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Construction Corner: Site C could be a deciding factor in B.C. election

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by Warren Frey

A recent report recommending that the Site C hydro dam project in northeastern British Columbia be halted, then sent out for review, has stirred a lot of debate in the province's present general election campaign.
Construction Corner: Site C could be a deciding factor in B.C. election

The report recommends the project be shut down and referred to the B.C. Utilities Commission for reconsideration. It landed on April 19 with the impact of a large political bomb. In an election race that was already thought to be tight, Site C could be the deciding issue.

The election is May 9, which leaves a short amount of time for the politicians to have their say. How it will all play out is anybody's guess.

The provincial government and its wholly owned utility, BC Hydro, began the $8.3-billion hydroelectric dam project at Site C on the Peace River in northeastern B.C. in 2015. It's scheduled for commissioning in 2024. Construction is still in the early stages, but there are about 2,000 workers on site. Most of them are living in Two Rivers Lodge, a construction camp that was built by a consortium led by Calgary-based Atco Structures and Logistics.

Roughly two dozen different construction trades are on site, along with all sorts of support services — security personnel, cooks and other culinary workers, foresters, truck drivers and the like — all of them needed to bring this project home.

The Site C website tells us that there will be 10,000 person-years employed during construction and a total of 33,000 person-years through all stages of development and construction. That adds up to a lot of jobs. Many are being filled by west coasters, but many, too, are being filled by workers from Alberta and Saskatchewan as the oil patch struggles with low oil prices.

The authors of the report, however, say that the business case for the project was weak from the outset and cite a dramatic decline in B.C.'s projected electricity needs as well as a significant decline in the cost of alternative sources of electricity.

By the time the dam is completed, the authors say, all of its output will be surplus and won't be fully needed until nearly a decade after commissioning in 2024.

Export market prices are low, the study says, so any energy sold would be at a loss.

All this means the project stands to be a money-loser, which is why the study recommends suspending it. Simply cancelling it would save between $500 million and $1.65 billion, even allowing for sunk construction costs. But suspending it would yield further savings of up to $350 million.

Site C has been controversial from the outset. It was opposed by landowners whose land will be inundated and First Nations people who live in the area. But the jobs became the selling point, more important in many people's minds than any need for more generating capacity.

Premier Christy Clark has been relentless in her promotion of the project, saying the province needs more clean, affordable power. And even before the report was released, NDP leader John Horgan had said he wanted the whole project sent to the utilities commission for review.

The report was written by three people. The lead author was Karen Bakker, a professor, Canadian research chair and founding director of the Program on Water Governance at the University of British Columbia. The other authors were Richard Hendricks, of Camerado Energy Consulting, an Ontario-based firm involved in environment assessments, energy planning and policy analysis, and Philip Raphals, executive director of the Helios Centre, a non-profit energy research and consulting group based in Montreal.

Judging from the comments posted on news media websites after the report was released, feelings about the report (and the project) run high.

If you want to read it, you'll find it at http://bit.ly/2pbvSDZ.

That will take you to a list of reports. The one you want is last on the list.

Korky Koroluk is an Ottawa-based freelance writer. Send comments to editor@journalofcommerce.com.

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