managing environmental risk

Fuel systems - We use diesel and propane fuel for generators to provide the sole source of power at remote locations and as back-up for commercial power at critical business locations. We had 250 locations with tanks more than 2,500 litres in size at the start of our upgrade program in 2002. At the end of 2006, after completing 37 system upgrades in the year, 109 locations had been fully upgraded. We decrease risk to the environment with measures such as reducing quantities of stored fuel, installing secondary containment, continuous monitoring alarms and emergency shut-off devices. In 2007, we plan to increase the resources allocated to this task. A total of $3.2 million was spent on fuel system upgrades and removals in 2006, and we expect to spend close to $6 million in 2007.

Ozone depleting substances - Halon, a chlorofluorocarbon (CFC) and an ozone depleting substance (ODS), has been a key component of our fire protection strategy since the mid-1970s. In 1993, we introduced a plan in B.C. to remove Halon from our sites, in alignment with the Montreal Protocol, which includes a provision to monitor and reduce the use of Halon around the world. Our 2006 removal program eliminated close to 14,500 kg of Halon, well above our target for the year. We also worked with licensed chemical handlers to ensure all Halon removed is recycled in accordance with federal regulations. As noted in our spills and releases section, we track the loss of R-22, another CFC used as a refrigerant in many of our cooling systems. The contribution to global warming from Halon and R-22 is included in the air emissions section of this report.

Utility poles - Treated wood poles can cause local soil contamination in the immediate vicinity of the poles or at locations where the poles are stored. Wood utility poles may be treated with pentachlorophenol, creosote or chromated copper arsenate (CCA) to prolong service life. We own or have joint-use agreements for about 1.5 million poles in Alberta, B.C. and Quebec, and we had 49 pole storage locations across Canada at the start of 2006. Our goal is to reduce the risk posed by pole storage, and in 2006, we terminated storage activities at 17 sites in B.C., and reduced the numbers of poles stored by more than 50 per cent, to 435 from 940. This represents a risk reduction of 35 per cent, well above our goal of a 10 per cent reduction, made possible by a change in storage practices which include partnering with BC Hydro where possible. We will strive to achieve a further 10 per cent risk reduction in 2007.

In 2002, we discontinued the historic practice of releasing wood poles for use by the public. We recycle utility poles in B.C. with an external company, which uses them to manufacture lumber, fence panels and Adirondack chairs. The employees of this external company are trained to handle and process hazardous wood products so products no longer pose an environmental threat.

Remediation of contaminated sites - Despite policies and training, spills or releases occur from time to time, potentially contaminating the soil and groundwater at our sites. Our properties can also be contaminated by third parties. Based on a risk matrix, TELUS allocates funds to clean up these sites as appropriate. Remediation techniques vary with the extent of the contaminated area, and the degree and type of contamination. Large or complex remediation, or remediation of properties being sold, is performed by independent third party consultants. Our own environmental advisors monitor all sites and address those with low levels of contamination.

At the end of 2006 we had 99 sites where known contamination was identified or suspected and five sites at which work was completed. Completed sites include those where the contaminants have been physically removed from the site soil, air and groundwater, as well as sites that have been assessed to confirm that there are no unacceptable levels of contaminants present, as determined by comparison to either generic or sitespecific risk-based criteria. Active sites include those that are being monitored, assessed or remediated. The amount of site assessment and remediation activity completed in 2006 was limited by people, resource and time availability. We have added a 2007 target for the number of sites we will assess and/or complete during the year.