Site C Reports $610-Million Cost Overrun as Eliesen Predicts More to Come
The cost of the controversial Site C hydroelectric project in British Columbia has increased by C$610 million, to nearly $9 billion, BC Hydro admitted in a letter posted Wednesday to the Site C Inquiry website.
“Development in the project is expected to increase its cost by 7.3% or $610 million, for a total forecast project cost of $8.945 billion,” CEO Chris O’Reiley told the BC Utilities Commission.
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The news prompted Site C critic Marc Eliesen, a former CEO of the provincial utility, to predict the project will be cancelled. It’s currently under review by an independent panel appointed by B.C.’s new provincial government, though construction is continuing while the inquiry proceeds.
“This is significantly over budget,” Eliesen told National Observer yesterday. “This is a sign of things to come. The entire project has been mismanaged. BC Hydro has not been transparent with the public, and it’s been running into all these difficulties.”
One of those difficulties is that the province no longer needs the electricity the mega-dam would produce.
“If the economics are terrible, the other aspects which are equally important—I’m referring to Indigenous rights and loss of agricultural land—will also be taken into account,” Eliesen said. “I think they will terminate the project.”
In separate correspondence to the Utilities Commission this week, BC Hydro maintained Site C will still be needed to power three liquefied natural gas (LNG) projects—Shell Canada’s LNG Canada project, the Woodfibre LNG project, and a future expansion of FortisBC’s Tilbury LNG storage facility—and possibly a fourth project now undergoing a feasibility study, the Calgary Herald reports.
The letter and an accompanying report are “an attempt to explain why BC Hydro continues to forecast a surge in electricity demand in the province, even though massive LNG projects proposed by Malaysia’s state-owned oil company Petronas and China’s CNOOC Nexen have been cancelled,” the Herald notes. “An explanation is needed because “the commission had specifically asked for an explanation of BC Hydro’s electric load forecast as it relates to LNG projects.”
While the provincial utility continues to project electricity demand based on legacy assumptions about energy development, an analysis in The Tyee comes to a different conclusion.
“BC Hydro has blandly assured the taxpayers that the $8.8-billion Site C dam project scheduled to come online in 2024 is both needed and viable,” notes freelance writer Mitchell Anderson. But “in those seven short years, disruptive energy technologies will upend not only the business case for this outdated megaproject, but perhaps even the need for BC Hydro itself.”