Kananaskis Falls and Horseshoe Falls Water Power Regulations (SOR/97-473)

For the operation of the development at Kananaskis Falls on the Bow River in the Province of Alberta

ISSUED under the authority of the Kananaskis Falls and Horseshoe Falls Water Power Regulations.

WHEREAS the Calgary Power Company, Limited, a company incorporated under the Companies Act of Canada, the head office of which was situated in Montreal, Quebec (referred to hereinafter as the “Original Licensee”), made application on January 12, 1910, with supplementary information dated December 20, 1910, for a licence to divert, take and use the waters of the Bow River at Kananaskis Falls for the purpose of developing water-power by using a total head of 72 feet, 45 feet within the Stoney Indian Reserve and 27 feet in the then Rocky Mountains Park, all in the Province of Alberta;

WHEREAS, by agreement made October 14, 1912, His Majesty, represented by the Minister of the Interior of Canada, pursuant to section 35 of The Dominion Lands Act, S.C. 1908, c. 20, and the Regulations made thereunder by Order in Council dated June 2, 1909, agreed, upon the fulfilment by the Original Licensee of all the terms, conditions and covenants to be performed and kept by the Original Licensee as set out therein, to grant to the Original Licensee a licence to take, divert and use for power purposes all of the waters of the Bow River at Kananaskis Falls, subject to the Regulations governing water-power rights then or thereafter in force and in accordance with the plans and specifications approved or to be approved by the Minister for the construction of the works, and to the rights existing or that may be created under the Irrigation Act, the term of the licence to be 21 years, renewable for three further consecutive periods of 21 years each, but to terminate when the licence to be granted pursuant to the agreement dated October 14, 1909 for power purposes at Horseshoe Falls terminates, the annual rental payable during the first term of the licence to be $100, the Original Licensee to have the power to acquire and take for the purposes of its undertaking such land within the Stoney Indian Reserve as the Minister may consider necessary and to be granted a lease of the necessary Dominion Park lands;

WHEREAS, by agreement made May 20, 1914, between certain chiefs of the Stoney Indian Band and the Original Licensee, it was agreed that the Original Licensee should pay, through the Department of Indian Affairs, to the Stoney Indian Band the sum of $16,500 in settlement for all claims for damages or otherwise which the Stoney Indian Band had against the Original Licensee for about 95 acres of land, an easement for poles, gravel, and the rental of the water-power at Kananaskis Falls until January 1, 1919, being at the rate of $1,500 per annum, and it was also agreed that the annual rental after January 1, 1919 should be $1,500 payable in advance during the currency of the lease; which sum was duly paid and which rental was also paid by the Original Licensee from January 1, 1919;

WHEREAS the Original Licensee duly fulfilled on or before October 14, 1915, all the conditions provided by the agreement of October 14, 1912, and thereby became entitled to a licence in accordance with the terms thereof and the Regulations;

WHEREAS by section 13 of The Dominion Water Power Act, S.C. 1919, c. 19, section 35 of The Dominion Lands Act was repealed subject to the proviso that the repeal should not affect any rights acquired or any liabilities incurred or any act or thing done with respect to water-power under The Dominion Lands Act and that rights theretofore acquired in respect of water-power should be administered by the authorities constituted in pursuance of The Dominion Water Power Act and as nearly as may be in conformity with its provisions;

WHEREAS the Original Licensee operated the power development at Kananaskis Falls to the satisfaction of the Minister of Mines and Resources of Canada, and duly paid the rentals and performed its obligations as if a licence had been issued to it under The Dominion Lands Act on October 14, 1915, and the licence had continued in effect beyond the first 21 year term;

WHEREAS, in accordance with the provisions of the regulations made under section 35 of The Dominion Lands Act, a licence issued on October 14, 1915, for a term of 21 years would have become renewable on October 14, 1936, for a further term of 21 years as provided in the regulations;

WHEREAS, under the authority of and subject to the provisions of section 35 of The Dominion Lands Act and section 13 of The Dominion Water Power Act and The Alberta Natural Resources Transfer (Amendment) Act, 1945, a licence (referred to hereinafter as the “Original Licence”) was issued on May 28, 1946 to the Original Licensee for a term of 21 years beginning on October 14, 1936, renewable for two further consecutive periods of 21 years each, but to terminate no later than the date when the licence granted to the Original Licensee for the use of the waters of the Bow River at Horseshoe Falls terminates;

WHEREAS the Original Licence, with the approval of the Minister of Mines and Resources of Canada dated June 11, 1947, and the Minister of Agriculture of Alberta dated June 2, 1947, was assigned as of May 31, 1947 from the Original Licensee to Calgary Power Ltd., a company incorporated under the Companies Act of Canada, the head office of which is situated in Calgary, Alberta;

WHEREAS the Original Licence was renewed on December 7, 1956 for a term of 21 years beginning on October 14, 1957 and was again renewed on June 21, 1979 for a term of 20 years beginning on October 14, 1978 under the authority of the Kananaskis Falls Water Power Regulations, SOR/77-665, and this last term expires on October 13, 1998, but the last term of the licence for the use of the waters of the Bow River at Horseshoe Falls expires on October 13, 1997;

WHEREAS Calgary Power Ltd. changed its name to TransAlta Utilities Corporation (referred to hereinafter as the “Licensee”), effective June 1, 1981 pursuant to the provisions of the Canada Business Corporations Act;

WHEREAS the Licensee applied on June 29, 1993 for an extension of its rights held under the Original Licence;

WHEREAS the conditions of the licence set out hereunder (referred to hereinafter as the “Licence”) are not in all respects the same as those imposed by the Original Licence and the agreement attached as Schedule I to, and given effect by, The Alberta Natural Resources Transfer (Amendment) Act, 1945, which agreement required the agreement of the Provincial Minister to any change in any condition of the Original Licence; and

WHEREAS the Minister of Environmental Protection of Alberta has agreed to the changes to the conditions of the Original Licence as reflected in this Licence;

NOW THEREFORE, under the authority of and subject to the Dominion Water Power Act, the Kananaskis Falls and Horseshoe Falls Water Power Regulations and The Alberta Natural Resources Transfer (Amendment) Act, 1945, this Licence is issued, granting to the Licensee the right to divert and use for power purposes all of the waters of the Bow River at Kananaskis Falls within the area described below for a term of 30 years beginning on October 14, 1998, and the Licence is renewable in accordance with the regulations, as amended from time to time, made under the Dominion Water Power Act and is subject to those regulations as amended from time to time except to the extent that the regulations are inconsistent with the terms of this Licence and to any existing rights that were created under the Irrigation Act. This right to divert and use the waters is to be exercised in accordance with the plans and specifications approved by the Minister of the Interior of Canada for the construction of the works and any modifications to those plans and specifications approved under the Regulations made under The Dominion Water Power Act and subject also to the following conditions:

• 1 The works shall be operated within the area shown on record plan no. KAT 18487 dated October 1995 and filed in the Office of the Director of Water-Power or in any other office under the jurisdiction of the Minister responsible for the Dominion Water Power Act.

• 2 The Licensee shall return all waters diverted from the Bow River to the channel through which they would have flowed as if there had been no diversion thereof and the waters shall be so returned in such a manner as shall not lessen the volume of water in the channel, from the point therein at which the waters shall be so returned, as compared to the volume of water that would have flowed through the channel if there had been no diversion thereof from the waters of the river.

• 3 The Licensee shall indemnify the Crown against all actions, claims or demands against it by reason of anything done or not done or permitted to be done or not done by the Licensee under the authority of the Licence, including any renewals thereof, in the erection, construction, maintenance or operation of the works or in the exercise or purported exercise of the rights and privileges so granted or agreed to be granted to the Licensee or otherwise, and the Licensee shall also indemnify the Crown against all actions, claims or demands whatsoever against it by reason of any failure of the dam and works.

• 4 The rental under this Licence shall be calculated and paid as follows:

  • (a) for each licence year (being the period beginning on October 14 in one calendar year and ending on October 13 in the next calendar year, inclusive),

    • (i) the amount of $40,000, payable on the first day of the licence year, and

    • (ii) the amount by which the product of $0.60 and the total number of megawatt hours of power produced during the licence year exceeds the amount paid under subparagraph (i), payable no later than 60 days after the end of the licence year;

  • (b) for the purpose of subparagraph (a)(ii), the amount of power produced shall be the total amount produced by all the generators as shown by the meters at the generators, without any reduction for any power consumed in the operation of the works;

  • (c) the accuracy of the meters is subject to verification, at the expense of the Licensee, by an inspector authorized by the Minister, which inspector shall perform the verification at least once every five years;

  • (d) where an authorized inspector determines that a meter is inaccurate, the Licensee shall pay any balance owing on account of that inaccuracy within 30 days after the amount is determined or may reduce any amount owing under paragraph (a) by any overpayment on account of that inaccuracy;

  • (e) in the event that the Licensee fails to make any of the required rental payments within 30 days after the date mentioned herein, the Licensee shall pay interest on arrears at the rate of one per cent per month, compounded monthly, for the period beginning on the date any amount is due and payable and ending on the date it is paid;

  • (f) the amounts described in paragraph (a) are subject to revision as follows:

    • (i) where, on a revision date, being the 5th, 10th, 15th, 20th or 25th anniversary of the first day of the term of this Licence, the Province of Alberta is charging a rental for other hydroelectric works that exceeds the rate per megawatt hour payable under this Licence for the preceding licence year, the rate payable under paragraph (a) commencing on that revision date shall be increased to the provincial rate and the lump sum payable under paragraph (a) on that date and in respect of subsequent licence years shall be increased by the same proportion, and

    • (ii) where the Minister, on the basis of the rentals payable for other comparable hydroelectric works owned by corporations that are not Crown corporations and regulated by Her Majesty in right of Canada or in right of a province other than Alberta, determines that the rental commencing on a revision date should be more than the amount payable under subparagraph (i) and so notifies the Licensee at least six months before any revision date, the Minister and the Licensee shall attempt to agree on the amount by which the rental shall be increased;

  • (g) if, by the revision date, the Minister and the Licensee fail to reach agreement on the amount by which the rental shall be increased under subparagraph (f)(ii), either may refer the issue for final determination in accordance with the Commercial Arbitration Act, except that

    • (i) the appointment of arbitrators shall be in accordance with article 11(3) of the Commercial Arbitration Code in Schedule 1 to the Commercial Arbitration Act, and

    • (ii) “court” or “competent court” means the Federal Court; and

  • (h) the rental shall be payable to the Government of Canada and to the Province of Alberta in the proportions provided for Her Majesty in right of Canada and the Province of Alberta, respectively, in paragraph 2(e) of the Agreement attached as Schedule I to The Alberta Natural Resources Transfer (Amendment) Act, 1945, and the Licensee shall accordingly pay to Canada 45/72nds of all rentals, and pay to the Province of Alberta 27/72nds of all rentals; provided that the annual rental of $1,500 payable under the terms of the agreement of May 20, 1914, or under any patent or other grant of land confirming or replacing the agreement shall be considered to be included in the portion of the rental payable to Canada.

• 5 In the event that the Licensee fails to perform, observe or keep any of the terms, conditions or other provisions of this Licence, including those in the regulations to which it is subject, the Minister may, by notice in writing, set out the particulars of the default and require the Licensee to commence and to diligently proceed to remedy the default, within 30 days or such longer period of time after the date of receipt of the notice as is reasonably required.

• 6 In the event that the Licensee fails to commence and to diligently proceed to remedy the default within the time prescribed, the Minister may, by notice in writing, suspend or cancel this Licence without compensation.

• 7 Despite section 6, the Minister shall not suspend or cancel this Licence for any default by the Licensee caused by acts of God, civil disruption, labour disputes, transmission system failure or major breakage of or damage to the works, the occurrence and effect of which are beyond the reasonable control of the Licensee.

• 8 Except as provided in paragraph 2(a) of the Agreement attached as Schedule I to The Alberta Natural Resources Transfer (Amendment) Act, 1945, the Licensee shall not assign this Licence or any of the privileges thereunder except in accordance with the regulations made under the Dominion Water Power Act.

• 9 In the event of the Government of Canada taking over, controlling and operating the Minnewanka storage dam, the Licensee shall, upon six months’ notice in writing from the Minister responsible for these works under the Dominion Water Power Act, pay such rental for the benefits derived from the operation of the storage dam for the development of water-power at Kananaskis Falls as is sufficient to cover its fair share of the costs of operating the dam, relative to other beneficiaries.

• 10 In case of dispute between the Minister and the Licensee as to the amount of money payable under section 9, it shall be fixed by arbitration in accordance with the paragraph 4(g).

• 11 The Licensee shall maintain and operate the works authorized hereby, in accordance with the practice of a reasonably prudent electrical utility, to the satisfaction of the Minister responsible for these works under the Dominion Water Power Act. The Minister has the power at any time to have the works inspected by such person as the Minister may appoint and the Licensee shall pay all reasonable expenses connected with the inspection, up to a maximum of two inspections per year, including any fee or remuneration paid the inspector for the inspection on the presentation of certified accounts to the Licensee by the Minister.

• 12 The Licensee shall carry out a closure and reclamation program that has been approved by the Director on cancellation, expiration or other termination of this Licence, except where the Director notifies the Licensee that the works will continue to be operated by another person. Where this Licence is being terminated by the Crown before its term is up for a reason other than default by the Licensee, the Crown shall reimburse the Licensee for the costs of carrying out the program.

  The Licensee shall, not later than three years before the decommissioning of the works, submit to the Director a detailed plan for the closure and reclamation of the works (referred to hereinafter as the “Plan”) that sets out the Licensee’s plan to meet the following objectives:

  • (a) ensure that the site is physically stable, and that any requirements for long term maintenance and monitoring are minimized;

  • (b) eliminate any threat to public safety;

  • (c) prevent any continuing impacts from contaminants and wastes on the environment; and

  • (d) restore the site to a reasonable state, giving due consideration to economics and to any future uses.

  The Director shall review the Plan and, if the Director determines that it meets the objectives set out in paragraphs (a) to (d), approve it. Where the Director does not approve the Plan, the Director shall, after consulting with the Licensee on the reasonable changes that should be made to the Plan in order that it meet those objectives, approve the Plan with such changes.

• 13 Compensation will be paid to the Licensee in accordance with

  • (a) sections 28 and 29 of the Dominion Water Power Regulations as they read on the date this Licence is signed, in the case where the Licensee applies for a renewal at the end of a term of this Licence but the Minister decides not to renew it or where Her Majesty in right of Canada takes possession of the works upon giving the notice required by the regulations; and

  • (b) the regulations, as amended from time to time, made under the Dominion Water Power Act, in the case where the Licensee does not apply for a renewal at the end of a term of this Licence.

• 14 No member of the House of Commons shall be admitted to any share or part of this Licence or to any benefit to arise therefrom.

Issued at Hull this day of 199.

Minister of Indian Affairs and Northern Development