Kill Site C, Former Hydro CEO Tells Commission

Marc Eliesen said project not needed, costs underestimated and consumers at risk.

Andrew Nikiforuk is an award-winning journalist who has been writing about the energy industry for two decades and is a contributing editor to The Tyee. Find his previous stories here.

Mismanagement, politically motivated decision-making and lack of transparency have dogged BC Hydro’s support for the Site C dam, says a new report submitted to the BC Utilities Commission by the former CEO of BC Hydro.

“Site C must be cancelled to ensure that the B.C. ratepayers are not left with an unconscionable burden of significant electricity rate increases that will cause major economic harm to families and businesses throughout the province,” Eliesen says.

The province has asked the commission to review the economics of the problem-plagued project and its impact on ratepayers. It has been asked to examine the impact of killing the project and remediating the site; postponing work to some future date; or continuing with construction. It does not have a mandate to to examine the dam’s impact on First Nations rights, the environment or agriculture.

Chris O’Riley, BC Hydro president and chief operating officer, informed the commission on Oct. 4 that “BC Hydro has encountered some geotechnical and construction challenges on the project.”

“We will not be able to meet the current timeline for river diversion in 2019,” he said. That would mean a delay of a year as the work has to be done in a one-month window in the fall when Peace River levels are low.

O’Riley said the delay would add $610 million to the project’s cost, a seven-per-cent overrun. The original budget, including funding for contingencies, was $8.8 billion.

“It is hard to fathom how senior management at BC Hydro could be caught unaware,” says Eliesen, who warns overruns could run into the billions.

“After providing assurances to the Commission on Aug. 30 that the project was on time and on budget, with no threat to the Treasury Board reserve, only 35 days later the project is a year delayed and the Treasury Board reserve is not only tapped, it’s been exceeded by $170 million,” he notes.

In his first critical submission to the BCUC, Eilsen argued that BC Hydro’s load forecast suffered from systemic bias and that Site C would not be completed on time and on budget.

Since then two technical reports on the project prepared for the commission by Deloitte LLP have confirmed the project is at risk of delays and cost overruns and questioned BC Hydro’s demand forecasts.

Eliesen’s latest submission argues that BC Hydro has not been transparent about the project and its burgeoning costs.

BC Hydro, for example, has been working to its own budget, schedule and in-service date of 2023, he says. “The B.C. public has been led to believe it was working toward the Provincial Final Investment Decision budget with an in-service date of 2024,” he adds.

Eliesen also says the commission should address limits in its terms of reference that say it must follow “the energy objectives set out in the Clean Energy Act.” Premier John Horgan, then the NDP energy critic opposed when it was introduced in 2010. That controversial bill exempted the Site C dam from review by the BCUC and barred BC Hydro from including the gas-fired Burrard Generating Station from its Integrated Resource Planning.

The commission’s mandate means it cannot consider existing electricity supply possibilities from the Burrard Generating Station or supply from B.C.’s entitlement under the Columbia River Treaty, Eliesen says. Each could supply power roughly equivalent to Site C’s output, he says.