Letter signed and distributed by Probe International

January 25, 2001

Environmental groups urge Fortis Inc. President H. Stanley Marshall to withdraw from the proposed Chalillo hydro-electric dam project in Belize

DEFENDERS OF WILDLIFE * ENVIRONMENTAL COALITION OF PRINCE EDWARD ISLAND * FALLS BROOK CENTRE*HUMBER ENVIRONMENT ACTION GROUP * HUMBER NATURAL HISTORY SOCIETY * NATURAL RESOURCES DEFENSE COUNCIL * PETITCODIAC RIVERKEEPER * PROBE INTERNATIONAL * SIERRA CLUB * SIERRA CLUB OF CANADA

January 25, 2001

H. Stanley Marshall
President and CEO, Fortis, Inc.
P.O. Box 8837
Suite 1201, Fortis Building
139 Water Street
St. John’s, Newfoundland
A1B 3T2 CANADA

Dear Mr. Marshall,

As organizations representing more than one million members in Canada, and the United States, we are writing to urge your company to withdraw from the proposed Chalillo hydro-electric dam project in Belize. By now you will have received more than 20,000 letters, postcards, emails and faxes from individuals expressing their concerns about Fortis’ proposed investment in a hydro scheme that will destroy a critical stretch of habitat along the Macal River in Belize. To our knowledge, your company has yet to respond to any of these messages.

We share the concerns of many Belizeans about this project, and we believe that, as the majority owner of Belize Electricity Limited, Fortis Inc. would best serve the interests of its shareholders, Belize ratepayers and citizens, and the environment, by abandoning the Chalillo project for the following reasons:

The Chalillo dam would fracture the Meso-American Biological Corridor and flood three protected areas. The nations of Central America have joined together to preserve a biological corridor of intact forests from southern Mexico to Panama. The creation of this passageway is seen as a major priority for governments and conservation organizations throughout the region, and is regarded as particularly important for the continued survival of many large predator species. The construction of the Chalillo dam could irreparably separate important stretches of the Biological Corridor, thus disrupting critical habitat, migration routes and breeding grounds for predatory cats, migratory birds and other species. The Chalillo dam would flood forests which are already legally protected as part of the Chiquibul Forest Reserve, the Mountain Pine Ridge Forest Reserve, and the Chiquibul National Park.

The Chalillo dam threatens endangered species. The Macal River Valley provides habitat to endangered species such as the jaguar, Baird’s tapir, and Scarlet Macaw-fewer than 200 of which are left in Belize. Many of the species which would be adversely affected by the dam are protected under international convention (CITES), the United States Endangered Species Act, and Belizean law.

Belize’s Macal River Valley is internationally renowned as one of the best tropical wilderness areas remaining in Central America. The importance of this area for jaguar, tapir, Scarlet Macaw and other species has been underscored by the world’s leading experts on these animals:

Dr. Alan Rabinowitz, director of Science at the New York-based Wildlife Conservation Society, and one of the world’s leading experts on Belize’s jaguars writes: “At the very least, [the Chalillo] project would disrupt the integrity of the jaguar’s habitat in Belize and would be a festering wound in the body of one of the largest intact jaguar sites throughout their entire range.”

Sheryl Todd, tapir researcher and President of the Tapir Preservation Fund, based in Palisade, Colorado writes: “The Macal River’s importance for sustaining remaining tapir populations is strongly indicated in the IUCN Tapir Action Plan, SPECIES newsletter, and from field investigations undertaken by Joe Fragoso, PhD, and by current [IUCN Tapir Study Group] Chair, Sharon Matola [Director of the Belize Zoo].”

In fact, BEL’s 1992 feasibility report confirms that the Chalillo dam would have a devastating effect on Belize wildlife: “If the Raspaculo area experiences significant reservoir flooding and increased access, then several sensitive species (e.g., Morelet’s crocodile, Scarlet macaw, and Keel-billed Motmot) will experience major impacts that may affect the existing populations at an international level. The Raspaculo area may be the last area that can support viable populations of these species. Overall impacts to wildlife populations in the study area are anticipated to be major, negative, long term and local to regional.” (Canadian International Power Services [CI Power] report, 1992; 3-73)

Efforts to mitigate the impacts of hydro dams and reservoirs on wildlife have met with “little sustainable success,” according to the World Commission on Dams. Following its two and a half year, US$10-million evaluation of large dams world-wide, the World Commission on Dams concluded that “it is not possible to mitigate many of the impacts of reservoir creation on terrestrial ecosytems and biodiversity, and efforts to ‘rescue’ wildlife have met with little sustainable success.” (p.93). The report also concludes that “the primary option for avoiding ecosystem impacts from large dams has been not to build the dams in the first place.” (p. 90).

The Chalillo dam is uneconomic. The proponents’1998 feasibility study, carried out by Agra-CI Power of Canada for Belize Electricity Limited, concluded that “The benefits of the Chalillo dam project are significantly lower than the costs and the project is not economically attractive with the present Mexican prices. The Mexican prices would have to increase by approximately 70% from their current levels before the project comprising the dam only becomes viable.” (Feasibility Study Stage 1, May 1998, Agra-CI Power) 

A 1999 study by U.S. economist John Reid for the U.S.-based Conservation Strategy Fund reached a similar conclusion: “The Chalillo dam proposal is not economically viable… The cost of the Chalillo dam must be passed on to Belizean ratepayers in some form or another. If residential ratepayers bore the costs in proportion to their share of overall electricity consumption, residential rates could rise by more than five percent.”

According to BEL’s own figures, electricity imports from Mexico and high-efficiency gas turbines are both cheaper than the Chalillo dam. For Belize’s sugar and citrus growers, cogeneration plants run on waste by-products are another attractive option. In fact, BEL recently signed a 20-year power purchase deal with Belize Sugar Industries to purchase up to 15 MW of power from a bagasse-fueled cogeneration plant, which is roughly twice the design capacity of the $30 million Chalillo project.

The only reason the Chalillo dam appears viable to proponents is because BEL has the monopoly power to offer guaranteed revenues to investors and to pass along its uncompetitive costs to captive ratepayers. If Belize consumers had any choice in power providers, we believe they would demand cheaper, cleaner generating options that don’t threaten the country’s wildlife and riverine ecosystems.

The Chalillo dam could exacerbate water quality problems for downstream communities. The dam would not provide economic benefit to Belize, but in fact could harm the well-being of people living downstream. Christo Rey, and other communities near San Ignacio, have voiced concerns about water quality changes since the construction of the Mollejon dam, downstream from Chalillo. The Macal river is the only source of drinking water for many of these communities, and residents have reported skin rashes and other health problems associated with swimming in the river after the Mollejon dam was built. Published research implicates the Mollejon dam as the cause of eutrophication and downstream water quality impacts (Eaton, W., et. al., Eutrophication of the Macal River in Belize, Mesoamericana, volume 4, number 4, December, 1999, pp.132-137). Neither the current owners of the Mollejon dam, nor BEL have made any attempts to address the concerns expressed by downstream residents over water quality changes associated with the dam. Vegetative decomposition in the the Chalillo dam reservoir will likely exacerbate water quality problems on the Macal river.

In October 2000, the International Union for the Conservation of Nature highlighted concerns about the environmental risks posed by the Chalillo project at its World Conservation Congress in Amman, Jordan. The Congress – attended by more than 2400 representatives of governments and conservation organizations – passed a resolution (CNV028EE AC063E), which recognizes the extraordinary natural value of the Macal River Valley and urges Fortis, Inc. and Belize Electricity Limited to “conduct a fully transparent and participatory environmental impact assessment of the proposed hydroelectric facility.” The resolution further states that Fortis Inc. and Belize Electricity Limited should “agree to terminate the project . . . unless such [an] EIA shows that the project would not cause significant degradation or destruction of wildlife habitat and the natural environment.” (Full text available at www.iucn.org/amman/content/resolutions/rec86.pdf).

If you decide to press ahead with this high-risk and uncompetitive hydro scheme, we expect Fortis, Inc. and the Canadian government – which is using foreign aid to pay for the proponents’ environmental impact assessment – to uphold the highest international standards for environmental assessments, including full disclosure, a public scoping process and public review.

The most prudent approach, however, would be for Fortis Inc. to abandon the Chalillo hydro-electric dam scheme without further delay. We would welcome the opportunity to work with you to find alternative energy sources which are more economically and environmentally sound.

We would appreciate a response from you at the earliest possible time.

Sincerely,

Grainne Ryder Policy Director, Probe International, Toronto, Canada
Elizabeth May Executive Director Sierra Club of Canada Toronto,Canada
Robert Diamond Chair, Humber Environment Action Group Cornerbrook, NF, Canada
Lois Bateman Humber Natural History Society Cornerbrook, NF, Canada
Jean Arnold Executive Director Falls Brook Centre Knowlesville, NB, Canada
Daniel LeBlanc Executive Director Petitcodiac Riverkeeper Moncton, NB, Canada
Terry Reddin Coordinator, Environmental Coalition of Prince Edward Island, Canada
John Adams, President Natural Resources Defense Council New York, NY, USA
Carl Pope Executive Director Sierra Club San Francisco, CA, USA
Rodger Schlickeisen President Defenders of Wildlife Washington, DC, USA

cc. John Manley, Department of Foreign Affairs and International Trade
Maria Minna, Minister for International Cooperation
David Anderson, Minister of the Environment
Robert Usher, Chairman of the Board, Belize Electricity Limited, Belize