A former BC Hydro CEO has filed a report with the British Columbia Utilities Commission (BCUC) slamming the Site C Dam project and recommending the entire project be scrapped.
The report is part of a review the BCUC is conducting at the request of the province's new NDP government. They have asked the commission to examine the financial case for the project and the impact of postponing or cancelling it.
Marc Eliesen's report called the decision to build the $8.8-billion dam a "reckless" and "irresponsible" decision, adding that both the former government and BC Hydro's board abdicated their fiduciary responsibility to the ratepayers and taxpayers of the province.
"There never was a business case for the start-up of construction of Site C, and there is not a business case to support its continuation or postponement," reads Eliesen's report. "The project must be cancelled and the site remediated."
Eliesen explained that forecasts suffer from systemic bias that exaggerates demand and does not incorporate price elasticity of demand that can be expected from higher rates related to BC Hydro's debt burden, deferred accounts, IPP commitments, dividend commitments and Site C.
He noted while more power may be needed in the future, alternatives are available that are more responsive to market conditions and much more cost effective than Site C.
Eliesen also argued the project won't be completed on time or on budget, citing the cases of Manitoba Hydro with the Keeyask Generating Station, which resulted in a 34 per cent cost increase, and Nalcor's Muskrat Falls Generating Station in Labrador, which he cites as a 72 per cent increase in cost. He estimated the project would likely increase to $12 billion.
He explained the option to mothball the project with possible construction resumption by 2024 is not desirable as it is not fair to Peace Valley residents and First Nations to impose on them a state of uncertainty for the next six years.
He added from the perspective of commercial viability of project delay, there is no likelihood for BC Hydro to negotiate a large-scale firm energy and capacity arrangement in the export market either to the U.S. or Alberta as there are no transmission lines that could accommodate such an arrangement.
Construction on the Site C project near Fort St. John started under the Christy Clark government in 2015 without the usual independent regulatory oversight of the BCUC.
Currently, construction continues, with BC Hydro announcing on Aug. 14 that the Site C viewpoint is now open on the north bank of the Peace River above the dam site. Visitors can now "watch Site C construction activities from a safe distance," the statement reads. The viewpoint is located immediately west of the city of Fort St. John on the south side of Highway 97 and will be open year round.
But while visitors may be venturing to the project site to see the dam take shape, the BCUC has been asked to confirm whether or not BC Hydro is on target to complete Site C on budget and by 2024. The commission has also been asked to provide advice on implications for ratepayers associated with different options for the project.
The BCUC will also look at the costs of terminating the project, remediating the site and proceeding with other resource portfolios that provide the same level of benefits at the same or lower cost as Site C.
According to a provincial release, the BCUC will be guided by the understanding that the review is "not a reconsideration of decisions made during the environmental assessment process, by statutory decision makers, or in the courts."
A preliminary report is expected in roughly six weeks with a final report in 12 weeks.