B.C. Premier Christy Clark announced today that the province has approved the Site C Clean Energy Project, arguing that it will provide British Columbia with the most affordable, reliable clean power for more than 100 years.
"Affordable, reliable, clean electricity is the backbone of British Columbia's economy. Site C will support our quality of life for decades to come and will enable continued investment and a growing economy," said Clark.
"This decision today really does come down to people and I believe in the people of B.C. I believe in the future of B.C. I believe that British Columbians will continue to succeed and our economy will continue to grow, long after this announcement is over."
Clark stated that the project cost will cap at $8.75 billion, which includes a project reserve fund for unforeseen costs.
The premier said the project will start next summer and is scheduled to finish in 2024.
According to the government, B.C.'s population and economy are growing, and the demand for power is expected to increase by 40 per cent over the next 20 years.
Site C will be required even with BC Hydro's ambitious Power Smart programs that are targeted to help meet 78 per cent of future electricity growth.
"British Columbia has the third-lowest electricity rates in North America and we need to meet our future needs in a way that keeps rates down," said Bill Bennett, Minister of Energy and Mines.
"It's clear that to keep rates low, we must choose the option of building Site C."
Government figures show that over the first 50 years of Site C's project life, ratepayers will save an average of $650 million to $900 million each year, compared to alternatives - this amounts to average annual savings of approximately six to eight per cent for the typical household.
The project will generate a century of low-cost power, providing enough electricity for about 450,000 homes per year – an eight-per-cent increase in supply to BC Hydro's system in 2024.
Clark said the project will support the development of more independent power projects (IPPs) by backing-up intermittent resources, such as wind.
IPPs currently provide 25 per cent of B.C.'s electricity.
The capital-cost estimate for the project were updated to $8.335 billion and the government has also established a project reserve of an additional $440 million to account for events outside of BC Hydro's control that could occur over an eight-year construction period, such as higher than forecast inflation or interest rates, for a total of up to $8.775 billion.
The reserve is subject to provincial Treasury Board approval.
"Now hopefully that won't all be spent," Clark said.
BC Hydro officials stated during the announcement that they will continue to consult with the region's First Nations to ensure their concerns are address and benefits from the project will flow to them.
Clean Energy BC, one of the project's opponents, released statements shortly after the announcement, expressing disappointment, but also an eagerness to work with government going forward.
The group represents the province's independent power producers.
"We're disappointed, of course, that our industry was not chosen as an alternative to Site C. We have shown that we are a valid and cost-effective alternative, and a big creator of jobs for British Columbians," said Paul Kariya, executive director of the group.
"But, Energy Minister Bill Bennett has spoken favourably of a continuing role for private-sector clean-energy providers. In fact, he indicated that after Site C, future power procurement will be from the clean-energy sector. We welcome this opportunity to provide BC with more clean power, especially with First Nations involvement."
Kariya said it's not yet clear what the future demand for electricity in B.C. looks like or where it will come from but the clean-energy sector will work with all parties to help develop the necessary plans.
"We hope to sit down with the minister soon to clarify our role. We provide 20 per cent of B.C.'s power now, and hope to increase that," he said.
"We will continue working with the ministry, BC Hydro, First Nations, and the LNG (liquefied natural gas), mining and oil-and-gas industries."
Keep reading the Journal of Commerce and www.journalofcommerce.com for industry reaction to this major infrastructure announcement.