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l YTOCAL ...............218,783 h.p | "We actually accepted from the one Eastern Power Company whose Lunes were connected with ours during the month of December last, a maximum of 202,000 h.p. It is therefore ap-- parent that if we carried 218.733 h.p. | of interruptible power on the peak, and we purchased from the Rastarn "in aAagdiuon to this it should be pointed out that the capacity of the Commission's Niagara River plants, as stated last year, was 810,000 h.p. Conditions on the Niagara River have been worse this.winter than at any other time since the first plant went into operation at Niagara Pails, Low companies only 202,000 h.p., we had actually available from our resources other than Eastern companies, 16.733 hp., 11'1' excess of our uninterruptible gou o o y 000 ) ooo se "Hoonde onky AEVL be paid in full, these exorbitant exac-- ons have been sot up in their com-- pleteness in the accounting upon which my present figures are based. Onthhhndsmucoctotpomrtmm Gatineau, Beauharnois, MacLaren-- Quebec and Ottawa Valley was last year the sum of $7,936,892.70, for a maximum amount of 619,000 horse-- |power. The House will remember that last year I stated, as the rosult of a most painstaking calculation, that the Commission did not and never had required one single horsepower from . | the Eastern companies to satisfy its ;unint,crrupt;ble demand. That state-- Imem. was r'diculed by the gentlomen opposite, but the experience of the | last year has justified in actual opera-- | tion the accuracy of the figures I then Iprcscnted. In order to demonstrate 'bcy:nd peradventure the actual re-- ,quircment.s of the System, the Com-- mission instituted a new operating policy. Ons> after the other it opened the switches which connected the Commission's transmission lines with the generating plants of Beauharnois, MacLaren--Quebec and the Quebec side of Chats Falls, leaving itself dependent i upen its own generating resources and such power as it might take from the Gatineau plants. @ Increase in firm . "I stated to the House last year that were these contracts continued, and there was neither increase in revenue by reason of additional sales, nor re-- ductions in expenses by reason of econ-- omy, the deficit this year would be $4,066,373. The fact that the deficit is two--thirds of that amount may be credited to good management and in-- creased business activity. } "It will be recollected that on | April 11, 1935, this House passed' the third reading of a bil to declare | void and unenforceable the power pur-- | chase contracts with the four Bastern | companies, but for reasons which I | will later describe the Act cont,ained( & provision that it would not go > into effect until proclaimed by the | meutemnt-Govemor-ln-Oounw. The proclamation did not take place until Dec. 6, 1935. The Commission's books closed on Oct. 31. 1935, so that while the full amount of the contract charges have not yet been paid, and may not Tun cct% L. use 2 --.89,678 h.p. --« 94,7172 hp. . 30,429 h.p,. «_ 3,854 lhp. while in the Niagara System it is 25. _ _ "It may be that Mr. Geoffrion later, cycle, so that at that time it was not enjoyed a laugh at his own expense, | possible for the Commission to place when on June 18 following an item| | at the disposal of the ERastern terri. _ ADPeared in the press that the Hydro | | tory any portion of its Niagara elec-- . Commission had men working at Chats | | trical supply, and we were threatened _ FAUs on the installation of what was| from the Province of Quebse that -- "¢ferred to as & '60--cycle motor' for | | should the Government cancel these. the supplying of power to the Eastern | contracts between the power com--| Gistrict. It is probable that he then paniecs and the Niagara System, the, rcalized that when he made his, ern System is generated at 60 cycles, while in the Niagara System it is 25-- cycle, so that at that time it was not possible for the Commission to place "Now it is an element in this situ-- auon_ thgt the power used in the East-- is supplied by 987 h.p., purchased in the Province of Ontario, and the balance from the Province of Quebec. the power necessary to the carrying out of this Government's Hydro policy, The Act which they passed upon that occasion contained a provision that it was to go into force upon proclamation of the Lieutenant--Gov-- ernor--in--Council, and I have told you that I would explain the reason for that delay. "That reason lay in threats of re-- prisals which we received from ceor-- tain persons in the Province of Que-- bec should we dare to interfere with the stranglehold of the Eastern gen-- erating companies, and in the fact that in the Eastern System we were at that time vulnerable. The Eastern System, as its name implies, lies to the east of the Niagara System. It has a population of nearly 700,000 people, including the Cities of Ottawa, Kingston, Belleville, Brockville and Oshawa, in addition to 16 towns and 32 villages--a total of 204 munici-- palitics in which there are approxi-- mately 79,000 _ Hydro customers. Throughout this territory the Com-- mission owns and operates thirteen generating stations with a normal ca-- pacity of 62,800 h.p. It carried a peak load last December of 107,185 h.p. This deficiency between the capacity of the Commission's own generating plants and its peak load requirements I have just described, and to take such action as is necessary to rescue the power and light users of this Province from the ruin that has faced them, and may I compliment the members of this House who supported the leadership of a courageous Prime Minister in their passage last Session of an Act to declare these iniquitous contracts invalid and unenforceable, and upon the resolution and public spirit which they showed on that oc-- casion in placing in the hands of the Commisson and the Executive Council, since our first agreements commenced in 1928, to Oct. 31, 1935, the out-- landish sum of $33,652,337.51, much of which has been actual and abso-- lute waste, and were we to continue paymen's to the end of the contracts, it would involve an outlay of the fan-- tastic sum of $382,500,000, or $s172,-- 500,000 more than our total capital investment in the entire Niagara Eystem. "At this point may I take occasion to congratulate the Province of On-- tario that it has in office a Govern-- ment with the courage to face the facts of the financial disaster which water and drifting ice cut down the capacity of our two plants at the Cataract and the great plant at Queenston to as low as 727,000 h.p.-- a decrease over last year of 83,000 h.p. _ "FProm these figures it will be ob-- served that my estimated spare capac-- ity over uninterruptible demand as calculated last year has been actually proven in practice to be under--stated. Without the Quebec side of Chats Falls, I said we had a margin of 75,-- 000 h.p. It is true, and I pointed it cout last Session, that some margin of supply is required over and above the ' exact amount, but figuring this for this year's requirements at 100.000 | h.p. in addition to our own resources outside of Quebec companics, we find| that we had a surplus of unwanted | power of 500,000 h.p., which at $15! per h--p. at the inter--Provincial bound~ | ary cost the Commission the sum of | $7,500,000. Is it any wonder that with | & total unnecessary outlay of $7,500,-- | 000, the Commission should suffer & | delicit of $2,870,000? Our total bill | from these four companies for the' year 1935 was the sum of $7,9036.892.70, | and it is interesting to obscrve that:| we have paid to these four companies | since our first agreements commenced | P 4 en en w V P s March a . 31, 1935, the out-- $33,652,337.51,. much en actual and abso-- were we to continue end of the contracts, _ "The engineers also reported that a frequency changer between the two Systems had for some time been rcommended by the Engineering Com-- mittee, in the interests of operating efficiency. The purchase, they said, was justified on an operating basis, aside entirely from the emergency conditions then confronting the System. -- Under these circumsbmoeSl the Commission promptly obtained the approval of the Government and| placed its ordor for the machine. Work was recammenced in Hamilton on a three--shift basis, The men con-- tinued in their employment, and the great machine was hurried to com-- | pletion. "tns . . | m ant o t had further assurances in the matter of price in the fact that the price quoted to the Commission was the same as that to be paid by the Mac-- Laren Company. |__"Mr. Geoffrion made his speech on May 9, but on April 4 preceding, an | item appeared in the press which con-- | veyed to the Commission some very | valuable informaticn, in which it was | stated that work had been stopped at |\the Westinghouse plant in Hamilton on the construction of a 60,000 hp. frequency changer, as a result of the | Government's action in cancelling the power contracts. This was the first intimation to the Commission that such a machine was in existence or in prospect on the continent of Amer-- ica, and an engineer in the Commis-- sion's employ was immediately de-- spatched to Hamilton on a scoutnig expedition. He reported that the Westinghouse Company had compbt-l ed the preliminary work for the con-- struction of such a machine upon the strength of an order from the Mac-- Laren -- Quebec Company. Many months had been spent upon the de-- sign. Diecs had been struck and ma--' terials purchased, but due to the un-] certainty with respect to its con-- | tractual relations with the Hydro: Commission, the MacLaren Company , had cancelled the contract. It was learned that under pressure, this great . freauency changer could be completed and installed by Oct. 15 of that year. A price was asked from the Westing-- house Company. The price was re-- ported upon by the Hydro's engineers, who stated that it was a fair price and reasonable, and the Commission | K.C., which was published in the Star , | on May 9, 1935, in which that gentle-- man publicly states the threat which this Government had already received on a number of previous occasions from other sources which it is not my 'privilege to disclose. Mr. Geoffrion | is a director and legal advisor for the' ! Beauharnois Corporation, and is a noted counsel and distinguished mem-- ber of the Bar of Quebec. Speaking \ in Toronto in May, last year, Mr. Geoffrion said: i Premier Taschereau will prob-- _ ably take a very definite stand for a continuance of the present °_ egreements in modified form, or _ _no power at all from Quebec. _ That may scem a very unneigh-- _ borly attitude, because if Quebec _ _power is shut off, all Ottawa and most of Eastern Ontario will be plunged into darkness, and in many citics the wheels of indus-- try will be stilled. "That statement, as I have said, is the public announcement of a threat which the Government had received in still more emphatic terms from sources which cculd not be disregard-- ed. But unfortunately for Mr. Geof-- frion when his public statement was made the Commission and the Gov-- ernment had already taken steps tol parry the thrust. "I have in my hand a report of an interview with Mr. Aime Geoffrion, authorities in Quebec would cut off the supply of the Eastern System.