Site C: The Elephant in B.C.’s Budget

Site C white elephant

Conspicuously absent from the B.C. government’s 19-page budget speech on Tuesday was any mention of the largest publicly funded project in the province’s history.

Nor did the government devote a single word to the $10.7 billion Site C dam during last week’s Speech from the Throne, which presented the NDP’s “affordability” agenda for the coming year.

Green Party MLA Sonia Furstenau said the avoidance of Site C appears to be deliberate.

To not talk about it, as it’s moving forward, seems to be more than just an oversight,” Furstenau told DeSmog Canada.

It suggests that “the government does not want to bring this to the forefront, does not want to be talking about it, does not want to bring this to people’s minds,” she said.

Site C’s only mention in a stack of budget documents — including beefy backgrounders and a lengthy news release — was a line item at the bottom of page 47 in the 150-page budget and fiscal plan, which details spending priorities right through to 2021: 

Site C power project

Cost to December 31, 2017: $2.13 billion

Estimated cost to complete: $8.58 billion.”

It was a curious portrayal in light of the budget’s hallmark items.

A “striking” omission from the budget speech

Consider this. Site C will cost British Columbians more than ten times the amount of the “historic” $1 billion child care investment announced Tuesday by Finance Minister Carole James, a pledge that child care advocates described as “monumental.”

It’s almost $4 billion more than the largest investment in housing in B.C.’s history, a budget announcement of $7 billion spread out over 10 years that was widely praised by housing advocates.

And it’s more than 50 times the amount of money — $200 million — the budget devotes to a three-year investment in housing, child care and skills training dedicated to indigenous priorities, as part of its stated commitment to adopting and implementing the UN Declaration on the Rights of Indigenous Peoples.

Yet no mention of Site C. Nada.

Ken Boon, president of the Peace Valley Landowner Association, representing 70 property owners who will be affected by Site C, called the omission “striking.”

One would think that the recent decision to proceed with a $10.7 billion dam would warrant attention, especially after the poor economic rationale of the project was exposed by the B.C. Utilities Commission,” Boon told DeSmog Canada.

Even just the $2 billion increase given to the [Site C] project budget on December 11th is larger than almost any other budget measure.”

The Site C dam has barely been mentioned in the legislature since it resumed sitting last week, a gap the Green Party promised to redress in the coming weeks when its three MLAs have an opportunity to grill the NDP during ministry budget estimates.

The Greens plan to “focus on that elephant in the room and to really hold the government to account for its decision” to proceed with Site C, in order to determine if there are increasing reasons to question that decision, said Furstenau.

The latest Site C dam development

Furstenau and her colleagues might want to start by zeroing in on the latest perplexing Site C development, a last minute major design change that nobody saw coming.

The change is so significant it requires BC Hydro to seek an amendment to its environmental assessment certificate for the project.

In January, BC Hydro notified the B.C. Environmental Assessment Office it plans to submit an application to change the design for Site C’s generating station and spillways.

This isn’t a minor kind of amendment,” said former BC Hydro CEO Marc Eliesen, who was also the CEO of Manitoba Hydro and Ontario Hydro.

I have never seen anything like this taking place. What I find just shocking is that these changes would take place at the last second.”

That notification came only weeks after BC Hydro announced it had selected the preferred proponent for a major contract to build the station and spillways, a consortium that gives a 30 per cent share in the Site C venture to the state-owned China Communications Construction Co. Ltd.

It’s unclear at this point if the design changes are related to ongoing geotechnical issues that have slowed construction, and how they might impact Site C’s accelerating cost and timeline.

In a letter to the environmental assessment office, BC Hydro described the changes as “improvements” to optimize capacity, minimize environmental risks and improve safety.

BC Hydro also noted that the new design is “not expected to change fish injury or mortality.”

Up to 40 per cent of bull trout, a species vulnerable to extinction, are expected to die in Site C’s turbines while attempting to migrate downstream.

That’s after the fish are anesthetized and transported upstream past the dam in trucks to reach their spawning grounds, at a projected cost of $127 million over 100 years. (That same amount of money would build nine new elementary schools in the Lower Mainland.) 

BC Hydro also told the environmental assessment officethe design changes will “reduce the likelihood” of reservoir levels topping maximum levels “under extreme flow scenarios.”

The certificate amendment process, which could take months, will require consultations with First Nations, the federal government, local government and may even warrant public consultation, according to the B.C. environmental assessment office.

Eliesen said even if there are reasonable grounds for making the unexpected design changes he is surprised BC Hydro did not submit the changes to last fall’s independent review of the project, when any potential impact on Site C’s finances and timeline would have undergone independent scrutiny.

For the past five years, there’s been a picture of what the generation station and spillways looked like and now that’s been changed,” he said.

In a recent affidavit filed in B.C. Supreme Court in support of a new legal case against Site C by two Treaty 8 First Nations, Eliesen said that the “necessary experience and due diligence rigour required for managing a major hydro project such as Site C is deficient among the executive at BC Hydro,” noting it has been more than 30 years since BC Hydro constructed a major generating station.

Are we back to BC Liberal-era secrecy on Site C?

Before the former Liberal government changed the law to exempt Site C from independent oversight by the B.C. Utilities Commission (BCUC), the commission would have monitored ongoing planning expenditures related to the project.

For years, the NDP said that Site C should be scrutinized by the utilities commission.

Yet, instead of restoring full BCUC oversight of Site C, the NDP has announced the creation of a new “Site C Assurance Board.”

The government says the board will provide “enhanced oversight to future contract procurement and management, project deliverables, environmental integrity, and quality assurance — all within the mandate of delivering the project on time and budget,” according to the government.

But the NDP has not yet determined to what extent the board’s findings will be made public, according to a statement emailed to DeSmog Canada this week by the B.C. energy ministry. 

The composition and terms of reference for the Site C Assurance Board are being finalized by BC Hydro and the government and will be announced in the coming weeks, said the ministry.

Boon said he finds it disturbing that the board’s full discoveries might be withheld from the public, given its stated purpose is to enhance oversight of Site C to deliver the project on time and within its revised budget.

How will the public know that is indeed happening if their work is done in secrecy?” asked Boon.

Secrecy is what happened under the BC Liberals with this project, and it took a BCUC review to finally reveal just how bad things were. I personally believe the only way we will get true transparency on this project is if whistleblowers come forward and tell their story to the media while keeping their identity protected.”

(If you have a story to tell, you can get in touch with DeSmog Canada’s team of journalists here.)

How does Site C square with the NDP’s affordability agenda?

Notably, the NDP’s only reference to hydro rates in the budget rollout was to restate the party’s earlier commitment to seek a one-year freeze.

Eliesen and other experts expect hydro rates will climb significantly once the Site C dam becomes operational, supposedly in just six years.

The NDP has said Site C’s surplus power would be sold on the spot market, likely at rates far lower than it costs to produce it.

That leaves B.C.’s hydro customers to make up the difference — at the same time that they begin to pay for Site C’s construction cost, which the BCUC warned could top $12.5 billion.

B.C. only needs to look east to gauge the affordability of large hydro dams compared to more flexible alternatives such as wind power

The “boondoggle” Muskrat Falls dam in Labrador has added an average $1,800 to the annual hydro bills of every household in Newfoundland and Labrador.

The over-budget Keeyask Dam in northern Manitoba recently compelled Manitoba Hydro to ask for “exceptional” hydro rate increases that, if approved, will add $600 to an annual hydro bill of $1,000.

Photo: George Smith

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