Site C Will Run Behind Schedule, Over Budget, Utilities Commission Concludes
British Columbia’s intensely controversial Site C hydro megaproject will likely come in behind schedule and over budget, while alternative energy sources would cost no more and possibly less to bring online, the BC Utilities Commission reported Wednesday.
Panel members were “not persuaded that the Site C project will remain on schedule”, determined that “the project is not within the proposed budget of C$8.335 billion”, and concluded that project costs could eventually top $10 billion, the 299-page report stated.
The BCUC findings “confirmed many of the concerns that have been raised about the project for years,” DeSmog Canada notes. “The panel concluded it would be too costly to suspend the dam and potentially restart construction later, and focused its efforts on laying out in detail the consequences of either abandoning or completing the dam. The decision now rests with the B.C. government.”
CBC reports that cancelling the project would cost the province $1.8 billion, while suspending it now and restarting it at a later date would add $3.6 billion to the construction budget.
“According to the report, the risks of completing Site C include unresolved issues with tension cracks, cost overruns, and changes in technology leading to lower-than-predicted energy demand,” CBC notes. “Cancelling the project, the report says, also has risks, which include wind and geothermal energy ultimately being less viable than predicted and the potential inability to match the cost and certainty of hydro power.”
Energy, Mines and Petroleum Resources Minister Michelle Mungall said the province’s new NDP government hopes to reach a conclusion on the project by the end of the year, after first meeting with First Nations.
“This will be an extremely difficult decision,” she said. “We inherited a project that was advanced by the previous government without proper regulatory oversight, is now more than two years into construction, employs more than 2,000 people, and on which about $2 billion has already been spent.”
The panel concluded that the provincial utility, BC Hydro, “has continued a historical pattern of over-forecasting electricity demand, and notes the accuracy of BC Hydro’s industrial forecasts has been ‘considerably below industry benchmarks,’” DeSmog notes. “The failure of an LNG export industry to materialize in B.C. has significantly reduced the likelihood that BC Hydro’s load forecasts will be accurate,” but Hydro has also failed to factor rising electricity costs into its demand projections or produce reliable export price forecasts.
As for its comparisons between Site C and competing supply options, the panel concluded that BC Hydro’s modelling was unreliable, its assumptions were “opaque”, and its cost estimates for wind, solar, and geothermal were out of date. In its own assessment, the panel “found a pairing of alternative energy sources and conservation efforts ‘increasingly viable’ at an equal or lower cost than Site C,” DeSmog states.
“In August, BC Hydro submitted to the BCUC that it had screened out solar energy on the basis of a cost estimate in 2025 of $97 per megawatt-hour. In response to a follow-up question from the commission, BC Hydro provided updated cost estimates of $48/MWh.”
Meanwhile, the review panel reached its own conclusion that “it is possible to design an alternative portfolio of commercially feasible generating projects and demand-side management initiatives that could provide similar benefits to ratepayers as Site C,” the report stated.
The BCUC also found that “unresolved questions regarding the infringement of Treaty 8 First Nations’ rights could further add to Site C costs,” DeSmog notes. “The courts have addressed administrative law issues including the Crown’s duty to consult but have not addressed whether the Crown, by approving Site C, has unjustifiably infringed Treaty 8 rights. West Moberly and Prophet River First Nations submit that the Crown bears the risk that in the event a lawsuit is commenced, the court will find in favour of Treaty 8 First Nations,” the report stated.
Noting that Indigenous rights and reconciliation emerged as a “major sub-theme” in the community input sessions it convened, the panel added that “the termination of Site C would be interpreted as a positive and meaningful step in the reconciliation process for those First Nations who did not reach an agreement with BC Hydro.”
The day before the report was released, Premier John Horgan acknowledged the project would face ongoing legal challenges from First Nations, and might well end up before the Supreme Court of Canada.
In one of the communities that did reach terms with the provincial utility, the McLeod Lake Indian Band, Chief Harley Chingee said the project should go forward in the name of “economic reconciliation”, adding that “economically, it would depress us big time” if Site C were cancelled. “Let’s move forward and make things happen.” In Fort St. John, car rental operator Montana Currie said much of the local economy is being driven by income from dam construction.
“It’s been massive. It’s turned us around,” she told CBC, adding that she would have to lay off staff if not for Site C. “I think it would be devastating for our whole community.”
Canadian Centre for Policy Alternatives Senior Economist Marc Lee is calling for a public inquiry to find out how the utility and the previous Christy Clark government made the case for Site C.
“It’s amazing. I would like to see a full inquiry to investigate how BC Hydro executives and the previous government essentially conspired to manufacture the case for Site C,” he told DeSmog. “As someone who strongly believes in public sector institutions and Crown corporations, to have our electricity utility lying to us, making up numbers and doing all sorts of spurious comparisons between its preferred option and the alternative, is shameful.”
B.C. Green leader Andrew Weaver said it’ll take leadership to cancel the project, but it’s still the right thing to do. “This should be viewed as the final nail in the coffin of Site C,” he said. “Ultimately, it is a political decision. We criticized the B.C. NDP for simply wanting to delay. They have a very difficult decision to make. The decision in my view is clear. This provides the evidence needed to say the Liberals were fiscally reckless to put this project forward.”
Galen Armstrong, Peace Valley campaigner with Sierra Club BC, saw two options for the provincial government: “continue with an unnecessary boondoggle, leaving taxpayers and ratepayers on the hook for decades to come, or pivot to a lower-cost alternative energy portfolio including wind and geothermal that would provide jobs for British Columbians at a lower cost.”