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REVISED INDEPENDENT POWER CONTRACT IN NEW YORK REDUCES FOR BUILDING EASTMAIN 1 AND OTHER HYDRO-ELECTRIC PROJECTS IN NORTHERN QUEBEC

 OTTAWA, Nov. 24 ~PRNewswire~ -- Bill Namagoose, executive director, Grand Council of the Crees (of Quebec) indicates that on Friday, Nov. 20, 1992 two significant decisions affecting the development of hydro- electric facilities in the James Bay region of Quebec were announced, one in Quebec and the other in New York. Each was addressed only in local media. According to Mr. Namagoose, "They are fundamentally related and should be viewed in the same context."
 The first decision, rendered by the Canadian Federal Court of Appeal, rejects the James Bay Crees' call for environmental assessment of Eastmain 1 and other new hydro-electric construction. Mr. Namagoose indicates that in effect, the decision, if not overturned on appeal, sets back the cause of environmental assessment and respect for native rights many decades.
 The second decision, rendered in the competitive New York electricity marketplace and announced on Friday in Albany, New York by Governor Mario Cuomo who mediated the arrangements, affirms a major change in market conditions in New York; 730 megawatts (MW) of independently produced power will now be treated as firm capacity until 2035. In effect, the revised contract between Consolidated Edison serving the New York City area and the Sithe~Energies Group's upstate cogeneration plant sets back Hydro-Quebec's hoped for export sales to New York for several decades.
 According to Governor Cuomo the Independence Project also addresses New York's environmental needs and will provide ''a guaranteed source of clean energy for well into the new century''.
 While pricing details are not yet available, this revised contract demonstrates conclusively that natural gas is now established as a major competitor to hydro-electric imports in the Northeastern United States.
 The new agreement between New York's investor owned utility Consolidated Edison and independent power producer Sithe~Energies Group, turns an existing five year contract for ''firm energy only'' into a forty year contract until 2035 for ''firm capacity and energy''. It drops the costs of the first five years more than $300 million and is depicted by Governor Mario Cuomo as a model for job development and environmental care. The agreement significantly reduces prospects that New York will be a market for hydro-electricity from Hydro-Quebec within the next quarter century.
 Natural Gas is a major competitor to hydro-electric imports for the foreseeable future whether for all year firm capacity, such as the 1,000 MW contract between New York and Quebec which was canceled in March 1992, or for seasonal firm capacity, such as the 800 MW diversity contract up for renewal between Hydro-Quebec and two New York utilities. This pending renewal contract can be canceled by November 1994 without penalty. Namagoose asserts that during 1993 Consolidated Edison (780 MW) and Rochester Gas & Electric (20 MW) will surely be evaluating gas- fired sources and conservation alternatives, including the 270 MW balance of the 1,000 MW Independence Plant.
 Just as New York's March 1992 cancellation of the 1,000 MW contract with Hydro-Quebec immediately altered and attenuated Hydro's construction proposals for the Great Whale project, Governor Mario Cuomo's Friday announcement should lead to immediate review of Hydro- Quebec's construction proposals and recent Court decisions to allow construction of mega hydro-electric projects without adequate environmental review or consideration for aboriginal rights.
 Only two weeks ago Hydro-Quebec announced in its 1993 Development Plan that it hoped to return to the New York and New England markets with 1,500 megawatts of sales by 2004 based upon its own projects of needs in those markets. Mr. Namagoose observes that the 1993 Development Plan and Hydro-Quebec's continuing disregard for environmental assessment appear inappropriate and out-of-touch with the contemporary competitive power market.
 New York's continuing concern for the environmental and social impact of additional hydro-electric development in the James Bay region was articulated by Governor Mario Cuomo in his press release announcing the cancellation of the 1,000 MW contract on March 27, 1992:
 "It will take time to sort out the full environmental costs and benefits of further hydro-electric development in the James Bay region. All interests both here and in Canada, will be served by a more complete understanding of the environmental impact of additional hydro- electric development in Quebec and the comparative environmental and energy impacts of such development in both Quebec and New York...The possibility of post 2000 system import contract with Hydro-Quebec should not be foreclosed as an option for New York if the cost is competitive, the need exists, and the appropriate environmental reviews for any new facilities have been conducted."
 (Governor Mario Cuomo in March 27, 1992 press release)
 The Canadian Federal Court of Appeal on Nov. 20, 1992, rejected the motion by the Crees of James Bay to have the Eastmain-1 hydro-electric project submitted to a full environmental impact assessment under the terms of the James Bay and Northern Quebec Agreement (JBNQA). The Court also exempted the Eastmain Project from the Canadian Federal Environmental Assessment Review Guidelines Order. This decision flies in the face of previous Canadian jurisprudence which accords a fair, open and modern interpretation of aboriginal and treaty rights and to the right to adequate environmental assessment of major developments.
 Unless reversed, this decision also flies in the face of Governor Cuomo's concerns and could affect a number of energy projects such as Eastmain 1, La Forge I & II. For the social and environmental impacts of these projects there will not be any environmental assessment, any public hearings, any submissions by interested parties, or any intervenor funding, and there is no guiding legislation if the present court ruling stands. This is not a good story to take to market in the Northeastern United States.
 By the elimination of environmental reviews for new facilities in Quebec and by the emergence of environmentally sound and cost-effective alternatives in New York, Bill Namagoose asserts the New York option for export sales by Hydro-Quebec may now be foreclosed.
 -0- 11~24~92
 ~CONTACT: Bill Namagoose, 819-825-5660, Brian Craik, 613-724-1097 or Ruben Brown, 292-349-5864, all for Grand Council of the Crees~


CO: Grand Council of the Crees (of Quebec) ST: Ottawa IN: UTI SU:

TM -- NY088 -- 1334 11~24~92 20:30 EST
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Date:Nov 24, 1992
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