially at 220 to make it
 6   scalable.
 7           MR. NETTLETON:    Scalable so that it could operate for
 8   future wind developments in the Tehachapi area?
 9           MR. RUSSELL:    Yes, if, as and when the projects
10   developed, yes.       There is more certainty developed.
11           MR. NETTLETON:    Can I take you to page 13 of the
12   decision, sir?
13           MR. RUSSELL:    Sure.
14           MR. NETTLETON:    It is the provision that starts -- or
15   the paragraph that starts, "On January 10th, 2007", and it
16   goes over the page to page 14.
17           What I would like is subject-to-check confirmation
18   that at the time of this decision, at least, SCE had
19   entered into contracts for 1,500 megawatts out of the 4,500
20   megawatts of transfer capacity.
21           MR. RUSSELL:    All I know is what I am reading in
22   paragraph 2.
23           MR. NETTLETON:    So you have no reason to take issue
24   with that?     You took some issue with the other provisions
25   of the decision that we referred to, but you don't know
26   whether -- you don't have any --
27           MR. RUSSELL:    I don't know the facts on this contract,
28   no.   I have no reason to dispute it or affirm it.

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 1         MR. NETTLETON:     Then it goes on -- the decision goes
 2   on to talk, under the heading "The Standard" --
 3         MR. RUSSELL:     Yes.
 4         MR. NETTLETON:     -- and it is talking about the
 5   approval of facilities necessary to -- in order to achieve
 6   RPS goals.     What are RPS goals, sir?
 7         MR. RUSSELL:     You mean RPS, renewable portfolio
 8   standard.     California was one of the states that initially
 9   established a percentage floor by a certain year of the
10   future by which renewables had to be had.
11         But California is blessed with a considerable amount
12   of geothermal, which is a base load resource and provides
13   considerably easier achievement of those kilowatt-hour
14   goals.
15         MR. NETTLETON:     It strikes me, sir, that in this
16   passage of this decision, where it talks about the
17   standard, the commission is indicating some exceptional
18   circumstances regarding the need to approve facilities and
19   the fact that there were some extraordinary circumstances
20   associated with this approval.
21         Are you familiar with that issue?
22         MR. RUSSELL:     I read the opinion here and it refreshed
23   my memory that such a debate was being conducted within the
24   commission, but I didn't re-familiarize myself with all of
25   it.
26         MR. NETTLETON:     Earlier in the day, you were speaking
27   of the Tehachapi case and you were discussing the cost
28   responsibility of those facilities in the context of the

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 1   FERC and the impact of legislation in California.
 2        Do you recall that?
 3        MR. RUSSELL:    Yes.
 4        MR. NETTLETON:    Is that the issue here that the Board
 5   or the commission is discussing in respect of the
 6   extraordinary circumstances of having to approve facilities
 7   for purposes relating to ensuring goals of RPS are met and
 8   the cost issues associated with those facilities?
 9        MR. RUSSELL:    Well, the paragraph synthesizes, I
10   think, what's going on.     It says:
11             "Normally the Commission does not approve a new
12             transmission line unless the present or future
13             need is clear and certain.       Section 399.25
14             recognizes that in order to achieve RPS goals, it
15             may be necessary for the commission to approve
16             new transmission projects in anticipation of
17             future renewable energy projects and to provide
18             unusual assurances of recovery of reasonable
19             construction costs."
20        This is what I was talking about before, that the
21   standard in California is a very much more relaxed standard
22   than that applied in the other 46 -- lower 48 states and
23   under the jurisdiction of FERC.        So this is the exception
24   to the rule.
25        As I said, when you get this exception and you can
26   recover -- Southern Cal Edison could recover anything FERC
27   didn't allow recovery of through retail rates of Southern
28   California Edison.

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 1        MR. NETTLETON:       So is it case, sir, at least in these
 2   circumstances, the approval was one intended to meet public
 3   policy objectives set down by legislation?         Is that a fair
 4   characterization?
 5        MR. RUSSELL:      I think the statute was a reflection of
 6   that California enthusiasm for the RPS, yes.
 7        MR. NETTLETON:       Thank you.
 8        On page 17 of the decision, sir, there is a reference
 9   at the end of the page, a statement made that states that:
10                "In total, the wind projects in the current ISO
11                queue for Tehachapi exceed 4,000 megawatts in
12                capacity."
13        Do you see that?
14        MR. RUSSELL:      Yes.
15        MR. NETTLETON:       And was it the case that the transfer
16   capability of the segment 1 facilities was 4,000 megawatts?
17        MR. RUSSELL:      No.    They were only picking up 210 or
18   201, something like that.
19        MR. NETTLETON:       But the overall capacity of the 500 kV
20   system, this overall MCR -– sorry, this overall transfer
21   capability, energized at the 500 kV level, would be 4,000
22   megawatts?     Do you know that?
23        MR. RUSSELL:      It might be, because I think they may
24   use dynamic rating.
25        In other words, typically these 500 kV lines are in
26   the 1,500-, 1,700 megawatt range, per circuit.
27        So a double-up of that would get you in the 33-, 3,400
28   range.   4,000 seems to me it would be, maybe they did some

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 1   dynamic rating where they took account of the fact that
 2   when the wind was heavily producing, the conductors would
 3   be cooled and could be rated at a higher capacity.
 4        I remember some discussion of that.      In fact, the
 5   California Energy Commission hired this friend of mine who
 6   has kind of pioneered the dynamic rating business.
 7        MR. NETTLETON:   Do you know, sir, whether or not when
 8   this approval was granted, interconnection agreements, with
 9   all 4,000 megawatts of wind capacity in the queue, had been
10   entered into?
11        MR. RUSSELL:   I doubt it, but the segment 1 that we're
12   talking about doesn't give us anywhere near this 4,500 that
13   you are talking about.    4,500 was some sort of ultimate
14   development.
15        MR. NETTLETON:   If we go over to tab 9, sir?
16        MR. RUSSELL:   Tab 9?
17        MR. NETTLETON:   Yes, which is the news release
18   associated with the approval.
19        MR. RUSSELL:   Okay.
20        MR. NETTLETON:   And at the second page, there is some
21   indication that:
22             "Projects representing over 4,000 megawatts of
23             wind capacity in the Tehachapi area are already
24             in the Cal ISO queue.     Many of these projects
25             have already entered into contracts with Edison
26             for purposes of the RPS goals."
27        So is it fair to glean from that statement that not
28   all of the 4,000 megawatts in the ISO queue had entered

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 1   into contracts with Edison?
 2        MR. RUSSELL:    That's correct, but phase 1, which
 3   included segments 1, 2 and 3, was only rated about 800
 4   megawatts, and that's the segment I was describing earlier
 5   today, in which many of the entities on that line had
 6   dropped out of the queue, undermining Edison's ability or
 7   its -- certainly threatening Edison's ability to get
 8   recovery for the segment 3, and perhaps the other segments
 9   too at FERC.
10        MR. NETTLETON:    If we go over to tab 10, sir, this is
11   the news release related to the next two segments.
12        MR. RUSSELL:    Okay, I see it.
13        MR. NETTLETON:    What is your understanding of those
14   two segments?    Is that -- to help you along here -- is it
15   consistent with the paragraph that describes them in this
16   press release, starting at the paragraph on the first page
17   that says:
18             "Tehachapi-Vincent includes a total of 56.8 miles
19             of new 500-, 220 kV line and two new substations
20             in segment 2 will be a 21.7-mile long connecting
21             line."
22        MR. RUSSELL:    Well, Tehachapi-Vincent and -- I think
23   that constituted segment 2 and 3.
24        I'm looking at my diagram and I can't decipher it from
25   what's here.    But there were three segments, and this is
26   segments 2 and 3 as being authorized, in the document
27   referred to in this press release.     That's right up there
28   in the second paragraph.

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 1        MR. NETTLETON:    If we go over the page, it reads:
 2             "Segments 2 and 3 are projected to be in-service
 3             in early 2010 and will enable delivery of
 4             approximately 700 megawatts of new generation
 5             from Tehachapi when fully energized."
 6        MR. RUSSELL:   Yes.   That sounds like what -- that
 7   sounds familiar, and that's the project which I discussed
 8   in my direct evidence this morning.
 9        MR. NETTLETON:    Then the last sentence in that press
10   release describes that there are, there were in fact 11
11   segments altogether to this project, segments 4 through 11.
12   Do you see that?
13        MR. RUSSELL:   Oh, yes, yes.
14        MR. NETTLETON:    It was a much bigger process than
15   segments 1, 2 and 3.
16        MR. RUSSELL:   Oh, sure.   But my point was they had
17   trouble filling segments 1, 2 and 3, after construction was
18   nearly complete.
19        MR. NETTLETON:    Overall, the project comprised of --
20   what was the overall capital costs of the project, sir?
21        MR. RUSSELL:   I think they were -- you mean all 11
22   phases?
23        MR. NETTLETON:    Yes.
24        MR. RUSSELL:   And that 500 kV, I think, hundreds of
25   millions, if not -– Well, it says the permits in the press
26   release here on Tab 10, the third paragraph quotes
27   Commissioner Grueneich:
28             "Together these permits reflect almost a billion

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 1               dollars of investment in California's energy
 2               infrastructure."
 3          But that's the Tehachapi-Vincent and two other large
 4   cases recently voted on, so I am not sure what the context
 5   is there.
 6          MR. NETTLETON:   So then, over to tab 11 --
 7          MR. RUSSELL:   I have it.
 8          MR. NETTLETON:   -- which is the application in respect
 9   of the remaining 4 through 11 segments, have you had a
10   chance to review this, sir?
11          MR. RUSSELL:   I see some underlines.     I must have,
12   yes.
13          MR. NETTLETON:   You can confirm with me on page 1 that
14   this application was filed on June 29th, 2007?
15          MR. RUSSELL:   Yes.
16          MR. NETTLETON:   So it's come after the segments 1, 2
17   and 3 applications and decisions, right?
18          MR. RUSSELL:   The application is June 29.      These press
19   releases are March 15th.
20          MR. NETTLETON:   I just wanted to understand whether or
21   not you were aware that during that time period, the ISO
22   queue for projects had remained the same, or declined, or
23   had increased.
24          MR. RUSSELL:   I don't recall.
25          MR. NETTLETON:   Well, I thought you explained to us
26   this morning that you had expected the queue to have
27   dropped off.
28          MR. RUSSELL:   No.    I said that on this particular

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 1   segment -- I think it was segment 3 -- entities early in
 2   the queue who were expected to contribute to it had dropped
 3   out.
 4          The remaining entities were projecting an in-service
 5   date well beyond the in-service date of the segment 3.
 6          So it was particular.     The people who dropped out of
 7   the queue were particular to segment 3, as I recall.
 8          MR. NETTLETON:    Is it your understanding that the
 9   segment 4 through 11 application is being justified and
10   supported -- the need for segments 4 through 11 are being
11   justified and supported based upon the queued projects?
12          MR. RUSSELL:    Not in isolation.
13          MR. NETTLETON:    Not in isolation, but, nonetheless, an
14   element of that need and justification?
15          MR. RUSSELL:    I am looking for that here.      I'm not
16   seeing it.
17          MR. NETTLETON:    Now, before you look too hard, I am
18   just wondering, again, just without looking at these
19   documents, I am just interested in knowing whether your
20   experience is that this application for segments 4 through
21   11 for Tehachapi were being justified on the basis of the
22   queue?
23          MR. RUSSELL:    Oh, there may have been cites to the
24   queue, but I thought the power purchase agreement for 1,790
25   megawatts that Edison had signed that you mentioned earlier
26   gave some particular evidence of certainty.          That's on page
27   1-2 and item 3.
28          MR. NETTLETON:    Is it the case, in your experience,

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 1   that queued capacity in an ISO like Cal ISO is used by a
 2   transmitter for purposes of demonstrating need?
 3        MR. RUSSELL:   It wouldn't surprise me that that would
 4   be one indicator of interest, but it's not a real indicator
 5   of certainty, for the reasons we have discussed.
 6        MR. NETTLETON:   Now, if I could take you back, sir, to
 7   your FERC testimony, and this was in relation to the rate
 8   treatment of the Tehachapi facility.      This is tab 7.
 9        MR. RUSSELL:   Yes, I have it.
10        MR. NETTLETON:   On page 2 of your affidavit, you
11   indicate that you filed testimony in CPUC investigation 00-
12   11-001 in 2003 with respect to the Tehachapi Transmission
13   Conceptual Facility Study.
14        MR. RUSSELL:   Yes.   That predated the system.
15        MR. NETTLETON:   I take it you did that on behalf of
16   the California Wind Energy Association?
17        MR. RUSSELL:   No.    It was on behalf of Mr. Romanowitz
18   in Charter Oak, as I recall, a wind developer.
19        MR. NETTLETON:   Through that process, did you become
20   aware of what the annual capacity factor of wind farms were
21   in the Tehachapi area?
22        MR. RUSSELL:   It seems to me, yes, I did.
23        MR. NETTLETON:   Subject to check, would the number 26
24   percent be in line with your memory?
25        MR. RUSSELL:   That wouldn't surprise me.
26        MR. NETTLETON:   Were you suggesting, when you carried
27   out that conceptual facility study, that wind generation in
28   the Tehachapi area should, in some way, be limited in terms

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 1   of gaining access to 500 kV systems based on their average
 2   or their annual capacity factors?
 3           MR. RUSSELL:   No, I don't remember that being an
 4   issue, and I didn't do the study.        We were commenting upon
 5   the Tehachapi Transmission conceptual study done by others,
 6   including Edison and my client.        It was a collaborative
 7   study.
 8           MR. NETTLETON:   So was the Tehachapi transmission
 9   project designed to take into account nameplate capacity of
10   wind generation?
11           MR. RUSSELL:   Yes, I think, but only for an N minus
12   zero.    I think an N minus 1 event took it all out,
13   especially in the early phases.
14           MR. NETTLETON:   Thank you.    And that result did not
15   influence your evidence in this proceeding?
16           MR. RUSSELL:   Oh, yes, because Mr. Chow and Hydro One
17   are looking for N minus 1 transfer capability for the wind.
18   That's a much more stringent standard.
19           MR. NETTLETON:   But in terms of designing a system to
20   meet nameplate capacity, that was not something that you
21   took into account in this proceeding?
22           MR. RUSSELL:   Well, you're mixing apples and oranges
23   here.
24           On the network facilities, we don't design for 100
25   percent, but on the radial gen tie facilities that are
26   closer to the generation, yes, we do want to be able to
27   move the diversified peak capacity, if the generators are
28   willing to pay for it and the customers are willing to pay

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 1   for it.
 2           MR. NETTLETON:   All right.    Madam Chair, I am moving
 3   to a different area.      I don't know what your plan is.
 4           MS. NOWINA:   I think it is a good time, then, Mr.
 5   Nettleton for us to put Mr. Russell on hold and have our
 6   examination of Mr. Chow.       Let's discuss that for a moment.
 7           So our session with Mr. Chow is going to be in camera.
 8   Some of you have signed undertakings and should remain for
 9   that.    Those of you who did not will have to leave.           This
10   is a convenient time to do it, because we will break for
11   supper.     I am assuming we will be finished with Mr. Chow by
12   5:30.    We will break for supper then, and we will resume at
13   6:30.
14           So those of you who have not signed undertakings, who
15   plan to come back, may come back at 6:30.         As I said
16   before, if you come back later than 7:00, you won't be able
17   to get access to the elevators.
18           Before you leave, what we'll do is the panel -- we'll
19   take a five-minute break while we shuffle things around.
20   Before we do that, I would like to thank all of the people
21   in the audience today.
22           It's quite gratifying for us to see so many interested
23   parties attending our hearing.        We don't usually get this
24   many people, and it must have been a long day for you so
25   far.    If you're returning, more power to you.
26           I just want to say how much we appreciate having you
27   here.    It reminds us of why we have the hearings and the
28   importance of the people that we have them for.

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 1        So thank you very much.
 2        We're going to adjourn for five minutes and we will
 3   come back and we will resume with Mr. Chow.
 4        --- Recess taken at 4:45 p.m.
 5        --- On resuming at 4:55 p.m.
 6        --- In-camera session commenced at 4:55 p.m.
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26   --- Dinner recess taken at 5:41 p.m.
27   --- Upon resuming at 6:47 p.m.
28   MS. NOWINA:   Please be seated.

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 1        Mr. Nettleton, Mr. Russell, are you ready to begin
 2   again?
 3        MR. NETTLETON:      Madam Chair, I have been requested by
 4   my friends -- counsel for Power Workers' Union, he has a
 5   conflict and he has very short cross and has asked if I
 6   could stand down to allow him to ask Mr. Russell a few
 7   questions.     He says he is going to be 10 to 15 minutes.      I
 8   am happy to do that, if that allows him to exit stage left,
 9   so to speak, subject to your...
10        MS. NOWINA:      That's fine.    My usual guidance, not more
11   than 15 minutes, Mr. Stephenson; and, Mr. Nettleton, you
12   can't repeat his questions.       Normally I would give him that
13   guidance, but you are letting him go first.
14        MR. STEPHENSON:      I promise, Madam Chair, that I will
15   abide by that.     The sooner I finish my questions, the
16   sooner I leave.
17        SAUGEEN OJIBWAY NATION - PANEL 1, RESUMED
18        Whitfield Russell, Previously Sworn
19        CROSS-EXAMINATION BY MR. STEPHENSON:
20        MR. STEPHENSON:      Good evening, sir.     My name is
21   Richard Stephenson.      I am counsel for the Power Workers'
22   Union.
23        MR. RUSSELL:      Hello again, Mr. Stephenson.
24        MR. STEPHENSON:      I just have a few questions for you.
25        As I understand your evidence, the bottom-line
26   conclusion that you have is that you oppose the proposal,
27   because you say there is an alternative available that
28   meets the project need; correct?

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 1         MR. RUSSELL:   Yes.
 2         MR. STEPHENSON:   Okay.   You say that your proposal
 3   meets the project need, notwithstanding the fact that you
 4   concede that that proposal will result in a certain amount
 5   of bottled generation from time to time; correct?
 6         MR. RUSSELL:   Depending upon the assumptions.
 7         The indications are that under a certain set of
 8   assumptions, the locked-in energy is negligible, and some
 9   of these scenarios are even cheaper than the principal
10   line, the recommended line.
11         MR. STEPHENSON:   And I understand that it is affected
12   by the assumptions that you make.      But, as I understand it,
13   I believe, under all scenarios, there is at least some
14   locked-in energy.
15         Am I not mistaken about that?
16         MR. RUSSELL:   Oh, that may be the case, but it's -- in
17   some scenarios, the excess cost of Hydro One's proposal is
18   higher.
19         MR. STEPHENSON:   That's what I understand.      And your
20   opposition now is premised upon a financial analysis
21   whereby you examine the NPV of the locked-in energy and you
22   compare it to the cost of --
23         MR. RUSSELL:   That's my supplemental evidence.         I have
24   a great deal of direct evidence that we filed back on April
25   18.
26         MR. STEPHENSON:   Okay.   What I want to do is challenge
27   your proposition that the project need can be met in a way
28   which results in locked-in energy.

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 1          I take it, sir, that you are familiar that there is a
 2   policy of the government of this province in favour of the
 3   elimination of coal-fired generation; correct, sir?
 4          MR. RUSSELL:   I so understood, yes.
 5          MR. STEPHENSON:   And there is also an explicit policy
 6   by the government of this province in favour of renewable
 7   energy and clean wind energy.       You are familiar with that,
 8   sir?
 9          MR. RUSSELL:   Yes.
10          MR. STEPHENSON:   I take it that you don't, in any way,
11   have a problem that that is a legitimate role for the
12   government, that they are perfectly entitled to make those
13   policies?
14          MR. RUSSELL:   That's true, but there are also
15   constraints that protect consumers and there is also
16   constraints that require the optimization of existing
17   rights of way and infrastructure.       So those have to be
18   balanced.    It's not simply the promotion of renewable
19   energy over all others.
20          MR. STEPHENSON:   I take it, sir, that you are familiar
21   with the fact that wind energy is, from a financial
22   perspective, far more expensive than coal-fired generation?
23          MR. RUSSELL:   Per kilowatt hour, yes.
24          MR. STEPHENSON:   Purely on a financial basis, but you
25   will concede that there are other factors that the
26   government has taken into account in making that policy
27   decision; fair?
28          MR. RUSSELL:   I don't know that.     I know that they

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 1   have a preference for it, but I haven't studied the
 2   legislative history or the history of the government.
 3        MR. STEPHENSON:    But whatever --
 4        MR. RUSSELL:    May I finish?
 5        MR. STEPHENSON:    Sure.
 6        MR. RUSSELL:    I just haven't studied the interaction
 7   of these policies and how they balanced these other
 8   competing needs in arriving at their policy.
 9        MR. STEPHENSON:    But you would concede, sir, that
10   whatever consideration they took, that was their legitimate
11   -- that was their perfectly appropriate function to make.
12   We may or may not agree with it, but that is an appropriate
13   role for them?
14        MR. RUSSELL:    I haven't investigated it.
15        MR. STEPHENSON:    Okay.   Now, here's my question.
16        I take it, sir, that once a decision has been made to
17   go out and procure wind-powered energy, part of -- you
18   would agree with me that part of the reason, the policy
19   behind that, is the government wants to replace what it
20   considers to be less environmentally benign generation
21   sources with more environmentally benign generation
22   sources; correct?
23        MR. RUSSELL:    Yes, but it is not confined to wind.
24        MR. STEPHENSON:    I understand that, sir, but that is
25   part of the portfolio; correct, sir?       They have explicitly
26   advocated that as one of the means of meeting this target;
27   correct?
28        MR. RUSSELL:    Do you have a source document, something

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 1   you can refer me to?
 2           MR. STEPHENSON:   Sure.   If you look at Mr. Nettleton's
 3   document, and you want to look at -- you can look at tab 4
 4   and you can look at tab 5.
 5           MR. RUSSELL:   Tab 4, our August 27 letter, yes, I see
 6   that.
 7           MR. STEPHENSON:   Okay.
 8           MR. RUSSELL:   This doesn't speak in terms of wind
 9   separately.
10           MR. STEPHENSON:   If you want to look at tab 5, which
11   is the IPSP directive, numbered paragraph 2.
12           MR. RUSSELL:   Yes.
13           MR. STEPHENSON:   Okay.   Hydroelectric, wind, solar and
14   biomass; do you see that?
15           MR. RUSSELL:   So it is it not confined to wind.
16           MR. STEPHENSON:   That's right.
17           MR. RUSSELL:   That is my recollection.
18           MR. STEPHENSON:   Okay.   Now, are you also familiar
19   with the fact that pursuant to this directive, it is the
20   OPA that is the final authority in terms of determining the
21   implementation of this directive, that this Board has no
22   role to play?
23           MR. RUSSELL:   I didn't understand that at all.
24           MR. PAPE:   Object, Madam Chair.     I would really
25   appreciate if Mr. Stephenson would not try to engage the
26   witness in legal analysis and legal questions.          That is a
27   very complex question and I, on behalf of one of the
28   parties to the IPSP hearing, to say nothing of the Board --

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 1   to say that the Board has no role whatsoever is, I have
 2   difficulty, and it is an example of the kind of question or
 3   assertion that Mr. Stephenson --
 4        MR. QUESNELLE:    Mr. Pape.
 5        MS. NOWINA:   Do you have your mike on?
 6        MR. PAPE:   I'm sorry, I thought it was on.      It's an
 7   example of the kind of assertion that he keeps putting to
 8   the witness that creates great difficulty for any witness.
 9        MR. STEPHENSON:   Just to be clear to my friend, Mr.
10   Pape, and I certainly apologize to the Board, I was
11   actually meaning, when I made that reference, I was talking
12   about the October 27th letter as opposed to the IPSP.
13        I'm certainly very familiar with the role the Board
14   plays in the IPSP, and I don't mean for a moment that there
15   is no role.   It's the August 28th pre-IPSP procurements
16   that I am referring to when I make that comment.
17        MR. PAPE:   Nonetheless, Madam Chair, the point is that
18   to engage the witness in questions about who has what
19   authority surely is not an appropriate thing to do when the
20   -- there's nothing in the witness's evidence about
21   authority and the scheme of authority or the regime, and I
22   would just ask that Mr. Stephenson not ask these heavy
23   rhetorical questions and put these heavy rhetorical
24   positions to the witness, because they tie us up and they
25   leave a witness, it seems to me, in an impossible position.
26        MR. STEPHENSON:   If the witness doesn't know the
27   answer to the question, he can say so.
28        MR. PAPE:   They're not appropriate questions.

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 1        MR. STEPHENSON:     As Mr. Pape knows, I can put any
 2   proposition to --
 3        MS. NOWINA:    My turn, gentlemen.
 4        MR. PAPE:   Sorry.
 5        MS. NOWINA:    Mr. Stephenson, the witness doesn't have
 6   any expertise in terms of who has what authority in
 7   Ontario, nor does he claim to have any.      If you want to
 8   move towards a point, perhaps you could rephrase it and do
 9   it without asking him those kinds of rhetorical questions.
10        MR. STEPHENSON:     I take it, then, he doesn't know, and
11   that is fair enough.    That's what I really wanted to know.
12        Now, my next question, sir, is this.      Insofar as it is
13   a goal of the province of Ontario to replace coal-fired
14   energy, in part, with wind, you at least would be familiar?
15   You would agree with me that much, would you, sir?
16        MR. RUSSELL:     Well, it's among the ways that the
17   province would like to replace the wind -- the coal that
18   has been shut down.    I so understood.
19        MR. STEPHENSON:     Would you agree with me that if wind
20   generation is procured in a fashion where it is constrained
21   by virtue of transmission limitations, that objective is
22   not being fulfilled?
23        MR. RUSSELL:   Yes.    But you are really milking mice
24   there, Mr. Stephenson.     The amounts of locked-in energy
25   compared to the amounts of coal being shut down, we're
26   talking very, very small amounts, almost de minimus, and
27   they're based upon assumptions which I think are unduly
28   favourable to the line itself.     There are a number of

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 1   errors in the financial evaluation model that have
 2   erroneous assumptions, and I think when those are
 3   corrected, we may see that the amount of locked-in energy
 4   under most scenarios declines even further.
 5        MR. STEPHENSON:     And you are relying on that financial
 6   analysis for your conclusion, aren't you, sir?
 7        MR. RUSSELL:     I am showing that the financial analysis
 8   yields different results when we have a more realistic set
 9   of assumptions.
10        MR. STEPHENSON:     What if I suggested to you, sir, that
11   the government's decision to replace coal with, among other
12   things, wind, has got nothing to do with financial
13   considerations?     Nothing whatever to do with financial
14   considerations.   They well know it's much more expensive to
15   run wind than coal.    Why is it that we have to concern
16   ourselves at all with the value of locked-in energy?
17        MR. RUSSELL:     Well, I had understood that this Board
18   was also interested with protecting consumers, but that was
19   the basis of my assumption.
20        MR. STEPHENSON:     Wouldn't you agree with me, sir, if
21   the Board was concerned about the interest of consumers, it
22   would direct -- the cheapest thing for consumers would be
23   to simply not have any wind at all.
24        MR. RUSSELL:     No.
25        MR. STEPHENSON:     And you would run coal.    It would be
26   much cheaper.
27        MR. RUSSELL:     I think accomplishing the goal, while
28   balancing the interests of consumers and minimizing or

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 1   optimizing the use of existing infrastructure is a balance
 2   that can be struck.
 3        So if that means a little locked-in energy, that leads
 4   to a more optimal result, that balance is one that I would
 5   recommend be struck.
 6        MR. STEPHENSON:     And you say that that balance
 7   overrides the government's policy in favour of going out
 8   and getting wind, because you would agree with me, sir, to
 9   the extent the wind is constrained, it is going to have to
10   be replaced by less environmentally benign sources.
11   Correct, sir?
12        MR. RUSSELL:     Okay.     Which of the two questions do you
13   want me to answer first?
14        MR. STEPHENSON:     Well --
15        MR. RUSSELL:     You posed two.
16        MR. STEPHENSON:     The latter one, sir.
17        MR. RUSSELL:     I have too many.
18        MR. STEPHENSON:     Yes.
19        MR. RUSSELL:     Do you want to pose another question?
20        MR. STEPHENSON:     My question is:    Would you agree with
21   me, sir, that to the extent the wind is constrained, it is
22   going to be replaced by less environmentally benign
23   sources?
24        MR. RUSSELL:     Not necessarily.
25        MR. STEPHENSON:     It's going to be -- well, as I
26   understand it, sir, there is nothing -- the incremental
27   generation from a windmill is the least --
28        MR. RUSSELL:     I disagree.

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 1        MR. STEPHENSON:     -- environmentally impactive --
 2        MR. RUSSELL:     That is just wrong.     Let's say we're in
 3   a minimum load condition and we're spilling water in some
 4   dam, which is renewable energy, because we're optimizing
 5   the production of wind from Bruce and surrounding areas.
 6   There is just no premise for you to say that.
 7        There are many situations in utility operations when
 8   one kind of renewable could be replaced by another.
 9        MR. STEPHENSON:     I take it, sir, that -- isn't the
10   same true, that to the extent the Bruce nuclear energy is
11   constrained-off, the incremental environmental impact of
12   that constrained-off energy is virtually nil.         Would you
13   agree with me about that?
14        MR. RUSSELL:     I don't have any basis to agree with
15   that, no.    I haven't done any study of that.
16        MR. STEPHENSON:     Let me just understand.      So you would
17   agree with me there are no emissions from that incremental
18   generation?
19        MR. RUSSELL:     I understand there are no greenhouse
20   gasses, but there can be emissions which can be very
21   harmful to people from nuclear plants.
22        MR. STEPHENSON:     From the incremental generation,
23   unrelated to the fact that you have a sunk nuclear plant
24   there.   I am talking about the incremental generation, sir.
25        MR. RUSSELL:     If your question is confined to
26   incremental generation, without regard to risks of
27   different technologies, then yes, that narrow question, I
28   agree that nuclear is not regarded as having an adverse

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 1   impact on greenhouse gas.
 2           MR. STEPHENSON:   You would agree with me, sir, that to
 3   the extent that is being displaced -- that that is being
 4   constrained-off, you're going to have to use some other
 5   generation source, by definition.
 6           MR. RUSSELL:   Yes, but I don't think you can point me
 7   to any place in my testimony where I am suggesting that we
 8   constrain-off nuclear.
 9           We would arm nuclear to be rejected.      But it is so de
10   minimus a factor in the consideration that it -- because it
11   so rarely happens.
12           MR. STEPHENSON:   Okay.   Now let me just take you to
13   one last thing, and I want to try to put an end to the
14   debate about the interpretation of the IPSP directive,
15   which is at tab 5, paragraph 3, which is the one regarding
16   nuclear power.
17           MR. RUSSELL:   On page 2, yes.
18           MR. STEPHENSON:   On page 2, and the issue was:         Is it
19   a floor, is it a ceiling, is it a target?
20           As I read it, and maybe -- I bring no magic to this,
21   but maybe you can assist me -- as I understand it,
22   paragraph 3 includes both a floor and a ceiling.          The
23   ceiling clearly is the 14,000.        I think we can all agree on
24   that.     But isn't there also a floor, which is the capacity
25   to meet base load energy requirements?         Whatever that might
26   be.   They must plan to meet base load energy
27   requirements --
28           MR. RUSSELL:   You have to put one question to me at a

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 1   time, Mr. Stephenson, because I simply can't react to these
 2   multiple questions.
 3        You want to start over, please?
 4        MR. STEPHENSON:     My question, sir, was:    Isn't there a
 5   floor there, which is plan for nuclear capacity to meet
 6   base load electricity requirements.
 7        MR. RUSSELL:     No, I read that very differently.      I
 8   read that for a plan for nuclear capacity as a means of
 9   meeting base load electricity requirements.       It's one of
10   the ways that one would meet base load electricity
11   requirements.
12        Then there is an upper limit on the amount we would
13   draw upon for meeting that requirement of 14,000 megawatts.
14   That's how I read it.
15        MR. STEPHENSON:     All right.   Okay.   By adding some
16   extra words, I gather, that aren't there.
17        MS. NOWINA:    Mr. Stephenson, your 15 minutes is up.
18   Can you wrap up?
19        MR. STEPHENSON:     Thank you.   Those are my questions.
20        MS. NOWINA:    All right.
21        MR. STEPHENSON:     Thank you, sir.   I appreciate it.
22        MS. NOWINA:    Mr. Nettleton.
23        MR. NETTLETON:     Thank you, Madam Chair.
24        CROSS-EXAMINATION BY MR. NETTLETON (CONTINUED):
25        MR. NETTLETON:     Mr. Russell, we were having a
26   discussion about California before the break.
27        I have just one last question related to your
28   experience in California.

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 1        MR. RUSSELL:     Is your mic on?
 2        MR. NETTLETON:    Yes, it is.    Sorry, I will speak up.
 3        We were having a discussion before the break regarding
 4   California and your experience in California, and in
 5   particular, with respect to the Tehachapi transmission
 6   project.
 7        Do you recall that?
 8        MR. RUSSELL:    Yes.
 9        MR. NETTLETON:    Mr. Russell, who is the counter party
10   that wind developers in California must contract with for
11   generation in that jurisdiction?
12        MR. RUSSELL:    The load serving entities and sometimes,
13   I think, I'm not sure if the California Power Authority can
14   do so as well.
15        I do know that a number of my municipal power clients
16   also purchase wind energy.
17        MR. NETTLETON:    So it is the multiple parties of load
18   serving entities who are the counter parties, and --
19        MR. RUSSELL:     Or intermediaries, traders, marketers.
20        MR. NETTLETON:    And is it those entities that have the
21   RPS goals established by legislation?
22        MR. RUSSELL:    Oh, I had understood it was
23   jurisdictional utilities.     I'm not sure about the RPS goal
24   with respect to municipals and coops.
25        MR. NETTLETON:    Is it the case, sir, that load serving
26   entities are typically the counter party in jurisdictions
27   outside of California, but in the United States, that are
28   the purchasers of generation?

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 1          MR. RUSSELL:     Either -- in an ultimate sense, yes,
 2   although a lot of marketers also purchase power for resale.
 3          MR. NETTLETON:     Now, in Ontario, as we noted when we
 4   reviewed the ministerial directives, we noted that the OPA
 5   has been given direction to procure renewable energy
 6   supply.    And that's, again, tab 4 and the RES I and RES II
 7   processes.     Right?
 8          MR. RUSSELL:     We discussed the procurement that -- the
 9   section in tab 4 that refers to the procurement by 2011,
10   yes.
11          MR. NETTLETON:     You understand that the OPA has other
12   responsibilities related to system planning in this
13   jurisdiction?
14          MR. RUSSELL:     I vaguely know.    I don't know the
15   details.
16          MR. NETTLETON:     Are you aware of any jurisdiction in
17   the United States that similarly has a central planning
18   authority, like the OPA, who has also been delegated
19   responsibilities to be the sole counterparty for purposes
20   related to the contracting of renewable energy supply?
21          MR. RUSSELL:     The sole counterparty?
22          MR. NETTLETON:     Yes.
23          MR. RUSSELL:     Even for export?
24          MR. NETTLETON:     Well, let's make that assumption, yes.
25          MR. RUSSELL:     So all renewable power in the province
26   has to be sold to OPA even if it's going to be exported to
27   a third party?
28          MR. NETTLETON:     Well, for purposes --

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 1        MR. RUSSELL:     I am really puzzled by that one.
 2        MR. NETTLETON:     Let's take this in pieces.      Let's
 3   answer the question first.
 4        MR. RUSSELL:     Okay, I am not aware of that.      As I said
 5   in the prior answer, I am not aware of those details.
 6        MR. NETTLETON:     All right.    Then if we remove that
 7   assumption, are you aware of any jurisdiction in the United
 8   States where there is a single or central authority that is
 9   acting as the counterparty for contracts, removing the
10   assumption that it's for export or out and through service?
11        MR. RUSSELL:     None as I sit here that come to mind.      I
12   just, um... -- the question is central planning authority,
13   plus the sole purchaser of renewable energy; is that the
14   question?
15        MR. NETTLETON:     Right.   Yes.
16        MR. RUSSELL:     I can't think of any.
17        MR. NETTLETON:     Sir, from a financing perspective,
18   from a credit perspective, one of the things that you
19   indicated was of concern to you related to arranging for
20   financing for facilities; right?
21        MR. RUSSELL:     Yes.
22        MR. NETTLETON:     And do you think that having the
23   counterparty being a central planning authority, such as
24   the OPA, would be favourable or unfavourable to address
25   concerns related to financial risk?
26        MR. RUSSELL:     Yes.   Of course, the creditworthiness of
27   your opposite party is always a factor.
28        MR. NETTLETON:     Thank you.

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 1           Now, Mr. Russell, I want to turn to the topic, the
 2   next area of disagreement, if you will, and that relates to
 3   generation rejection.
 4           You have presented two scenarios, as I understand it,
 5   that relate to transfer capability limits of 7,176 and
 6   7,476; right?
 7           MR. RUSSELL:   Yes.
 8           MR. NETTLETON:   And in both of those scenarios,
 9   generation rejection is a component that gives rise to the
10   overall transfer capability level; right?
11           MR. RUSSELL:   It's a contributor, yes.
12           MR. NETTLETON:   Right.   And just to confirm, the
13   assumption in both cases is that generation rejection would
14   be armed 100 percent of the time?
15           MR. RUSSELL:   No, I don't think so, but most of the
16   time.
17           MR. NETTLETON:   Well, how much would it be armed?
18   Have you investigated that?
19           MR. RUSSELL:   Well, no, but there are combinations.
20   If generation were out of service in sufficiently large
21   amounts, then you wouldn't have to -- and you could get
22   below the -- if you could get below the thermal or transfer
23   limit of the wires themselves without generation rejection,
24   then under that scenario you wouldn't have to arm.
25           MR. NETTLETON:   In any event, a very high level?
26           MR. RUSSELL:   I would expect you would arm a good deal
27   with either of these, yes.
28           MR. NETTLETON:   With respect to both scenarios, sir,

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 1   the other element that's common is the use of series
 2   capacitors; right?
 3        MR. RUSSELL:     Yes.
 4        MR. NETTLETON:     Okay.   Let's first turn to the issue
 5   of the Ontario resource and transmission assessment
 6   criteria.
 7        If you could turn to tab 19 of my aid to construct --
 8   sorry, aid to cross book.
 9        MR. RUSSELL:     I have it.
10        MR. NETTLETON:     On the third page of that tab, I have
11   replicated the section 3.4.1 that was discussed with Mr.
12   Pape this morning.     Do you see that?
13        MR. RUSSELL:     I see it.
14        MR. NETTLETON:     This is the final version.      This is
15   not the marked-up version, but I just want to take you to
16   the sentence that there was some discussion about that you
17   had with Mr. Pape.
18        MR. RUSSELL:     Yes.
19        MR. NETTLETON:     In particular, the sentence that
20   reads:
21               "The reliance upon an NPCC Type I SPS for NPCC A-
22               2 design criteria contingencies with all
23               transmission elements in service must be reserved
24               only for transition periods while new
25               transmission reinforcements are being brought
26               into service."
27        Do you see that?
28        MR. RUSSELL:     Yes.

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 1          MR. NETTLETON:   All right.    Now, you understand, sir,
 2   that the evidence of the IESO in this proceeding is that
 3   they do not consider it to be appropriate for generation
 4   rejection to be used in the -- as a long-term measure;
 5   right?
 6          MR. RUSSELL:   I understand that is their preference,
 7   yes.
 8          MR. NETTLETON:   That's not only their preference.
 9   That's their position; is that fair?
10          MR. RUSSELL:   I think their practice is different from
11   this preference, and I refer you to the Hanmer-Essa
12   document that I referred to in my direct testimony.            We
13   also have a long history of using generation rejection, and
14   of course the most recent series of events with NPCC.
15   Generation rejection is a very long-standing tradition in
16   this province.
17          MR. NETTLETON:   But, as you noted, this change or this
18   wording is now a change from the prior wording; correct?
19          MR. RUSSELL:   Yes.
20          MR. NETTLETON:   Right.   And this wording requires, in
21   your view, a more restrictive tack to be taken; correct?
22          MR. RUSSELL:   I think that was the intent of it, yes.
23          MR. NETTLETON:   Now, Mr. Russell --
24          MR. RUSSELL:   That was one of the intents of it, yes.
25          MR. NETTLETON:   Mr. Russell, I heard you this morning
26   indicate that you believed that notwithstanding the IESO's
27   interpretation of its own reliability standard, you felt
28   that your option fell within and met this criteria?

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 1        MR. RUSSELL:    Yes, and I made reference to the Hanmer-
 2   Essa interconnection assessment for the interpretation of
 3   these words by the IESO.
 4        So if you would like to look at that, I can explain
 5   why I hold that position.
 6        MR. NETTLETON:    Well, I don't want to -- I want to
 7   focus on this application and the two scenarios that you
 8   have used or brought forward; namely, the series
 9   compensation plus generation rejection and the near-term
10   measures for -- that give rise to the 7,176 and the 7,476
11   limits.
12        MR. RUSSELL:    Okay.   I have that in mind.
13        MR. NETTLETON:    Okay.   How is it possible, sir, in
14   your view, that the position that you suggest that this
15   standard is met and should be preferred, when the standard
16   organization, the reliability organization, has come out
17   and said in this proceeding that generation rejection
18   should not be used as a long-term measure?
19        How is it that your position, in your view, should be
20   preferred over the IESO's?
21        MR. RUSSELL:    Okay.   Well, in two ways.     First of all,
22   if, as and when the economics dictate and demonstrate that
23   the new line is needed, I would -- I would recommend that
24   it be installed.    And, second of all, in the period between
25   now and when the series capacitors are installed is a
26   transition period while new transmission reinforcements are
27   being brought into service.
28        So while that may not -- while that may not be a long-

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 1   term resolution, it certainly mitigates the concerns that
 2   the NPCC has with the use of the SPS.
 3        MR. NETTLETON:     But --
 4        MR. RUSSELL:     So it is kind of a two-step -- two-step
 5   argument or position.    One is that we're mitigating by
 6   putting in series capacitors, and, if, as and when dictated
 7   by the syllogism I laid out in my direct testimony, we
 8   would go ahead with a new line.
 9        And if sufficient generation were retired or wind
10   generation were delayed, then you get down below the
11   transfer capability that the wires could carry without
12   generation rejection, then of course this would be
13   satisfied, as well.
14        MR. NETTLETON:     When would the new transmission
15   facilities, in either of your scenarios, be brought into
16   service?
17        MR. RUSSELL:     When the crossover point was within five
18   years.
19        MR. NETTLETON:     So isn't the case, sir, that the
20   latest graph that you have produced has the crossover
21   points -- this is K14.1.       So in the no voltage and the
22   voltage costs cases, you've got the crossover points
23   happening for the case of the 7,176 in 2024, and the 7,476
24   case of 2026, and roughly the same 2024 period for the
25   voltage cost case.    Right?
26        MR. RUSSELL:     That's an illustrative calculation for
27   that set of assumptions, yes.      But let's say that Mr. Chow
28   is right that more than the 700 megawatts of wind is

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 1   developed, and if Bruce C were to replace Bruce B, then
 2   we'd get a crossover point moving closer in time.
 3          MR. NETTLETON:   But for purposes of complying with
 4   this standard -- and your view is that it is the crossover
 5   point that dictates when new transmission reinforcements
 6   are required.
 7          MR. RUSSELL:   Yes.
 8          MR. NETTLETON:   We're talking about a period of 2024
 9   or 2026, that time --
10          MR. RUSSELL:   Under those hypothetical assumptions,
11   yes.
12          MR. NETTLETON:   Do you consider that to be, the time
13   period out to 2024, to be a short-term or a long-term?
14          MR. RUSSELL:   Well, I consider that to be a long-term
15   period.
16          MR. NETTLETON:   And you think that this standard
17   contemplates that type of time period being appropriate?
18          MR. RUSSELL:   Well, this standard is inconsistent with
19   other provisions, such as the designation of an SPS as an
20   extreme contingency.
21          So here you got these two competing principles, and so
22   you're saying on the one hand that the failure of an SPS is
23   what concerns you with respect to generation rejection.
24   And then in the same set of standards, you say that failure
25   of an SPS is so extreme, we don't even have to plan for it.
26          So you've got within the same document contradictory
27   driving principles.     And so, you know, you've got to have
28   some way to reconcile those things within the same

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 1   document, and I thought that was a way to reconcile these
 2   -- conflicting policy in the same set of criteria.
 3           MR. NETTLETON:    So the view is, then, part of your
 4   evidence, giving rise to your testimony this morning, is
 5   that this standard, this reliability standard that has been
 6   established and authored by the IESO, would need to be
 7   modified to accept the proposition that you are suggesting
 8   here?
 9           MR. RUSSELL:   Well, I'm saying that the long-term
10   scenario that you hypothesize wouldn't really fit within
11   the phrase "while new transmission reinforcements are being
12   brought into service" --
13           MR. NETTLETON:    Thank you.
14           MR. RUSSELL:     -- so I think that is the isolated point
15   you are trying to make, yes.
16           MR. NETTLETON:    Now, Mr. Russell, with respect to the
17   7,176 and the 7,476 limits, and the associated facilities
18   that give rise to those limits, let's just assume for a
19   minute that the transfer capability requirement of 8,160
20   was recognized to be a reasonable and appropriate level for
21   the purposes of planning.
22           MR. RUSSELL:   So you're asking me to make an
23   assumption in your hypothetical contrary to my testimony?
24           MR. NETTLETON:    Correct.
25           MR. RUSSELL:   All right.
26           MR. NETTLETON:    I am asking you to assume that 8,160
27   is the transfer capability requirement, has been determined
28   to be.

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 1        MR. RUSSELL:    All right.    It's a hypothetical.
 2        MR. NETTLETON:    Right.     Do you consider the Bruce-to-
 3   Milton transmission facilities as they have been applied
 4   for today to be able to meet that transfer capability
 5   limit?
 6        MR. RUSSELL:    I believe so.
 7        MR. NETTLETON:    Okay.    You have reviewed the
 8   alternatives that the OPA has and Hydro One have outlined
 9   in their application; correct?
10        MR. RUSSELL:    You are talking about the other 500 kV
11   alternatives that do not involve generation rejection?
12        MR. NETTLETON:    Right.
13        MR. RUSSELL:    I have reviewed those and other
14   alternatives, yes.
15        MR. NETTLETON:    And you haven't made reference to
16   those other alternatives in your evidence; correct?
17        MR. RUSSELL:    Not that I know of.
18        MR. NETTLETON:    No.    Could I have you turn to
19   paragraph 12 of page 13 of your evidence?
20        MR. RUSSELL:     Page 13, paragraph 12.
21        So it's the partial paragraph?
22        MR. NETTLETON:    Yes.    It starts on page 12 and it goes
23   over to page 13.    It's on the screen for ease of reference.
24        Now, in that paragraph -- do you have it, sir?
25        MR. RUSSELL:    Yes.
26        MR. NETTLETON:     And in that paragraph, you speak of
27   the sufficiently scalable qualities that your option
28   offers.

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 1        MR. RUSSELL:    Yes.
 2        MR. NETTLETON:    And you go on at the end of the
 3   statement or end of the paragraph to state:
 4             "For example, if one or more 500 kV Bruce-to-
 5             Milton circuits are later determined to be needed
 6             because increased generation capacity is
 7             approved, series capacitors can be expected to
 8             enhance the N minus 1 transfer capability of that
 9             upgraded system."
10        MR. RUSSELL:    Yes.
11        MR. NETTLETON:    So do I take it from that statement
12   that you don't quarrel with the reasonableness of the 500-
13   kv Bruce-to-Milton circuit, provided that an 8,160 limit is
14   determined to be reasonable?
15        MR. RUSSELL:    May I have your question again, please?
16        MR. NETTLETON:    Sure.
17        MR. RUSSELL:     It's getting late in the day.
18        MR. NETTLETON:    Do you quarrel with or take exception
19   with the view that the 500 kV Bruce-to-Milton circuit as
20   applied for here is appropriate in the event that an 8,160
21   transfer capability requirement is, in fact, the case?
22        MR. RUSSELL:    It is a way of doing it.     I haven't
23   examined whether there are better ways.      It certainly has
24   its downsides with respect to concentration of facilities
25   on a right-of-way.
26        MR. NETTLETON:    Concentration on a right-of-way is an
27   extreme contingency, sir, for planning purposes?
28        MR. RUSSELL:    Yes, yes.

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 1          MR. NETTLETON:   Thank you.
 2          MR. RUSSELL:   Which must be assessed.
 3          MR. NETTLETON:   Which must be assessed, but must it be
 4   planned to?
 5          MR. RUSSELL:   No.
 6          MR. NETTLETON:   Thank you.     Do you understand that the
 7   IESO has, in fact, considered the issue of the construction
 8   of two 500 kV circuits and a common right-of-way, as part
 9   of its system impact assessment?
10          MR. RUSSELL:   Are you talking about a double circuit
11   500?
12          MR. NETTLETON:   I'm talking about two 500 kV, the
13   existing Bruce-to-Milton 500 kV and the proposed, the
14   applied for 500 kV.
15          MR. RUSSELL:   Yes.   That would be two double circuits
16   within a single right-of-way, yes.
17          MR. NETTLETON:   That has been considered in the system
18   impact assessment, carried out by --
19          MR. RUSSELL:   That's the preferred alternative, yes.
20          MR. NETTLETON:   Yes.
21          Mr. Russell, on page 4 of your evidence, --
22          MR. RUSSELL:   This is the April 18th?
23          MR. NETTLETON:   Yes, it is, sir.
24          MR. RUSSELL:   I see it.
25          MR. NETTLETON:   The top of the page, which is part of,
26   I guess, paragraph (f) that goes over on to page 4, you
27   have used the term there on the third line "avoid undue
28   concentration".     Do you see that:

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 1                "... delivery facilities on the Bruce-to-Milton
 2                right-of-way that has historically been
 3                susceptible to tornadoes."
 4           MR. RUSSELL:   Yes.
 5           MR. NETTLETON:   Help me understand what you mean and
 6   how you came to the conclusion that the applied-for
 7   facilities, if approved, would result in undue
 8   concentrations of delivery facilities?
 9           MR. RUSSELL:   Well, if you had a repeat of the tornado
10   and there were no generation rejection in place, that would
11   be a very, very serious event, and that was what I
12   understood to be the purport of the NPCC correspondence in
13   recent weeks, that there would be no need to arm generation
14   rejection if the new line were put in place.
15           So you would unilaterally disarm yourself against the
16   very thing which took you out in 1985.
17           MR. NETTLETON:   So it is the fact that there has been
18   one tornado that you believe gives rise to this Bruce-to-
19   Milton right-of-way as being an unacceptable location for
20   this transmission facility?
21           MR. RUSSELL:   Yes.   I think the reason that the system
22   was not worse in 1985 is that generation rejection stepped
23   in to protect the system.
24           As I recall, there were three units and some 1,300
25   megawatts of load, a very large amount of load that was
26   dropped as a result of that generation rejection scheme in
27   1985.
28           As I read the new 3.4.1 and the NPCC documents, you

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 1   would not permit that.        With all facilities in service, you
 2   would not allow it to be armed.
 3           MR. NETTLETON:   I want to go back to the original
 4   question that I asked, Mr. Russell.        It's the fact that
 5   there has been one tornado, one event, that gives rise to
 6   your conclusion that locating the Bruce-to-Milton project
 7   in a common right-of-way is an unacceptable result?
 8           MR. RUSSELL:   Well, that coupled with the fact that
 9   generation rejection saved you in that one event before,
10   and now you're putting more eggs in that same basket
11   without generation rejection.
12           It just seemed like an unduly imprudent approach.
13           MR. NETTLETON:   So are you saying that if the new line
14   was constructed and had generation rejection, your concern
15   would be different?
16           MR. RUSSELL:   Yes.   Yes, sure.   That would mitigate
17   that risk, sure, but that is what I take to be forbidden
18   under this policy of 3.4.1 and your representations to
19   NPCC.
20           MR. NETTLETON:   Do you understand the evidence of the
21   Independent Electric System Operator is that they intend to
22   have an ongoing monitoring system, weather monitoring
23   system, for purposes of arming GR?
24           MR. RUSSELL:   Yes.   I remember that testimony, yes.
25           MR. NETTLETON:   And that, in your view, is not
26   sufficient to address the concern?
27           MR. RUSSELL:   No.    It wouldn't protect against a plane
28   crash.    It wouldn't protect against sabotage, no.        I mean,

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 1   I would want -- I would want something -- with that many
 2   eggs in the one basket, I might want that armed all the
 3   time.
 4           MR. NETTLETON:   So it is not the nature of the
 5   contingency, then, that gives rise to the concern.              It is
 6   the --
 7           MR. RUSSELL:   Too many eggs in one basket.
 8           MR. NETTLETON:   It's the consequence of the outcome?
 9           MR. RUSSELL:   Sure, sure.
10           MR. NETTLETON:   Have you studied that in any detail,
11   sir?
12           MR. RUSSELL:   Well, I haven't simulated it or -- if
13   that's what you mean.      No, I haven't conducted dynamic
14   studies.
15           MR. NETTLETON:   Did you ask -- did your client, or on
16   behalf of your client did you ask any questions or
17   interrogatories requesting the information from the
18   Independent Electricity System Operator in terms of how
19   they are intending to go about --
20           MR. RUSSELL:   Yes.   We asked that Saugeen -- I've
21   forgotten the number, but that was discussed at great
22   length when the NPCC documents came in.         We asked for all
23   of the historic documents on the existing SPS system and
24   all planned SPS systems, and I was refused a response.
25           MR. NETTLETON:   But can we -- can we agree, sir, that
26   your evidence and your supplementary evidence does not
27   concern itself with or take issue with the manner in which
28   the Independent Electricity System Operator intends to

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 1   monitor and carry out the operational activities associated
 2   with the new applied-for facilities?
 3        MR. RUSSELL:   I didn't understand what the policy was
 4   until I heard the testimony at the hearing, and, of course,
 5   being denied a response to my discovery, further inhibited
 6   my ability to reach any conclusions on that.
 7        MR. NETTLETON:     I want to talk to you now, sir, about
 8   your supplementary evidence in more detail.
 9        MR. RUSSELL:   Okay.
10        MR. NETTLETON:     Perhaps you could get that up.
11        MR. RUSSELL:   All right.
12        MR. NETTLETON:     The brunt of my questions, Mr.
13   Russell, will be in respect of appendix A, which are the
14   graphs.
15        MR. RUSSELL:   Okay.
16        MR. NETTLETON:     So when I refer to the page numbers, I
17   mean the page numbers within appendix A.      Okay?
18        Now, as I understand this first graph on page 1, sir,
19   this is the case of the assumption that there would be no
20   incurrence of voltage costs and that the Bruce B units
21   would be refurbished.
22        MR. RUSSELL:   Yes.
23        MR. NETTLETON:     Okay.   And in -- represented on the
24   graph are two crossover points, one for each of the 7,176
25   and 7,476 limits; right?
26        MR. RUSSELL:   Yes.
27        MR. NETTLETON:     And the crossover point for the 7,476
28   limit is 2024?

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 1        MR. RUSSELL:    Yes.
 2        MR. NETTLETON:     And for the 7,176, it's approximately
 3   20 -- between 2017 and 2018?
 4        MR. RUSSELL:    Yes.    It is somewhere in there, yes, if
 5   you want to interpolate.
 6        MR. NETTLETON:     Then if I go over the page to the
 7   voltage cost --
 8        MR. RUSSELL:    Okay.
 9        MR. NETTLETON:     -- the 7,176 limit, the crossover
10   point doesn't change.    It is the same; right?
11        MR. RUSSELL:    Yes, you're right, because we didn't
12   need the extra voltage support.
13        MR. NETTLETON:     Right.   Sir, that's common with all of
14   the cases; right?
15        MR. RUSSELL:     By that, you mean?
16        MR. NETTLETON:     That crossover point for the 7,176
17   limit for any of the four cases is between 2017 and 2018?
18        MR. RUSSELL:    Let me check.   On all four?    We did the
19   first two, didn't we?    7,176, okay, that's the third one.
20        It's 2018.     Yes, all four.
21        MR. NETTLETON:     And so the green line shifting for all
22   of the four cases, as compared to the graph 1 and graph 2 -
23   that is, the graph found on page 1 versus the graph found
24   on page 2 - the crossover point changes by approximately
25   four years, 2024 versus 2020, 2020 on graph 2; correct?
26        MR. RUSSELL:    2024 versus 2020, yes.
27        MR. NETTLETON:     So the difference between those four
28   years, sir, does that -- is that explained by the

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 1   assumption, the change in the assumption of the incurrence
 2   of voltage costs?
 3        MR. RUSSELL:     I think that is the only change, yes.
 4        MR. NETTLETON:     Okay.
 5        MR. RUSSELL:     Well, no it's two things: the change
 6   plus the magnitude of the transfers.        So you have two
 7   things going on.
 8        MR. NETTLETON:     But the transfer limit is the same,
 9   isn't it?
10        MR. RUSSELL:     Oh, yes, just moving from page 1 to page
11   2, the only change is voltage costs, yes.
12        MR. NETTLETON:     Okay.   And so that's using the
13   assumption of $70 million as being the voltage cost.
14        MR. RUSSELL:     The cost of voltage support, yes.
15        MR. NETTLETON:     Sorry, cost for --
16        MR. RUSSELL:     It says "voltage cost" but I meant
17   voltage support, the cost of voltage support.
18        MR. NETTLETON:     The underlying assumption in those two
19   cases is that Bruce, in fact, does get refurbished?
20        MR. RUSSELL:     Yes.
21        MR. NETTLETON:     And, sir, if -- I believe your
22   testimony this morning was that the $70 million cost was
23   predicated upon evidence provided by Mr. Falvo.         Is that
24   the case?
25        MR. RUSSELL:     Yes.   That was -- he said something on
26   the order of $70 million as a minimum.        I didn't go check
27   the transcript.     I was here for the testimony.
28        MR. NETTLETON:     If --

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 1          MR. RUSSELL:    It may have been in the technical
 2   conference and not in the -- I've forgotten.
 3          MR. NETTLETON:    Let's just understand, sir, that if --
 4   just from a relationship perspective -- if the 70 million
 5   was higher, let's assume 50 percent higher, so 105
 6   million --
 7          MR. RUSSELL:    Yes.
 8          MR. NETTLETON:    -- then would it be safe to assume
 9   that there would be a change in the crossover point, such
10   that the new crossover point would be more approximately
11   closer to the 2018 period?
12          MR. RUSSELL:    That would be a consequence, yes.
13          MR. NETTLETON:    So the line would shift left, the
14   green line would shift --
15          MR. RUSSELL:    The green line would shift to the left,
16   yes.
17          MR. NETTLETON:    Well, maybe we could turn up -- with
18   respect to the reasonableness of the $70-million cost,
19   maybe we could turn up Volume 8 of the transcript, page 12
20   and look at lines 3 through 27.
21          MR. RUSSELL:    All right.
22          MR. MILLAR:    Could we have the reference again, Mr.
23   Nettleton?
24          MR. NETTLETON:    Yes.   Volume 8 of the transcript, page
25   12, lines 3 through 27.
26          I think if we just go up to start at line 3, so this
27   is a discussion between Mr. Monem and Mr. Falvo.
28          MR. RUSSELL:    Okay.

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 1        MR. NETTLETON:     And what I want to refer you to, sir,
 2   is whether you accept that Mr. Falvo's evidence in this
 3   exchange suggests that the range of cost would, in fact, be
 4   higher than 70 million, because the $70-million estimate
 5   relates only to a voltage support mechanism that provided
 6   positive megavars, not positive and negative that would be
 7   required.
 8        MR. RUSSELL:     I did not so assume, but in any event, I
 9   assumed that this was the cost of providing the voltage
10   support.
11        MR. NETTLETON:     How about if we just look and focus on
12   lines 15 through 17, where he says:
13               "I think what we're -- the requirements that we
14               will be looking at, though, would be ones that
15               have a capability and a range that is both
16               positive and negative, because the voltages --
17               what we're seeing on the system is that the
18               voltages are very, very high, near their
19               maximums, in the precontingency state with
20               everything in-service, and then they're very low
21               following the contingency."
22        And then it goes on to say:
23               "So, in essence, what we need is pieces of
24               equipment that are helping us to keep the voltage
25               down before the contingency happens, and then
26               react very, very quickly to boost the voltage up
27               following the contingency.      So my expectation,
28               that it would be costing more than what he has

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 1             got in that undertaking."
 2        Do you take exception to the view that the cost
 3   estimate for voltage support will be higher than the $70
 4   to $80 million dollar estimate?
 5        MR. RUSSELL:   Yes.      We had priced out obtaining such
 6   voltage support through synchronous condensers at
 7   Nanticoke, and I testified to that, that would be a lower
 8   number.
 9        And so we use the 70 million as kind of an upper
10   bound, but I see where you would say that the upper bound
11   should be higher.
12        MR. NETTLETON:    Okay.    So with respect to Nanticoke,
13   let's put Nanticoke to one side because, as I understand
14   your testimony, there's a range.
15        MR. RUSSELL:   Yes.
16        MR. NETTLETON:    And so at the higher end of the range,
17   you have used 70, but in fact, based on Mr. Falvo's
18   testimony, it may be even higher than 70 million.
19        MR. RUSSELL:   If you use all static VAR compensators
20   for the solution, yes.     There may be other solutions.     I
21   took this to be a rough estimate.
22        MR. NETTLETON:    Sir, then with respect to the graphs
23   in the assumption that Bruce B is retired, right?
24        MR. RUSSELL:     Okay.
25        MR. NETTLETON:    And these are graphs 3 and 4.
26        MR. RUSSELL:   Yes.
27        MR. NETTLETON:    Now, the difference between the
28   voltage costs in these cases is more significant; correct?

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 1   That is to say that the crossover point for the 7,476 limit
 2   on the graph on page 3 is 2028, and then when there is
 3   voltage costs included -- which I am assuming is 70 million
 4   -- the crossover point is 2018, or thereabouts.
 5        MR. RUSSELL:     Yes, 2018.    Okay, yes.
 6        MR. NETTLETON:     So if the assumption with respect to
 7   the upper end of the voltage cost was, in fact, higher than
 8   70 million, again, say, let's assume 50 percent higher,
 9   then we would expect a more significant shifting of the
10   green line such that the crossover point would happen well
11   before the point shown on the graph on page 4.
12        MR. RUSSELL:     Yes.   If you added more voltage support
13   costs, just by definition, you'd have more costs in each of
14   the columns, the affected columns, yes.
15        MR. NETTLETON:     So the difference -- as I understand
16   it and subject to check, as I understand it -- the one
17   crossover point on graph 3 is 20 -- is it 2030?         I think
18   from the chart, it is 2030.      The line item in the
19   spreadsheet below, the 2030 shows that the 7,476 limit
20   exceeds the 720 number for BM?
21        MR. RUSSELL:     In 2030, yes.
22        MR. NETTLETON:     Right.     So on page 4, the 7,476 limit
23   exceeds or crosses over the BM line in the year 2018.
24   Right?
25        MR. RUSSELL:     I have 2019.    With voltage costs
26   included?
27        MR. NETTLETON:     Right.
28        MR. RUSSELL:     Yes.

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 1        MR. NETTLETON:        But in 2018, the amount is 707.
 2        MR. RUSSELL:        707, and it is below the cost of the
 3   Bruce --
 4        MR. NETTLETON: So the crossover point happens in the
 5   year 2019?     Is that --
 6        MR. RUSSELL:        That's how my convention went.
 7        MR. NETTLETON:        Okay.    And so there is approximately
 8   11 years there?
 9        MR. RUSSELL:        Yes.
10        MR. NETTLETON:        Okay.    So if there was an increase of
11   50 percent of the voltage costs, then there would be an
12   expectation of five-and-a-half years being the shift in the
13   green line.     Right?
14        MR. RUSSELL:        Roughly, the way we did this we just put
15   the 70 million in as a lump sum.         So it would almost have a
16   dollar for dollar effect.          But you have the discounting to
17   take account also.
18        MR. NETTLETON:        So, Mr. Russell, in all four cases,
19   there is -- there are crossover points?
20        MR. RUSSELL:        Yes.
21        MR. NETTLETON:        And with respect to Exhibit -- the
22   exhibit that you filed this morning, K14.1 --
23        MR. RUSSELL:        Okay.
24        MR. NETTLETON:        -- can you confirm that, again, the
25   graphs that you have prepared again show the red and the
26   green, the 7,476 and the 7,176 cases, crossing over the
27   8,160 limit case?
28        MR. RUSSELL:        Yes.

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 1        MR. NETTLETON:     And that's in both cases.    We're only
 2   seeing one on the screen, but if we went down the page,
 3   that would be in both cases; right?
 4        MR. RUSSELL:    I think we want to come back up to see
 5   the columns of numbers.    Yes, you can see the 7,476
 6   overtakes at 2026.
 7        MR. NETTLETON:     So, Mr. Russell, all of these cases,
 8   the analysis that you have prepared here, are a net present
 9   value of the costs associated with each alternative; right?
10        MR. RUSSELL:    Well, yes.   And as I said in response to
11   Mr. Stephenson, there are a number of known errors in this
12   calculation which, if corrected, would favour the series
13   capacitors alternatives.
14        MR. NETTLETON:     But in all of the cases in the long
15   term, the Bruce-to-Milton line represents the lowest-cost
16   case, when considered on a net present value basis; isn't
17   that the case?
18        MR. RUSSELL:    Until the crossover point -- after the
19   crossover point, yes.
20        MR. NETTLETON:     Right.   There is always a crossover;
21   right?
22        MR. RUSSELL:    There is always a crossover, but if you
23   built the line to enter in service -- the Bruce-to-Milton
24   line to enter in service, you would have realized all of
25   those savings until that year.
26        MR. NETTLETON:     But, in any event, can we agree that
27   the analysis presented shows in the long-term - by the long
28   term, I mean over the economic life of the asset, the

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 1   assets giving rise to each of the cases - the Bruce-to-
 2   Milton line represents the lowest-cost case?
 3        MR. RUSSELL:     Yes, if you are comparing the
 4   alternatives in isolation, but in my recommendation, you
 5   wouldn't do that.     You would bring the new line into
 6   service when its disadvantage had been dissipated.
 7        MR. NETTLETON:     Let's talk about that.      So as I
 8   understood your testimony this morning, the focus is, then,
 9   on the crossover point as being the benchmark, if you will,
10   or the --
11        MR. RUSSELL:     An indicator, yes.
12        MR. NETTLETON:     An indicator.
13        MR. RUSSELL:     Yes.
14        MR. NETTLETON:     Then there is some three- to five-year
15   period in advance of that point where you would expect
16   Hydro One or OPA or someone to then proceed with an
17   application for the construction of the facilities?
18        MR. RUSSELL:     Yes, and I would expect some more
19   refined analysis, as well, yes.       This is not a formulaic --
20   I wouldn't put aside all system planning and transmission
21   planning and just run these curves to decide when to put
22   this line in.    It would have to have a systematic analysis,
23   taking account of all factors, but these show that a big
24   disadvantage to this line in the early years under all
25   scenarios and that there is no -- very little risk and
26   advantage, economic advantage, to occur on that.
27        MR. NETTLETON:     Mr. Russell, this is effectively your
28   runs of the OPA's model?

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 1        MR. RUSSELL:   Yes.
 2        MR. NETTLETON:   Do you understand the OPA's model was
 3   intended for the purpose of determining when application
 4   should be made?
 5        MR. RUSSELL:   No.
 6        MR. NETTLETON:   That's your interpretation of that --
 7        MR. RUSSELL:   That is my interpretation of these
 8   results, yes.
 9        MR. NETTLETON:   So now let's just follow along how you
10   are interpreting these results.     I need to understand how
11   this would work, in your view.
12        If we follow along the green line or the red line -
13   take your pick - and we reach a point where we are some
14   three or five years prior to the crossover, can you agree
15   with me that in that circumstance there would have been
16   locked-in energy incurred?
17        MR. RUSSELL:   Yes.   That's why we would have a
18   narrowing between the curves.     That's what drives it, and
19   differences in losses.
20        MR. NETTLETON:   And there would have been capital
21   outlays of at least the series compensation facilities?
22        MR. RUSSELL:   Yes.
23        MR. NETTLETON:   And so then we hit a point three to
24   five years away from the crossover; correct?
25        MR. RUSSELL:   That's the working assumption, yes.
26        MR. NETTLETON:   And then it would be okay to incur the
27   costs of the new line?
28        MR. RUSSELL:   Yes.

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 1           MR. NETTLETON:   And that cost would then be $700
 2   million or $635 million?
 3           MR. RUSSELL:   Well, yes, but that's the way with all
 4   deferrals of capital investments.        You get an increase in
 5   the cost of the materials, typically, but it's exceeded by
 6   the savings in the avoided fixed charges.
 7           MR. NETTLETON:   What savings, sir, have we incurred
 8   when there has been locked-in energy equal to the amount
 9   under the blue line up to the point three to five years
10   before the crossover, and then you have the blue line
11   effectively superimposed on top of either the red or green
12   line?
13           MR. RUSSELL:   Well, the point is that the combination
14   of the low cost of the series cap alternative, the 97
15   million, added to the locked-in energy, the penalty, okay,
16   if any, which I dispute is correctly calculated, that shows
17   that there are savings by not building the Bruce-to-Milton
18   line in each of those years.
19           Unless and until those cumulations of annual locked-in
20   energy wipe out the disadvantage of building the expensive
21   line, we don't reach the crossover.        So you're saving money
22   by not building the line.
23           MR. NETTLETON:   But at the point three to five years
24   before the crossover, you then incur the cost of the line?
25           MR. RUSSELL:   No, you incur the cost of the line when
26   it goes in service.      Well, you get the construction work in
27   progress.     From the time period construction starts, you
28   start to incur the costs, yes.

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 1        MR. NETTLETON:     That is consistent with the blue line
 2   today --
 3        MR. RUSSELL:    Right.
 4        MR. NETTLETON:     -- as shown on your graph?
 5        MR. RUSSELL:    Right.
 6        MR. NETTLETON:     So you don't quarrel with the idea
 7   that the blue line would then be superimposed on either the
 8   red or the green line three to five years from the point of
 9   the existing crossover?
10        MR. RUSSELL:    Right.   But you would have saved the
11   cost of that transmission line, which is $59 million a year
12   in fixed charges.    So for every year you defer -- well, if
13   you look at your -- I don't remember the exhibit number, in
14   particular, but you have a calculation of the revenue
15   requirements for the transmission system with and without
16   the proposed line, and it runs about 9 to 10 percent of the
17   annual cost.   The annual cost runs about 9 or 10 percent of
18   the total capital cost.
19        So it runs in the range of $59 to $63, $64 million a
20   year that this Bruce-to-Milton transmission line will cost
21   you in fixed charges.    So every year you defer that, you
22   avoid that.
23        So long as you are avoiding a $60 million cost, and
24   the cost of the inflation in the poles and wires and
25   insulators is less than that, you're ahead of the game.
26        MR. NETTLETON:     But after the three- to five-year
27   mark; right?
28        MR. RUSSELL:    After the three- to five-year mark.

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 1        MR. NETTLETON:    You have then gone to the Board and
 2   you've got your new graph?
 3        MR. RUSSELL:    Right.
 4        MR. NETTLETON:    The tails of the red and green line no
 5   longer have any relevance; right?
 6        MR. RUSSELL:    Locked-in energy has disappeared.       You
 7   just don't incur those penalties.
 8        MR. NETTLETON:    So all that has happened is there
 9   would then be no crossover?
10        MR. RUSSELL:    Well, that's right, because you build
11   the line and locked-in energy -- the penalty associated
12   with both scenarios would disappear.
13        MR. NETTLETON:    Wouldn't the cumulative net present
14   value of the costs associated with having the green and red
15   line - take your pick - and then the blue line superimposed
16   on the green and red three to five years away from the
17   existing crossover give rise to a higher overall net
18   present value of costs?
19        MR. RUSSELL:    What you have is you have your $97
20   million line, okay, which you are depreciating over time.
21   You've got your locked-in energy savings, because the
22   locked-in energy costs plus the annual charges on the
23   lower-cost line are below the costs you would have incurred
24   with the new line.    So this demonstrates that you are
25   saving every year you defer that new line.
26        When that new line has to be put in place, then this
27   whole scenario ends.    Locked-in energy ends.
28        MR. NETTLETON:    Mr. Russell, did you carry out any

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 1   power flow studies to match the 7,476-megawatt case?
 2        MR. RUSSELL:     No.    I used the data response from which
 3   it was drawn.
 4        MR. NETTLETON:     All right.    Let's talk about the
 5   assumptions that you made with respect to Nanticoke as
 6   providing voltage support.
 7        MR. RUSSELL:     Yes.
 8        MS. NOWINA:    Mr. Nettleton, we're going to go for
 9   shorter periods before breaks for the court reporter, who
10   has been going all day.       How much longer do you think that
11   your cross will be?
12        MR. NETTLETON:     I am going to be very --
13        MS. NOWINA:    15 minutes or less?
14        MR. NETTLETON:     Yes, 20 minutes from the end.
15        MS. NOWINA:    All right.     Then we will break after you
16   finish.
17        MR. NETTLETON:     I just want to talk to you about this,
18   the Nanticoke voltage support.       Now, at paragraph 9 of your
19   supplementary evidence, that is found at page 2 and over
20   the page to page 3.
21        MR. RUSSELL:     In the narrative?
22        MR. NETTLETON:     Yes.
23        MR. RUSSELL:     Okay.    Paragraph 9, okay.
24        MR. NETTLETON:     You say:
25             "Based upon the ABB study and other material, a
26             lower-cost option, such as one involving some
27             combination of an SVC and static capacitors or
28             another involving conversion to synchronous

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 1              condensers of the coal generators at Nanticoke,
 2              might be technically feasible."
 3        MR. RUSSELL:    Yes.
 4        MR. NETTLETON:    What analysis, sir, did you do to
 5   assess whether the coal generators at Nanticoke, in fact,
 6   would be technically feasible?
 7        MR. RUSSELL:    That was part of -- the April 2006
 8   interconnection assessment of the series capacitors was
 9   considered.   I'm pretty sure it is in there.
10        MR. NETTLETON:    So if you didn't do any independent
11   analysis --MR. RUSSELL:     No.   This was the plan at one time
12   of Hydro One.
13        Now we also did -- I should, my sub-contractor, Mr.
14   Besich, who has retired from a long career at Southern Cal
15   Edison, worked up some rough numbers on other conversions
16   of generators to synchronous condense certificates and
17   that's, that was the basis of our assumption that it would
18   be cheaper.
19        MR. NETTLETON:    You're not relying or you have not
20   referenced or provided any cost studies, have you, with
21   respect to the costs of that conversion option that you
22   speak of in paragraph 9?
23        MR. RUSSELL:    That's correct.    We had a very, very
24   concentrated time, from the time we got the model and got
25   it running until we filed this, was a very packed,
26   concentrated time, and so we didn't carry out additional
27   studies.
28        MR. NETTLETON:    But I heard you today say that you

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 1   thought the costs would be in the range of three to five
 2   million.
 3           MR. RUSSELL:     That was what the research showed on
 4   other -- maybe it was three to ten.        I would have to go
 5   back and check with what Mr. Besich said.
 6           MR. NETTLETON:    Is that an annual cost, sir?
 7           MR. RUSSELL:   My recollection was that there was a
 8   capital cost and then there were some additional costs for
 9   losses, annual costs for losses.
10           MR. NETTLETON:    Would you expect or would you know
11   whether or not there would be an O&M cost for the Nanticoke
12   facilities to be used?
13           MR. RUSSELL:   Oh, sure.   You would have to have some
14   O&M, and we roughed out some numbers on that, as I recall.
15           MR. NETTLETON:    But you didn't look at those in any
16   particular detail?       For Nanticoke?
17           MR. RUSSELL:   Not specific to Nanticoke.      We looked at
18   costs of other conversions to synchronous condensers.
19   There were two or three of them in the Chicago area.            I've
20   forgotten which ones Mr. Besich did look at.
21           MR. NETTLETON:    Now you don't take exception to the
22   fact that, in order for the Nanticoke facilities to be used
23   in this manner as synchronous condensers, that the coal
24   units would have to be taken off line?         Or do you know
25   that?
26           MR. RUSSELL:   Yes.   You couldn't use the unit, the
27   generators, the synchronous condenser while it was
28   connected to the turbine, yes.

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 1        MR. NETTLETON:      And so decommissioning of the units
 2   would, then, have to take place, right?
 3        MR. RUSSELL:      Well, for the conversion, but they would
 4   provide voltage support until, in the ordinary course,
 5   while operating as synchronous generators.         There would be
 6   no extra cost there.
 7        MR. NETTLETON:      When would you or have you assumed
 8   that the coal SVCs would be available for service in this
 9   manner?
10        MR. RUSSELL:      At such time as Nanticoke was retired.
11   Until then, you couldn't get all of the voltage support you
12   need from the units as synchronous condensers.
13        MR. NETTLETON:      Isn't part of your analysis that the
14   voltage support would be required by 2012?
15        MR. RUSSELL:      Yes.   Yes.
16        MR. NETTLETON:      So you think it is reasonable to
17   assume that the Nanticoke coal units could be taken off
18   line and refurbished for purposes of providing voltage
19   support in this manner by 2012?
20        MR. RUSSELL:      Maybe I am not making myself clear.
21        If Nanticoke is operating as a base load generator,
22   it's going to provide voltage support anyway.          That's the
23   nature of the beast.      Synchronous generators are a source
24   of dynamic voltage support.
25        If, as and when they are retired, that's the point at
26   which you would make the conversion to a synchronous
27   condenser.     So you would have some time period during which
28   you did the conversion.       You wouldn't have the use of a

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 1   particular unit, but synchronous condensers would provide,
 2   after the conversion, they would provide voltage support.
 3        MR. NETTLETON:    Did you consider any of the, what I
 4   would call social costs associated with having the
 5   Nanticoke coal units taken off line, decommissioned?
 6        MR. RUSSELL:    I thought that was intended to be the
 7   case anyway.
 8        MR. NETTLETON:    By 2012, sir?
 9        MR. RUSSELL:    No.   But whatever time they were taken
10   off, there would be a time of conversion to synchronous
11   condensers, at which time they could, again, the
12   synchronous condensers could continue providing voltage
13   support.
14        You do understand that synchronous generators do
15   provide voltage support?     I mean that seems to be something
16   not implicit in your question.
17        MR. NETTLETON:    What I am trying to --
18        MR. RUSSELL:    One of the problems with retirement of
19   Nanticoke is that we lose the voltage support and it has to
20   be replaced with static VAR compensators and some static
21   capacitors.
22        So, that is one of the things which makes this -- adds
23   to the problem of upgrading Bruce station.
24        MR. NETTLETON:    Sir, in order for that to happen,
25   though, sir, you have to burn coal, right?
26        MR. RUSSELL:    To operate as a synchronous condenser?
27        MR. NETTLETON:    Before you convert it.
28        MR. RUSSELL:    If it's a coal unit that's running as a

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 1   generator, it provides voltage support.
 2         At such time as it shuts down and stops burning coal
 3   and operating as a generator, you make the conversion to a
 4   synchronous condenser, and then it provides voltage support
 5   as a synchronous condenser, and you don't need coal.           You
 6   need a little motor to start up the synchronous condenser
 7   and get it spinning.
 8         MS. NOWINA:    I'm going to jump in.     So you chose the
 9   year 2012 because that is when you believe they might go
10   off line?
11         MR. RUSSELL:    That's when the series capacitors come
12   on.
13         MS. NOWINA:    I see.
14         MR. RUSSELL:     You need three years from today, roughly
15   speaking.
16         Excuse me, yes.
17         MR. NETTLETON:    Can I have a moment, Madam Chair?
18         MS. NOWINA:    Yes.
19         [Mr. Nettleton consults.]
20         MR. NETTLETON:    Mr. Russell, could I take you back to
21   your supplementary evidence, appendix A, chart 2?
22         MR. RUSSELL:    Chart 2, okay.    I have it.
23         MR. NETTLETON:     I just want to revisit the idea of
24   superimposing the costs of the Bruce-to-Milton line at a
25   point three to five years from the crossover.         So if --
26         MR. RUSSELL:    Wait, wait.    The process would be that
27   in advance we would be updating this analysis and making
28   forecasts and projecting out when the crossover point might

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 1   occur.     It's five years in advance of that, closer in time.
 2           We would start the process for new application when it
 3   became clear that the line was needed so that it would be
 4   in service at the crossover.         If you missed by six or eight
 5   months or so, you would have a little extra locked-in
 6   energy.
 7           MR. NETTLETON:    Well, let's just take this chart for a
 8   minute.
 9           MR. RUSSELL:   Okay.
10           MR. NETTLETON:    And let's just assume that we're
11   planning based on the information that you have presented,
12   okay?
13           MR. RUSSELL:   Let's just say that this is what the
14   facts turned out to be; right?
15           MR. NETTLETON:    Fair enough.
16           MR. RUSSELL:   As we moved ahead in time.
17           MR. NETTLETON:    We're at a crossover for the red line
18   case, the 7,176 case.
19           MR. RUSSELL:   2017, 2018, okay.
20           MR. NETTLETON:     Yes.
21           MR. RUSSELL:   So we come back to 2013 and you would
22   start the process.
23           MR. NETTLETON:    So three to five years prior to that
24   is, say, 2015?
25           MR. RUSSELL:   2013.      Okay, so 2015.   Okay.
26           MR. NETTLETON:    So let's look at line 2015 on the
27   graph.
28           MR. RUSSELL:     Okay.

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 1        MR. NETTLETON:   And if we add at that point to the
 2   graph or to the -- either of the two line items, 553 or
 3   546, if we add to that the 635, that is the cost of the
 4   line; right?
 5        MR. RUSSELL:   Yes.
 6        MR. NETTLETON:   Subject to check, the 7,476 limit
 7   would be 1,181, 546 plus 635; right?
 8        MR. RUSSELL:   Yes, and you would have avoided all of
 9   those higher numbers in the Bruce-to-Milton line column.
10   You would not have incurred any of those.
11        So you've got to add all those add up, too, and then
12   add the cost that -- the 600 or so to the 546, but you have
13   got to subtract all the money you saved from 2009 to 2015
14   in the Bruce-to-Milton line, which is obviously higher.          It
15   is 1,400 -- it's 1.4 every two years.      You just don't incur
16   those costs.
17        MR. NETTLETON:   Sir, isn't this cumulative?
18        MR. RUSSELL:   Yes.   I stand corrected, yes.     Correct.
19        MR. NETTLETON:   All right.
20        MR. RUSSELL:   Yes.
21        MR. NETTLETON:   So the 546 plus the 635 would give us
22   the cost of the line, right, at that point in time?          It is
23   2015; right?   And that would equal 1,181, and that would
24   equal the cost of the combined series capacitor plus the
25   new line; right?
26        MR. RUSSELL:   I have to think about that.
27        MR. NETTLETON:   While you are thinking about that, let
28   me give you the other piece.

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 1          MR. RUSSELL:   All right.
 2          MR. NETTLETON:   And then with respect to the line,
 3   then we've got -- in line 2015, we've got the 707 number;
 4   right?
 5          MR. RUSSELL:   Well, you have saved the 16 million per
 6   year that you would have spent on the Bruce-to-Milton line
 7   for all of those years of deferral.       So that's got to be in
 8   the mix.
 9          So if we've gone from 2009 to 2017, what do we have?
10   Eight or nine years of 60 million, and you're going to take
11   a time value number of that, as well.        So you get those
12   savings accumulating with interest, as well.
13          So, you know, you're asking for a refinement of this
14   calculation, which I haven't done, but that would be the
15   logic.
16          MR. NETTLETON:   But, Mr. Russell, aren't these costs
17   cumulative?
18          MR. RUSSELL:   Yes, but the savings in avoided fixed
19   charges on the Bruce-Milton line are also cumulative, and
20   you have not subtracted those before you added the 600
21   million to the --
22          MR. NETTLETON:   These costs have all been discounted,
23   sir.
24          MR. RUSSELL:   The costs of deferral.     The savings on
25   deferral of the Bruce-Milton line are not in this
26   calculation, but they are implicitly saved and they have to
27   be recognized.
28          MR. NETTLETON:   Your position is they're not included

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 1   in the net present value calculation?
 2        MR. RUSSELL:      No, they're not.    If you don't build the
 3   line, you realize a savings.       That's basic power supply
 4   economics.
 5        MR. NETTLETON:      I am going to leave it at that, Mr.
 6   Russell.    I think it must be the hour of the day and the
 7   temperature in the room.
 8        Madam Chair, thank you.       Thank you, Mr. Russell.
 9   Those are my questions.       I appreciate your time.
10        MS. NOWINA:      Thank you.   Before we break, I will just
11   get a sense, Mr. Pape, are you going to have much in re-
12   examination?
13        MR. PAPE:     No.   I'm not going to have much, if
14   anything.
15        MS. NOWINA:      Mr. Millar, do you have any questions?
16        MR. MILLAR:      No.
17        MS. NOWINA:      Mr. Pape -- is there anyone else who
18   wanted to cross-examine in support of Hydro One?          None?
19        So, Mr. Pape, do you have any re-examination?
20        MR. PAPE:     If I could have a minute?
21        MR. PAPPAS:      Would it be possible --
22        MS. NOWINA:      Mr. Pappas, you already had your chance.
23        MR. PAPPAS:      I wasn't included in that?
24        MS. NOWINA:      No, you weren't included.      I was looking
25   for --
26        MR. PAPPAS:      I was just wanting to check.      You were
27   looking around.
28        MS. NOWINA:      I was looking at folks on this side of

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 1   the room.
 2           MR. PAPPAS:   I wasn't sure.    Thank you.
 3           MS. NOWINA:   That's okay.
 4           MR. PAPE:   Sorry, Madam Chair.
 5           [Mr. Pape consults with Mr. Monem.]
 6           MR. QUINN ROSS:    Madam Chair?
 7           MS. NOWINA:   Mr. Ross.
 8           MR. QUINN ROSS:    I think what Mr. Russell has been
 9   talking about with Mr. Nettleton for the last few minutes
10   has been very important, and I think that we are all are
11   getting sort of an idea about the arithmetic involved, but
12   haven't been able to put it together; at least I haven't
13   with my calculator on my computer.
14           I don't know if it is appropriate or whether my
15   friends would agree to allow Mr. Russell to file as an
16   undertaking the math that he is talking about that actually
17   expresses, in numbers, what he has been alluding to in
18   words.
19           MS. NOWINA:   Mr. Nettleton, how would you feel about
20   that?    And, Mr. Pape, I will get your opinion, as well,
21   since it is your witness.
22           MR. NETTLETON:    Madam Chair, I am conscious of the
23   question you asked me 15 minutes ago about how much longer
24   I would be.     I am getting -- it sounds like I need time to
25   speak with my client.      It might be appropriate to take a
26   break, if we can have that discussion that I need to have
27   with my client.
28           MS. NOWINA:   Well, we think we have it figured out,

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 1   and that is probably -- that's probably important, so I am
 2   going to Ms. Chaplin has a question, and maybe I will let
 3   her ask her question and we will see where we all are --
 4        MR. NETTLETON:     Thank you.
 5        MS. NOWINA:     -- at that point.
 6        QUESTION FROM THE BOARD:
 7        MS. CHAPLIN:     Just a little bit of pressure.      What I
 8   am curious -- I am also looking at, in your supplementary
 9   evidence, the chart, the second chart in appendix A, which
10   is marked: "Bruce refurbished with voltage costs included."
11        MR. RUSSELL:     Yes, ma'am.
12        MS. CHAPLIN:     So as I understand Mr. Nettleton's
13   questions, he is asking how this chart looks and how the
14   underlying analysis looks, if you were to start off
15   operating along either the blue -– sorry, either the green
16   or red lines.    So in other words, you put in the series
17   caps, you rely on some level of generation rejection, you
18   have the near-term measures and you don't build the Bruce-
19   to-Milton line.
20        My understanding -- I may well be wrong -- but my
21   understanding is if, for example -– and let's say this was
22   how it was going to look, so there was this crossover in
23   2018, and I think what you have suggested is sort of five
24   years in advance of that, you would start the process and
25   it might be that a line would be then justified and
26   approved.
27        What I would assume that then meant is somewhere
28   around -- in other words, the blue line would not change in

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 1   any way except it would shift to the right.
 2          MR. RUSSELL:    Yes.
 3          MS. CHAPLIN:    And so, let's say, it is sort of showing
 4   kinds of a one-, two-, three-year ramp-up.        So sort of in
 5   2014 it starts, and then it crosses over, the crossover
 6   point is still the same?
 7          MR. RUSSELL:    Yes, with the exception of inflation.
 8          MS. CHAPLIN:    Okay, with the exception of inflation.
 9          MR. RUSSELL:    Yes.
10          MS. CHAPLIN:    So in other words, the system would be
11   operating along the red or green line, the Bruce-to-Milton
12   line would come into service at the crossover point, give
13   or take the year, and then you would essentially be
14   operating along that blue line and those red and green
15   lines, to the extent they're above the blue line, are
16   immaterial at the point --
17          MR. RUSSELL:    Because the locked-in energy ceases,
18   yes.
19          MS. CHAPLIN:    I am not sure if that is helpful, but
20   that helped me.      Thank you.
21          MS. NOWINA:     It is helpful to us.
22          MS. CHAPLIN:    In other words, the blue line doesn't go
23   up.    It goes over.
24          MR. RUSSELL:    Yes.
25          MS. CHAPLIN:    Thanks.
26          MR. QUINN ROSS:    Based on that explanation, Madam
27   Chair, I can withdraw my request for my undertaking.
28          MS. NOWINA:     All right.

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 1          Mr. Nettleton, I am -- if the others don't object, I
 2   am willing to give you your 15 minutes, but I don't want to
 3   spend another half an hour on this.       I think we figured it
 4   out.
 5          MR. NETTLETON:   I understand.    What I am hearing from
 6   the peanut gallery, so to speak, is that there is an issue
 7   with respect to the concept that there would be only a
 8   shift to the right, and not a shift up and to the right, to
 9   take into account the $635 million of capital cost that
10   would be associated with the line and the need for that net
11   present value, that cumulative net present value element of
12   the line to be included, such that there would be a higher
13   cost, because you would be getting series comp as well as
14   the new line.
15          So it wouldn't just be simply a shift to the right.
16   It would be a shift up and right.       So I am going to have to
17   revisit with Mr. Russell that issue, and I can do that now
18   or I would prefer taking five minutes just to seek
19   instructions from my client on that point.
20          MS. NOWINA:   All right.   Let's take a 15-minute break
21   and come back and ask that one question.
22          There is coffee and refreshments out this door, for
23   anyone who wants them.      You may bring them back in here if
24   you would like.
25          --- Recess taken at 8:21 p.m.
26          --- Upon resuming at 8:41 p.m.
27          MS. NOWINA:   Please be seated.
28          Mr. Nettleton.

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 1        MR. NETTLETON:     Madam Chair, I think we've had an
 2   opportunity to collect our thoughts and revisit this in a
 3   more straightforward way.
 4        If I could ask Mr. Russell just a few more questions
 5   regarding his appendix A document?
 6        Mr. Russell, page 6 of appendix A, do you have that?
 7        MR. RUSSELL:    I have it.
 8        MR. NETTLETON:     You have produced the run data for
 9   scenario 3; right?
10        MR. RUSSELL:    Yes.
11        MS. NOWINA:     Is your mike on, sir?
12        MR. RUSSELL:    I'm sorry.   Yes.
13        MR. NETTLETON:     And so in scenario 3, I understand
14   that relates to the Bruce B retired voltage costs included
15   case; right?
16        MR. RUSSELL:    Yes.
17        MR. NETTLETON:     Now, we were talking about the case, a
18   new case, where in 2015 there would be the incurrence of
19   capital costs associated with a new line; right?
20        MR. RUSSELL:    Yes.
21        MR. NETTLETON:     And so that capital cost outlay would
22   effectively hit the third column under the title "Capital",
23   right, in 2015, if we were to show it on this graph or on
24   this spreadsheet; right?
25        MR. RUSSELL:    If you did that, it would show in that
26   column.   I am not sure of the logic of it, but I am going -
27   - I understand what you're saying.
28        MR. NETTLETON:     Then, sir, to your point you made, one

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 1   would expect that after the line came into service - that
 2   is, to say in 2019 - you wouldn't expect any locked-in
 3   energy costs, right --
 4          MR. RUSSELL:    Right.
 5          MR. NETTLETON:    -- past that point?
 6          MR. RUSSELL:    Right.
 7          MR. NETTLETON:    And you wouldn't expect any losses,
 8   either, from 2019 forward; right?
 9          MR. RUSSELL:    Right.    You might even get a credit,
10   yes.   Okay.
11          MR. NETTLETON:    And there would be no peaker costs
12   either; right?
13          MR. RUSSELL:    I have to think about that.      Possibly.
14          MR. NETTLETON:    What I would ask you to do, sir, is
15   undertake to produce -- reproduce this scenario with the
16   following:     A capital cost outlay in 2015 of $635
17   million --
18          MR. RUSSELL:    2013?
19          MR. NETTLETON:    2015.
20          MR. RUSSELL:    2-0-1-5?
21          MR. NETTLETON:    2-0-1-5.    To modify the second column,
22   the LIE column, from 2019 to 2030 with zero LIE amounts.
23          MR. RUSSELL:    Okay.
24          MR. NETTLETON:    To modify the losses column from 2019
25   to 2030 and place the number zero in those cells, and the
26   same for the column entitled "Peaker" from 2019 to 2030.
27          MR. RUSSELL:    Okay.    I understand what you're
28   suggesting, yes.

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 1        MR. NETTLETON:     Will you undertake to do that, please?
 2        MR. RUSSELL:     I will do that.
 3        MR. NETTLETON:     Thank you, sir.
 4        MR. PAPE:   I have an objection, Madam Chair.       This is
 5   very -- first off, I don't know what the complexities are
 6   of taking this modelling work, which was done for one
 7   purpose, and converting it to another.       I mean, this is
 8   surely the work that Hydro should have built a model that
 9   it was capable of doing.     This model was not built to do
10   this kind of thing.
11        So I don't know enough about the complexity of the
12   technical, financial or economic task that has just been
13   asked of Mr. Russell to know whether it is appropriate for
14   him to be put in a position where he undertakes to do that.
15   That's one level of concern I have with this.
16        I am in a difficult position, because I can't --
17   because this is all being done during the period of his
18   cross, I can't talk to him about that.
19        The second thing is -- and, again, I don't know how
20   significant this is, but it strikes me that if this task
21   should be done at Mr. Nettleton's request, then it should
22   not be done on the basis of the graph on page 3, because
23   the curves and crossover points, and so on, are all based
24   on a Bruce B retirement scenario, and it is pretty
25   unlikely, given all that we have heard, that there's going
26   to be a need for the new line, for the Bruce-Milton line,
27   10 or 15 years down the road if Bruce B is going to be
28   retired.

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 1           So if this should be done, it should probably be done
 2   on the basis of a more appropriate graph, I would think, or
 3   a more appropriate scenario as the starting point.
 4           But, as I understand it, what Mr. Russell is really
 5   being asked to do is undertake a whole -- a quite different
 6   exercise.     The basic conceptual frame of what he has been
 7   explaining to the Board in his evidence and in his cross
 8   was clearly understood by the Board and by Ms. Chaplin, as
 9   a member of the Board, and was explained, from Ms.
10   Chaplin's question, that in many ways these -- as I
11   understand it, anyway, these present value charts or graphs
12   are meant for one purpose, and they are not meant to, in
13   fact, envisage or to provide the answer to this question
14   that's now being asked.         So I...
15           MS. NOWINA:    We will come back to your question about
16   which scenario is correct.         Let's address the substance of
17   your question, or the more important part of your questions
18   first.
19           First, Mr. Russell, you agreed to do this.       So in
20   terms of the calculation, it's possible to do; is that
21   true?
22           MR. RUSSELL:   Whether it makes sense, I don't know,
23   but the -- we could do it, yes.
24           MS. NOWINA:    Right.    What I would suggest is that you
25   could put whatever caveats you want into it, whatever
26   comments -- Mr. Russell can add whatever comments he wants
27   about his concerns about doing it.
28           The second thing that I was going to suggest is that

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 1   Mr. Russell, or on behalf of you, if you wish to do it,
 2   might want to make another run, which is whatever he thinks
 3   is appropriate to explain his scenario, so not just
 4   following Mr. Nettleton's instruction.        Do that run for
 5   Hydro One, but if he wishes or you wish him to do another
 6   run which he thinks better explains his position, he may do
 7   that, as well.
 8          Everyone can address them in argument and explain
 9   their scenarios.
10          MR. PAPE:   Well, I will not object if the Board thinks
11   that is an appropriate thing to do.       I take your point that
12   whatever caveats are appropriate to be added would be
13   added.
14          MS. NOWINA:   Yes.   Now, let's get to the more minor
15   point in terms of which scenario is the appropriate one to
16   run.   Does Hydro One have a position on that?
17          MR. NETTLETON:    Madam Chair, the confusion goes back
18   to a remark that my friend, Mr. Pape, clarified and I had
19   forgotten -- I was remiss -- that all of the subheadings
20   have "Bruce refurbishment run" on it.        I guess given the
21   hour of the day, I meant that the "run" would be the Bruce
22   refurbished voltage cost included run.
23          I believe that is scenario 3, on page 6, because if
24   you look at the cumulative net present value amount of
25   1,010, that is consistent with the cumulative net present
26   value of 1,011.      I think that is right.
27          MS. NOWINA:   Well, in any case, I think likely Mr.
28   Russell can sort that out.      We're looking for Bruce

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 1   refurbished voltage costs included.
 2        MR. RUSSELL:    Okay.
 3        MS. NOWINA:    Does that make sense?
 4        MR. RUSSELL:    Bruce refurbished costs scenario 3, yes.
 5        MS. NOWINA:    That is your scenario 3.    On the graphs,
 6   it shows as number 2, on page 2, but --
 7        MR. RUSSELL:    Yes, but it is, in fact, scenario 3.
 8        MS. NOWINA:    It is, in fact, scenario 3.
 9        MR. MILLAR:    Madam Chair, with that, we will give that
10   an undertaking number.
11        MS. NOWINA:    Let's give it two undertaking numbers.
12   One for Hydro One's scenario and another for the Saugeen
13   Ojibway scenario, if they choose to enter one.
14        MR. MILLAR:    Okay.    J14.1 will be the scenario
15   described by Mr. Nettleton a minute or so ago, except on
16   scenario 3 instead of scenario 1, as I think he indicated.
17        UNDERTAKING NO. J14.1:      TO RE-RUN THE HYDRO ONE
18        SCENARIO WITH 1)    A MODIFIED CAPITAL COST OUTLAY IN
19        2015 OF $635 MILLION; 2) A MODIFIED LIE COLUMN, FROM
20        2019 TO 2030 WITH ZERO LIE AMOUNTS; 3) A MODIFIED
21        LOSSES COLUMN FROM 2019 TO 2030 AND PLACE THE NUMBER
22        ZERO IN THOSE CELLS, AND THE SAME FOR THE COLUMN
23        ENTITLED "PEAKER" FROM 2019 TO 2030.
24        MR. MILLAR:    J14.2 will be a scenario run by Mr.
25   Russell using the inputs he thinks are appropriate.
26        I should add for J14.1, Mr. Russell is permitted to
27   put whatever caveats and explanations he wishes to.
28        UNDERTAKING NO. J14.2:      MR. RUSSELL'S SCENARIO

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 1           MS. NOWINA:    In the text, that would change the run.
 2           MR. MILLAR:    In the text, yes, not of course in the
 3   chart.
 4           MS. NOWINA:    Is that clear, Mr. Russell?
 5           MR. RUSSELL:    Yes, that's acceptable.    I will do that.
 6           MS. NOWINA:    Thank you.    Now, there is a timing issue,
 7   because we have given dates for argument-in-chief, and I
 8   suspect that Mr. Nettleton will want to have this before
 9   your argument-in-chief?
10           MR. NETTLETON:    Please.
11           MS. NOWINA:    We have given a week for that.     Mr.
12   Russell, how long do you think it might take you to do
13   this?
14           MR. RUSSELL:    Let me get home and --
15           MS. NOWINA:    Assuming we ever let you go home.
16           MR. RUSSELL:    Let me get home and clear my head, but
17   you would need a few days assimilate it, so let me try to
18   get something by the -- what's today?
19           MS. NOWINA:    Wednesday.
20           MR. RUSSELL:    Wednesday.    Let me try to get something
21   no later than Monday, hopefully by the weekend, but I will
22   be getting home mid-day tomorrow, so let me just see what I
23   can do.
24           MS. NOWINA:    Will that work for you, Mr. Nettleton?
25           MR. RUSSELL:    When is his argument due?
26           MS. NOWINA:    One week from today.
27           MR. RUSSELL:    Oh, okay.    Okay.
28           MR. NETTLETON:    I take it there is no way of extending

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 1   the argument date?
 2          MS. NOWINA:    I would prefer not to, Mr. Nettleton.
 3   But it's important that we get this information and that
 4   you do have time to analyze it.
 5          So what I would suggest -- may I put it this way, if
 6   Mr. Russell is able to get it to you by the weekend, can
 7   you still make Wednesday?
 8          MR. NETTLETON:    Yes.
 9          MS. NOWINA:    If he does not communicate with Mr.
10   Millar, and we will get into a discussion about when you
11   can submit your argument.
12          MR. NETTLETON:    Thank you.
13          MR. MILLAR:    Yes, and we can deal with it by way of
14   PO, if necessary.
15          MS. NOWINA:    Yes, thank you, Mr. Millar.
16          Does that complete our examination of Mr. Russell?         No
17   one else has any further questions?
18          MR. PAPE:   No redirect.
19          MS. NOWINA:    No redirect.    Thank you very much, Mr.
20   Russell, we appreciate your time and apologize for the long
21   day.
22          MR. RUSSELL:    Thanks you.    It's a pleasure.   I told
23   them I would take my beating like a man.
24          MS. NOWINA:    And you have.
25          Mr. Brill, are you ready to come forward?
26          Mr. Fallis.
27          MR. PAPE:   Madam Chair, with your leave, may I just
28   apologize that we have to leave.       We have to be in Nawash

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 1   tomorrow morning, early for meetings.       We have things we
 2   have to finish at the office and we have to get Mr. Russell
 3   on the plane and so on.     So it's not because we don't care
 4   about Mr. Brill --
 5         MS. NOWINA:   It's not because you don't want to stay
 6   with us or to hear our explanation about what we're doing
 7   tomorrow morning?    Yes, reluctantly, you have to leave, to
 8   go.
 9         MR. PAPE:   I do have a habit of sharing a little more
10   than you need.    Thank you.
11         MS. NOWINA:   Mr. Fallis, do you want to introduce your
12   witness?   Then we will have him sworn.
13         MR. FALLIS:    Yes.   Madam Chair, Members of the Panel,
14   it gives me great pleasure, late in the evening to
15   introduce Mr. Edward Brill of SEA Limited of Fort
16   Lauderdale, Florida.    Mr. Brill is making, as you are
17   aware, a second visit to Toronto to attempt to provide
18   testimony in these proceedings.
19         As the Board will recall, the first prearranged
20   attempt was somewhat frustrated by late-breaking news that
21   foreclosed his attempt.
22         Mr. Brill was assigned by SEA Limited to evaluate the
23   prefiled evidence of Hydro One, the transcripts and the
24   technical conference -- from the technical conference in
25   October and to make a determination into the need and
26   justification of the proposed double circuit 500 kV line
27   from Bruce to Milton, requested -- and originally by the
28   Ross firm group of intervenors to review alternate

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 1   technologies for viability and provide opinions on the
 2   feasibility and appropriateness of alternate technologies.
 3        Mr. Brill is here today to support the report of SEA
 4   Limited and to testify in these proceedings, and I would
 5   ask that he be sworn.
 6        MS. NOWINA:   We will do that.
 7        FALLIS FIRM GROUP OF INTERVENORS - PANEL 1
 8        Edward Brill, sworn
 9        MS. NOWINA:   You can go ahead, Mr. Fallis.
10        EXAMINATION-IN-CHIEF BY MR. FALLIS:
11        MR. FALLIS:   I just want to make sure that -- I am
12   going to ask that it be formally put in as an exhibit, the
13   document, the report itself.     Has it been assigned a number
14   or an exhibit?
15        MR. MILLAR:   This is Mr. Brill's report?
16        MR. FALLIS:   Yes, it is.
17        MR. MILLAR:   No, I don't believe it has its own
18   exhibit number, but it is on the record and I believe
19   everyone has a copy.
20        MR. FALLIS:   Does it need one, or do you --
21        MR. MILLAR:   I don't think it needs one.
22        MR. FALLIS:   Okay, fine.    I don't know the procedure.
23        Anyway, Mr. Brill, before I ask you questions about
24   SEA Limited, I would like to review with you your
25   educational experiences to give evidence in these
26   proceedings, and with the leave of the Board, I would like
27   to lead the witness to expedite matters.
28        Mr. Brill's resume is set out in the attachment number

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 1   1 to the report, immediately following on page, it would be
 2   15 and 16 of his report.     He received his bachelor of
 3   science in electrical engineering from Florida Atlantic
 4   University in Boca Raton, Florida in April of '87.
 5   Received a bachelor of science in business administration
 6   from Bryant College in Dayton, Tennessee in 1983.        Graduate
 7   of the United States Naval Academy in Annapolis, Maryland
 8   from 1979 to 1981.
 9        From 2003 to the -- from 1983 to 2003, to December of
10   2003, Mr. Brill was associated as a project engineer with
11   SEA Limited of Florida.     And is in his last capacity
12   from1998 to 2003, he was senior power quality business
13   manager of that company.     And before that, from 1988 to
14   1998, ten years, he was a power quality engineer and was
15   involved with customer service and engineering training
16   from 1983 to 1987.He has been involved in many seminars and
17   additional education with respect to electrical engineering
18   issues and transmission and other major power companies.
19        He has different certifications.       He has taught
20   courses and been involved with many presentations from 1992
21   to 2007.   Section 86 his report shows his affiliations, and
22   there is a schedule attached there, too, showing his
23   testimony experiences more laterally with SEA Limited in
24   his capacity as -- I will ask questions about that later.
25        With respect to your background, I would just like, so
26   we have a comparison, Mr. Brill, can you advise the Board
27   of the size of Florida Power & Light in comparison to Hydro
28   One or the power generation in the province of Ontario?

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 1   What would be the daily average power generation consumed
 2   by -- generated, transmitted and distributed by Florida
 3   Power & Light in the State of Florida?
 4          MR. BRILL:    While I was with FPL, I think we were very
 5   comparable in size, and, as far as customers and generation
 6   to -- at that time, it was Ontario Hydro.        Roughly 4-1/2
 7   million customers, generation of about 25,000 megawatts and
 8   of which a combination of nuclear, fossil fuels and natural
 9   gas.
10          MR. FALLIS:   And what were your work experiences with
11   FPL that caused SEA Limited, or S-E-A Limited, to assign
12   the project to you to prepare the report that's now been
13   prepared and submitted in these proceedings?         What were
14   your qualifications inside that organization?
15          MR. BRILL:    Having worked for Florida Power & Light
16   for 20 years, a lot of my time between 1987, when I got my
17   electrical engineering degree, and the time I left in 2003
18   was spent with the power quality area of the company.
19          During that time, power quality issues and concerns
20   were related not only to residential customers, commercial
21   customers, but also distribution, transmission and
22   generation customers.     So not only did I get involved in
23   power quality issues that affected residential customers,
24   but also worked closely with the transmission and
25   generation groups to work with them with power quality
26   problems as they related to outages on the transmission
27   system, outages at a generation station, and then also
28   problems at those locations where things were being

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 1   affected on the customer side, as well as on the utility
 2   side, with different types of power quality events.
 3        During that time, I was assigned to be the --
 4   basically coordinate R&D efforts in the power quality
 5   field, and we worked very closely with EPRI, which is the
 6   Electric Power Research Institute, of which at the time I
 7   know Ontario Hydro, which they were known at the time, was
 8   part of.
 9        Under that group of R&D for the company, I not only
10   supported R&D for my group, commercial industrial, but also
11   for transmission issues and distribution issues.        And
12   during my time in the early 1990s, the FACTS technology, of
13   which -- one of the things that they asked me to look at,
14   was being developed, actually, out of the power quality
15   field, because a lot of the technologies in the FACTS
16   system were borne out of the power quality area, with UPSs
17   and static switches, and that technology was then looked at
18   to say, How can we use this in the transmission system to
19   provide different benefits, whether it is voltage
20   stability, load transferring?
21        So those are technologies that I would bring back to
22   Florida Power & Light and meet with transmission and
23   generation engineers within the company to say, Here are
24   some of the technologies that are out there.        Some of them
25   were cutting edge at the time, but it's things that we
26   wanted to consider as a utility in case they were needed on
27   the FPL system, as something that we would want to look at
28   and consider.

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 1        So we would work with EPRI at the time to voice our
 2   concerns with the technology, and also was involved in
 3   looking at a lot of these different technologies.       During
 4   that time, you know, conductor types were also brought up
 5   as issues related to power quality with areas with
 6   constrained transmission, where there was not a lot of
 7   options of building new lines because of growth that had
 8   come in place and prevented a new line from being added.
 9        So these are areas that we looked at with different
10   types of conductors that were out there as just options
11   that FPL would consider and eventually approve as
12   acceptable technologies that FPL would consider putting on
13   their system, if the need arose.
14        So my job was to not only bring those technologies
15   forward, but also to help analyze and decide whether or not
16   they were technologies that FPL wanted to consider in
17   implementing on their side of the meter, or possibly on the
18   customer side of the meter.
19        MR. FALLIS:    So with respect to the types of
20   transmissions that FPL has, what were they in terms of your
21   major systems?    Were they 500s, 230s?
22        MR. BRILL:    We have a large 500 system that runs down
23   the centre of the state, and in some ways it was very
24   similar to what the set-up is in the Bruce area, because we
25   had -- that 500 kV line in the early 1980s was actually
26   there to bring coal power from Georgia down the centre of
27   the state to south Florida, where the load centres are
28   located in south Florida.

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 1        So there is a long area of space between Georgia and
 2   the load centres that this 500 kV line went over, and we
 3   would -- some of the similar issues that they have at Bruce
 4   would be issues that we came up with at Florida Power &
 5   Light in early 1980s, one of which was a brush fire that
 6   occurred underneath the 500 kV line, taking that line out
 7   completely, and causing wide-scale power outages in south
 8   Florida.
 9        So some of the considerations in my report, as far as
10   reliability, are tied not only to analysis as an engineer,
11   but also direct experience of similar type of events that
12   have occurred on the Florida Power & Light system while I
13   was there.
14        MR. FALLIS:      You mentioned that there are -- there are
15   nuclear plants that produce and generate power into your
16   system?
17        MR. BRILL:      Yes.   Florida Power & Light has two
18   nuclear plants, St. Lucie plant, which is about, I would
19   say, 200 miles north of Miami, and Turkey Point nuclear
20   plant, which is about half an hour south of Miami on the
21   east coast.
22        MR. FALLIS:      Now, in your capacity with Florida Power
23   & Light, did you have any experience in looking at
24   alternate transmission technologies?
25        MR. BRILL:      From the FACTS standpoint, yes, because
26   FACTS as a technology, that really came out of the power
27   quality field.     It was a technology that we brought back to
28   the transmission group and basically said, Hey, here is

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 1   some of the technologies that are coming out for the
 2   transmission system.   And we wanted those guys to consider
 3   it, get their input and look at the costs versus the
 4   benefits of these different technologies.
 5        Again, we had a team involved that would look at
 6   different technologies and say whether these technologies
 7   were feasible on the FPL system, whether they were cost-
 8   effective, and then whether or not they were reliable.
 9        Back in the early 1990s, you know, these technologies
10   were relatively new and the utility was hesitant to
11   consider some of these new technologies, because they had
12   not been proven at the time.
13        MR. FALLIS:   With respect to your position as a
14   quality -- senior quality project officer with the company,
15   did you interface between industrial commercial users and
16   ratepayers, in terms of discussing alternative projects or
17   technologies that might be used within projects?
18        MR. BRILL:    That was mainly -- the main part of my job
19   was to be the interface between the power company and the
20   ratepayer and the consumer.    From an industrial standpoint,
21   you know, it would be customers such as -- like Cape
22   Canaveral, which is a transmission level customer,
23   Tropicana, which is also transmission, and we would also go
24   down to the residential side.     And being the interface
25   between the customer from the engineering standpoint, when
26   there were issues with new transmission lines and projected
27   projects and proposed projects that FPL was considering, we
28   were the group that actually had to be the technical

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 1   interface between these large customers, similar to what
 2   you have, you know, as far as the way this is being
 3   handled, where we would present a proposed -- either a line
 4   extension or a new line to the consumer, and as an engineer
 5   dealing with the -- you know, as the interface between the
 6   customer, we had to ask the questions that we felt the
 7   ratepayer was going to ask the utility, as far as, Why are
 8   you doing this?    What options have you considered, and, you
 9   know, why didn't you do that?
10        So we, as the expert, wanted to try to see if we could
11   look at the proposals, you know, whether it was EMF --
12   because EMF was a big issue for many years for new
13   potential transmission projects.     We were actually the
14   interface to go out and talk about EMF issues with the
15   customer, talk about why the lines were being built, what
16   alternatives were considered and why the proposal that was
17   being put forth before the Public Service Commission, which
18   is a similar entity to what this Board is set up as, you
19   know, whether this made sense to the ratepayer and whether
20   we looked at all of the different options that were
21   available to the ratepayer.
22        MR. FALLIS:    So, with respect -- you mentioned you've
23   had experience in analyzing FACTS technologies, and I am
24   just going to throw out some topical words, and I am not an
25   expert so I may be not using them in the correct sense, but
26   like thyristor.    Is that something that is part of the
27   FACTS technology, is that a part of the -- is that
28   something you are familiar with as well?

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 1        MR. BRILL:    Yes, and it is just one component of one
 2   device.   Basically, when we talk about series capacitors,
 3   and there has been a lot of talk about series capacitors,
 4   during these hearings, all of the FACTS technology is, is
 5   one version of a series capacitor.
 6        When you talk about FACTS -- which stands for Flexible
 7   Alternating Current Transmission System -- there's a FACTS
 8   technology that is based on series capacitors, and they
 9   use, they can use thyristors, which is basically just an
10   electronic switch to control and turn on these series
11   capacitors in varying degrees.
12        By adding the extra electronic thyristor device, you
13   now give yourself a lot more control and a lot more power
14   with your series capacitors, to be able to control them and
15   adjust them to avoid issues like we've heard discussed in
16   these hearings about subsynchronous resonance.        But again,
17   you are going to add cost to that technology, so it has to
18   be weighed in with cost and benefits.
19        So when you look at the series capacitors, you may
20   want to look at what -- if we were to put in thyristor-
21   controlled series capacitors -- what benefits would we get
22   that are in addition to the benefits we're going to see
23   with a fixed capacitor, and then look at the costs
24   associated with that and decide as a utility if that is a
25   better option than just with a series capacitor standing
26   alone.
27        MR. FALLIS:    With respect to conductors, have you
28   looked at different types of conductors from the type that

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 1   Hydro One is proposing to use and has used, and other types
 2   of conductors that have been -- have you looked at that?
 3        MR. BRILL:   Yes.   At Florida Power & Light, we had
 4   probably five, maybe six different conductors that we used
 5   on our transmission system.
 6        ACSR, which is the one that is being used, I think,
 7   exclusively through the Bruce area today, is a technology
 8   that has been around for many years and there are
 9   transmission lines in Florida that Florida Power & Light
10   uses the ACSR conductors on.
11        Because we are in Florida and we live right near the
12   ocean, we know that there's salt spray and corrosion issues
13   that you don't have to deal with here in Canada, that
14   require us to use other types of conductors that have no
15   steel in them, because the steel will corrode and it won't
16   last in the Florida environment.
17        So there is all aluminum type of applications and
18   copper type of cables that Florida Power & Light also uses
19   in transmission lines that are going to be routed near the
20   ocean.
21        We also have used an ACSS type of a conductor, which
22   is a -- that stands for Aluminum Conductor Steel Supported,
23   and that type of conductor can handle much higher thermal
24   limits.   Again, it is heavier, it's more expensive, it
25   weighs more, but it is something that can be considered in
26   applications where you needed a higher thermal rating.
27        In the last several years, the ACCR technology --
28   which stands for Aluminum Conductor Composite Reinforced

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 1   conductor -- has become an option for many utilities to
 2   consider, because now it's not simply a cutting edge
 3   technology that hasn't been proven.      There has been
 4   extensive testing of that type of cable that allows you to
 5   now put in conductors that can double, you know, in a lot
 6   of cases, double the amount of ampacity that can be carried
 7   on a transmission system.
 8        I think when we said these are some technologies we
 9   would want to consider, it was from the basis that I don't
10   think anyone said, you know, that the Bruce area should be
11   reconductored 100 percent with one type of cable or the
12   other.   It's just another option or another technology to
13   be considered with possibly a FACTS technology, possibly
14   some just straight capacitor type technologies that can
15   give a different option to be considered besides just, you
16   know, one or the other by themselves, because you really
17   have to look at them as a group, not as an individual
18   technology in a stand-alone --
19        MR. FALLIS:    I will come back to that.
20        Just the other thing, load congestion; is that
21   something that you would have looked at in Florida Power &
22   Light?
23        MR. BRILL:    The area where I was involved in load
24   congestion was more from a load control standpoint, where
25   Florida Power & Light has probably one of the most
26   extensive load control type programs out there for not just
27   commercial customers but residential customers.
28        That's a different technology that's used to prevent,

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 1   when there is a contingency event, instead of shutting
 2   customers' loads off, you have customers who have agreed to
 3   allow you to shut off their load and they receive a benefit
 4   for that.
 5           I think up to, you know, last I looked before I had
 6   left, that was well over 2,500 megawatts of load that by
 7   pushing a button, FPL had the control to drop 2,500
 8   megawatts of customer load.       And this was agreed-upon load
 9   that customers had signed up to allow the utility to turn
10   off.    In most cases, no one even knows it occurred because
11   it is just cycling your air-conditioning at your house,
12   shutting off your pool pump and turning off your water
13   heater for a 15- or 30-minute period during high peak time.
14           So it gives the utility and gave the power supply
15   group, which in this case would be the IESO-equivalent,
16   another option to add into the contingencies to prevent
17   having to just shut customers loads off, you know, because
18   you've lost generation or you've lost the transmission
19   line.
20           MR. FALLIS:   Sir, dealing with the company that you
21   work for, SEA Limited.       What is the business of SEA Limited
22   and its size and what does it do, and where does it do its
23   business?
24           MR. BRILL:    Well, when I decided to leave Florida
25   Power & Light, one of the things that I had missed was the
26   analysis part of looking at a problem or looking at a
27   scenario and determining the cause and the solution.
28           SEA Limited is a forensic engineering firm that has

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 1   about 10 offices, or 11 offices now in the United States.
 2   It's a forensic engineering firm.     It has electrical,
 3   mechanical, civil type engineers that are assigned to look
 4   at either failures, look at occurrences of where people
 5   have been injured or fires have occurred or accidents have
 6   occurred, and basically use the scientific method which is
 7   look at the data, analyze the data, collect more data,
 8   develop a hypothesis, and then weigh and measure whether
 9   your hypothesis is supported by the data and the evidence
10   you have collected.
11        So looking at the evidence here is a very similar
12   function that I do every day in my job, which is collect
13   the data, analyze the data, develop a hypothesis and then
14   test these different hypotheses, which in this case would
15   be different options for this scenario, and see if they
16   raise any questions or issues that I think need to be
17   further clarified.
18        So that is kind of the analogy of how SEA Limited
19   operates its business.
20        MR. FALLIS:     Could you explain how your duties at SEA
21   Limited serve to assist you in being able to prepare and
22   review the -- review an evaluation request that was made
23   with respect to the project that was assigned to you in
24   this instance?
25        MR. BRILL:    It's very similar to what I used to do
26   when I was with Florida Power & Light, but it is more of a
27   formal process.    When I was with Florida Power & Light as
28   an engineer, a lot of my time wasn't put together to

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 1   analyze data based on litigation, or in this case,
 2   hearings.
 3        A lot of it was done behind the scenes at the power
 4   company, to assist the internal parts of the company in
 5   getting data and information that would help them make
 6   their decision.
 7        Since I have been with SEA, it is more geared toward
 8   preparing your analysis for, possibly, litigation.             In the
 9   United States, very common that there will be an accident
10   or a failure, and an example of that has been talked about
11   recently here with synchronous condensers, one of my cases
12   is at a failure location in Maryland that had synchronous
13   condensers fail in operation, so it had to be able to look
14   at all of the data and the information and collect what
15   happened, interview people at the site, and then also
16   analyze all of the data to develop a hypothesis of what
17   happened and how it could be prevented, and present that
18   information to, whether it's attorneys or insurance
19   companies, whoever is involved in the case.
20        MR. FALLIS:     Madam Chair, I would like to submit to
21   the Panel Mr. Brill as an expert to this Board, to give
22   evidence in respect to the quality and reliability of
23   electrical transmission and distribution issues, and
24   analyzing new tech knowledge, and to be so recognized by
25   this Board as an expert in that area.
26        MS. NOWINA:     Comments, Mr. Nettleton.
27        MR. NETTLETON:     Yes, Madam Chair.     I think we are back
28   to where we were with Mr. Lanzalotta and Mr. Fagan.

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 1        I am objecting to the request that Mr. Brill be
 2   qualified as an expert in the areas described by my friend,
 3   Mr. Fallis.
 4        I think that determination can only be made after the
 5   cross-examination of his credentials on the matters that he
 6   is seeking to be qualified as an expert.
 7        My request would be at that point in time, the
 8   determination of the Board be made.
 9        I recognize, Madam Chair, that pre-emptively the
10   matter may be dealt with if the decision is ultimately it's
11   a matter of weight and a question of weight of the
12   testimony and the evidence that Mr. Brill has filed.         If
13   that is in fact the case, then I see no reason why Mr.
14   Brill would have to be qualified as an expert, because it
15   all goes to weight.
16        MS. NOWINA:    Let me make a suggestion.
17        Would you accept Mr. Brill's qualifications if we
18   identified them as an expert in power quality and forensic
19   engineering?
20        MR. NETTLETON:    I would have no problems with that
21   characterization.
22        MS. NOWINA:    And of course the question of weight is
23   always there with all of the witnesses.
24        MR. NETTLETON:    Right.
25        MS. NOWINA:    Mr. Fallis, it's clear from his resume
26   that qualifying him as an expert in power quality would be
27   something that --
28        MR. FALLIS:    I think that is probably -- maybe the

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 1   other words probably bring themselves in under that,
 2   anyway.    Quality is reliability.     It's nomenclature.      He
 3   has something that we feel the Board should hear, and I am
 4   happy to hear it under whatever acronym we wish to give to
 5   the area of testimony.       It's not one that --
 6        MS. NOWINA:     I think this fits well within his resume.
 7   Mr. Brill, we will qualify you as an expert in power
 8   quality and forensic engineering.
 9        MR. NETTLETON:     Thank you.
10        MR. FALLIS:     Okay.   Mr. Brill, I would ask you to
11   confirm that you have reviewed the filing -- prefiled
12   evidence of the Fallis and Ross group of intervenors.
13   There are two volumes of material, and I don't propose to
14   do anything more than identify them.        Perhaps you might
15   show the size of those two volumes, Mr. Brill, to the
16   Board.    They're there, but they're rather enormous.
17        What they are is -- maybe you can describe basically
18   what they are, Mr. Brill, so if you can -- in part 1,
19   anyway.    Part 1 and 2 are the same, but...
20        MR. BRILL:     Volume 1 is just basically a composition
21   of different tests that have been done on some of the
22   different types of conductors, some of the ACCR conductors.
23   These are different independent tests that have been done
24   by -- you know, basically through Georgia Tech -- most of
25   them have been done through our research arm of Georgia
26   Tech University in the Atlanta area; then have actually
27   done testing for the utilities and for the utility industry
28   and for EPRI on these different conductors, ACCR

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 1   especially, to say whether this technology is something
 2   that does what it says it does, whether it provides
 3   benefits that it is claiming that it provides, and whether
 4   or not it's going to last and do its job over the life of
 5   the time that the utility system and the utility companies
 6   desire the transmission system to be up and operational
 7   with little maintenance and long life.
 8           So a lot of these tests are just different variations
 9   and different types of tests that have been done on the
10   different sized conductors, different setups and
11   arrangements, but basically just testing that not only does
12   it meet the ampacity, it also meets strength issues, it
13   meets installation issues that the utilities have brought
14   out as far as issues that they want to see and get resolved
15   before they consider this as a viable technology for their
16   system.
17           MR. FALLIS:   You have reviewed that and you're
18   satisfied that it sets out the tests that they performed on
19   ACCR?
20           MR. BRILL:    Yes.
21           MR. FALLIS:   With respect to the second yellow
22   document, you have it as a bound document, the evidence of
23   the intervenors, and it is -- there are actually eight
24   parts of the document, but -- seven.         There is an index
25   there.    Unfortunately, the person did not put the last part
26   in, the last six pages, which were the -- they were taken
27   from the transmission alternatives considered from the
28   prefiled evidence of the -- of Hydro One, the last six

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 1   pages.
 2        You have reviewed that document, sir?        You have gone
 3   through the material in there?
 4        MR. BRILL:     Yes.
 5        MR. FALLIS:     Okay.    The third is a document -- I left
 6   copies, which was for circulation.       It's a supplementary
 7   evidence package.     It was served two days ago, on the 10th,
 8   electronically.     It is just a summary of the package.
 9        MS. NOWINA:     We have it.
10        MR. FALLIS:     If you have that one electronically, I am
11   going to give you three pages.       There was a 13A.    It just
12   didn't get in there.       Maybe you could slide it in.        It was
13   actually one of the exhibits --
14        MR. QUESNELLE:     Mr. Fallis, the court reporter can't
15   pick it up when you're away from the mike.
16        MS. NOWINA:     If you give it to Mr. Millar, he will ...
17        Maybe you could explain to us what it is once you get
18   back to your mike.
19        MR. FALLIS:     Yes.    I have corrected it in the other
20   copies.   There's a page 13B, which is really the -- it was
21   Exhibit J1.1 on day 1, and inadvertently it was not
22   included in the electronic transmission, so it is just an
23   insert of that page.
24        MS. NOWINA:     So this document that you sent by
25   letter --
26        MR. FALLIS:     It goes 13, 14.
27        MS. NOWINA:     The supplementary evidence of the
28   intervenors, this part 3?       This would be page -- go after

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 1   page 13 in that document?
 2        MR. FALLIS:    Yes, before 14.    If you have the
 3   electronic version, that's -- the other ones that I gave
 4   today have it in there but...
 5        MS. NOWINA:    Let's mark this one as an exhibit,
 6   including the additional page.      So the entire package,
 7   including the additional page, will be the exhibit.
 8        MR. MILLAR:    Exhibit K14.4.    Those are the
 9   supplemental materials of the Fallis group, including a new
10   page 13.
11        EXHIBIT NO. K14.4:     SUPPLEMENTAL MATERIALS OF THE
12        FALLIS GROUP, INCLUDING A NEW PAGE 13.
13        MS. NOWINA:    It's marked as 13A.
14        MR. MILLAR:    Marked as page 13A.     That's Exhibit
15   K14.4.
16        MR. FALLIS:    Sir, you have reviewed these documents
17   and you're satisfied that...
18        MR. BRILL:    Yes.
19        MR. FALLIS:    With respect to all of the documents,
20   part 1, part 2 and part 3, for the benefit of reviewing
21   them, do you adopt the contents as part of your testimony?
22        MR. BRILL:    As far as my review has been, I said I
23   looked at everything.     I haven't read every word verbatim,
24   but I have reviewed everything in the package.
25        MR. FALLIS:    With respect to your report, sir, the
26   report was done by SEA Limited, and it has been signed by
27   yourself and also another officer of SEA Limited, a peer
28   review, a person in your company; is that correct?

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 1        MR. BRILL:     That's correct, a director of engineering.
 2        MR. FALLIS:     That's a protocol that you go through
 3   when you do reports, that they're signed off by the
 4   company, as well as --
 5        MR. BRILL:     Yes.   In our industry, that is a
 6   requirement for when we write reports, that they are peer
 7   reviewed.
 8        MR. FALLIS:     With respect to the task that was
 9   described at the outset that was assigned to you by SEA
10   Limited, what protocols or evaluations would you go through
11   to carry out that project?
12        MR. BRILL:     When I was contacted about this project,
13   again, I was initially contacted in February 12th by Mr.
14   Ross, is that they wanted basically a general review of the
15   data that was out there for this proposed Bruce-to-Milton
16   500 kV line and to review the data and just offer an
17   opinion, based on my review of the data, on whether or not
18   there was things in that proposal that I had questions on
19   that I didn't feel were answered, or were some areas that I
20   felt additional research may be needed, and, also, from --
21   the main gist of what I was asked to do was to look at some
22   the different technologies, since that was part of my
23   background in the power quality field, was to look at some
24   of the technologies that were being proposed, if I was
25   familiar with them, and to look at whether or not they were
26   considered in this case.
27        MR. FALLIS:     In your report, you made certain summary
28   conclusions, and then the report goes on to talk about --

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 1   back it up.
 2           With respect to the conclusion that you make on page 1
 3   of your report, you made an observation that it seemed to
 4   be -- that no other options appeared to be considered, at
 5   least technical options or alternatives?
 6           MR. BRILL:    It was based on, again, my experience,
 7   training, knowledge and time at Florida Power & Light, that
 8   when a project like this was being proposed, that, you
 9   know, the technologies that are out there and available
10   would be considered as part of an option.
11           Not just considered in a stand-alone basis, but, say:
12   What are some potential options that we can take in place,
13   in case a new line is not to happen?         In other words, if
14   the line doesn't occur, what are we going to do then?
15           We like to say:   Here's our option 1, here is option
16   2, here is option 3.      When I looked at the different
17   options that were considered, it was basically:          Build this
18   line.    Build that line.     Build that line.    But as far as
19   consideration for other technologies, I didn't see where
20   that had been done in the data that I had reviewed.
21           MR. FALLIS:   If Florida Power & Light were HONI in
22   Ontario, and this project came before you in an Ontario
23   setting, would your review considerations to the protocol
24   be any different than you would be if you were in Florida?
25   Would you look at it any differently?
26           MR. BRILL:    Well, I looked at it based on my
27   experience of where, you know, putting myself in the place
28   of the ratepayer and saying:       What questions would I want

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 1   to have asked and answered, was what things, you know, are
 2   out there that you considered in your different options
 3   that you have put forth before the committee when you
 4   decided to eventually actually pick the option that you
 5   did?
 6          MR. FALLIS:   What options would you think you would
 7   have expected to see and didn't see, as far as things that
 8   would be in on the table for consideration?
 9          MR. BRILL:    Well, as far as -- there's always
10   assumptions that go into every project or proposed project
11   on the utility side.
12          There's assumptions on future load, there's
13   assumptions on losses and outages, and you have to take
14   those assumptions and basically put those into a model.
15   That is something that wasn't part of the scope of what I
16   was asked to look at.     But you are also asked to look at
17   what technologies are out there and what options are out
18   there for the utility to use, in case you can't do the
19   option that you would like to do.
20          If there are technologies that are out there that can
21   provide a certain amount of added capacity or added
22   benefit, you would want to at least weigh those options out
23   and provide the information saying you considered them,
24   this is what they are, whether it's a FACTS technology,
25   whether it is reconductoring parts of a line, certain
26   lines, whether it is adding technology here, and maybe
27   three other places.     You would want to have those options
28   out there, so you could at least say:        We considered them.

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 1   We looked at them, and this is why we eliminated them,
 2   where I didn't see that there was a lot of documentation
 3   that supported that analysis.
 4        MR. FALLIS:      Now, sir, I -- would the installation of
 5   new types of conductors be an alternative that might be
 6   considered?
 7        MR. BRILL:      As far as new conductors?
 8        MR. FALLIS:      New types of conductors, other than the
 9   ACSR that you mentioned that was used.
10        MR. BRILL:      I mentioned there is another one that is
11   the AASS, which is steel supported aluminum conductor, that
12   has higher thermal ratings than ACSR and different
13   technologies, but it is maybe not quite as expensive as the
14   ACCCR.     But the benefit that you get with the ACCR is that
15   you end up with the same size conductor, the same weight
16   conductor, so you don't have to install new structures or
17   new poles or new supports to reconductor the line and get a
18   lot larger ampacity out of that line.
19        MR. FALLIS:      Let's talk about ACCR, then, with respect
20   to that.     You say it has a larger thermal limit.       What is
21   your understanding of the thermal limit of an ACCR line as
22   opposed to the existing ASCR line?
23        MR. BRILL:      Reviewing the data that HONI provided, the
24   lines out of the Bruce line, the ACSR lines, have an
25   average thermal rating of about 127 degrees C.          It varies a
26   little bit from some of the 230 lines to the 500 kV lines,
27   but that's roughly the average thermal limiting temperature
28   on the lines that are out at Bruce today.

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 1           An ACCR type of cable can provide up to 210 to 240 at
 2   the degrees Celsius thermal limits, so if you're looking
 3   for another way to get maybe wind power out of the Bruce
 4   area, you know, another option of reconductoring maybe some
 5   230 lines in combination with looking at reconductoring
 6   possibly a 500 line or adding 500 lines.         It is just
 7   something that should be weighed in with consideration of a
 8   different option of applying a technology that is available
 9   and being used today, that may allow you to eliminate or
10   put off installing a new line at a much higher cost.
11           MS. NOWINA:   Mr. Fallis, before you go any further.
12   For examination-in-chief, we don't simply want a repeat of
13   what is already in the evidence.
14           MR. FALLIS:   Okay.
15           MS. NOWINA:   So if you can focus on some very narrow
16   points, or points that have come up during the examination
17   of other witnesses.      It's late and we don't need to repeat
18   anything.
19           MS. FALLIS:   I realize that.
20           With respect to the preparation of your report, you
21   had indicated in your comments that you required and did
22   not seem to have available -- made available to you any
23   historic information, and you were able to procure that
24   information from the International Atomic Energy
25   Association shortly before, I think, April 7th before you
26   got the order -- the ordered material from the Board order
27   -- as a result of the Board order issued to you on April
28   10th.

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 1           Why did you require that information to write your
 2   report?    What was your need for that information and why
 3   was it --
 4           MR. BRILL:    Well, I think before you look at taking
 5   into consideration of whether you're going to use a
 6   nameplate rating on the loads that you are putting on the
 7   line, it is always good to review what the historical data
 8   has been, because you don't want to just make decisions
 9   based on what you think is you're going to have from a
10   nameplate stand point in the future.         You'd want to be able
11   to go back and look at, historically, how are these lines
12   operated.
13           And, you know, while I worked at Florida Power &
14   Light, we knew this website was out there, as far as the
15   International Atomic Energy Agency that keeps data on all
16   power plants, all nuclear plants around the world.
17           It's a source that is out there to look at historical
18   data.    When, I think, we had discussions on whether that
19   information was being provided, it was my understanding
20   that with the way the utility system has changed, that
21   Bruce Power is no longer part of the utility.          So that
22   information wasn't available, you know, from HONI.
23           So I knew there was areas out there and going to this
24   website, we were able to find that data to look at the
25   historical data and see what the load factors and the
26   capacity factors have been, historically, out of the Bruce
27   nuclear plants.
28           MR. FALLIS:   Did that information when it was provided

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 1   assist you in going forward with your report?
 2          MR. BRILL:    It was something, as far as a piece of
 3   data that was considered in the data I reviewed.
 4          MR. FALLIS:   With respect to your review of the
 5   evidence, in the Florida Power & Light situation, what is
 6   the range of transmission capacity for 230 kV lines and 500
 7   kV lines, in terms of transmission capacity that one might
 8   expect if they were constructed?
 9          MR. BRILL:    Again, they differ, you know, they differ
10   significantly from utility to utility.        At Florida Power &
11   Light our 500 kV lines are rated somewhere in the 3,000- to
12   4,000-amp range, which, is I think if you look at the --
13          MR. FALLIS:   Expressed in megawatt range.
14          MR. BRILL:    Megawatt range to compare to, that that
15   gives you around a 2,500- to 3,400-megawatt thermal rating
16   on your 500 lines, and our 230 lines, while I was down
17   there working at Florida Power & Light, we had a 1,600- amp
18   to about a 3,000-amp rating, which transmits to about 600
19   to 1,170 megawatts of capacity on the 230 line.
20          So again, different conductor size, different as far
21   as requirements on the utility for thermal ratings and how
22   they're determined, would account for some of the
23   differences in --
24          MR. FALLIS:   What did you understand from your review
25   of the HONI evidence, as to the rating capacity,
26   transmission capacity of the 230 and the 500 lines of Hydro
27   One?
28          MR. BRILL:    Well, that they were roughly about 2,350

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 1   megawatts is the thermal rating on each of the 500 lines
 2   out of Bruce.
 3          Somewhere in the 300 to 408 range is the thermal
 4   limits for the 230 lines out of the Bruce area.
 5          MR. FALLIS:   I see.   Does the lower transmission
 6   capacity of Hydro One transmission capabilities of its 230
 7   lines and 500 lines running from the Bruce have anything to
 8   do with the type of conductors that Hydro One might be
 9   using?
10          MR. BRILL:    In some cases, it does.    In some cases, it
11   has to do with the type of structure that's being used, the
12   size of the conductor that's being used.        Those are other
13   things that would determine the differences between the
14   thermal ratings.
15          But the fact of considering other technologies also
16   allows you to look at those lines, which I think -- when I
17   looked at the numbers, had an average age about 30 years --
18   look at possibly whether reconductoring some of those lines
19   may be another option to get more power out of the Bruce
20   area, especially with some of the wind projects that were
21   being proposed may be more cost-effective to get the wind
22   power out than building a new 500 line.
23          MR. FALLIS:   If I could ask you to turn to the
24   supplementary document that has just been made an Exhibit
25   K14.     That's the -- in particular, the inserted page.       It
26   may be 13A in your document, which was previously made an
27   exhibit on day 1 of the hearings, May 1st, and filed on May
28   the 2nd.

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 1           There are two -- there are different -- it is entitled
 2   "Working paper re conceptual alternatives to a new 500 kV
 3   line." It was dated April 24th, 2008.
 4           With respect to the third item, Bruce to Longwood, and
 5   the fourth item, Nanticoke to Longwood, what observations
 6   did you make about what the author of that document was
 7   attempting to cost, and what are your opinions on the
 8   cost --
 9           MS. NOWINA:   Mr. Fallis, is this just a repetition of
10   what is in the filed evidence?        Is the responses that the
11   witness is going to give -- is this not something that he
12   dealt with in the filed evidence?        If it's not, then that's
13   fine.
14           MR. FALLIS:   The evidence is there.     I think the -- I
15   don't think it is.
16           MS. NOWINA:   All right.
17           MR. FALLIS:   Let me ask the question this way.
18           MS. NOWINA:   He can answer the question, Mr. Fallis,
19   but from here on in, please make it brief.         I'm thinking we
20   need to get him to cross-examination.
21           MR. FALLIS:   Okay.   With respect to the figure that
22   was set for -- $220 million for reconductoring the Bruce to
23   Longwood and 105 for reconductoring the Nanticoke to
24   Longwood with ACCR, what comments do you have with respect
25   to the adequacy and sufficiency of the cost estimate
26   conclusions as prepared by the author of that document?
27           MR. BRILL:    Well, my analysis -- really wasn't, you
28   know, part of my analysis.       I wasn't asked to look at the

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 1   different costs of these different technologies, because --
 2   at the time that I had been involved in this project, but
 3   just looking at these numbers on the series capacitors, as
 4   well as the cost to reconductor the lines, there is a lot
 5   of information in here that, you know, we don't know what
 6   the assumptions are or where these numbers were developed,
 7   as far as, you know, were costs considered?       What costs
 8   were assumed in installing these conductors?
 9        So there is a lot of assumptions in these costs that
10   just throw a number out there and say these are the
11   proposed numbers.   I can't really comment, because I don't
12   know what assumptions went in and what information went in
13   to develop these estimates.
14        MR. FALLIS:    With respect to -- you mentioned earlier
15   about the technology that Florida Power & Light has put in
16   place with respect to shedding load.      I think you said
17   2,500 megawatts; they can push a button and drop it.
18        Have you reviewed any of the programs that are set
19   forward in Ontario with respect to similar programs in
20   Ontario that are currently forward, and do you have a
21   comment on --
22        MR. NETTLETON:   Madam Chair, I'm sorry to interrupt my
23   friend, but it's time to get to cross-examination.
24        Mr. Fallis is now having examination-in-chief on new
25   evidence, on evidence that isn't spoken to or addressed in
26   the report that Mr. Brill is here to speak to, and that is
27   his report, his filed report.
28        His filed report doesn't speak to load shedding.          His

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 1   filed report speaks to different alternative technologies.
 2   It's highly inappropriate to be using this narrow window of
 3   introducing a witness and having the witness sworn and
 4   having him adopt the evidence that he's here to testify to,
 5   and use it as a crutch to introduce completely new evidence
 6   that we have certainly had no opportunity to review or
 7   hear.
 8           MS. NOWINA:   Mr. Nettleton is correct, Mr. Fallis.         We
 9   can't do that, and in my instructions this morning I did
10   talk about the purpose of examination-in-chief.          We really
11   need to keep it to that.
12           MR. FALLIS:   Fair enough.
13           MR. QUINN ROSS:   Madam Chair, actually, Mr. Falvo
14   addressed the topic of smart metering, and its
15   implementation in Ontario and what it is and is not capable
16   of.   That's the line of question I understand Mr. Fallis to
17   be entering upon.
18           And in your opening submissions to -- or your opening
19   statement to Mr. Fallis, you indicated that if it was in
20   response to evidence that has been raised, it was in fact
21   an appropriate question.
22           I think based on that --
23           MS. NOWINA:   I did indeed.    I didn't understand it to
24   be going there.
25           MR. FALLIS:   That's exactly what it was.      It is what
26   they have been able to do with smart technology.          That is
27   what I am asking, and I was asking him if he had seen the
28   program, that's all.

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 1        MS. NOWINA:     All right.
 2        MR. NETTLETON:     Madam Chair, Hydro One did not lead
 3   evidence regarding smart metering.     The evidence regarding
 4   smart metering came onto the record as a result of cross-
 5   examination.
 6        MS. NOWINA:     Cross-examination.
 7        MR. FALLIS:     So it's evidence in that regard.        It
 8   comes up, and the evidence is the evidence no matter how it
 9   goes in, Mr. Nettleton.
10        MR. PAPPAS:     Madam Chair, I also added, ahead of this,
11   information in my various evidences regarding smart
12   metering and the smart grid, and it arose as late evidence,
13   in that although the IESO and HONI are both involved in a
14   project that they had to have been considering for quite
15   some time, they only announced this smart grid forum late
16   in our proceeding.
17        And that's why I had it in, and the technology
18   involved there does have a lot to do with this.       And, as
19   far as I'm concerned, if they knew they were involved in
20   this, that should have been way back in prefiled evidence.
21   So I think perhaps that might be fair.
22        MS. NOWINA:     Thank you, Mr. Pappas.
23        Mr. Fallis, if this can move ahead quickly and you
24   have a couple of questions on it, at most.      I believe you
25   gave Mr. Millar an estimate of your time for cross-
26   examination which I had counted on you sticking to.
27        MR. FALLIS:     My direct.
28        MS. NOWINA:     Your examination-in-chief, sorry.

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 1        MR. FALLIS:     I only have one other -- other than this
 2   question, I only have one other area to address, and it is
 3   probably -- I am probably within five minutes of finishing.
 4        MS. NOWINA:     All right.   Ask the question.   I also
 5   want to keep in mind is that I am not certain that this
 6   witness is an expert in the area that you are discussing,
 7   and he can clarify that when he answers the question.
 8        MR. FALLIS:     With respect to smart metering, sir, do
 9   you have any expertise or experience with that in Florida,
10   as far as putting in place any programs of that type in
11   your organization?
12        MR. BRILL:    Again, just to be real brief, you know, I
13   was quality power manager before I came to work for SEA,
14   under page 2 of my experience.     The development of a power
15   monitoring service is a smart meter technology that, a lot
16   of these, Mr. Fallis is referring to, is that -- as the
17   technology that we have looked at at Florida Power & Light
18   when I was there to be able to not only control customers'
19   loads, but also provide two-way communications on the
20   system to be able to shed load through our customers in a
21   program of providing them savings every months or a rebate
22   every month to allow their load to be shed.
23        I think the issue that came up from some of the
24   contingencies that were put out, that there is
25   contingencies out there that require a lot of customer load
26   to be shed under certain situations, just to say that the
27   smart metering technologies are out there to allow the
28   utilities to control quite a bit of load.      In fact, I

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 1   mentioned that at Florida Power & Light, almost 3,000 --
 2   2,500 megawatts of load can be dropped to prevent customers
 3   from actually being shut off and load shed and causing
 4   rolling blackouts or outages.
 5        And that is probably -- the area where I have been
 6   involved.
 7        MS. NOWINA:     Thank you.
 8        MR. FALLIS:     I will leave it at that.
 9        With respect to your report, sir, were you able to
10   review the transmission data that was provided by Hydro One
11   in the Bruce since 2002 and compare the amount of
12   transmission that would flow on the Bruce-to-Milton line
13   with the amount of transmission that would flow on the
14   Bruce-to-Longwood line?      Did you look at that and did you
15   come to any conclusion or observation about those?
16        MR. BRILL:     That comes just back to my time as far as
17   in the power quality and reliability standpoint of looking
18   at the data, and I think I referred to the last attachment
19   in my report.    It is just a graph showing some of the
20   proposed load flows with the new line in place, the point
21   just being taken that from a reliability standpoint -- I
22   know it has been covered here several times and I'm not
23   going to go over it again, but putting all of your lines in
24   one right-of-way, whether or not it is a requirement that's
25   to be looked at by certain agencies here in this case, it's
26   something that I think, if you are representing the
27   ratepayer and you're representing the customer who is
28   getting power, it is something that at least needs to be

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 1   considered.
 2        Having had this issue come up in Florida where we have
 3   lost all of the transmission lines in one corridor, due to,
 4   you know, several events that have occurred over the last
 5   20 years, whether it is a hurricane, fire or plane crash,
 6   it is just something that needs to be considered.       And I
 7   think the number is put out about 84 percent of the power
 8   flowing out of Bruce will be flowing through this one
 9   corridor, this one right-of-way.
10        It just seems to be a very large percentage of load
11   that if it were to be lost, would create these large
12   outages that you are trying to avoid by using your
13   protection system and looking at these different
14   contingencies.   That was my point there.
15        MR. FALLIS:     Those are my questions.
16        MS. NOWINA:     Thank you.
17        We're going to take a 10-minute break and resume at
18   ten o'clock.
19        --- Recess taken at 9:55 p.m.
20        --- Upon resuming at 10:07 p.m.
21        MS. NOWINA:     Please be seated.
22        Questions for this witness, those of you in support of
23   Mr. Fallis's group; Mr. Pappas, Mr. Barlow.       Mr. Pappas, do
24   you want to go first?    The 15-minute rule.    Your mike, sir.
25   Do you have your microphone on, sir?
26        CROSS-EXAMINATION BY MR. FALLIS:
27        MR. PAPPAS:     There we go.   I will try to make it even
28   shorter than that.

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 1           MS. NOWINA:      Great.
 2           MR. PAPPAS:      Could we go to the -- I'm sorry, could we
 3   go to the first item on that list I gave you?
 4           MS. NOWINA:      What is it, Mr. Pappas, for the record?
 5           MR. PAPPAS:      It's the 10-year outlook, IESO, 2006 to
 6   2015.    Oops, no.       The other one.    I'm sorry, it's the other
 7   document, tab -- I'm sorry, I'll give you the tab and
 8   everything on that.         No, I think you have it.      Oh, there we
 9   go.   Thank you.
10           It's Exhibit C, tab 4, schedule 1, attachment 1, okay?
11   And I guess we're going to page 40.           Yes, it will be
12   section 5.1.1.
13           Okay.     Well, Mr. Brill, I'm not sure if you were able
14   to review all of this document, but I believe you did have
15   it for review.
16           MR. BRILL:      Yes.
17           MS. NOWINA:      Put your mike on, Mr. Brill.
18           MR. BRILL:      Yes, I did.
19           MR. PAPPAS:      Thank you.   I'm just going to read this
20   to you as you look at it, and then I am going to ask for
21   your -- your expert opinion on this matter.             It says --
22           MS. NOWINA:      Mr. Pappas, let's try to shorten things
23   and not have you read the whole thing.            Point to at least
24   the paragraph and read a small portion.
25           MR. PAPPAS:      It is just a couple paragraphs here and I
26   don't need everything in them.           It says:
27                   "Reactive power support in critical locations is
28                   needed in order to maintain adequate voltage

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 1                throughout the system, particularly GTA, Golden
 2                Horseshoe, Kitchener, Guelph, where a significant
 3                portion of the load is concentrated.       Without
 4                voltage support, the ability of the system to
 5                transfer energy would be reduced and the ability
 6                to supply energy to loads would be lessened.
 7                Nanticoke generation station is particularly
 8                important in this regard.     Without these units in
 9                service, reduction in the output of the Bruce
10                nuclear generating station would be necessary.
11                In the event that all units at Nanticoke are shut
12                down, the equivalent replacement voltage support
13                is not available.    The allowable output from the
14                Bruce generating station would be significantly
15                restricted and the feasibility of returning units
16                1 and 2 to service would be jeopardized.           This is
17                described in more detail in section 5.1.6."
18           So I will stop right there and ask you your opinion of
19   that statement.      Does that imply to you that, as it stands,
20   the retirement of Nanticoke and power from the Bruce are
21   mutually exclusive?
22           MR. BRILL:   Well, again, just having reviewed this and
23   not really having done a lot of analysis on it, it's pretty
24   much talking about the fact that when you have a large
25   generation station that's located in an area and you now
26   shut it off, there could be voltage issues that come into
27   play.    And this happened in California after deregulation,
28   where they wanted to shut down what they determined were

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 1   dirty power plants that were, you know, either operating
 2   coal or had a high amount of pollution issues.
 3        They forced them to shut down as a result of
 4   deregulation, and then found out that they had to restart a
 5   couple of these dirty plants up, because they were having
 6   voltage problems in the San Francisco area.        That was a
 7   power quality case that we had, you know, reviewed.
 8        That's what they're saying here, is that they just
 9   need to make sure that they have enough voltage support in
10   that area if they take that power plant off of service.          I
11   think there's others, including Mr. Russell, who has been
12   reviewing this, and this would be something that would be
13   used in his analysis.
14        MR. PAPPAS:     Thank you.   Can we go to, I believe --
15   well, it is 5.1.6.    It is probably page 47.
16        Okay, if we could keep going down.      Okay.    Okay, if we
17   could just stop right there, the bottom of page 43?          I do
18   need to go to 47, but I just want to read one thing:
19             "It must be recognized that the system
20             requirements associated with the shutdown of
21             Nanticoke are significantly affected by the need
22             to incorporate additional Bruce units."
23        I believe that speaks to your last answer?
24        MR. BRILL:    Yes.   You can read it there.     I don't have
25   any comment on it.    It is something I have read.
26        MR. PAPPAS:     Could we drop down to page 47?     Okay, at
27   the bottom of the page there's -- well, not quite the
28   bottom.   Part way up -- no, no.     Where are we?    After the

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 1   first set of bullets, it starts:
 2             "Even with transmission enhancements, it is
 3             recognized that the incorporation of additional
 4             Bruce units, together with the need to cease
 5             burning coal at Nanticoke, will require
 6             significant changes in the supply and delivery
 7             infrastructure.    Fortunately, the same types of
 8             system developments required to eliminate the
 9             need for Nanticoke generation described earlier
10             in this section are the same enhancements needed
11             to accommodate additional generation at the Bruce
12             site.    These developments include the following:
13             Installation of generation in proximity to the
14             large GTA demand, location of generation close to
15             the load facilities, the installation of
16             additional generation at Bruce in two ways ..."
17        Facilitates -- sorry:
18             "... location of generation close to the load
19             facilitates the installation of additional
20             generation in Bruce in two ways:      First, less
21             energy needs to be transported long distances to
22             the GTA, reducing competition for transmission
23             capability between Nanticoke and Bruce; and,
24             second, reactive power needs of the system are
25             met by the local generation in the GTA."
26        The next bullet states --
27        MS. NOWINA:    Mr. Pappas, you don't have to -- we can
28   read it for ourselves.    Can you just ask your question?

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 1           MR. PAPPAS:    Okay, in that case, it makes it a lot
 2   easier.    If you would read just that section down to the
 3   bottom of the page, could you tell me whether you feel that
 4   that is an appropriate recommendation for that situation?
 5           MR. BRILL:    Again, I did not conduct analysis on
 6   what's being proposed here.       I did review it.     And, to me,
 7   it just comes so -- you know, comes from the fact that
 8   since you are removing generation which is in a particular
 9   area, that you have to take into account ways to deal with
10   that loss of generation from different issues.          These are
11   different issues that the IESO felt were needed to be
12   addressed.
13           I did not review or research or do any analysis on
14   these particular proposals, but it is something that makes
15   sense when you read it.
16           MR. PAPPAS:    Thank you very much.    Okay, we can go
17   from that.     That one is done.
18           If we could go to the evidence, book 1, to tab 9?
19           MS. NOWINA:    Which evidence book, Mr. Pappas?
20           MR. PAPPAS:    It's the one prepared on behalf of Chris
21   Pappas by Klippenstein's.       I don't have an actual number on
22   it, but I gave them the -- they have it over there.
23   Actually, it was what she put on the screen first.
24           MS. NOWINA:    Can you tell me what the title of the
25   document is?
26           MR. PAPPAS:    It's Evidence Book 1, for June 4 plus 11,
27   2008.    Yes, that's where I want to go.       That's tab 9, and
28   we are going to page 22.       All right, 5, "Future expansion

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 1   to Bruce SPS."    If you could just read the two paragraphs
 2   right under number 5, and then I will simply ask my
 3   question.
 4        MR. BRILL:     Okay.
 5        MR. PAPPAS:     Okay.    As the IESO has stated that this
 6   transmission build will require further complexity of this
 7   SPS, and that the SPS has obsolete components and must be
 8   rebuilt, should the applicant, or do you feel the applicant
 9   should have included this necessary financial undertaking
10   in their application as a further cost of this project?
11        MR. BRILL:     I really can't comment, because I haven't
12   reviewed this or reviewed the SPS system as part of my
13   analysis.    So I really can't comment on that.
14        MR. PAPPAS:     Okay, thank you very much.      I believe
15   I've got one left.
16        Okay, there we go, last one.       The Bruce-Grey area is
17   frequently at risk from ice storms, wind storms, and less
18   frequently, tornadoes.       If such a major contingency occurs,
19   would it take longer to reconnect the consumers if two or
20   three adjacent lines went down, than if a solitary line was
21   compromised?
22        MR. BRILL:     It depends.    There's a lot of variables
23   there.   You can't –-
24        MR. PAPPAS:     Well, I mean, I will put it this way.       If
25   you had two lines that were far apart down, I imagine, for
26   example, it would be reasonable maybe to put one up and
27   worry about the other one afterwards.        But when we're
28   talking about lines that are adjacent to each other and all

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 1   feeding the same two ends, if they all sustained about the
 2   same damage, would you not have to bring them all up before
 3   you could reconnect?
 4          MR. BRILL:    Again, I can't really answer that
 5   question, because there's so many variables in what you're
 6   asking as far as, you know, what's served off the load,
 7   what the load is, whether the power plant is available --
 8          MR. PAPPAS:   Put it this way.    You mentioned having
 9   severe outages in Florida.      Well, in those kind of outages
10   where all of your adjacent lines went down, did you find
11   that -- like in your own experience, what were you required
12   to do when a number of lines went down at the same time,
13   maybe had extensive damage?
14          MS. NOWINA:   Mr. Pappas, I think the witness answered
15   the question and it -- he has answered the question.
16          MR. PAPPAS:   Okay.   So then we will ask this.         Well,
17   what I was going to ask is if rather than building another
18   adjacent line, you instead upgraded one existing line to
19   solely carry the power, could -- I mean would that be an
20   option to being sure that if it goes down, you can make
21   sure you can reconnect in a least amount of time?
22          MR. BRILL:    Again, there is a lot of variables, but
23   just in general, by having less exposure in one right-of-
24   way, you're going to have less load being affected by an
25   event that would take out the conductors in that right-of-
26   way.   So the less you rely on one right-of-way to carry a
27   bulk amount of your load, the less impact it's going to
28   have on your overall contingencies and outages.

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 1        MR. PAPPAS:      Thank you very much.     I'm done.
 2        MS. NOWINA:      Thank you.    Mr. Barlow.
 3        CROSS-EXAMINATION BY MR. BARLOW:
 4        MR. BARLOW:      You have dealt with, quickly, on smart
 5   meters and said that in Florida you could take out 2,500
 6   megawatts.
 7        If we could get at least 1,400 megawatts or more done
 8   in Metropolitan Toronto, for instance, could that assist in
 9   the SPSS, and that that would be able to offload that much
10   load that we're now talking about using the special
11   protection system for?
12        MR. BRILL:      In one scenario it would, in one scenario
13   it wouldn't, the scenario where you've lost generation
14   elsewhere in the province, and the generation out of Bruce
15   is becoming overloaded, and you're contingencies are shut
16   customers down, under-frequency events occur, you have to
17   shut power plants down to protect them.         By being able to
18   shed load, you would be able to reduce the amount of load
19   that is on the system, thereby possibly preventing yourself
20   from losing your generation.
21        In the case where you lose a line and you can't get
22   the generation out of the area, the load control really
23   doesn't impact that particular location, because it doesn't
24   help you get the power out.        It just helps you to have to
25   reduce the amount of power that has to be transferred
26   around that outage, to meet the load to prevent from being
27   shut down.
28        MR. BARLOW:      That would provide at least Ontario with

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 1   another option that they can depend on, rather than just
 2   totally depending on the SPS?
 3        MR. BRILL:    In Florida, it was actually used to
 4   prevent having to build an additional power plant.           They
 5   looked at getting the amount of load up to say:       We want to
 6   be able to drop up to a power plant's worth of load, which
 7   would prevent us having to build that power plant to meet
 8   peak demand.     So it is a more cost effective way of dealing
 9   with the peak by not having to build a power plant to just
10   meet that few hours of peak demand that you see on the
11   system during high load times.
12        MR. BARLOW:    Can tell me where the smart meters are
13   made that you are using in Florida?
14        MR. BRILL:    They're made by all different
15   manufacturers.    Siemens is one of the brands of meters that
16   we use for the program.    There is a multiple -- residential
17   uses actually a load control device, which is a box that is
18   installed next to the meter that has power line carrier
19   capabilities to shut down air-conditioning, pool pumps and
20   water heaters at residential customers' homes.
21        MR. BARLOW:    Is that technology being used in Canada
22   at all?
23        MR. BRILL:    It's my understanding that they're looking
24   at several technologies that are similar in ways, but I
25   don't think a lot of them don't have the ability to control
26   and provide the two-way communication available at this
27   point in time.
28        MR. BARLOW:    You talked about the, I'll say it,

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 1   recabling or putting new lines in.
 2        Could that be an alternative to building another line,
 3   if it was costed out, rather than all of the inconvenience
 4   of having to acquire land and all of the other adjacent
 5   things with it?    Would that be a reasonable thing for Hydro
 6   One to look at as an alternative?
 7        MR. BRILL:    I think reconductoring is a reasonable
 8   technology to evaluate, but, again, it has to be weighed
 9   with the benefits and costs and whether or not you are
10   being constrained by, you know, whether it's voltage, or
11   whether it's load.    There's different reasons why you may
12   be able to use it in some applications and not in other
13   applications.   But you don't have to look at reconductoring
14   all of your lines, which I think, one of the things that
15   came out in some of the testimony was the cost to
16   reconductor all of the lines out of Bruce.      No one is
17   saying that that's a solution that should be considered.
18        MR. BARLOW:     If you actually built a new line, would
19   you, from your experience, recommend they put higher
20   capacity lines in so that they would have some -- more
21   flexibility with their lines?
22        MR. BRILL:    It absolutely should be weighed into the
23   cost benefit analysis to determine, you know:       What kind of
24   load do I want to carry on this line or what are my
25   available -– do I either put bigger lines up or do I put,
26   you know, technology that provides me the ability to maybe
27   put a smaller structure up and use a line that can carry
28   more power than a larger structure being needed?       So it is

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 1   something that just needs to be weighed in the analysis.
 2          MR. BARLOW:    Earlier today, we talked about Nanticoke
 3   and the voltage support, through Mr. Russell's and Mr.
 4   Nettleton's questions.
 5          I believe there is more than just the Bruce line goes
 6   into Nanticoke.      Is that correct?   There are more than one
 7   line that goes through Nanticoke that's dependent on --
 8   there's lines from other locations?
 9          MR. BRILL:    Yes, that's correct.
10          MR. BARLOW:    Therefore what I was driving at is the
11   costs of voltage control and the other things you may have
12   to do there should not be allocated to a single line or
13   probably spread out over all the lines that go through
14   there.
15          MR. BRILL:    I think I mentioned before, you know, my
16   testimony really wasn't and what I was -- the scope of what
17   I was asked to look at didn't include that, but I would
18   assume that that is something that Mr. Russell would want
19   to consider in his analysis of the cost of the voltage
20   controls.
21          MR. BARLOW:    My last question was that you have been
22   talking for hours on where the green line and the blue line
23   or the pink line go across the green line, or whatever it
24   was.
25          I think our exercise here mainly was to provide some
26   breathing space, through using technologies such as the
27   ones you're suggesting, so that the people in Ontario have
28   the opportunity and the Board has the opportunity to

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 1   determine whether this line is really needed in the future
 2   and that more things are clarified or become more apparent
 3   as to where the province is going before they make that
 4   commitment.
 5        Would you say that is a reasonable solution in the
 6   near term, to exclude large expenditure for short
 7   expenditure, and also the series compensation can be used
 8   anyways in the long term?
 9        MR. BRILL:      That's correct.    Again, I think Mr.
10   Russell's testimony went into the analysis of that, but
11   just from an overview, there is a lot of uncertainties in
12   wind generation and renewable energy, and not knowing where
13   those uncertainties are going to take you, it gives you
14   time to look at those and actually see where they're going
15   to be and where they're actually going to show up.
16        Again, I would defer that back to Mr. Russell's
17   testimony.
18        MR. BARLOW:      Thank you very much.
19        MS. NOWINA:      Thank you, Mr. Barlow.     Mr. Nettleton.
20        CROSS-EXAMINATION BY MR. NETTLETON:
21        MR. NETTLETON:      Thank you, Madam Chair.      Good evening,
22   Mr. Brill.
23        MR. BRILL:      Good evening.
24        MR. NETTLETON:      Mr. Brill, you don't have experience
25   in transmission system planning of 500 kV systems, do you?
26        MR. BRILL:      No, I don't.
27        MR. NETTLETON:      And you don't have expertise in the
28   area of planning and the design of type I SPS - that is,

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 1   special protection systems - do you?
 2        MR. BRILL:     I was not asked to look at that as part of
 3   my scope, no.
 4        MR. NETTLETON:       But that is not part of your
 5   expertise, is it?
 6        MR. BRILL:     No.    I am not claiming it is.
 7        MR. NETTLETON:       You do have expertise or experience,
 8   at least, with power quality matters; right?
 9        MR. BRILL:     That's one area, yes.
10        MR. NETTLETON:       Another area relates to forensic
11   engineering; right?
12        MR. BRILL:     That's correct.
13        MR. NETTLETON:        And your experience from your resume
14   relates to matters concerning product liability cases?
15        MR. BRILL:     That's one of the things I look at as part
16   of my job with SEA.
17        MR. NETTLETON:       With respect to your expertise in
18   terms of testimony before the Florida Public Service
19   Commission -- from your resume I understand you have
20   testified before the Florida Public Service Commission?
21        MR. BRILL:     That's correct.
22        MR. NETTLETON:       In that testimony, you were qualified
23   as an expert?
24        MR. BRILL:     Yes.
25        MR. NETTLETON:        And that matter dealt with a boundary
26   dispute?
27        MR. BRILL:     It actually came down to a power quality
28   case, is the reason I got involved, a customer looking at

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 1   generators to be able to avoid momentary interruptions.
 2        MR. NETTLETON:     Can we agree that there is a
 3   discipline difference between power quality and
 4   transmission system planning disciplines?
 5        MR. BRILL:     There is definitely differences, yes.
 6        MR. NETTLETON:     Thank you.    You were retained by Mr.
 7   Ross, were you, originally?
 8        MR. BRILL:     Originally, yes.
 9        MR. NETTLETON:     And that occurred, did I hear, in
10   February of 2008?
11        MR. BRILL:     That's correct.
12        MR. NETTLETON:     And from your evidence, do I
13   understand that you have been asked, as part of your
14   retainer, to review, in varying levels of detail, certain
15   documents that have been filed in this proceeding?
16        MR. BRILL:     That's correct.
17        MR. NETTLETON:     All right.    With respect to the
18   preparation of the report that has been filed, was it the
19   only report, or is this the final report of several drafts
20   that have been previously provided?
21        MR. BRILL:     This is the only signed report that I
22   provided, yes.
23        MR. NETTLETON:     Did you sign it, sir?
24        MR. BRILL:     Well, if I'm in the office, I sign it.    If
25   I'm not in the office, it is signed for me.       In this case,
26   it was signed for me since I was out of the office.
27        MR. NETTLETON:     Is that the case, that the person that
28   signed for you also signed it on behalf of the report -- of

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 1   who it was prepared by?
 2        MR. BRILL:    Yes.   Because this person is located in
 3   our Columbus, Ohio office, that's handled through an e-mail
 4   and a fax, where his signature is on record as having
 5   reviewed this document.
 6        MR. NETTLETON:    With respect to page 11 of your
 7   report, under the heading "Alternative Technologies", I
 8   wanted to turn your attention to the sentence that reads, I
 9   believe the third sentence:
10             "SEA would request to see information whether
11             HONI ..."
12        Which I assume means Hydro One Networks Inc.:
13             "... has investigated or conducted research on
14             adding capacitor technologies in combination with
15             upgraded lines with higher capacity conductors."
16        Do you see that?
17        MR. BRILL:    Yes.
18        MR. NETTLETON:    Sir, do you know when the data request
19   or the interrogatory process deadline was for this
20   proceeding?
21        MR. BRILL:    Some of those deadlines were conveyed to
22   me by Mr. Ross and Mr. Fallis.
23        MR. NETTLETON:    Was part of your role and
24   responsibility, the retainer, the preparation of questions
25   for the purposes of the interrogatory process?
26        MR. BRILL:    It was originally supposed to be that way,
27   but there was no time, so I never got involved in being
28   able to do that.

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 1        MR. NETTLETON:     So you didn't follow up on this
 2   recommendation to request information regarding what HONI
 3   had investigated or conducted research on adding capacitor
 4   technologies?
 5        MR. BRILL:     It was my understanding that the
 6   interrogatories had already been, I guess, turned in before
 7   I was able to write my report.
 8        MR. NETTLETON:     Okay.   So this report came -- that's
 9   right.   This report was filed in late April; is that right?
10        MR. BRILL:     It was -- yes.
11        MR. NETTLETON:     And so that request or that advice was
12   provided in contemplation of what, sir?
13        MR. BRILL:     I'm sorry, I don't understand your
14   question.
15        MR. NETTLETON:     The sentence that states, "SEA would
16   request to see information whether HONI investigated or
17   conducted research", I'm just wondering what you were
18   intending to mean by that for the purposes of this
19   proceeding.
20        MR. BRILL:     Well, based on the data that was reviewed
21   by myself, which I think is listed in my report on pages 4,
22   5 and the top of 6, this was the data that was provided to
23   me to review as part of my investigation.
24        MR. NETTLETON:     Do you know whether at any time your
25   clients requested costing information regarding -- or
26   questions regarding whether HONI had investigated or
27   conducted research on adding capacitor --
28        MR. QUINN ROSS:     Madam Chair, this is squarely in the

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 1   area of litigation privilege.        This is my relationship as
 2   counsel with my expert and the scope of the retainer.           What
 3   I did or did not ask him to review is subject to litigation
 4   privilege.     His report and what he relied upon in his
 5   report is waived from privilege, as is the law.
 6        However, what we decided to do and how we strategized
 7   in the preparation of our report is subject to litigation
 8   privilege, and these questions aren't appropriate.
 9        MS. NOWINA:      Mr. Nettleton.
10        MR. NETTLETON:      Madam Chair, I am only asking the
11   question of whether or not Mr. Brill knows whether Mr. Ross
12   or Mr. Fallis followed up or asked any questions regarding
13   this advice.     That's not the subject matter of litigation
14   privilege.     That's the subject matter of this proceeding.
15        MS. NOWINA:      Mr. Pappas, could you turn off your mike,
16   please?
17        MR. PAPPAS:      Oh, I'm sorry.    Sorry about that.
18        MS. NOWINA:      That's all right.    Can you tell me again
19   what your question was, Mr. Nettleton?
20        MR. NETTLETON:      My question was simply whether or not
21   Mr. Brill knew if any follow-up had been made with respect
22   to the request to see information, whether Hydro One had
23   investigated or conducted research on adding capacitor
24   technologies.
25        MR. QUINN ROSS:      And if he does or doesn't know, that
26   is subject to privilege.       It's the conversations between
27   counsel and expert in the contemplation of the preparation
28   of an expert report.      Those are all privileged things.

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 1        Those documents which are relied upon cease to be
 2   privileged once they form the basis of the report.            We have
 3   dealt with this line in motions already.
 4        MR. NETTLETON:    I think it must be the hour of the
 5   evening.   I will move on.    Nothing turns on it, Madam
 6   Chair.
 7        MS. NOWINA:    Thank you, Mr. Nettleton.
 8        MR. NETTLETON:    With respect to the retainer, Mr.
 9   Brill, what purpose were you, in fact, retained for?
10        MR. BRILL:    I think it is listed under --
11        MR. FALLIS:    I object to that question, because it is
12   currently in the report, and it says in the report what the
13   retainer was.   I don't know why we have to impeach the
14   witness on what the retainer, when it is fully described in
15   the report.
16        MS. NOWINA:    We will move ahead a lot more quickly if
17   we can answer the simple questions.
18        That one I suspect isn't subject to privilege, and if
19   the witness can answer it briefly, then we can move ahead,
20   Mr. Fallis.
21        MR. BRILL:    It's listed in the scope of the project.
22        MR. NETTLETON:    So there were three items in the scope
23   of the project that are stated.      The first one says:
24              "Specifically, SEA was requested to render
25              professional opinions as to whether HONI's choice
26              to acquire additional land and build a new 500 kV
27              double circuit is the better solution to the
28              landowners and ratepayers affected by this

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 1             project."
 2        That was the first purpose of your retainer?
 3        MR. BRILL:    That was the initial, as far as reviewing
 4   the files and the documents in this case.
 5        MR. NETTLETON:    All right.   The second purpose is
 6   stated that you:
 7             "... were asked to review alternative
 8             technologies for viability for the proposed
 9             project and transmission needs."
10        Do you see that?
11        MR. BRILL:    Yes.
12        MR. NETTLETON:    Then the third is:
13             "To provide opinions on the feasibility and
14             appropriateness of alternative technologies."
15        MR. BRILL:    Yes.
16        MR. NETTLETON:    This report addresses all three of
17   those purposes?
18        MR. BRILL:    It does, and I think the first item there
19   which says, the first part of the bullet, was based on the
20   experience that I had at Florida Power & Light, having to
21   be the interface between the ratepayer and the company on
22   issues related to transmission, including, you know, as I
23   mentioned before, EMF issues and also proposed projects for
24   transmission expansion and transmission maintenance that
25   would affect the customers.    I was asked to look at it
26   based on that experience.
27        MR. NETTLETON:    So when you rendered professional
28   opinions, you were rendering the professional opinion as it

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 1   relates to your expertise vis-à-vis power quality?              Is that
 2   fair?
 3           MR. BRILL:   That's part of my experience at Florida
 4   Power & Light.
 5           MR. NETTLETON:   But is that what you did in respect of
 6   this particular purpose, or scope of your retainer?
 7           MR. BRILL:   Looking at the first part was just based
 8   on the experience that I had during the 20 years with
 9   Florida Power & Light, as it dealt with issues with
10   interfacing between the ratepayer, answering the
11   ratepayer's questions, and interacting between the
12   transmission group, the generation group, the distribution
13   group, and the customer service group and the customers.
14           MR. NETTLETON:   So not from a transmission system
15   planning perspective?
16           MR. BRILL:   No, it was not.
17           MR. NETTLETON:   Okay.   Mr. Brill, let me try and
18   shorten this up a little bit.
19           It strikes me, from when I reviewed your evidence, I
20   can discern one of two things.        The first is that the
21   application is, in some way, deficient, because ACCR
22   technology was not considered as an alternative.          Is that
23   the point of your report?
24           MR. BRILL:   I think I mentioned earlier that ACCR
25   conductors is a technology that should be considered but
26   not in a vacuum by itself.       It should be considered with
27   other possible technologies.
28           MR. NETTLETON:   So when I say that the application

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 1   that is before this Board is in some way deficient because
 2   that specific technology was not included, that's one -- is
 3   that what your -- the gist is of your report?
 4        MR. BRILL:   No.    I think the gist from my first
 5   conclusion was that based on the proposals of options that
 6   were presented by HONI, as far as here's the different
 7   options to deal with the generation at Bruce and the
 8   additional wind that's being proposed, here's the different
 9   options that we considered, I didn't see anything that
10   considered other technologies, whether they included FACTS
11   technology, ACCR, reconductoring, or a combination of these
12   technologies and other technologies.
13        MR. NETTLETON:     Right.    The second point that maybe
14   can you help me clarify with your evidence is, are you
15   suggesting -- is your point of your evidence that use of
16   ACCR technology vis-à-vis reconductoring, is a better and
17   preferred alternative to the facilities that have been
18   applied for?   Is that your opinion?
19        MR. BRILL:   No.    My opinion there is that I can't say
20   that because I don't see analysis that shows that it was
21   considered.
22        MR. NETTLETON:     Okay.    So that's not your evidence in
23   this proceeding, that you have a preferred alternative?
24        MR. BRILL:   That's correct.
25        MR. NETTLETON:     Okay.    What you're saying in this
26   report is simply that you can't make that determination,
27   because you don't have the information necessary to make an
28   informed opinion about it?

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 1        MR. BRILL:   Basically to say that I didn't see
 2   evidence in the review, file, the documents that I reviewed
 3   that HONI considered those options in their analysis.
 4        MR. NETTLETON:   Now, sir, do you understand that
 5   through this process, evidence has come on to the record
 6   where discussion was given and explanation was provided by
 7   HONI's witnesses to costs associated with reconductoring?
 8        MR. BRILL:   After my report or before my report?
 9        MR. NETTLETON:   After your report, sir.
10        MR. BRILL:   Yes, I was aware that some of that
11   information was looked at afterward.
12        MR. NETTLETON:   That includes the undertaking J1.1
13   which has been included as part of Exhibit K14.4, right?
14        MR. BRILL:   That is my understanding, yes.
15        MR. NETTLETON:   So were you in attendance, sir, when
16   that evidence was provided in this proceeding?
17        MR. BRILL:   No, I wasn't.
18        MR. NETTLETON:   And so the evidence-in-chief that Mr.
19   Fallis led you through, vis-à-vis your views now on this
20   document, is simply from the plain reading that you have of
21   this document?
22        MR. BRILL:   That's correct.
23        MR. NETTLETON:   All right.    Do you have an
24   understanding that the evidence in this proceeding by Hydro
25   One is that the grand total cost of reconductoring is $1.8
26   billion, and it would take 15 years to implement?
27        MR. BRILL:   I am not aware of all of the analysis or
28   what that number includes.

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 1           MR. NETTLETON:    Right.   Now, let's just assume
 2   something, sir.
 3           If there has been evidence led in this proceeding that
 4   would suggest the necessary transmission facilities, the
 5   need for new transmission facilities was required before 15
 6   years from now, the transfer capability associated with
 7   reconductoring, are we able to agree that an option that
 8   would require 15 years would not be reasonable?
 9           MR. BRILL:    Well, that would depend on a lot of
10   assumptions on where those numbers came from.
11           MR. FALLIS:   Madam Chair, again we're going back to
12   Mr. Pape's comment.      We have a double hypothetical put to
13   this witness.     One at a time, at least.      First of all, it
14   is 15 years and then it is going to cost this much.             So two
15   hypotheticals and, again, that is same problem Mr. Pape had
16   with the question asked of Mr. Russell this afternoon that
17   I am having right now.
18           MS. NOWINA:   Although, Mr. Brill, unlike the rest of
19   us, seems to be surprisingly alert and able to put it
20   together.     So if Mr. Brill is having difficulty with the
21   questions, he can ask Mr. Nettleton to rephrase them or
22   repeat them or give them one at a time.         But from my
23   vantage point, he seems to be able to handle them at this
24   time.
25           MR. NETTLETON:    For your counsel's benefit, let me
26   start again.
27           Let's assume that there is need for a transmission
28   reinforcement that is required three years from now, and an

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 1   option that has been evaluated cannot be implemented in
 2   that time period.    In fact, it would take 15 years.
 3        All other things being equal, Mr. Brill, would you
 4   consider that type of option to be reasonable or
 5   unreasonable?   Or can you tell?
 6        MR. BRILL:     I can't tell, because I don't know what
 7   the assumptions are built into that 15 years.       Is the
 8   entire, every aspect of the project, 15 years or there are
 9   certain things that extend that out to 15 years?
10        MR. NETTLETON:     The requirement, the transfer
11   capability requirement necessary to meet the need could not
12   be met for 15 years.
13        MR. BRILL:     If that assumption is true, you would have
14   to look at all of the data and say:     Where is the bottle
15   neck in that process?
16        MR. NETTLETON:     If the cost of that, implementing that
17   option was a cost that was approximately three times the
18   cost of the next best option, all other things being equal,
19   sir, as between the two options, would you have any reason
20   to think that the lower-costing option would be a more
21   reasonable option than the higher-costing option?
22        MR. BRILL:     Again, going through the assumptions that
23   it would take that long to do what you're saying it would
24   and it would cost that much more, if those assumptions are
25   true, then I think it is basically the function of this
26   Board to do what's best for the ratepayers in the province.
27        I think you would want to -- if it's based on cost,
28   then, yes, you would want to go with the cheaper cost

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 1   option.    But it's something that just needs to be
 2   considered and weighed in the evidence, and these numbers
 3   that are given here, I have no way to either support them
 4   or contradict them, because I don't know what assumptions
 5   went into putting these numbers together and putting your
 6   15-year timeline in -- together.
 7        MR. NETTLETON:      They were -- and this is evidence in
 8   this proceeding, though; right?        You are aware of that?
 9        MR. BRILL:      Yes.
10        MS. NOWINA:      Excuse me for a moment, Mr. Nettleton.
11   Mr. Barlow?
12        MR. BARLOW:      I object to his not giving a complete --
13   complete information about the 15 years.         And it was 15
14   years to do the entire province.        That makes a huge
15   difference and not just this line.        That's what Mr. --
16        MS. NOWINA:      Mr. Barlow.
17        MR. BARLOW:      The other thing is we were never given
18   the numbers other than something that somebody did
19   overnight.
20        MS. NOWINA:      Mr. Barlow, it is not your job to object.
21   It is Mr. Fallis's job to object if he thinks there is a
22   problem.    He is counsel for the witness.       You are not.
23        MR. BARLOW:      Thank you.
24        MS. NOWINA:      Go ahead, Mr. Nettleton.
25        MR. NETTLETON:      So I just want to go back to scope of
26   the retainer found at page 1, if I could.
27        Have you, in fact, rendered professional opinions
28   about the choice to acquire additional lands and build a

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 1   500 kV circuit as being a better choice or better solution?
 2           MR. BRILL:   No.    I didn't go through the analysis of
 3   that particular.      What I did here, part of my scope was to
 4   review the documents based on my experience, training,
 5   knowledge and education, and my time at Florida Power &
 6   Light, was to look at the data, look at the information
 7   that has been put forth in this case and say, What issues
 8   do I have, what concerns do I have and what things raise
 9   flags in my mind, more from an overview, because it was my
10   understanding that there were others doing modelling and
11   more in-depth analysis of the data, which I did not have
12   time, coming in this late into the game, to do any of that.
13           MR. NETTLETON:     So with respect to the second point of
14   review, alternative technologies for viability for the
15   proposed project needs, have you done that?
16           MR. BRILL:   I did that based on the information that I
17   reviewed at the time -- up to the time of this report.
18           MR. NETTLETON:     What is your professional opinion in
19   that regard?
20           MR. BRILL:   I didn't see a review of alternative
21   technologies that were done by HONI as part of their, you
22   know, due diligence in this proceeding.
23           MR. NETTLETON:     Mr. Brill, were you -- did you review
24   the issues list associated with this proceeding as part of
25   your review?
26           MR. BRILL:   The listing of what I reviewed is given
27   here.     If that's in there, I probably did look through it.
28           MR. NETTLETON:     Did you review any of the OEB

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 1   procedural orders associated with this application?
 2        MR. BRILL:      Again, I reviewed a lot of documents in
 3   this case.     I can't say for sure, you know, how much time I
 4   gave to each document, but some of them was just looking at
 5   it from the scope of my project.        It was more in-depth as
 6   it applied and related to the scope of my project.
 7        MR. NETTLETON:      So if it's not on this list, then you
 8   didn't review it?
 9        MR. BRILL:      That's correct.    At the time of this
10   report, this is what I had reviewed.         There is a lot of
11   stuff on the website I reviewed.        It may have been one of
12   the things I reviewed on the website.
13        MR. NETTLETON:      All right.    I want to turn to the area
14   that you have referenced in your report dealing with
15   nameplate capacity and the use of nameplate capacity.
16        I believe that is found starting on -- the discussion
17   is on page 8, I believe.
18        MR. BRILL:      Yes.
19        MR. NETTLETON:      Now, is it your evidence and testimony
20   that transmission system planning using nameplate capacity
21   is inconsistent with the methods and ways in which
22   transmission system planning has been carried out in
23   Ontario in the past?
24        MR. BRILL:      Again, I reviewed it based on my
25   experience and time with Florida Power & Light.          I did not
26   review all of the issues as they relate to particular
27   issues here in Ontario, but I looked at it from the
28   perspective of the ratepayer, which is the same perspective

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 1   I would look at it whether I worked in Florida or whether I
 2   worked in Ontario.
 3        MR. NETTLETON:   Have you had any experience in the
 4   field of economics?
 5        MR. BRILL:   As it relates to what?
 6        MR. NETTLETON:   You don't have any training in
 7   economics, do you?
 8        MR. BRILL:   Just what I developed through my business
 9   degree.
10        MR. NETTLETON:   Have you had occasion, in your area of
11   work, to look at congestion management costs?
12        MR. BRILL:   I did not.
13        MR. NETTLETON:   No.   So did you review any of the
14   locked-in energy forecast modelling or anything like --
15   anything of the information on the record in this
16   proceeding relating to that?
17        MR. BRILL:   I was informed by my client that that was
18   being reviewed by others.
19        MR. NETTLETON:   Okay.    So the concept of planning with
20   nameplate capacity and locked-in energy, any relationship
21   between the two, you did not -- that was not part of your
22   area of expertise or area of your retainer?
23        MR. BRILL:   Just having -- the area where it would
24   have impacted as part of my retainer is the fact I did look
25   at it based on my experience with Florida Power & Light.
26   Again, FPL Energy is part of Florida Power & Light, which
27   is I think the leader in North America in the amount of
28   wind projects that are out there, and having seen a lot of

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 1   information on wind projects and been involved, from a
 2   power quality standpoint, on problems with the wind
 3   turbines when they were first being developed, is that wind
 4   is -- with FPL Energy is not considered at a nameplate as
 5   it relates to the entire transmission system.
 6           It's done, as Mr. Russell indicated, at the point of
 7   connection, but it's not done when you're weighing that
 8   wind over the entire transmission system that it is
 9   connecting to.
10           MR. NETTLETON:   Do you know of any jurisdictions in
11   the United States that has transmission system planning
12   standards that outline that approach?
13           MR. BRILL:   That outline that approach?
14           MR. NETTLETON:   Yes.
15           MR. BRILL:   No, I wouldn't have any information on
16   that.
17           MR. NETTLETON:   Okay.
18           If I could take you to page 9, Mr. -- this is page 9
19   of your report.
20           MR. BRILL:   Yes.
21           MR. NETTLETON:      You talk about, at the first
22   paragraph, that wind generation continues to be cost
23   prohibitive without subsidies.
24           MR. BRILL:   That's correct.
25           MR. NETTLETON:   You go on in that paragraph to state
26   that, "The technology", and I am assuming the technology
27   meaning wind generation:"... has also not been proven in an
28   area with weather conditions similar to the Bruce area."

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 1        MR. BRILL:    That's correct.
 2        MR. NETTLETON:     So that technology is wind technology,
 3   wind generation?
 4        MR. BRILL:    The wind technology that is available
 5   today, yes.
 6        MR. NETTLETON:     So what basis did you make that
 7   statement, sir?
 8        MR. BRILL:    The basis on that was the documents that I
 9   have reviewed, and also the documents that I have reviewed
10   when I was with Florida Power & Light, because FPL Energy
11   -- and wind production was such a large percentage of the
12   portfolio of FPL Energy, a lot of our -- when we worked for
13   the power company, a lot of our value in stock and
14   retirement was based on the success of FPL Energy, mainly
15   in the area of wind.
16        So it was something that we all looked at very
17   carefully, because if they failed, there is a good chance
18   our retirement would fail along with them.
19        So it was definitely information that was presented to
20   us as employees as it related to FPL Energy and their
21   application for wind.    Of the 5,900 megawatts, I believe,
22   of wind that FPL has in their portfolio, 16 states are
23   represented in that amount of wind projects that FPL has
24   managed.
25        And there's zero megawatts of wind that have been
26   installed in Florida, because of the analysis that has been
27   done, you know, over the years on where, which areas are
28   the best for wind and whether they're cost-effective and

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 1   good business decisions for being applied, you know, in
 2   different areas of the country.
 3           MR. NETTLETON:      I just want to go back to the
 4   sentence, because maybe I'm missing something, sir.
 5           MR. BRILL:   Yes.
 6           MR. NETTLETON:   Are you saying, in that sentence, that
 7   technology has not -- has also not been proven in an area
 8   with the weather conditions similar to the Bruce area?          In
 9   order to make that statement -- well, let me ask you this.
10           Are you suggesting that wind technology, wind
11   generation is not a technology suitable for the Bruce area?
12           MR. BRILL:   No, I'm the not saying it is not suitable.
13   I'm saying that based on the thousands of megawatts that
14   are installed throughout North America, a very small
15   percent arm's of that wind has been installed in the Great
16   Lakes area, or in the area of the country that would be
17   considered similar geographically and weather condition-
18   wise as the Bruce area.
19           MR. NETTLETON:   Were you here when I was cross-
20   examining Mr. Russell?
21           MR. BRILL:   Today?    Yes.
22           MR. NETTLETON:   Yes?    Do you recall me asking Mr.
23   Russell questions about the RES I and RES II programs?
24           MR. BRILL:   I do.
25           MR. NETTLETON:   Do you know, sir, whether the RES I
26   and RES II programs related to wind generation in the Bruce
27   area?
28           MR. BRILL:   Again, that was not something I reviewed

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 1   as part of the scope of my project.
 2        MR. NETTLETON:      Are you aware, sir, whether or not
 3   there are existing wind farms under development and
 4   under -- in construction in the Bruce area?
 5        MR. BRILL:      Yes, I did read that in the documents I
 6   reviewed.
 7        MR. NETTLETON:      Does that change your opinion of that
 8   statement?
 9        MR. BRILL:      No, not at all.
10        MR. NETTLETON:      Well, help me understand it, then.
11        MR. BRILL:      Well, installing wind in an area, just
12   looking at the amount of wind that has been installed in
13   this area, it is obviously not an area that has been
14   considered a proven wind-generating area because there just
15   hasn't been a lot of wind project to date in this area of
16   the country, of Canada.
17        MR. NETTLETON:      Do you think that has something to do
18   with the lack of transmission capability out of the Bruce?
19   Could that be one of reasons why?
20        MR. BRILL:      I think that is one thing to consider.
21        MR. NETTLETON:      Are you aware, sir, of whether your
22   former employer is a proponent of wind farm developments in
23   the Bruce area?
24        MR. BRILL:      I know they were not when I was an
25   employee there.      I do not know if they are today.
26        MR. NETTLETON:      Would it surprise you if they are?
27        MR. BRILL:      Oh, no, it would not surprise me at all.
28        MR. NETTLETON:      In your report, you made reference to

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 1   the historical nuclear data.     This is found at page 10.
 2         MR. BRILL:    Yes.
 3         MR. NETTLETON:    And as I understand your evidence,
 4   sir, it is that this historical data has some bearing on
 5   the future planning of the transmission system requirements
 6   out of the Bruce.
 7         MR. BRILL:    That's not my understanding.     My
 8   understanding was it was some of the information that was
 9   requested to be reviewed, and one of the things that I
10   asked for, you know, is whether this information was
11   available as part of the documents that I reviewed for my
12   clients.
13         MR. NETTLETON:    So you don't take the position that
14   that historical data has any value or relevance to the
15   question of future transmission system planning for
16   refurbished nuclear facilities out of the Bruce?
17         MR. BRILL:    I think it is very relevant.     You always
18   want to look at historical data in your decision-making
19   process, because that's where you learn a lot of
20   information about what has been successful, what hasn't
21   been, and what issues come up in play.
22         The fact this data wasn't available was surprising to
23   me.
24         MR. NETTLETON:    If the old data, if the historical
25   data does not reflect facts and circumstances of present
26   day and of the future, particularly as it relates to the
27   capability of present and future nuclear generation
28   facilities, help me understand why the historical data has

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 1   relevance.
 2        MR. BRILL:      For me, the historical data had relevance
 3   because there hasn't been a period of time, I think, in
 4   many years here in Ontario where all of the units at Bruce
 5   have been operating together.        There was a short period of
 6   time that that occurred.
 7        So part of my review is to say:         Is that data
 8   available that shows what the system was doing at the time
 9   when all of these generators were connected to the system,
10   and what type of loads were being generated out of Bruce
11   during those times that all units were operating?           Because
12   that's where -- it's my understanding that is where they're
13   trying to get back to, is to get all of the units back on
14   line that have been coming offline over the years.
15        MR. NETTLETON:      Thank you, Mr. Brill.
16        Thank you, Madam Chair.         Those are the questions that
17   we have.
18        MS. NOWINA:      Thank you.     Mr. Millar, do you have
19   questions?
20        MR. MILLAR:      No, thank you.
21        MS. NOWINA:      Mr. Fallis?
22        MR. FALLIS:      No redirect.
23        MS. NOWINA:      No redirect.
24        Are we really finished?        There isn't some surprise
25   piece of evidence that someone would like to bring forward
26   at the last minute so we could debate it for a couple of
27   hours?   No?
28        MR. FALLIS:      The question I have, do the elevators go

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 1   down, if they don't go up?
 2        MS. NOWINA:     They do go down, yes.     That's a fire
 3   regulation, so you don't have to stay.
 4        Thank you, everyone.      Thank you, Mr. Brill, very much.
 5   And we apologize that you came before and now have to come
 6   and testify at this time of night, so thank you very much.
 7   We're usually friendlier than that in Ontario.
 8        Thank you, everyone, for all of your efforts through
 9   this proceeding.     We look forward to receiving your
10   argument.    We are now adjourned.
11        ---Whereupon the hearing concluded at 11:05 p.m.
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