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Critics Predict Big Hydro Rate Hikes as Commission Issues Interim Site C Report

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The British Columbia Utilities Commission (BCUC) says it needs more information before passing judgement on whether provincial utility BC Hydro should complete its controversial Site C hydroelectric project.

In a preliminary report this week, the commission says it “has identified numerous areas of information gaps which require supplemental evidence and analysis from BC Hydro and/or the public in order to make definitive and conclusive findings.”

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With C$1.8 billion already spent on the project, “money seems to be the biggest point of contention in the report, which says there wasn’t enough information to tell whether the hydroelectric dam is on track to meet its $8.3-billion budget, or what the cost would be to put the project on hold,” CBC reports.

“The Commission said the project is currently on time and, indeed, has a year’s worth of contingency time built in,” the Vancouver Sun adds [2]. “It says BC Hydro appears to be pushing ahead more aggressively than planned and if it experiences no delays, it could be producing power a year ahead of schedule, in 2023.”

But even “a one-year delay in the project would have a significant effect on the budget,” the commission warned. “BC Hydro is facing significant challenges with the main civil works on the left bank as a result of two tension cracks, and currently expects to use three months of float as a result.”

The Sun refers back to an earlier analysis [3] by consultants at Deloitte, which found that a one-year project delay would increase Site C’s final cost by 10%. “A delay of more than one year will boost the project’s price tag by 20 to 50%,” Deloitte stated at the time.

“The Deloitte report says the dam’s construction faces major risks, including contractor performance problems, unforeseen geotechnical conditions, and cost issues related to major contracts that haven’t been awarded yet,” CBC recalls.

In somewhat roundabout terms, the utilities commission suggests BC Hydro may be burning through project funds faster than work on the ground is progressing. “The panel is concerned that the $356-million contingency that has been allocated and committed to date represents 45% of the planned $794-million contingency, two years into an eight-year project,” commissioners noted, referring to the contingency funds set aside in the original project budget to deal with unforeseen issues. That means the sums spent to date “might not accurately represent the spending that should have happened based on the project activities to date.”

In its 866-page submission to the BCUC, Hydro said a decision to cancel the project would cost $7.3 billion. Deloitte calculated costs of $1.2 billion to postpone construction until 2025, or $1.4 to cancel Site C outright.

In a scathing project chronology [4] [sub may be req’d] published September 17, iPolitics columnist Michael Harris cites a report to BCUC commissioned by a coalition of environmentalists, First Nations, and other citizens. It concluded that BC Hydro has no customer waiting for Site C power, its electricity demand forecasts are off by 30%, its cost overruns on the project will likely hit $1.7 to $4.3 billion, and wind and geothermal are environmentally friendly alternatives to the project.

“If Site C were to be halted, it would save British Columbian between $770 million and $1.6 billion,” Harris writes, citing the review by international energy expert Robert McCullough. “The alternative is to complete the project and usher in major hydro increases for British Columbians.”