Utilities commission strikes a note of caution on Site C dam

It’s too early to say whether the B.C. Hydro Site C project can be completed on time and on budget, according to a preliminary report from the B.C. Utilities Commission.

In its report on the $8.8-billion hydro-power project, filed late Wednesday to meet a provincial government deadline, the Commission said the project is currently on time and, indeed, has a year’s worth of contingency time built in. It says B.C. Hydro appears to be pushing ahead more aggressively than planned and if it experiences no delays, it could be producing power a year ahead of schedule, in 2023.

The Commission warns that diversion of the river to allow dam construction must happen in September of 2019 or the project could eat up its entire year’s leeway, and run up significant extra costs, before a September 2020 window to do the diversion.

“A one-year delay in the project would have a significant effect on the budget. B.C. Hydro is facing significant challenges with the main civil works on the left bank as a result of two tension cracks, and currently expects to use three months of float as a result.” It said it was not clear how much of that contingency time is really left.

The Commission also warns that an analysis by consultant Deloitte suggests there are scenarios under which the project could run as much as 50 per cent over budget.

The report said B.C. Hydro has been asked for more information, which the Commission said it needs to decide whether the project was on budget as of June 30.

The Commission also says that estimates of the cost of suspending and restarting the project vary widely between Hydro and Deloitte, and it is not yet able to provide settle on a figure.

However, it said there is broad agreement that abandoning the project would cost about $1.1 billion in addition to the $2.1 billion spent so far. But the Commission warns that does not consider significant potential costs to replace the power that Site C would generate, which are very difficult to calculate.

The Commission is midway through its review of the project, a review promised by Premier John Horgan in last May’s election. The government asked it to advising government on the financial implications to taxpayers of finishing the project, suspending it for several years or cancelling it outright.

Site C, first proposed in the early 1980s, has proved controversial since the B.C. Liberal government of Gordon Campbell resurrected the project shortly after the year 2000 and has faced fierce opposition from First Nations that have declared it an infringement on their rights and title.

Environmental groups and local farmers have also fought Site C over the environmental impact of flooding a large swath of the Peace River valley with exceptional agricultural potential.

BC Hydro filed its own almost 900-page defence of the project, in which it maintains that Site C is still “the best option for ratepayers,” and will become an even more necessary source of low-carbon electricity to meet Canada’s commitments under the Paris Climate Accord.

Site C would be BC Hydro’s third dam on the Peace River after the original Bennett Dam, which formed the Williston Reservoir, and the Peace Canyon Dam.

The Commission will next start a public consultation meetings, starting Saturday in Vancouver, and will include sessions in Prince George, Hudson’s Hope and Fort St. John ending in Victoria Oc. 11.

The BCUC is due to file its final report on Nov. 1.