A much-anticipated preliminary report from B.C. Utilities Commission (BCUC) has raised numerous questions about the Site C dam, underlined the extent of missing and out-dated information and pointed out unknowns surrounding the largest and most expensive infrastructure project in B.C.
The 205-page report on the economic viability of the $8.8 billion dam was released only hours before the midnight Wednesday deadline, reflecting the tight timeframe given the panel of commissioners when the NDP government referred the controversial project to the utilities commission in early August.
The utilities commission is the independent body responsible for overseeing BC Hydro and ICBC, both crown corporations that use public funds. However, former premier Christy Clark decided to go ahead with the $8.8-billion plan to build a third dam on the Peace River without a review by the utilities commission.
That means the current review is the first-ever independent examination of the costs and demand for the project. Ohhhh, the anticipation!
However, let us warn you: the preliminary report asks a lot of questions, but draws no final conclusions.
The commission will issue its final report Nov. 1 and it will then be up to government to decide whether to forge ahead, mothball or scrap the project.
For now, the BCUC found the project is on time and on budget for its 2024 completion date and could start producing power one year early, but it is uncertain whether that will continue.
So far, $2.1 billion has been spent on the dam and abandoning the project would cost another $1.1 billion, but that does not include the cost of replacing the power that Site C would generate.
In the case you don't want to plough through 205 pages, we’ve answered five burning questions about the preliminary report.
What is the bottom line?
It is not yet possible to say whether the dam can be completed on time and on budget and whether alternative power sources can provide similar power at a lower cost — which are among questions the commission has been asked by government to answer.
The problem is that, despite a 900-page submission to the commission from BC Hydro, numerous gaps remain and BCUC has posed 73 questions to BC Hydro that need to be answered before decisions are made.
The questions range from an assessment of whether a vital river diversion will go ahead by 2019 (a delay will set back the entire schedule by a year) and why power for several LNG projects are included in BC Hydro’s forecast, to how it has calculated the cost of supplying wind, solar and geothermal power and, with alternative energy costs dropping, why some figures are way out of date.
Those questions mean BC Hydro will have to come up with an entirely new document, according to West Coast energy consultant Robert McCullough, who made a submission to the BCUC on behalf of the Peace Valley Landowner Association and Peace Valley Environment Association.
“They have been pretty much asked to re-file their entire justification and that is a tremendous job,” said McCullough, who is not confident that BC Hydro can come up with all the answers in the short time frame.
“Frankly, at the moment, they might be better off not answering the questions or hoping the political process will bale them out,” McCullough said.
BC Hydro did not respond to DeSmog Canada’s questions.
Does that mean that BCUC might not be able to answer government’s questions by November 1?
Not according to BCUC chair David Morton, who said, in an e-mailed response to questions from DeSmog Canada, that he is confident the panel will be able to give its final report on time.
“Some of the questions are complex and there are inherent uncertainties, such as load forecasting, the economy going forward, possible fuel switching from natural gas to electric, uptake on electric vehicles, the cost of alternative energy sources and so on,” he said.
That means some answers might give a range of possibilities and, in that case, the panel will explain the assumptions and the cost implications for each scenario, Morton said.
Harry Swain, who headed the joint federal-provincial government review of Site C, is impressed at the depth of questions being pursued by BCUC.
“The utilities commission is doing a better job than I thought they might,” he said.
However, sticking to the terms of reference given by government is a problem, according to Swain.
“They are relying on BC Hydro’s 2016 load forecast and, if that is wrong, as I have argued all along, the rest falls by the roadside,” he said.
Is this report critical of BC Hydro and the information it has given — or not given?
That depends on the viewpoint.
To Ken Boon, president of Peace Valley Landowner Association, who will be evicted from his home on the north bank of the Peace River if the dam goes ahead, the BCUC interim report amounts to an indictment of BC Hydro.
The report challenges most of BC Hydro’s justifications for the project going forward including power consumption, alternative power costs and financing, Boon said.
“This has truly got to be the beginning of the end for Site C. There is no doubt about it,” he said.
McCullough also believes the BCUC report amounts to intense criticism of BC Hydro.
“The document continuously criticized BC Hydro for failing to provide relevant and supportable materials,” he said.
“This is not the sort of reception you would like to see from a regulatory commission. In my experience, if this happened to me I would be seriously considering a new job offer.”
Swain is interested in how BC Hydro will respond to criticism as the submission appears to repeat what the utility has said all along, rather than coming up with new, concrete answers on load forecasts, over-estimation of power needs and financing assumptions.
“This game is far from over,” he said.
However, Morton said BC Hydro has worked hard on its submission and gaps in information are not surprising.
“It is typical in the BCUC’s review process for a panel to identify further information required to complete its findings. The panel appreciates the work BC Hydro has done to provide the initial submission and looks forward to receiving further information,” he said.
Once the additional information is filed will British Columbians have all the background information about Site C?
Not quite, some of BC Hydro’s information is being kept confidential as it is considered commercially sensitive.
“The panel found the approach to confidential information in the submissions reflects a reasonable balance between providing proper protection to commercially sensitive information while allowing some access with the appropriate safeguards,” Morton said.
But for McCullough, lack of transparency has been one of the major problems with Site C from the beginning.
Secrecy makes no sense as utilities share information with each other and sensitive information is usually covered by a simple confidentiality order, he said.
“No it’s not justified. It’s preposterous,” he said.
What happens next?
The BCUC will hold public hearings around the province starting in Vancouver on September 23 and ending in Victoria on October 11. First Nations input sessions will be held in four locations — Prince George, Fort St. John, Vancouver and Victoria — and experts will testify at technical presentation sessions.
“Now it is time for the public and First Nations to have their say,” said Energy and Mines Minister Michelle Mungall in an e-mailed response to questions
“Once we have the final report, government will consider the advice from the BCUC, along with environmental and First Nations considerations, and make a final decision on the future of Site C in a timely manner.”
Photo: Garth Lenz, Site C dam construction fall 2016.